Entrepreneurial use of context for technological system creation and expansion: The case of blockchain-based peer-to-peer electricity trading

Abstract

This paper engages with the question of why certain radical innovations succeed while others fail or stagnate when encountering established actors and sector logics. We develop an analytical framework that extends the technological innovation systems (TIS) functional approach to explicitly account for contextual factors and entrepreneurial activities. We contribute to two ongoing debates: the conceptualization of context in TIS and the micro-foundation of TIS. First, a two-dimensional matrix is constructed to locate influential factors in the spatial (geographical) and sociotechnical (sectoral) contexts. Second, for early stages of the innovation process, we identify entrepreneurial activities as the locus of the system-building functions, i.e. the activities that use contextual and system-internal factors to develop the novel technological system. We use the TIS approach to analyze the innovation system build-up of peer-to-peer (P2P) electricity trading on a blockchain platform, materializing in two local projects, one in Australia and another in the USA. We find that how and why the new configuration succeeded in productively encountering electricity sector incumbents can be explained by the extent to which entrepreneurs could use opportunities in various contexts across spatial and sectoral boundaries.