Innovation and Technology Dissemination in Clean Technology Markets and The Developing World: The Role of Trade, Intellectual Property Rights, and Uncertainty

Kristina M Lybecker

doi:10.7341/20141021

Abstract

Innovation is an inherently risky and uncertain process. Many of the broader challenges to innovation in general are both mirrored and exaggerated in clean technology innovation. The development of environmental technologies is further complicated by the public goods nature of knowledge, environmental externalities, and uncertainty. This study on clean technology focuses on recent work on the role of uncertainty, the participation of emerging and developing nations, the controversy surrounding intellectual property rights, and the variety of market actors and strategies in place. The paper also considers the policy instruments that are available, the cost, benefits and consequences of their use. As scholars continue to analyze when, where, why and how clean technology innovations are developed and adopted, it is essential that government policymakers aim to reduce uncertainty and risk, incentivize innovation with effective intellectual property rights, and foster transparency in the market. This continues to be a field of increasing future importance, and a rich area for continued academic study and analysis. Consumers, government policymakers and innovators would all benefit from a greater understanding of the process of technological change in the development, diffusion and financing of clean technologies.

Highlights

Innovation is an inherently risky and uncertain process
The market for clean technologies is characterized by significant uncertainties and risks, making the transfer of environmental technologies difficult. As described here this is especially true for developing nations and presents distinct challenges for their adoption of clean technology innovation
2 Given that this paper aims to update the collection of three 2009 literature reviews, the focus is primarily on papers written since 2009 in the fields of economics and innovation

Summary

Introduction

Innovation is an inherently risky and uncertain process. Many of the broader challenges to innovation in general are both mirrored and exaggerated in clean. The market for clean technologies is characterized by significant uncertainties and risks, making the transfer of environmental technologies difficult As described here this is especially true for developing nations and presents distinct challenges for their adoption of clean technology innovation. Both externalities operate on a global scale, further complicating the issues of regulation, mitigation and cooperation In both the development and the diffusion of environmental technology, the challenges surrounding uncertainty loom large. Actual costs, uncertainty about the end-product of a research process, uncertainty about the reception by the market, uncertainty about the ability to appropriate the returns to research while competitors try to produce similar results, uncertainty about current and future policies and regulations, uncertainty surrounding the pricing of competing as well as complementary goods, and uncertainty about regulatory impacts on the research process and end-result This is exacerbated by the uncertainty surrounding the rate of innovation itself which complicates any estimate of global climate change, making it difficult to substantiate the reasons that justify further research funding. Within the table, Popp, Newell and Jaffe (2010) identify the barriers to adoption as well as the key results from each paper

Key Results

Findings

Conclusions