Executive Summary

Overview of topicPublicationReport

Eco-innovation overview

Eco-innovation publicationEco-innovation report

Report presented by Asel Doranova, Carlos Hinojosa, Geert van der Veen

The importance of Eco-innovation is clearly being recognised in the EU and worldwide.

Eco-innovation is not limited to a particular sector or only equated to environmental technologies, goods or services. It can be defined as: “the introduction of any new or significantly improved product (good or service), process, organisational change or marketing solution that reduces the use of natural resources (including materials, energy, water and land) and decreases the release of harmful substances across the whole life-cycle." (Eco-innovation Observatory)

The development of eco-innovation and eco-industries presents a significant economic opportunity. Eco-innovation in companies leads to reduced costs, improves their capacity to capture new growth opportunities and strengthens company image in the eyes of customers. Furthermore, there are growing markets for environmental goods & services, for technologies for pollution management, cleaner production etc. (market volume estimate for 2020: €2.2 trillion) (2), as well as growing opportunities in the market for more pervasive and systemic eco-innovations designed to reduce resource use across all aspects of the economy.

Given its potential for decreasing environmental pressure and economic opportunities, eco-innovation is being addressed by policymakers at all levels. At EU level, the agenda is set out by the Eco-innovation Action Plan (2011) and confirmed by flagship initiatives, such as ‘Resource Efficient Europe’, ‘Innovation Union’ and ‘An Industrial Policy for the Globalisation Era’ within the Horizon 2020 framework programme for research and innovation. Various European Innovation Partnerships as well as funding mechanisms in Horizon 2020 provide a means to promote eco-innovation. The Eco-Innovation Observatory is also gathering strategic knowledge resources on eco-innovation for businesses and policymakers. Many other EU initiatives, including those with an environmental focus, are relevant to eco-innovation.

As part of its effort to focus EU cohesion policy resources for 2014-2020 on a smaller number of priorities, the Commission is proposing that member states and regions concentrate resources on thematic priorities directly linked to the Europe 2020 objectives. These include the shift towards a low-carbon economy; climate change adaptation, risk prevention and management, environmental protection and resource efficiency. In the coming years, EU Regional Policy will consequently become one of the main EU policies to foster eco-innovation and to respond to the challenges of sustainable energy, climate change and the use of natural resources. Across EU regions, there are, however, wide disparities in terms of eco-innovation performance and eco-innovation policy-making experience level, which can be addressed by the numerous opportunities offered for interregional learning.

Within the current INTERREG IVC programme, there are already a number of initiatives for policy learning in the field of eco-innovation policy at regional level. This study has focused on analysing seven projects grouped under the ‘eco-innovation’ theme:

  • Cleantech-incubation Europe (CIE): supporting regional policies for cleantech incubation
  • Forwarding regional environmental sustainable hierarchies (FRESH): promoting regional policies to support and measure eco-innovation in the construction sector
  • Regions using ECO-ManageMENt for eco-innovation Development (RECOMMEND): supporting regional policies to promote eco-management as an instrument for corporate eco-innovation
  • European Clusters and Regions for Eco-Innovation Network Plus (ECREIN+): developing an effective regional policy mix to support eco-innovation
  • ECOREGIONS: improving  the effectiveness of local and regional development policies in the area of eco-innovation and more specifically, green technologies, with a particular focus on SMEs
  • Developing Sustainable Regions through Responsible SMEs (DESUR): helping businesses to grow in a more sustainable and innovative way by improving regional policies aimed at promoting responsible innovation in SMEs by means of Corporate Social Responsibility programmes
  • Producer Services for European Sustainability and Competitiveness (PROSESC): fostering regional policies to promote the environmental sustainability and competitiveness of road transport (from two-wheel to e-vehicles and fuel-cell powered buses), with a focus on the role of the knowledge-intensive producer services sector

In terms of projects’ achievements, some 110 good practices were identified in these projects. Analysis of the good practices reveals that:

  • The large majority of good practices are non-financial (83), despite the fact that most regions consider financial support crucial to the development of eco-innovation;
  • Financial good practices are exclusively focused on grants, subsidies and vouchers while  other types of financial support measures (guarantees, loans, fiscal incentives, venture capital) are not tackled by projects;
  • A majority of good practices have a supply-side focus (68); among these, 26 focus on the promotion of networks and partnerships, and 22 on education, training and mobility;
  • Good practices with a demand-side focus are relatively few; the majority of these focus on setting regulations and standards;
  • Most good practices have a strong focus on eco-innovation but also cover other areas of innovation (non-exclusive focus);
  • Thematic coverage: there is a good representation of good practices with an energy efficiency/renewable energy focus, a few with a focus on sustainable construction and transport; other good practices aimed at improving resource efficiency are less present.

Overall, three types of good practices can be identified:

  • Policy Good Practices related to specific policy instruments (e.g. policies, programmes, strategies, initiatives etc.)
  • Support Good Practices in relation to specific policy tools for eco-innovation analysis (e.g. benchmarking instruments, technology atlases, genuine progress indicators (GPIs), etc.)
  • Good Practices in relation to various technological solutions to environmental issues (e.g. low energy housing, biogas plants, etc.)

In terms of transferability, the transfer of technological and support tool good practices are likely to be less complex, but the impact on eco-innovation may be more limited.

Eco-innovation can be supported through ‘traditional’ innovation support mechanisms. However, providing support more efficiently requires tailoring policies to more specific eco-innovation-orientated objectives. Some of the objectives pursued by the projects include: developing support infrastructure, promoting sustainability, protecting the environment and promoting more ethical behaviour.

Lessons for identifying and transferring Good Practices

These lessons can be divided into two broad categories based on how they relate to the issue of eco-innovation.

The first set of lessons can be categorised as generic, as they can apply to any good practice regardless of the theme addressed:

  • Transferring a good practice is not a direct ‘copy-paste’ procedure: it is important to take into account the relevance, rationale, concept and context (institutional, political, social, economic, etc.) of the good practice when considering transfer;
  • In some cases, it is more important to improve existing policy initiatives based on the experiences of other regions, rather than transferring new policy initiatives and starting from scratch; this approach will enable the region to build on previous work and benefit from the ‘incremental’ policy development perspective;
  • When transferring good practices, the motivation level of regions is very important, as well as the skills of regional authorities and institutions involved in the transfer;
  • It is very helpful to have well developed methodologies for the  identification and transfer of good practices;
  • When transferring a good practice, there needs to be a supportive policy framework and sufficient capabilities/knowledge/expertise/skills to support and implement it, both from a policy framework (horizontal) perspective as well a technological/sectoral (vertical) one
  • Technical good practices should be transferred along with the policy measures supporting them;
  • Methodological good practices (e.g. benchmarking tools, scoreboards) should complement tangible good practices (policy instruments, technologies), thereby helping regions lagging behind to catch up more quickly;

In the specific field of eco-innovation, the following lessons for identifying and exchanging good practices have been noted:

  • It is important to consider the responsiveness of the society, environmental pressures and the local market demand when identifying and exchanging eco-innovation good practices;
  • The commitment of the regional government to sustainability goals (e.g. having specific green targets, or a sustainability strategy) can help ensure the success of the transfer and the implementation of eco-innovation good practices;
  • Technological and support tool good practices require less coordination and long-term commitment to be successfully transferred; however, the impacts in terms of eco-innovation outcomes are likely to be lower than those of a policy good practice - in addition, when transferring a technological good practice, it is important for partner regions to also ensure a minimum transfer of the know-how necessary to enable the successful implementation of the technological solution;
  • Due to the cross-cutting nature of eco-innovation, importing eco-innovation-related good practices requires additional efforts from regional stakeholders to involve a wide range of players and audiences in the process;
  • Eco-innovation can be supported through generic innovation support instruments, however tailoring the instruments to better meet eco-innovation objectives will ensure more effective results;
  • Eco-innovation is riskier and generally more expensive than traditional innovation;  greener products and services are still not part of the mainstream and, in terms of cost, cannot fully compete with mainstream products and services - therefore, special support measures and framework conditions need to be fostered; this should be taken into account when identifying and exchanging good practices

Concluding messages of the study

  • All things considered, eco-innovations are central to the promotion of sustainable and smart growth in regions because of their wide-ranging benefits for the economy and the environment. Regional authorities are well positioned to facilitate transformative changes by supporting various eco-innovations and involving different players in the development and implementation of eco-innovative strategies. Consequently, regions should place eco-innovation at the core of their smart specialisation strategies (RIS3) and their regional operational programmes in light of the next programming period of European funding.
  • When designing their strategic policy framework for eco-innovation regions should remember that eco-innovation is not limited to specific industries and sectors. Eco-innovation can be introduced into any field via new or improved products, technologies, services, management and organisational structures, institutional arrangements, lifestyles and social behaviour. In addition, eco-innovations should not be seen simply as a remedy for environmental problems in the regions, but also as a means to boost the economy and to strengthen the regions’ competitiveness in national and international markets.
  • Including eco-innovation as a main pillar of the RIS3 is one of the key conditions to developing an integrated approach, capable of generating systemic impacts at a regional level. This will also require establishing a long-term vision and the development of a model for sustainable and smart regions.
  • When planning eco-innovation strategies and activities, it is recommended that regions conduct a thorough analysis of the state-of-the-art in the field of eco-innovation. This includes identifying key economic stakeholders, priority sectors and policy targets, as well as measuring eco-innovation markets. It also involves identifying existing and emerging drivers and barriers to eco-innovation. In order to achieve this, regions may rely on tools such as directories and databases, foresight and prospective studies, aimed at assessing the performance and needs of the companies and SMEs, analysing the sustainability, the environmental performance and the footprint of major industries in the region and developing a deeper understanding of the barriers and drivers to eco-innovation at a regional level.
  • Effective eco-innovation policy and strategic support requires the participation of many different types of stakeholder. This is particularly true of systemic eco-innovations, for which a wide range of stakeholders should be involved, namely regional and local authorities, businesses and industries, research organisations, cluster organisations and universities, NGOs, citizens, living Labs, user groups, and regional or local innovation or development agencies.
  • In order to achieve far-reaching results in promoting eco-innovations, regions should develop a comprehensive policy mix that includes both supply and demand-side measures. When doing this, it is important for regions to build on good practices from other EU regions and countries, taking account of both their successes and failures. The INTERREG IVC eco-innovation projects include a number of policy initiatives addressing issues such as: eco-innovation assessment and planning, regional eco-innovation strategies, demand-side policies including procurement, eco-innovation incubation and clusters, eco-innovation funding and eco (-innovation) management in SMEs. This being said, when exchanging good practices, it is crucial to take into account the specific economic, regulatory, technological, innovation and climate profiles of the regions, as they may respond differently to the different incentives and barriers to eco-innovation.
  • To create demand for eco-innovative products and services regions should make innovative use of the policy instruments at their disposal, such as green public procurement .They should also support eco-innovation in SMEs directly, through providing subsidies, advisory and technical support.
  • Finally, when planning eco-innovation focused projects and programmes, regions should apply a comprehensive Monitoring and Evaluation framework based on a well-defined and measurable set of indicators designed to track progress in activities and outputs and results.

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