The First Mover (2019)

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The First Mover

The Spatial Embeddedness of the Danish Wind Turbine Cluster - Ode

to Garud and Karnøe (2019)

By Ingrid Katrine Amundsen


ARCHITECT • HUMAN GEOGRAPHER • PHOTOGRAPHER


This essay was part of an exam paper at Institute of Sociology and Human Geography, UiO. The corse in the Master in Human Geography was titeled: Economic Geography: Institutions, evolution and sustainability transitions; my favorite subject of my Master cources in Human Geography.






ABSTRACT


Garud and Karnøe (2003) discuss the 'path creation' of Danish windmills that originated in the early 1970s, through crucial key events, that problematize its evolutionary process from point zero. The academic essay describes an technological innovation system (TIS) that evolved from it's original point zero to a path creation of idiosyncratic evolutionary processes, change and dynamics embedded in a heterogeneous and dynamic cluster of co-evolution. It is a prime example of many of the fundamental aspects of clusters, TIS and core ideas in evolutionary economic geography. Unlike "the new economic geography", evolutionary economic geography facilitates evolutionary economic processes of path creation and novelties, embedded at real sites, in genuine time and through the emergence of a regional Danish cluster of windmill competance. Path creation is thus spatially embedded in three ways; in the society, in networks and territories (Hess, 2006). However; in the Danish windmill cluster there was no existing knowledge, practice and innovation within this new energy sector. All knowledge, practice and innovation arises from several private persons with technical interests or education that simultaneously started to experiment with technical development and design of windmills. They participated in key events –a 'big bang' of incidents started out the Danish windmill cluster from scratch. Taken together, these moves created a Danish windmill industry that had strategical and technical expertise in windmills, and they became 'the first mover' in the global market of windmills, a strategical position of which the Danish windmill cluster tok great advantage of (Garud and Karnøe 2003).



THEORY


The origin of evolutionary economic geography is 1920s Darwinism idea on evolution based on variety, natural selection and continuance. One of Darwins most striking thoughts was that he argued that natural systems self-organized or transformed from within through the core evolutionary functions of variety, natural selection and continuance. These terms are however not directly applied in other scientific fields, but are used metatheoretically. At the beginning of the 1970s evolutionary economic geography gained little attention. It was first at the beginning of the 1990s through the so called cultural or institutional turn, by which the spotlight of courtesy was targeting evolutionary economic geography. Simultaneously evolutionary economic geography was inspired by other scientific fields, such as history and sociology. History and geography was on the agenda. Evolutionary economic geography is based on modern Darwinism, complexity theory and path dependency. The idea of self-organizing stem from all these fields -- the economy simply transforms from within from scratch through the evolutionary functions -- hence a new path is created. Evolutionary economic geographic processes are, however, more dynamical, irreversible and characterized by change than the equilibrium of "the new economic geography" that favors lock-ins, rather than path creation. Variety, as a evolutionary term, may describe diversity and the firms in e.g. the firms in the Danish windmill cluster as heterogeneous and differential. Natural selection may describe which firms that have the right routines and practices to be selected. The appliance of the evolutionary term; continuance hence argues that the firms in the Danish windmill cluster need certain stability and inertia through routines and practices, to ensure long-term economic growth. Evolutionary economic geography thus argue that knowledge, innovation and creativity, are core functions in the market that have huge impacts on self-organization, path creation and change. Since these functions always change -- so can a path creation process start from point zero. Dewald and Truffer (2012) however shows that path creation goes through three phases from scrach to become a 'first mover' in a global market and secure long-term economic growth.



The development of the Danish windmill cluster evolved in three phases: From 1972-1980, 1980-1990 and from 1990s and onward. The first phase can be named a 'nuturing phase' (Dewald and Truffer 2012), in which innovation and local initiative was crucial, but in the late 1970s and at the beginning of 1985, the windmill cluster entered a 'bridging phase', in which the windmill cluster entered a global market and less local initiative. At last; in the 1990s the Danish windmill cluster moved on to a global market formation; 'the mass market phase', in which the Danish windmill industry competed on a global scale and exploited their position in the global market as the first mover. It is however important to know that Garud and Karnøe (2003) were among the first to open the debate on alternative energy sources.



Garud and Karnøe (2003), as well as Dewald and Truffer (2012) points out the importance of local initiative and idealism to boost of a path creation. While the local initiative in Dewald and truffer's (2012) academic essay was mainly because of the oil crisis, Chernobyl and resistance against neuclear power plants, the Danish windmill clusters growth was primarily a reaction a against neuclear power plants. The Danish urge was to develop an alternative and sustainable energy source; a core goal set by the windmill enthusiasts and innovators. The energy sector was accountable for 80% of climate emissions -- the debate around alternative energy sources has, however, gained to little attention. Garud and Karnøe (2003) and Dewald and Truffer (2012) has however opened this debate; by suggesting alternatives to the traditional energy sources such as oil, gass and coal -- by accentuating the possibilities of windmills and photovoltaics. But, to understand the windmill enthusiasts and innovators key events of evolution, it is of need to define what a cluster is. A cluster is a co-localization of actors and firms within a similar sector. These actors and firms cooperate and compete in innovation processes on knowledge, creativity and development -- in a way that these processes of evolution have a synergy effect on each other. Since these diverse actors have co-evolved, complemented each other in heterogeneous ways by being co-localized -- they also have co-created this Danish windmill cluster. The cluster have formed the framework of different actors experimentation and risk taking in the innovation processes, which are diffused through learning, coordination, communication and information by being situated in situated in geographical proximity to each other, the same region.



The proximity and co-localization of businesses are fundamental in innovation processes. This is enabled by the spatial embeddedness of the Danish windmill cluster. Hess (2006) eloquently distinguishes between three types of spatial embeddedness. The Danish windmill cluster was embedded in a characteristic network, a particular territorium and in the Danish society. This joint influence on key actors, caused by spatial embeddedness, again influence the outcome of key events. The societal embeddedness influence the output of evolutionary key events in a path creation process, because the actors that participate in these key events are based within the same Danish framework, with clearly defined characteristics and opportunities that influence the actors. The anchoring in the Danish society would have explained how this key events could happen in this specific societal embeddedness -- why in Denmark, why in this regional Danish cluster? While the network and territorial embeddedness is thoroughly discussed, the societal embeddedness could thus be more elaborated. By being embedded in networks the actors of the Danish windmill cluster takes place in evolutionary processes that ties together local, regional and global scales. Garud and Karnøe (2003) specifically accentuate the sharing of information, coordination, competition and cooperation. These forms of social interactions happens in networks. All of the innovators, suppliers and consumerists are related to a territory that shapes their possibilities to participate in evolutionary path creation processes. The network and territorial embeddedness is thereby highly safeguarded in Garud and Karnøe's essay. Through spatially embedding the Danish windmill cluster in network and regionally, they argue that communication, information, local initiative and sharing of knowledge, had huge effects on the joint output of key co-creation processes and key events -- as if they were tapping into the same currents of our Zeitgeist simultaneously. These key events are:



First, in the early '70s experimenting, risk taking, local initiative, idealism with little economic support characterized the Danish windmill cluster. Knowledge and innovations started to diffuse. Second, by a random mistake a journalist published a story on Danish windmill innovator/entusiast that had gained permission to produce his windmill design. This led to huge attention from the media. Third, a storm showed that the windmills became defect when exposed to very strong winds. This resulted in increased learning, safety and improved technology. Fourth, in 1976 the Danish state decided to subsidize large-scale wind mill farms. The windmills went from being an alternative energy source, to phase out nuclear power plants. Fifth, investments and deliverance of windmills to California, US: the Danish windmill industry thereby gained learning, knowledge and experience on how to deal with large-scale deliverance and maintenance, and become viable in a global market. Safety and technology was even more improved. Sixth, in the '90s all key events of the economic evolutionary path creation processes and the Danish windmills regions were exploited. The Danish windmill cluster's strategically favorable 'first mover' position, lead to a Danish dominance in the global market of windmills (Garud and Karnøe 2003, pp. 733-752). These are the step-by-step evolutionary key events that transformed the Danish Turbine cluster from a path creation to a global consumer market (Garud and Karnøe 2003, pp.733-752)




CONCLUSION


Garud and Karnøe (2003) argued that the different key events was influenced by institutional density or concentration, as well as diffusion of innovation and communication -- adaption. In addition to these factors, the different actors in the windmill cluster complemented each other, the cluster was thus heterogeneous as Garud and Karnøe (2003) argued. They do, however, not as Coenen (et al., 2012) comments, explain the emergence of Danish windmills from a multi-scalar perspective. Coenen (et al., 2012) thus use the multi-scalar and sustainability transition perspective to comment on Garud's and Karnøe's (2003) essay on the Danish windmill cluster. Garud and Karnøe (2003) accentuate other perspectives; such TIS, where the Danish windmill cluster is analyzed from a systemic perspective and technological adaption, that contains all the technological factors, which contributes to economic evolution, systemic change -- a regional cradle of path creation. Coenen (et al., 2012) criticize Garud and Karnøe (2003), as well as Dewald and Truffer (2012) for paying to little attention to place and context. He suggests a multi-scalar perspective on alternative energy sources to promote and ease sustainability transitions. A a more dynamic relation between the local and the global should be emphasized, and a gradual transformation to a more sustainable production mode and consumer system, that is ecologically responsible.



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REFERENCES


Coenen, L., Benneworth, P., and Truffer, B. (2012). Toward a Spatial Perspective on Sustainability Transitions. Research Policy, 41, pp. 968-979.


Dewald, U., and Truffer, B. (2012). The Local Sources of Market Formation: Explaining Regional Growth Differentials in German Photovoltaic Markets. European Planning Studies, vol. 20, pp. 397-420.


Essletzbitchler, J. & Rigby, D.L. (2010). Generalized Darwinism and Evolutionary Economic Geography. Boschma, R. & Martin, R. (eds.). The Handbook of Evolutionary Economic Geography, pp. 43–62.


Gertler, M.S. (2010). Rules of the Game: The Place of Institutions in Regional Economic Change. Regional Studies, 44:1, pp. 1-15.


Hess, M. (2004). ’Spatial’ relationships? Towards a Reconceptualization of Embeddedness. Progress in Human Geography, 28, pp. 165-186.


Karnøe, P., and Garud, R. (2012). Path Creation: Co-creation of Heterogeneous Resources in the emergence of the Danish Wind Turbine Cluster. European Planning Studies, vol. 20, pp. 733-752.


MacKinnon, D., Cumbers, A., Pike, A., Birch, K., and McMaster, R. (2009). Evolution in Economic Geography: Institutions, Political Economy, and Adaptation. Economic Geography, 85, pp. 129-150.


Martin, R., and Sunley, P. (2006). Path Dependence and Regional Economic Evolution. Journal of Economic Geography, 6, pp. 395-437.

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