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Green Innovation Systems in Swedish Industry, 1960–1989

Abstract

Organizational networks had a strong influence on the diffusion of green knowledge within the Swedish pulp-and-paper industry from the mid-1960s to the 1980s. The environmental adaptations made by this industrial sector were not merely the result of a corporate initiative or of the response by firms or industries to environmental regulation. An examination of the innovation-system approach that was used to further the industry's environmental goals reveals that the knowledge and technology development underpinning the project depended on a network of diverse actors. Within this network, the semi-governmental Institute for Water and Air Protection, working with a consulting company, was a critical generator and intermediary of knowledge. Thus, the success of the project was largely due to the Institute's balanced relations with government and industry.

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1 We define the concept “green knowledge” as the knowledge needed to achieve deep emission reductions in Swedish heavy industry in the 1960s to the 1980s, with focus on the Swedish paper and pulp industry. It is assumed that knowledge is built up (and required) in the individual firm as well as in the related organizations and institutions that affect and assist the company in this knowledge accumulation process. These include, above all, other industrial enterprises, suppliers, consultants, industry associations, research institutions and public institutions, including environmental policy and regulation. A central assumption in this context is that the green knowledge was built up in the interaction between these institutions.

2 See, for example, Lipartito Kenneth and Sicilia David, “Corporate Technological Capabilities and the State: A Dynamic Historical Interaction,” in Constructing Corporate America, ed. Lipartito Kenneth and Sicilia David (New York, 2004). Recently, a limited number of books have, however, been published on the state's role in shaping infrastructural development. See, for example, White Richard, The Transcontinentals and the Making of Modern America (New York, 2011) and John Richard R., Network Nation: Inventing American Telecommunications (Boston, 2010).

3 A recent overview was given by Sluyterman Keetie in her article “Royal Dutch Shell: Company Strategies for Dealing with Environmental Issues,” Business History Review 84 (Summer 2010): 203–26.

4 Rosen Christine Meisner, “The Business-Environmental Connection,” Environmental History (Jan. 2005).

5 Lipartito and Sicilia, “Corporate Technological Capabilities and the State.”

6 Rosen and Sellers furthermore put forward that besides governmental influence, technology, the market, ideas, values, and perceptions are also important. See: Rosen Christine Meisner and Sellers Christopher, “The Nature of the Firm: Towards an Eco-Cultural History of Business,” Business History Review 73 (Winter 1999): 577600; Rosen Christine Meisner, “Industrial Ecology and the Transformation of Corporate Environmental Management: A Business Historian's Perspective,” in Inventing for the Environment, ed. Molella Arthur and Bedi Joyce (London, 2003).

7 Bergquist Ann-Kristin, Guld och Gröna Skogar? Miljöanpassningen av Rönnskärsverken, 1960–2000 [Going Green? A Case Study of the Rönnskär Smelter, 1960–2000], PhD diss., published as Umeå Studies in Economic History, no. 36/2007, Available at: http://umu.diva-portal.org/smash/record.jsf?searchId=1&pid=diva2:140796; Bergquist Ann-Kristin and Söderholm Kristina, “R&D Collaboration and Environmental Adaptation: A Pilot Study of the Swedish Pulp and Paper Industry, 1900–1990,” Umeå Papers in Economic History, no. 39/2010. Available at: http://umu.diva-portal.org/smash/record.jsf?pid=diva2:312526.

9 The Royal Majesty's Bill (Kungl. Maj:ts proposition), no. 154, 1965.

10 Bergquist and Söderholm, “R&D Collaboration and Environmental Adaptation.”

11 Lindmark Magnus and Bergquist Ann-Kristin, “Expansion for Pollution Reduction? Environmental Adaptation of a Swedish and a Canadian Metal Smelter, 1960–2005,” Business History 50 (2008): 530–46; Lundqvist Lennart, The Hare and the Tortoise: Clean Air Policies in the United States and Sweden (Ann Arbor, 1980); Lundqvist Lennart, “Sweden,” in National Environmental Policies: A Comparative Study of Capacity Building, ed. Jänicke Martin and Weidner Helmut (Berlin, 1997).

12 Linderström Magnus, Industrimoderniteten och miljöfrågans utmaningar: En analys av LO, SAF, Industriförbundet och Miljöpolitiken, 1960–2000 (Linköping, 2002); Bergquist Ann-Kristin and Söderholm Kristina, “Miljöforskning i Statens och Industrins Tjänst: Institutet för Vatten och Luftvårdsforskning (IVL), 1960-tal till 1980-tal,” Umeå Papers in Economic History, no. 40/2010.

13 See, for example, Haagedorn John, “Inter-Firm Partnership: An Overview of Major Trends and Patterns since 1960,” Research Policy 31 (2002): 477–92.

14 See Cortat Alain, “How Cartels Stimulate Innovation and R&D: Swiss Cable Firms, Innovation and the Cartel Question,” Business History 51 (2009): 754–96.

15 Powell Walter W., Koput Kenneth W., and Smith-Doerr Laurel, “Interorganisational Collaboration and the Locus of Innovation: Networks of Learning in Biotechnology,” Administrative Science Quarterly 41, no. 1 (1996): 116–45.

16 Hildén Mikael et al. , Evaluation of Environmental Policy Instruments: A Case Study of the Finnish Pulp and Paper and Chemical Industries, Monographs of the Boreal Environment Research, no. 21 (2002).

17 Lipartito and Sicilia, “Corporate Technological Capabilities and the State.”

18 Hildén et al., Evaluation of Environmental Policy Instruments.

19 Innovation systems have been studied from different angles. On national innovation systems, see Lundvall Bengt Åke, National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning (London, 1992); Edquist Charles, ed., Systems of Innovation: Technologies, Institutions and Organisations (London, 1997). On regional innovation systems, see Braczyk Hans-Joachim, Cooke Philip, and Heidenreich Martin, eds., Regional Innovation Systems (London, 1998). On sectoral innovation systems, see Carlsson Bo and Stankiewitz Rikard, “On the Nature, Function and Composition of Technological Systems,” Journal of Evolutionary Economics 1, no. 2 (1991): 93118; Breschi Stefano and Malerba Franco, “Sectorial Systems of Innovation,” in Systems of Innovation: Technologies, Institutions and Organisations, ed. Edquist Charles (London, 1997). Also the term technological system (see Carlsson and Stankiewitz, “On the Nature, Function and Composition of Technological Systems” and Archibugi Daniele and Lundvall Bengt-Åke, The Globalizing Learning Economy [New York, 2001]) has been referred to as a version of innovation system, but it should, however, not be confused with the notion of Large Technological Systems (LTS) introduced by the historian of technology Thomas Hughes. See Hughes Thomas P., Networks of Power: Electrification in Western Society, 1880–1930 (Baltimore, 1983).

20 Saviotti Pier-Paolo, “On the Co-Evolution of Technologies and Institutions,” in Towards Environmental Innovations Systems, ed. Weber Matthias and Hemmelskamp Jens (Berlin, 2010).

21 Edquist, Systems of Innovation.

22 Lipartito and Sicilia, “Corporate Technological Capabilities and the State.”

23 For functions in literature overviews, see: Johnson Anna, “Functions in Innovation System Approaches,” Paper for DRUID's Nelson-Winter Conference, Aalborg, Denmark (2001); and Hekkert Marko P. et al. , “Functions of Innovation Systems: A New Approach for Analysing Technological Change,” Technological Forecasting and Social Change 74, no. 4 (2007): 413–32; Lundvall , National Systems of Innovation; Edquist , ed., Systems of Innovation.

24 For further description of the functions, see Hekkert et al. , “Functions of Innovation Systems,” 421–25.

25 Bessant John and Rush Howard, “Building Bridges for Innovation: The Role of Consultants in Technology Transfer,” Research Policy 24 (1995): 97114.

26 See also Schein Edgar H., Process Consultation: Its Role in Organization Development (Reading, Mass., 1969).

27 “Many user firms lack the resources or experience to understand and prioritize their problems in such a way that external resources and opportunities can be effectively utilized. Consultants can provide a valuable input to this first stage of innovation, by creating a strategic framework for change; they can also move from identifying needs in this fashion to suggesting means whereby the identified problems can be solved,” Bessant and Rush, “Building Bridges for Innovation,” 102.

28 The literature on the social constructionist approach to technology (SCOT) literature explains how this occurs. This literature typically focuses on individual consumers' appropriation of technology (see Oudshoorn Nelly and Pinch Trevor, eds., How Users Matter: The Co-construction of Users and Technology [Cambridge, Mass., 2003]). On how firms as users can influence and get influenced by a technology, see Yates Joanne, Structuring the Information Age: Life Insurance and Technology in the Twentieth Century (Baltimore, 2005).

29 Söderholm Kristina, “Environmental Awakening in the Swedish Pulp and Paper Industry: Pollution Resistance and Firm Responses in the Early Twentieth Century,” Business Strategy and the Environment 18, no. 1 (2009): 3242.

30 Bergquist and Söderholm, “R&D Collaboration and Environmental Adaptation.”

31 Söderholm, “Environmental Awakening in the Swedish Pulp and Paper Industry.”

32 Lundgren Lars J., “Från Miljöproblem till Miljövård: Ett genombrott med fördröjning,” Deadalus, Tekniska Museets Årsbok (1999).

33 The 1942 Reform of the Water Act introduced a concession system, where those who wanted to release pollutants into water could apply to the Water Court for permission for such activities (some industries were obliged to, such as chemical pulp mills, sugar mills, and textile factories). The list of activities that required pre-investigation was extended by the Preliminary Examination Announcements of both 1946 and 1956. Also, the Water Conservation Committee was appointed in 1953, whose work resulted in a new regulatory law in 1956, meaning that the central water assessment now came to be administered by the State Water Inspection board instead of by the Fishing Authority. With the Health Care Act of 1958, local health boards were to ensure that necessary and reasonable measures were taken for the containment of water and air pollution, noise and other disturbances. See Darpö Jan, Vem har ansvaret? Rättsläget idag och förslag på framtiden: Eefterbehandling och sanering, SNV (Swedish Environmental Protection Agency) Report no. 4354 (Stockholm, 1994); Hydén, Rättens Samhälleliga Funktioner.

34 Bergquist and Söderholm, “R&D Collaboration and Environmental Adaptation.”

36 SSVL, Reports, 1970–2001, available on CD-ROM at the Swedish Forest Industries, Stockholm.

37 See Table 3 in Söderholm Kristina and Bergquist Ann-Kristin, “Firm Collaboration and Environmental Adaptation: The Case of the Swedish Pulp and Paper Industry, 1900–1990,” in Scandinavian Economic History Review (forthcoming).

39 Skogsindustriernas miljödatabas (Forest industries' environmental database) (http://miljodatabas.skogsindustrierna.org/si/main/main.aspx?l1=home).

40 See Lundqvist, The Hare and the Tortoise.

41 Swedish National Code SFS 1969: 387.

42 Jänicke Martin, “Conditions for Environmental Policy Success: An International Comparison,” The Environmentalist 12, no. 1 (1992): 4758.

43 Lundqvist, The Hare and the Tortoise.

44 Lundqvist Lennart, Förvaltningen i det politiska systemet (Lund, 1971).

45 Reinstaller Andreas, “The Technological Transition to Chlorine Free Pulp Bleaching Technologies: Lessons for Transition Policies,” Journal of Cleaner Production 16, no. 1 (2008): 133–47.

46 Harrison Kathryn, “Ideas and Environmental Standard Setting: A Comparative Study of Regulation of the Pulp and Paper Industry,” Governance: An International Journal of Policy, Administration and Institutions 15, no. 1 (2002): 6596.

47 The Royal Majesty's Bill (Kungl. Maj:ts proposition), no. 154, 1965; “Skrivelse från Sveriges Industriförbund till regeringen 9 september 1964,” Immissionssakkunniga vol. 1, National Archives, Stockholm, Sweden.

48 See, for instance, IVL verksamhetsberättelse 1980/81, archive of Swedish Environmental Research Institute (IVL), Stockholm.

49 IVL verksamhetsberättelse 1966–1979/80, 1986/87, archive of IVL, Stockholm; interview with Stig Freyshuss, president of the Water Laboratory of the Forest Industry in 1958 to 1964 and of IVL in 1966 to 1982, Stockholm, 8 Oct. 2009.

50 Interview with Arne Jernelöv, research leader at IVL in the 1970s, Stockholm, 19 May 2010; IVL verksamhetsberättelse 1967/68, 1975/76, 1976/77, and 1981/82, archive of IVL, Stockholm; IVL styrelseprotokoll 20 Sept. 1973 and 3 Oct. 1974, archive of IVL, Stockholm.

51 See the IVL Web site, www.ivl.se, accessed March 2011.

52 Bergquist and Söderholm, “Miljöforskning i Statens och Industrins Tjänst.”

54 Interview with Arne Jernelöv, Stockholm, 2010.

55 IVL verksamhetsberättelse 1966/67, archive of IVL, Stockholm.

56 IVL verksamhetsberättelse 1966–1979/80, 1986/87, archive of IVL, Stockholm; interview with Arne Jernelöv; interview with Stig Freyschuss.

57 As entrepreneurial activities suggested by Hekkert et al., “A New Approach for Analysing Technological Change.”

59 See Bessant and Rush, “Building Bridges for Innovation.”

60 Interview with Arne Jernelöv; interview with Stig Freyschuss.

61 IVL verksamhetsberättelse 1966–1979/80, 1986/87, archive of IVL, Stockholm.

62 IVL verksamhetsberättelse 1966/67, archive of IVL, Stockholm.

63 IVL verksamhetsberättelse 1966–1979/80, 1986/87, archive of IVL, Stockholm.

64 During the same period, the total turnover increased from 44 employees and 2.4 million SEK in 1970 to over 150 employees and 30 million SEK in 1979 (about 16 million USD in today's money). In current prices, the activity of IVL grew by an average of 30 and 45 percent annually during the 1960s and the 1970s, respectively. See Bergquist and Söderholm, “Miljöforskning i Statens och Industrins Tjänst.”

65 IVL verksamhetsberättelse 1966–1979/80, archive of IVL, Stockholm.

66 Interview with Arne Jernelöv.

67 IVL verksamhetsberättelse 1980/81.

68 IVL verksamhetsberättelse 1966–1979/80.

69 See IVL styrelseprotokoll 1 Sept. 1966, 24 Jan. 1967, and 17 Sept. 1971, archive of IVL, Stockholm; IVL verksamhetsberättelse 1966–1979/80, archive of IVL, Stockholm.

70 IVL verksamhetsberättelse 1966–1979/80, 1986/87, archive of IVL, Stockholm.

72 Bergquist, Guld och Gröna Skogar?

73 IVL verksamhetsberättelse 1975/76 and 1978/79, archive of IVL, Stockholm.

74 IVL Konferensen 1975, IVL-publikation, 1976, Stockholm.

75 IVL styrelseprotokoll 31 Jan. 1975, archive of IVL, Stockholm.

76 Interview with Arne Jernelöv; interview with Stig Freyschuss; interview with Björn Lundberg, president of IVL in the 1980s and 1990s, Sollentuna, 11 May 2009.

77 Bergquist and Söderholm, “R&D Collaboration and Environmental Adaptation.”

78 Interview anonymous Franchise board official with experiences of pulp and paper licensing processes of the late 1980s and onwards, Stockholm, 8 June 2010.

79 Interview with Arne Jernelöv; interview with Stig Freyschuss; interview with Björn Lundberg.

80 It was taken over by another large consulting company, ÅF-Energi-Konsult-AB (IVL verksamhetsberättelse 1980/81, archive of IVL, Stockholm).

81 IVL verksamhetsberättelse 1966–1979/80, archive of IVL, Stockholm; interview with Arne Jernelöv; interview with Stig Freyschuss.

82 Interview with Arne Jernelöv.

83 Interview with Arne Jernelöv.

84 Interview with Björn Lundberg.

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Business History Review
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