‘Legitimation’ and ‘development of positive externalities’: two key processes in the formation phase of technological innovation systems

Responding to the climate change challenge requires a massive development and diffusion of carbon neutral technologies and, thus, emergence and growth of new socio-technical systems. This paper contributes to an improved understanding of the formative phase of new technological innovation systems (TIS) by outlining a framework for analysing TIS dynamics in terms of structural growth and key innovation-related processes (“functions”) and by discussing two of these functions at some depth: “legitimation” and “development of positive externalities”. Empirical examples are provided from case studies on renewable energy technologies. We highlight the problematic role of technology assessment studies in shaping legitimacy and the importance of early market formation for the emergence of “packs of entrepreneurs” that may contribute to legitimation, and discuss how exploitation of overlaps between different TISs may create positive externalities, opening up for a powerful “bottom-up” process of system growth. Associated policy and management challenges are identified.

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