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Policy Mix Consistency and Innovation: An Empirical Analysis of Offshore Wind in Germany

Environmental Policy
Governance
Policy Analysis
Karoline Rogge
Fraunhofer Institute for Systems and Innovation Research
Karoline Rogge
Fraunhofer Institute for Systems and Innovation Research

Abstract

In recent years, the term policy mix has been increasingly used in the context of climate policy, environmental policy and innovation policy, but these existing studies tend to apply a rather narrow policy mix concept with ambiguous characteristics focusing on the combination of instruments only. In a recent paper, Rogge and Reichardt (2013) make a first attempt towards a more comprehensive and interdisciplinary policy mix conceptualization. In this paper, we test the suitability and usefulness of their definition of policy mix consistency for characterizing policy mixes and their impact on firm behaviour. We do so by analyzing the research case of innovation activities in wind offshore in Germany and how they are impacted by the relevant policy mix and its consistency. Methodologically, we are conducting qualitative case studies with power generators and technology providers in Germany (Yin 2002). In order to study the innovation impact of policy mix consistency we adjust the research framework of Rogge et al. (2011) to show the main link between policy mix consistency and innovation, as well as how this link is affected by context factors and firm characteristics. Preliminary results indicate a positive link between policy mix consistency and innovation. While for a firms’s strategic entry decision the consistency of the policy strategy appears to be key, concrete investment decisions seem to depend on a consistent instrument mix which renders the new technology competitive. In addition, weak inconsistencies between policy strategy and instrument mix do not seem to have an effect on innovation activities as long as the policy strategy appears credible. Our first findings let us preliminarily conclude that the differentiation of three levels of consistency provides useful insights in the mechanisms of the impact of a complex policy mix on firm behaviour and allow for deriving precise policy recommendations.