presentation to workshop on Management of Variation and Diversity, Forum Chriesbach, Zurich, 158 Apr

1
Pathways, Politics and Diversity in 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)
PROVENANCE
TEMPORALITY
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
PROVENANCE
TEMPORALITY
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 Raimunds and Evas
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

• Some Key Questions

What is diversity? Variety? Difference?
Concentration?
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
Jochens point on levels of aggregation and
system delineation
11
Towards a Systematic Approach

• Some Key Questions

What is diversity?
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

• Some Key Questions

What is diversity?
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

2 Monotonicity 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
6 Open Accommodation ? is symmetric to any
perspective on disparity
7 Robust 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
? ?ij dij.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
? ?ij dij.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
? ?ij dij.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
? ?ij dij.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
? ?ij dij.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 gt 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
Freds 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

39
(No Transcript)
40
ANNEXES
41
Diversity and Innovation

• Social, cultural, economic, historic and
  geographic studies converge

functional application
42
Some Properties of the New Diversity Heuristic
? ?ij dij.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
? ?ij dij.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
? ?ij dij.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 gt ? B
45
Some Properties of the New Diversity Heuristic
? ?ij dij.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 ?i ri.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
51
Mapping Diversity-Performance Relationships
ANALYSE TRADE-OFFS diversity / performance
total value of value of aggregate value due to
system portfolio performance of
interactions and performance individual
options portfolio diversity
Vportfolio ?i ri.pi ? . ?ij
dij.iij.pi .pj
where Vportfolio total value of
portfolio performance ri value of
performance of ith option pi
proportional reliance on ith option ?
marginal value of portfolio diversity dij
disparity distance between options i and
j iij interaction multiplier for
options i and j
52
Mapping Diversity-Performance Relationships
APPRAISE PERFORMANCE technology options / policy
criteria
CHARACTERISE DISPARITY institutions / functions /
technologies
DEFINE INTERACTIONS portfolio effects
ANALYSE TRADE-OFFS diversity / performance
53
Mapping Diversity-Performance Relationships
APPRAISE PERFORMANCE technology options / policy
criteria
CHARACTERISE DISPARITY institutions / functions /
technologies
DEFINE INTERACTIONS portfolio effects
ANALYSE TRADE-OFFS diversity / performance
54
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 effects
ANALYSE TRADE-OFFS diversity / performance
55
Diversity and Innovation

• Social, cultural, economic, historic and
  geographic studies converge

functional application
technological system
56
Diversity and Innovation

• Social, cultural, economic, historic and
  geographic studies converge

functional application
technological system
57
Diversity and Innovation

• Social, cultural, economic, historic and
  geographic studies converge

functional application
technological system
institutional context
58
Diversity and Innovation

• Social, cultural, economic, historic and
  geographic studies converge

functional application
technological system
institutional context
59
Diversity and Innovation

• Social, cultural, economic, historic and
  geographic studies converge

functional application
technological system
institutional context
60
Diversity and Innovation
densely connected network
homogeneous connectivity
impedes innovation
functional application
technological system
institutional context
after Grabher and Stark (1997)
61
Diversity and Innovation
densely connected network
compartmentalised networks
homogeneous connectivity
unconnected subsystems
impedes innovation
impedes innovation
functional application
technological system
institutional context
after Grabher and Stark (1997)
62
Diversity and Innovation
densely connected network
loosely coupled networks
compartmentalised networks
homogeneous connectivity
heterogeneous connectivity
unconnected subsystems
impedes innovation
fosters innovation
impedes innovation
functional application
technological system
institutional context
after Grabher and Stark (1997)
63
Diversity and Innovation
loosely coupled networks
heterogeneous connectivity
fosters innovation
technological and institutional diversity
helps foster loosely coupled social networks
which promote more robust innovation
64
Diversity and Lock-in

• Social studies, philosophy, history and economics
  paint common picture

space of technologicalpossibilities
time
65
Diversity and Lock-in

• Social studies, philosophy, history and economics
  paint common picture

space of technologicalpossibilities
time
66
Diversity and Lock-in

• Social studies, philosophy, history and economics
  paint common picture

space of technologicalpossibilities
time
Technologies can present different equally-viable
paths
67
Diversity and Lock-in

• Social studies, philosophy, history and economics
  paint common picture

space of technologicalpossibilities
time
Technologies can present different equally-viable
paths
but, in practice, reduced by momentum, autonomy,
entrapment and lock-in
68
Diversity and Lock-in

• Social studies, philosophy, history and economics
  paint common picture

space of technologicalpossibilities
time
Technologies can present different equally-viable
paths
diversity mitigates lock-in and so enhances
deliberate reflection and learning
for society raises key questions over power,
agency and choice
69
Diversity, Ambiguity and Ignorance
knowledge about
knowledge about outcomes
probabilities
outcomes
not problematic
problematic
not problematic
RISK
AMBIGUITY
apples and oranges landscape / emissions /
safety definition of GM harm
engineering failure known epidemics transport
safety
UNCERTAINTY
problematic
IGNORANCE
human element global climate change unassessed
chemicals
surprises like BSE, CFCs endocrine disruption
Risk assessment limits are practical,
methodological and theoretical Arrows Nobel
Prize shows sound scientific policy is an
oxymoron !
70
Diversity, Ambiguity and Ignorance
knowledge about probabilities
knowledge about outcomes
not problematic
problematic
not problematic
RISK
AMBIGUITY
INCERTITUDE
UNCERTAINTY
problematic
IGNORANCE
71
Diversity, Ambiguity and Ignorance
knowledge about probabilities
knowledge about outcomes
not problematic
problematic
not problematic
RISK
AMBIGUITY
risk assessment decision analysis cost-benefit
analysis
deliberation, negotiation citizen
participation mapping approaches plural/conditio
nal outcomes
UNCERTAINTY
problematic
IGNORANCE
rules of thumb sensitivity analysis scenario
analysis
horizon scanning research and monitoring social
learning flexibility, resilience, robustness
Diversity addresses fundamental limits to
analysis and deliberation accommodates
ambiguities and hedges against ignorance
72
Diversity in Energy Policy
SECURITY OF SUPPLY IS MORE THAN DIVERSITY
SECURITY
DIVERSITY
- hedge ignorance- foster innovation- promote
competition - accommodate values - mitigate
lock-in
- fuels- technologies- producer regions-
industrial interests- supply and trade-
infrastructures
- control- interdependence - self reliance -
planning- efficiency- capacity, stocks-
resilience, flexibility
DIVERSITY IS MORE THAN SECURITY OF SUPPLY
73
The Properties of Sustainability
durability under internal change
Sustainability maintain system functions over
long term
stability against endogenous disruptions
resilience against exogenous shocks
society, economy, environment
robustness under external shifts
74
Diversity in this Workshop
Title key theme managing variation
Jochen important to maintain and enhance variety
Staffan imperative to pursue in parallel varied
technology clusters
Fred need to focus on variety creation and
selection
Kornelia need to address three types of variety
Harald diversity relates to institutional
incoherence and adaptability
Raimund diversity as a means to selection of
superior products

• But many questions over meanings and contexts?

75
Conventional Approaches to Technological Diversity

• DISPARITY degree to which options are
  different
• complex taxonomic indices

eg Weitzmann Function maxi?S DW(S \ i)
dW(i, S \ i) (also Lancaster)
focus directly on concepts of difference BUT
- assumes single objective characterisation
of difference
- assumes universally rooted directed tree
(utltrametric distances)
- neglects variety
- neglects balance