Pathways, Politics and Diversity in the Governance of Technological Transitions

1. Pathways, Politics and Diversityin the Governance of Technological Transitions presentation to workshop on ‘… Management of Variation and Diversity’, Forum Chriesbach, Zurich, 15-8 April 2007 explanatory / normative heuristic – destabilising / keystone concept(epistemic ‘niche’ not ‘landscape’) 1: Diversity – much discussed but surprisingly little analysed 2: The nature of diversity and some different approaches 3: A new general conceptual framework and heuristic 4: Some implications: towards ‘Transition Portfolios’?

2. Disciplinary Interests in Techno-Institutional Diversity History and philosophy of science (Merton, Kuhn, Nowottny) interactions in diverse scientific disciplines enhance rigour and creativity Research and innovation strategies(Rosenberg, Rothwell, Landau) diverse portfolios offer flexibility and learning across programmes Governance of science and technology (Gibbons, Walker, Jasanoff) diversity of engagement promotes trust, democracy and social robustness Regulation of technological risk and sustainability (Norgaard, NRC, EEA) diverse knowledges / perspectives foster adaptive, precautionary policy Strategic technology policy (eg: energy security) (Brooks, Folke, EC, IEA) diversity of technological options provides resilience to shock and surprise Mainstream market economics (Ricardo, Markowitz, Hayek) diversity of firms resists oligopolistic concentration, enhances competition Evolutionary economics (Grabher, Dosi, Metcalfe, Arthur) diversity of actors, functions and contexts generates ‘fitness’ in innovation

3. Diversity and Sustainable Technologies Dynamic Properties of Sustainable Infrastructures (Adrian) TEMPORALITY PROVENANCE internal (to system / frames) external (to system / frames) transient disruption (transient disruption) STABILITY RESILIENCE enduring pressure (enduring pressure) DURABILITY ROBUSTNESS

4. Diversity and Sustainable Technologies Dynamic Properties of Sustainable Infrastructures TEMPORALITY PROVENANCE internal external transient disruption STABILITY RESILIENCE diversity is ubiquitous in general strategies towards sustainable technological systems eg: major element in energy security policy enduring pressure DURABILITY ROBUSTNESS

5. Diversity in Energy Technology Transitions Like all technological systems, diversity is key emergent property of energy systems, even if not deliberately planned reflect context diversity allows sensitivity to heterogeneous context Austrian hydro, Norwegian gas, Swedish biomass point arose strongly – especially in Raimund’s and Eva’s presentations

6. Diversity in Energy Technology Transitions Like all technological systems, diversity is key emergent property of energy reflect context diversity allows sensitivity to heterogeneous context Socio-technical diversity also relevant to deliberate transition-building foster innovation diverse configurations and contexts stimulate creativity interactions between microgeneration technologies

7. Diversity in Energy Technology Transitions Like all technological systems, diversity is key emergent property of energy reflect context diversity allows sensitivity to heterogeneous context Socio-technical diversity also relevant to deliberate transition-building foster innovation diverse configurations and contexts stimulate creativity mitigate ‘lock-in’ diverse portfolios resist pressures to concentrate support for different PV concepts and trajectories

8. Diversity in Energy Technology Transitions Like all technological systems, diversity is key emergent property of energy reflect context diversity allows sensitivity to heterogeneous context Socio-technical diversity also relevant to deliberate transition-building foster innovation diverse configurations and contexts stimulate creativity mitigate ‘lock-in’ diverse portfolios resist pressures to concentrate hedge ignorance ‘eggs in different baskets’ anticipate surprise energy security or unforeseen environment issues

9. Diversity in Energy Technology Transitions Like all technological systems, diversity is key emergent property of energy reflect context diversity allows sensitivity to heterogeneous context Socio-technical diversity also relevant to deliberate transition-building foster innovation diverse configurations and contexts stimulate creativity mitigate ‘lock-in’ diverse portfolios resist undue pressures to concentrate hedge ignorance ‘eggs in different baskets’ anticipate surprise accommodate dissent diversity helps reconcile plural values and interests polarisation behind nuclear, renewable, clean coal… both about orientation and mode of transition path

10. Towards a Systematic Approach – What is diversity? Variety? Difference? Concentration? • Some Key Questions – Which things to diversify? Staffan: technologies Raimund: communities Fred: actors, attributes Kornelia: 3 types of variety in TIS Eva: expectations, levels, local ‘solutions’ Daniel: regime plasticity – supporting sustainability Uli: transformative capacity / institutional adaptability – How to make diversity symmetrically operational for all salient aspects? address Jochen’s point on levels of aggregation and system delineation

11. Towards a Systematic Approach – What is diversity? • Some Key Questions – Which things to diversify? – How should we articulate diversity with other portfolio properties? Philip: trade-offs Marko: 7 functions Staffan: 5 (6) functions Kornelia, Frans: portfolio interactions Adrian: normative frameworks and pathway stability Raimund: scale economies, sustainability performance, business criteria

12. Towards a Systematic Approach – What is diversity? • Some Key Questions – Which things to diversify? – How should we articulate diversity with other portfolio properties? Key point: diversity is not a ‘free lunch’ – foregone benefits, standardisation, scale, transaction costs, diminished accountability, reduced stability of transition paths Ambiguities inhibit practical policy attention – ‘apple pie’ rhetoric is vulnerable to special pleading Highlights need for systematic framework for analysing ‘diversity’ … – high profile, but circumscribed and surprisingly neglected

13. What is Diversity? increasing diversity capital investments / research programmes / development strategies socio-technical trajectories / strategic niches / transition portfolios comprising mix of elements eg: coal, oil, gas, nuclear, wind

14. What is Diversity? variety number of options in mix eg: Norway vs USA increasing diversity balance evenness in contributions eg: nuclear – Japan vs France disparity degree of differences eg: renewables vs fossil

15. Conventional Approaches to Technological Diversity •  VARIETY = the number of options in a portfolio • conventional framing in economics and policy eg: Saviotti,, Metcalfe, Llerena, Kaufmann – much discussion at this workshop • convenient proxy in absence of complex analysis, BUT - partitioning of ‘techno-institutional options’? • eg: ‘biofuels’ – or biodiesel, bioethanol, biogas? • - when to start counting? • eg: one PV array? ten thousand? 0.1% of system? • - what about varying degrees of niche representation in transition portfolio? • eg: “90% / 5% / 5%” or “33% / 33% / 33%” • - what about the degree to which options are different from each other? • eg: biodiesel, bioethanol, biogas, CaTe PV, CIS PV, a-Si PV?

16. Conventional Approaches to Technological Diversity •  BALANCE = ‘evenness’ of option contributions • indices from ecology / information theory eg: Stirling, 1994; DTI, 1995; 2006; Grubb, 2004; use Shannon (– i pi.ln pi ) • readily applicable and comprehensive in scope - does address problem of when to start counting (partitioning) • eg: one PV array? ten thousand? 0.1% of system? • - does address varying degrees of representation in system • eg: “90% / 5% / 5%” or “33% / 33% / 33%” BUT: • - still raise questions over ‘when is it one option and when two’? • eg: ‘biofuels’ – or biodiesel, bioethanol, biogas? • - treat options as if they are all equally different from each other • eg: biodiesel, bioethanol, biogas, CaTe PV, CIS PV, a-Si PV?

17. Conventional Approaches to Technological Diversity • DISPARITY = degree to which options are different portfolio theory, taxonomy, cladistics eg: MVPA (Markowitz, Lucas, Awerbuch); Lancaster, Weitzman • Portfolio methods are powerful for financial planning in firms, BUT: - assumes single objective characterisation of difference - address differences entirely in terms of past experience • - highly circumscribed in scope (eg: fuel prices) • - highly restrrictive assumptions (eg: normal probability distributions) • - neglects variety • - neglects balance

18. Towards a Complete, Integrated Diversity Concept • need to address and explore variety, balance and disparity ie: - number of options in the portfolio - proportional representation of options in the portfolio - degree to which options are different from each other • need to avoid sensitivities to arbitrary assumptions eg: - when to start counting? when one option and when two? - assumption that difference reduces to single parameter - assumption uncertainty can be treated probabilistically - assumption that past predicts future - assumption that all data is normally distributed • need symmetry on divergent contexts, views and dimensions eg: - include wider economic, environmental and social criteria - be flexible towards different values and priorities

19. Constructing a General Diversity Heuristic • For any given perspective on the appraisal of a given transition context • option differences can be seen as dimensions in ‘disparity space’

20. Constructing a General Diversity Heuristic • For any given perspective on the appraisal of a given transition context • option differences can be seen as dimensions in a ‘disparity space’ number of dimensions represent different aspects of option disparity

21. Constructing a General Diversity Heuristic • For any given perspective on the appraisal of a given transition context • option differences can be seen as dimensions in a ‘disparity space’ number of dimensions represent different aspects of option disparity positions of options in space determined by any salient disparity attributes eg: functions (Staffan / Marko) features (Eva / Daniel) capacities (Uli) attributes (Fred) • In principle, this framework can address any perspective • on salient features of institutions, technologies, functions, networks or effects

22. From Disparity to Diversity • For any given perspective on the appraisal of a given transition context • option differences can be seen as dimensions in a ‘disparity space’ Distances between pairs of options represent their mutual disparity (da,b ) a c b

23. From Disparity to Diversity • For any given perspective on the appraisal of a given transition context • option differences can be seen as dimensions in ‘disparity space’ Distances between pairs of options represent their mutual disparity (da,b ) a Disparity of a portfolio of options is given as a function of these pairwise distances c da,b db,c and… Variety and balance can be captured by weighting this by the product of the proportional importance in the system of each option in the pair (pi.pj) b •  = .pi.pj • ij (ij)dij

24. Formal Conditions for a General ‘Diversity Heuristic’ • Scaling of variety: where variety = 1,  = 0 2Monotonicity of variety: for equal B / D;  rises monotonically with V • Monotonicity of balance: for given V / D;  rises monotonically with B • Monotonicity of disparity: for given V / B;  rises monotonically with D 5 Scaling of disparity: where aggregate difference = 0;  = 0 6Open Accommodation: is symmetric to any perspective on disparity 7Robust to Partitioning: is insensitive to aggregation on taxonomy 8 Parsimony of Form: has few components and simple structure • Explicit Aggregation: allows explicit weightings on V, B and D 10 Ready Articulation:  can be incorporated in portfolio performance

25. Some Properties of the New Diversity Heuristic •  = ijdij.pi .pj • Can be shown robustly to fulfill first eight quality criteria:

26. Some Properties of the New Diversity Heuristic • ´ = ij(dij).(pi .pj) •  •  • Can be shown robustly to fulfill first eight quality criteria: • 9 Allows explicit aggregations of variety, balance, disparity

27. Some Properties of the New Diversity Heuristic • ´ = ij(dij).(pi .pj) •  •  • Can be shown robustly to fulfill first eight quality criteria: • 9 Allows explicit aggregations of variety, balance, disparity   ´ diversity property 0 0 ij dij0 variety 0 1 ij pi.pj balance 1 0 ij dij disparity 1 1 ij dij.pi.pj diversity

28. Some Properties of the New Diversity Heuristic •  = ijdij.iij.pi .pj • Can be shown robustly to fulfill first eight quality criteria: • 9 Allows explicit aggregations of variety, balance, disparity • Additional single term allows heuristic attention to interactions • (eg: Kornelia, Frans)

29. Some Properties of the New Diversity Heuristic •  = ijdij.iij.pi .pj • Can be shown robustly to fulfill first eight quality criteria: • 9 Allows explicit aggregations of variety, balance, disparity • 10 Additional single term allows heuristic attention to interactions PORTFOLIO A 75% CCGT 25% wind

30. Some Properties of the New Diversity Heuristic •  = ijdij.iij.pi .pj • Can be shown robustly to fulfill first eight quality criteria: • 9 Allows explicit aggregations of variety, balance, disparity • 10 Additional single term allows heuristic attention to interactions PORTFOLIO A + 75% CCGT 25% wind +

31. Some Properties of the New Diversity Heuristic •  = ijdij.iij.pi .pj • Can be shown robustly to fulfill first eight quality criteria: • 9 Allows explicit aggregations of variety, balance, disparity • 10 Additional single term allows heuristic attention to interactions PORTFOLIO A PORTFOLIO B + 75% CCGT 25% wind 75% nuclear 25% wind + • value [ { A } ] > value [  { B } ]

32. Mapping Diversity – Performance Relationships • – economics • functions , capacities • sustainability metrics • APPRAISE PERFORMANCE • technology options / policy criteria • – attributes • dimensions • types • functions, capacities • CHARACTERISE DISPARITY • institutions / functions / technologies • – research programmes • innovation systems • transition paths • DEFINE INTERACTIONS • portfolio relationships, system effects – Fred’s “facilitation of reflexive action” • ANALYSE PRIORITIES • diversity / performance

33. Mapping Diversity – Performance Relationships Fred: “embrace cognitive diversity” • APPRAISE PERFORMANCE • technology options / policy criteria • CHARACTERISE DISPARITY • institutions / functions / technologies • DEFINE INTERACTIONS • portfolio relationships, system effects • ANALYSE PRIORITIES • diversity / performance

34. Mapping Diversity – Performance Relationships • APPRAISE PERFORMANCE • technology options / policy criteria • DELIBERATE • OVER • FINDINGS • divergent assumptions • and perspectives • CHARACTERISE DISPARITY • institutions / functions / technologies • DEFINE INTERACTIONS • portfolio relationships, system effects • ANALYSE PRIORITIES • diversity / performance

35. Mapping Links between Diversity and Performance • Look for Pareto dominance in all possible portfolios • under each particular perspective (eg: for three options) • diversity •  • aggregate portfolio performance • (economic, functions, sustainability) • dominant portfolios lie on this boundary

36. Results of a Schematic Energy Example • Identifies ‘efficient frontier’ for each perspective • portfolio • contribution • max max • performance diversity • not optimisation – each perspective treated separately • but a ‘heuristic’ – allows exploration of divergent perspectives

37. Reflexivity on Diversity in Analysis and Policy Perspective Z Perspective Y Perspective X HEURISTIC FRAMEWORK FOR ANALYSIS / CATALYST FOR REFLEXIVE DELIBERATION

38. Implications: towards ‘Transition Portfolios’? • diversity is crucial in building & understanding technological transitions • fosters innovation of a kind essential to radical infrastructure change • mitigates ‘autonomy’, ‘momentum’, ‘lock-in’ and ‘entrapment’ • hedges ignorance, so helps promote resilience and precaution • accommodates divergent social interests and values • diversity is not a ‘free lunch’, but analysis remains strangely neglected • therefore vulnerable to incoherent, rhetorical and expedient arguments • ‘variety’, ‘balance’, ‘disparity’ are necessary properties of diversity • crucial issue is how to articulate these properties and strike a balance • between diversity and other aspects of science and technology portfolios • heuristic framework for explanatory analysis and normative engagement • allows open, reflexive deliberation – engaging different perspectives • aids move from managerial view: unitary niches, single transition paths • towards reflexive, robust, accountable politics of transition portfolios

40. ANNEXES

41. Diversity and Innovation • Social, cultural, economic, historic and geographic studies converge functional application

42. Some Properties of the New Diversity Heuristic •  = ijdij.pi .pj • easily shown to fulfill first eight quality criteria: • 1: if variety = 1;  = 0 • 2: rises monotonically with variety • 3: rises monotonically with balance • 4: rises monotonically with disparity • 5: if disparity = 0;  = 0 • 6:  accommodates any perspective on disparity • 8:  is simple and parsimonious

43. Some Properties of the New Diversity Heuristic •  = ijdij.pi .pj • Easily shown to fulfill first eight quality criteria • in particular: takes full account of disparity (criterion 9)

44. Some Properties of the New Diversity Heuristic •  = ijdij.pi .pj • fulfils basic quality criteria outlined earlier • in particular: takes full account of disparity (criterion 9) PORTFOLIO A PORTFOLIO B coal gas wind coal gas wind 70% 5% 25% 70% 25% 5% •  { A } > { B }

45. Some Properties of the New Diversity Heuristic •  = ijdij.pi .pj • fulfils basic quality criteria outlined earlier • in particular: takes full account of disparity (criterion 9) • allows exploration of different weights on variety, balance, disparity • ´ = ij(dij).(pi .pj) •  • 

46. Mapping Diversity-Performance Relationships • APPRAISE PERFORMANCE • technology options / policy criteria • CHARACTERISE DISPARITY • institutions / functions / technologies • DEFINE INTERACTIONS • portfolio effects • ANALYSE TRADE-OFFS • diversity / performance

47. Mapping Diversity-Performance Relationships • Vaggregate = iri.pi • where: • Vaggregate = value of aggregate performance of individual options • ri =value of performance of ith option • pi = proportional representation of ith option • APPRAISE PERFORMANCE • technology options / policy criteria • CHARACTERISE DISPARITY • institutions / functions / technologies • DEFINE INTERACTIONS • portfolio effects • ANALYSE TRADE-OFFS • diversity / performance

48. Mapping Diversity-Performance Relationships • APPRAISE PERFORMANCE • technology options / policy criteria • {i x i matrix} • yields set of (i - 1)2 / 2 • disparity distances (dij) • where: • i = number of options in portfolio • dij = disparity distance between options i and j • CHARACTERISE DISPARITY • institutions / functions / technologies • DEFINE INTERACTIONS • portfolio effects • ANALYSE TRADE-OFFS • diversity / performance

49. Mapping Diversity-Performance Relationships • APPRAISE PERFORMANCE • technology options / policy criteria • CHARACTERISE DISPARITY • institutions / functions / technologies • {i x i matrix} • yields set of (i - 1)2 / 2 • Interaction multipliers (iij) • where: • i = number of options in portfolio • iij = interaction multiplier for options i and j • DEFINE INTERACTIONS • portfolio effects • ANALYSE TRADE-OFFS • diversity / performance

50. Mapping Diversity-Performance Relationships • APPRAISE PERFORMANCE • technology options / policy criteria • CHARACTERISE DISPARITY • institutions / functions / technologies • DEFINE INTERACTIONS • portfolio effects • ANALYSE TRADE-OFFS • diversity / performance