The structure of environmental policy and environment-orientated technology policy signals for environment-orientated innovation

Abstract The development of environment-orientated innovation depends crucially on (a) incentives internal to a potential user company of environment-orientated technology and (b) on external stimuli. The decision to innovate, it is frequently claimed, depends mostly on external stimuli in the form of market information or legal requirements. Due to this recognition, two different external incentives co-exist, i.e. market-orientated and policy-orientated incentives. This contribution focuses mainly on policy-orientated stimuli, acknowledging market-specific and internal factors, however, if connected directly to policies. The emphasis in this paper is on policy signals and their perception, with the aim of providing assistance in policy design, taking into account the policy-specific structures of stimuli. The policy-orientated stimuli discussed for environment-orientated innovation have their origins in two separate policy fields—environmental policy and technology policy. Both policy fields follow different strategies in promoting innovation. In principle both are sending out signals but in different forms to various receivers and at different stages of a particular innovation project. In this contribution these signals and their effects are analysed. A distinction between first mover-orientated and diffusion-orientated signals and their effectiveness is made. Two principal receivers of such signals exist: technology users and technology providers. The question is which kind of policy stimulus exerts the major influence on which receiver? Another central question is, who receives the signal first? The main thesis is that different types of signals are needed to provide a stimulus for different receivers. Policy signals hence need to be tailor-made to achieve innovation strategies that are carried out by pioneers. Finally the paper presents different types of innovation relay systems within which the signals are transmitted and lead to specific actions within an innovation project.