Professional Documents
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Module 04
Supporting Innovation for Green Growth
Lesson 1
Green innovation: An Introduction
World Bank
Institute
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We will also provide some links to references and resources for more
information.
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In the context of the energy sector, innovation includes technology upgrading for
pollution and Green House Gas emissions reduction and resource efficiency that
will help improve energy access and rural electrification and the generation,
storage, transmission, distribution and energy use efficiency. It also includes
energy technology upgrading for reduced vulnerabilities and adaptation to
climate change, and for job and wealth creation, and poverty reduction. Some
technologies likely to be specific: for better photovoltaic cells, improvements in
energy use for households and industries. Others may be systemic and involve
broader technological improvements such as changes in transport systems, new
organizational patterns of cities and the production of goods and services, which
change the energy footprint of societies.
For developing countries, innovation can provide major opportunities. It can
contribute to satisfying the growing energy demand through a transformation of
the power sector while meeting development needs. Investing in innovation can
enable countries to develop their own domestic innovation trajectories. Hence,
there is a significant incentive for governments to create an enabling
environment for domestic research, innovation and entrepreneurship, and for
tapping existing global knowledge and research in order to capitalize on the cobenefits from their needed energy build-out.
This module will challenge the common perception that innovation is focused
primarily in the industrialized countries. Rather, it is important to encourage
innovation in all development contexts.
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marketplace. This process is not linear, and consists of overlaps and feedbacks
between the different steps, with new ideas often generated in the Diffusion
step from customer feedback or customer co-design, and then benefiting from
further Research and Development.
When we put this process into a bigger context, we see that there are many
factors impacting the innovation process. This figure now shows a National
innovation system. Systems for green growth build domestic capacity that
enables entrepreneurs within an appropriate innovation climate to choose,
absorb and promote the technologies that are best for improving the energy
sector.
There is need for innovation throughout the life cycle of the products and supply
chain. Innovation can for example include: Entrepreneurs can learn to ship products
more efficiently, learn how to source parts better, learn how to improve
manufacturing or the operation of a technology. Grid operators and utilities can
learn how to integrate a technology into the energy system more efficiently. And
policymakers can learn which policies and regulatory frameworks most effectively
support the use of the best technologies at the lowest cost.
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Another important factor to note is that the innovation climate in every country is
affected by social, cultural and historical factors that are unique to the country in
question and sometimes even unique to each region within a country.
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In the next slides, you will learn more about these two types of innovation, and
the role of entrepreneurship and absorptive capacity. Later on, when we turn to
look at the policy options, they will be based on each of these categories.
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Other countries that are not shown in the table but that are also important
emerging economies of green innovations are Argentina, Hungary, India,
Malaysia, Mexico and South Africa.
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include both formal large-step and informal small-step innovations, that can be
either frontier or adaptive, and are facilitated by entrepreneurship and improved
absorptive capacity. The benefits of them are that they are often co-created with
poor consumers themselves which means that they meet the needs of poor
households at much lower costs per unit. Examples could be to create cook
stoves at a small cost that are also easy to scale up and that would entail cobenefits such as improved health.
They also include sophisticated high-tech vaccines for neglected diseases, or for
common diseases at significantly lower costs.
Yet, to date very few BOP (and related low-tech) green innovations have been
sufficiently scaled-up. This can be partly explained by the low profitability of such
innovations. Therefore, it remains essential for governments to create an
appropriate policy environment to support them. In the next lesson, you will
learn more about these BOP policies.
For now, click on the box to learn more about the challenges of base of the
pyramid innovation.
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