Grand societal challenges and the
reorientation of incumbent
industries:
A dialectic issue life cycle model and examples
Prof. Frank Geels
SPRU, Univ. of Sussex
(sustainable practices workshop, 26-27 Jan. 2012)
Structure
1.
2.
3.
4.
5.
Introduction/motivation
Theoretical framework
Case study 1
Case study 2
Conclusions
1. Introduction
Why at this workshop?
• NOT about consumption practices
• But it is about:
- “problems such as climate change”  Issue life cycles (the dynamics of
problems)
- Political economy  much talk in transitions literature about power and
politics, but remains vague (often rather discursive)
-
“Questions of the interaction between political and regulatory frameworks”. And
industry/technical innovation, markets and civil society/discourse.
Background (innovation studies)
• New topic: Grand societal challenges (climate change,
energy security, transport and resource efficiency, food safety, obesity, health
and aging)
• Linked to: Systemic transitions + directionality of
innovation (rather than speed and output)
• Focal actor: Industry (population of firms)
• Embedded in organizational field (link to my previous work)
Organizational field
S up ply ch ain:
* m aterial su pliers
* co m pon ent sup pliers
* m achine suppliers
U sers
P ro duction ,
indu stry :
* firm s
* engin eers,
designers
R esearch :
* univ ersities
* technical in stitutes
* R & D laboratories
S ocietal gro ups:
P olicy, pub lic authorities:
* E u ropean C om m ission, W TO , G AT T
* G overnm ent, M inistries, P arliam en t
* L o cal authorities and executive branches
(e.g. G reenpeace,
m ed ia, bran ch
organisation s)
Lock-in, inertia, path dependence
Research questions
1.How do societal problems emerge and develop?
2.How do industries respond to societal problems?
When do they implement substantial responses
(i.e. overcome lock-in)?
Research strategy
• Develop an enriched issue life cycle model
• Confront the model with in-depth case studies:
US car industry and:
a) Local air pollution (1945-1985)
b) Car safety (1910-2000)
c) Climate change (1990-2010)
2. Theoretical framework
Issue life cycle theory (Business & Society)
Public
attention
Dramatic
event or
trigger
Voluntary
or government
mandated
resolution
Secondary
trigger
A
B
C
Expectational
gap(s) has
opened
Debate; coalitions
develop possible
redefinitions of
the gap/issue
Implementation;
monitoring by
most interested
parties
A = The issue re-emerges because the resolution is not satisfactory or new issues emerge from the resolution
B = The issue is satisfactorily resolved as long as the resolution mechanism remains in place.
C = The issue dies because of further social, economic, political, or technological change.
Mahon and Waddock (1992)
Tombari (1984)
Rivoli and Waddock (2010)
Strengths
•
•
•
•
a)
b)
c)
d)
Issues/problems have temporality
Issue dynamics are socially enacted
Social construction + power/politics
Multi-dimensional:
Activists/social movements
Public opinion
Political debates
Political decisions (+ implementation)
Weaknesses
1. Too little conflict/struggle (teleological
unfolding)
2. Too little corporate strategies
3. Linear sequence (problem in many phase-models)
Improvements
1) Link to broader industry framework
2) Add more strategy and struggle/conflict
3) Flexible with phases: backwards, forwards
Triple embeddedness framework of industry
Inspired by:
•
institit. theory: org. fields
•
Structuration theory (‘rules and resources’)
•
Regulation theory (mode of production, regime of accumulation, mode of regulation)
•
Scott’s (1993) institutional pillars
•
Evolutionary theory: adapting to selection pressures
Industry regime
Knowledge, capabilities
(technical regime)
Beliefs, interpretations
Mission,
behavioural norms
Regulations
Civil society,
social movements,
public opinion
Customers
Industry
Suppliers
Politics
Task environment
Firms
Institutional
environment
Framing, PR and issue management strategies
• Ignore, deny, downplay problems
• Emphasize uncertainties and contest the science
• Emphasize costs and difficulties of solutions
Adjust storylines to increase (Benford and Snow, 2000):
•
•
•
•
•
Actor credibility
Empirical fit
Centrality
Experiential commensurability
Macro-cultural resonance
Corporate political strategies (Hillman and Hitt, 1999)
1. Information and framing strategy - industry research institutes to build expertise
- contest the science
- commission research reports
- testify as expert witness in hearings
2. Financial incentives strategy
- make contributions to political parties
- pay fees to politicians for speeches
- offer politicians lucrative jobs at the end of
their career
3. Organized pressure strategy
- create fake grassroots organizations
(‘astroturf’)
- create industry associations that speak for the
industry
- mobilize employees, suppliers, customers to
pressure their representatives
4. Direct lobbying strategy
- hire lobbyists to work politicians
- mobilize CEOs to speak with politicians
5. Confrontational strategies
- oppose laws through litigation
- threaten policy makers with plant closures
- refuse to implement or obey policies
Economic positioning strategies
• Porter: low cost, high performance, niche market
• Supply chain management, marketing strategies
• Corporate strategy/mission
Innovation strategies
Tension: Radical and incremental innovation
• Exploitation-exploration (March, 1991)
• Ambidextrous organizations (Tushman)
Radical innovation not just about knowledge
flows (innovation systems),
But also about beliefs and strategic commitment
Rothwell (1992)
Tactical factors
Strategic factors
Effective linkages with external sources
of know-how
Top management commitment to, and
visible support for, innovation
Effective functional integration;
involving all departments in the project
from its earliest stages
Long-term corporate strategy in which
innovation plays a key role
Careful planning and project control
procedures
Long-term commitment to major
projects.
Temporal unfolding of pressures and responses (ideal-type)
Phase 1: Problem definition and framing struggles
Phase 2: Rising public concerns and defensive industry responses
Phase 3: Political debates/struggles and
defensive hedging
Phase 4: Political regulations and diversification
Phase 5: Spillovers to task environment and reorientation
Different issue cycles
3. Longitudinal case study:
Air pollution, technical innovation, and the American car industry (1943-1985)
27Los
Source: University of Southern California Digital Library and
Angeles Times photographic archive, UCLA Library
Phase 1: Issue emergence and
sensemaking attempts (1943-1953)
Pressures:
• Severe smog events in California (1943, 1948)
• Public concerns and protests
Source: University of Southern California Digital Library
Smog protestants at Board of Supervisors, 1947
• Symbolic policy statements (concern)
Source: University of Southern California Digital Library
Smog committee at District Attorney's Office, 1947
• Research into causes (sensemaking struggles)
• Initial blame to stationary sources (oil and waste burning)
• Haagen-Smit research: car exhausts + smog chemistry
Source: University of Southern California Digital Library
Smoking stack from Mercer Hotel, LA, 1949
Car industry responses:
• Unconcerned
• Rejected automobile as cause
Phase 2: Policy learning and defensive
industry responses (1953-1960)
Pressures:
• 1953 ‘five-day siege of smog’ increased public concern
Stamp Out Smog meets with public officials
Source: Jacobs and Kelly (2008:192)
• Activist movement:
Stamp out Smog (1958)
• Policy debates and early Federal involvement
• Federal Air Pollution Control Act (1955)
stimulated further studies on the causes and
(health) effects of air pollution
• First National Conference on Air Pollution in
1958
Car industry responses
• Industry acknowledges the issue (denial impossible)
• Framing strategies:
a) Science base uncertain
b) California is special case (no federal involvement needed)
• Incremental R&D programme by Vehicle
Combustion Products Committee (1953)
• But also collusion: agree not to compete
Phase 3: Increasing public concern, early
legislation and industry delay (1960-1970)
Health risk framing of air pollution in the early 1960s
Source: Washington Star, reprinted in U.S. Department of HEW (1966:3)
Pressures
•Growing scientific understanding of health effects
•New framing in
public discourse
• Increasing anxiety
•Smog problems spread to other states (New
York, Philadelphia)
•New activist groups: Clean Air Council (1967) and the
Group Against Smog and Pollution (GASP) (1969)
•Coalition with medical establishment
•Californian legislation: Motor Vehicle Pollution Control Act (1960)
•1963 Clean Air Act (CAA): weak, no standards,
but do more research
Source: Scanned cover of the book
Decreasing legitimacy of car industry:
at any speed
1) ‘anti-trust caseRalphofNader’s
theUnsafe
century’
(1969):
conspiracy re. pollution control devices
2) Secret recall campaigns: 20% of cars recalled for
safety defects between 1960 and 1966
3) Safety issue: Nader (1965)
and regulations (1967)
Public perception: car industry no
regard for public interest.
 Needs to be forced by law
Car industry responses
Source: Washington Post, reprinted in U.S. Department of HEW (1966:53)
Framing strategies:
• ‘regulation is not needed’ (Voluntary’ installation of
Cartoon mocking the reluctance of the car
devices in 1960)
industry to install control devices
• Solutions are expensive
(mocked in newspapers)
Incremental innovation strategies
•
•
•
•
•
PCV valves
evaporation-control systems (ECS)
transmission controlled spark (TCS)
thermovacuum switches (TVS)
air injected reactor (AIR)
Radical innovation strategies
• Suppliers (chemical industry) offer catalytic converters
• Industry rejects, but starts R&D
Phase 4: Tough legislation and resisted
implementation (1970-1977)
Pressures
• Peak in public attention
• Air pollution resonates with broader cultural
trend of environmentalism (Earth Day, 1970)
Source: Getty images
Earth Day One (April 22nd, 1970)
• Increasing frustration with car industry
• Political jockeying Muskie and Nixon
 Result in tough Clean Air Act (1970)
Figure 7: Number of air pollution control bills introduced
Car industry responses
Framing strategies
• CAA is threat to US economy (imposes costs)
• Emphasise trade-offs with fuel efficiency (1973)
Political strategies
• Lobby senators to kill the bill
• Complain directly to President
• Litigation tactics to fight CAA implementation
Innovation strategies
• Continue incremental innovation
• But also improve catalysts
 Innovation race (patents)
Source: Google News Archives
• GM breaks industry front and installs catalytic
converters (1975)
• Advertising
GM’s 1975 add of catalytic converters
Phase 5: Industry fightback, implementation
delays, and institutionalization (1977-1985)
Pressures
• Decline in public attention
• Postponement of 1977 standards
• Other issues: oil crises, economic problems (late
1970s), unemployment
• Policy makers more interested in saving car
industry than air pollution
• New anti-regulation discourse (causing economic
problems)
• Reagan (1981) attempts regulatory rollback
Car industry responses
Economic problems (weak demand + Japanese
competition)
• Economic problems embolden industry:
refusal to comply with 1978 standards
• Industry supports anti-regulation discourse
• Ask policymakers for support
Innovation strategies
• Slowing down patent race
• But install three-way catalyst (1981), which
reconfigured the engine
Pattern matching
Relatively good match with first three phases
Deviations in fourth and fifth phase, due to:
a) Decreasing pressure from public opinion
b) Limited spillovers from the issue to consumer
demand
c) Rise of competing issues
d) Strong resistance from the powerful car industry
50
4. Case study 2: Safety (1900-2000)
Main dynamic
• Until 1960s: 3E-framing dominant (Engineering,
Education, Enforcement)
• Car design was kept off agenda
• Alternative framing in 1950s: crash engineering
and medical establishment
Clash between professional communities (not
driven by ‘the public’)
Nader (1965) + public outrage + policy learning
National Highway Traffic Safety Act (1966)
Followed by resistance and implementation
struggles (seatbelt vs. airbag controversy)
Difference with case 1
Public attention continuous rise
 spillover to consumer preferences in late 1980s
Relative importance of decision criteria for car purchase
‘Safety did not sell’ in 1950s and 1960s, but does in 1990s
 Market demand stimulates major industry effort
Automobile safety patents (based on USPTO)
Lesson: Industry fights regulation to delay issue progression
But when issue spills over to markets, industry can accelerate and mobilize resources
5. Concluding comments
• Industries tend to postpone substantial
solutions to ‘issues’
• External pressures important: public opinion,
activists, politics, markets
• Pressure around issues develops gradually and
dialectically (conflict)
• Issues go up and down
• What about climate change?
Decreasing public attention
absolute # articles
6000
The Guardian
5000
The Times
The Independent
4000
Daily Express
3000
2000
1000
2011*
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
2011*
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
0,8
1993
1,0
1992
1991
1990
normalized: max=1
The Guardian
The Times
The Independent
Daily Express
0,6
0,4
0,2
0,0
Volatile and low carbon price
• Kyoto successor postponed (limited political
pressure)
• contesting the science (UEA ‘climate gate’)
• Debates (Newsnight) on costs of green energy
Maybe the climate change issue moves back
to earlier phase
Need to analyze pressures and responses
(third case next year?)