Institutional

entrepreneurship
0EM150
Anna J. Wieczorek
24 March 2020
This is an online lecture
Due to corona virus policy of TU/e

• The lecture is recorded & the link is shared with students

• It purposefully contains more words than what you are
used to get from me
• Including example by Geert Verbong
• Another online conversation is possible to respond to
your questions

• Pls submit your assignment by Tuesday next week 17:00

• Comments, feedback will be given via canvas
• You can always approach Anna & Erik via email
Course design

sustainable institutional
sustainability & participation & user
entrepreneurs justice entrepreneur
global context co-creation innovation
hip ship

MLP (Anna)
x x x

TA (Erik)
x

EJF (Luc)
x

Ethics (Erik)
x x

SNM (Anna)
x x
Course schedule

wk date time date time/date

Tue 10:45-12:3 L1: Introduction + Global context
 Fri

1 13:45-15:30 Pitch your case
4- Feb 0 Anna Wieczorek 7-Feb

Tue 10:45-12:3 Guest Lecture Fri

2 13:45-15:30 T1: Global context
11-Feb 0 Philip Macnghten, WUR 14-Feb

L2: Sustainable
Tue 10:45-12:3 Fri T2: Sustainable
3 entrepreneurship 13:45-15:30
18-Feb 0 21-Feb entrepreneurship
Erik Laes

Tue 
 Fri 28-

Carnaval Carnaval
25-Feb Feb

Tue 10:45-12:3 L3: Justice Fri

4 13:45-15:30 T3: Justice
3-Mar 0 Luc van Summeren 6-Mar

Tue 10:45-12:3 L4: Participation & co-creation Fri T4: Participation & co-
5 13:45-15:30
10-Mar 0 Erik Laes 13-Mar creation

Tue Fri 20- L5: User innovation

6 Free
17-Mar Mar Anna Wieczorek

L6. Institutional
Tue T5: User innovation Fri 27-
7 17:00 entrepreneurship 

24-Mar Anna Wieczorek Mar
Anna Wieczorek

Tue T6: Institutional Fri

8 17:00 13:30 Wrap up & summary
31-Mar entrepreneurship 3-Apr
Learning objectives

1. Understand aspects of systemic, radical & responsible

innovation (ST & RI) for sustainability 


2. Apply ST & RI tools to the analysis of sustainable

innovations 


3. To critically reflect on the theory & its usefulness to the

empirical case
Content

1. Rules, institutions, regimes, agency (MLP, SNM)

2. Examples
3. Institutional entrepreneurship
4. Assignment
Multilevel Perspective (MLP)
A meso theory of socio-technical change
Eclectic character of the MLP

• Evolutionary economics (e.g. Levinthal 1998; Nelson &

Winter 1982; Saviotti 1996; Ziman 2000; Malerba et al
2003),
• History of technology (e.g. Basalla 1988; Constant 1980;
Mokyr 1990a),
• Science & technology studies (e.g. Rip & Kemp 1998;
Schot 1998)
• Technology management (e.g. Rosenkopf & Tushman
1994; Van de Ven and Garud 1994).

Schot and Geels, 2007 Journal of Evolutionary Economics

Transitions are about stability and change
Three particular theories coming together

• Structuration theory (Giddens, 1984):

- Structure is both the context and the outcome of actors activities (duality)
• Institutional theory (a.o. North, 1991):
- 3 types of rules: normative, regulative, cognitive
- Institution - socially embedded systems of rules, socially accepted rules
of the game (Kanger and Schot)
- Institutionalisation - process of embedding and expressing the rules
• Sociology of technology (Bijker and Law, 1992):
- Adding role of technology, material and technical components
- Emphasis on combination of humans & non-humans in creating
functional configurations that work
Rules
What are these?

• Endogenous organising & coordinating features that

guide behaviour of regime actors towards functions that
meet societal needs (Geels & Schot, 2010)

• Humanly devised constraints that structure human

action leading to a regular pattern of practice, present in
a single s-t system (Kanger & Schot, 2018)

• Underlying deep structures (Geels, 2004, 2011)

Rules
Three types

• Regulative
- Focus on constraining and regulating behaviour
- Regulations, laws, standards
• Cognitive
- Stress the shared conceptions that constitute the nature of social reality and the
frames through which meaning is made
- Beliefs, search heuristics, goals, guiding principles, problem definitions, mental
maps
• Normative Regulative Normative Cognitive
Examples Formal rules, laws, Values, norms, role Prorities, problem
- Emphasise the normative aspects sanctions, incentive expectations, authority agendas, beliefs, bodies
that prescribe rights/privileges & structures, reward and systems, duty, codes of of knowledge
cost structures, conduct (paradigms), models of
responsibilities/duties governance systems, reality, categories,
power systems, typifications,
- Values, behaviour, norms protocols, standards, jargon/language, search
procedures heuristics
Basis of Expedience Social obligation Taken for granted
compliance
Mechanisms Coercive (force, Normative pressure Mimetic, learning,
Scott, 2014; Geels, 2011 punishments) (social sanctions such as imitation
‘shaming’)
Logic Instrumentality Appropriateness, Orthodoxy (shared
(creating stability, becoming part of the ideas, concepts)
‘rules of the game’) group (‘how we do
things’)
Basis of Legally sanctioned Morally governed Culturally supported,
legitimacy conceptually correct
Rules
What do they do?

• Their alignment, societal embedding, ongoing reproduction,

enactment through routines & practices of actors, lead to
creation of structures

• Structures account for regime stability

• Even if codified, they may be vague & ambiguous leading to

struggles over their meaning, application & enforcement

• When interpretation of the rules becomes to diverge, actors

disagree on shared ideas and preferences, which creates space
or opening for creativity but also conflicts may occur leading to
change

Geels & Schot, 2010

Institutions and institutionalisation

• Institution
- Socially embedded systems of rules
- Socially accepted rules of the game (Kanger & Schot)
• Institutionalisation
- Homogenisation & increasing compatibility with external environment (Dimaggio &
Powell, 1983)
- Process of embedding & expressing the rules & the way they are widely diffused &
adopted by broad section of society
• Forms
- Coercive isomorphism - formal & informal pressures exerted on organisations due to
expectations by society brought by government mandates & regulations
- Normative pressure’s - professional expectations, methods of work
- Mimicry - where organisations imitate or copy others who are successful to eliminate
uncertainty and minimise complexity
• Implications:
- Actors are rewarded for their resemblance to other due to benefits: legitimacy,
respectability, political power
- Incumbents do not have motivation to change
- Entrants face high barriers
Regimes

• Dominant, highly institutionalised socio-technical

structures subject to constant negotiation between
strategic actors
• Carry & store rules for how to reproduce & regulate
specific socio-technical fields
• Have dual nature: provide structure & agency
• Can be maintained, altered, reinterpreted & repurposed
• This reveals the dynamics in the regime: disintegration or
stabilisation
• Regimes just like niches can be sources of change
Regimes are stable and path dependent because of:

• Incumbent actors & established networks incl. their

vested interests in maintaining status quo
• Regulations, standards, practices, cognitive routines
that enable continuity and blind actors to realities outside
of their own focus
• Material elements e.g. infrastructure that enable lock in
due to sunk investments (Verbong and Geels, 2007;
Smith et al., 2010)
Agency

• Capacity of actors to express action through routines, imagination, judgements, habits

• Influenced by structures (enabling, constraining), composition of network (homogenous,
heterogenous)
• Actors - not cultural dopes or passive rule followers but knowledgeable agents
- Can reflect, engage, set deliberate strategies, interpret rules (Geels 2014)
- Devise (un)coordinated efforts that may lead to change
• Types:
- Embedded agency - where actors try to maintain the status quo through reproduction of rules (Geels &
Schot, 2010)
- Distributed agency - where actors are dispersed in structures they created (Garud et al., 2007) & have
capacity to deviate from established rules (Geels and Scot, 2010). Needed for institutional change.
- Strategic agency see next slide
• Ways of exercising agency that leads to institutional change (Hall & Thelen, 2009):
- Reform - inst. change explicitly directed or endorsed by actors
- Defection - when actors no longer adhere to the rules
- Reinterpretation - when they enact existing rules differently
Diagnostic framework of strategic agency

adapted from Giddens, 1979; Lawrence and Suddaby, 2006) by Wikke Novalia: https://
www.sciencedirect.com/science/article/pii/S1462901117305804#fig0005
Stability and change thus

• Is an interplay between structure & agency (Geels, 2002)

- High, limited and low (Raven, 2005) - inverted U curve

• Levels of structuration & degrees of institutionalisation (Fuenfschilling & Truffer,

2014)

• Can be demonstrated by scale & scope of diffusion of practices, historical

embedding of institutions, coherence, social resistance or level of acceptance
of the rules

• Depends on:
- Actors who are capable of strategic deliberation and interpretation of rules
- Internal dynamics of interests, values, power dependencies and capacity for action
(Greenwood and Hinings, 1996)
- Uncertainties - the greater, the higher the level of deinstitutionalisation & the more scope
for agency towards institutional change (Fuenfschilling, 2014)

=> institutional entrepreneurship

Strategic Niche Management 

A way to support institutional entrepreneurship

1. shielding 2. nurturing 3. empowering

• Stretch-and-transform
• Financial • Articulation of • Fit-and-conform
• Geographical expectations
• Institutional • Network formation
• Political • Learning
• Socio-cognitive
• Cultural
Dealing with barriers provided by rules

• SNM shielding & nurturing: allowing to deviate from rules

- Being economically competitive
- Experimenting, see e.g. EVs, P2P, flexibility
• SNM empowerment: changing regime rules (many,
selectivity needed)
- Interaction with regime (competitive, symbiotic)
- Changing the rules in favour of the niche
- Institutional entrepreneurship: how you change it
• Role of collective actors in transitions
- Citizens: lobbying for changes in regulations, creating narratives
- Legitimators: creating legitimacy for alternatives, making change of rules
credible

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Flexibility Unleashing Sustainable Energy
An example of collective inst. entrepreneurship

• FUSE: think tank of professionals for the energy transition

• Analysis of institutional barriers
- Organisation of the markets favours large players
✓ Opportunities for aggregators, prosumers
✓ Different (combination of) roles (Juffermans, 2018)
- Regulations prevent upscaling of experiments
✓ Many experiments but no upscaling
✓ Need for rule change (real time tariffs, number of connections, flexible
connections, P2P)

• Examples
• What needs to change

"Verduurzaming in eigen hand"

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Example:
Betuwse Energie Samenwerking Cooperative

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Cooperative: Betuwse Energie samenwerking

• Helicopter accident Bommelerwaard in 2007; major

black-out because of fringe location national grid
• Aim experiment (EU project): making the region self-
supporting by optimising regional energy system
- Local balancing supply RES and demand
• Several institutional barriers for upscaling:
- Participation of consumers and businesses in same project (Dutch
translation of EU rules)
- Value of flexibility: no incentive for DSOs
- Going back to integrated system?
- http://www.betuwestroom.nl/2016/11/03/project-proeftekst/

25-3-2019
Fuse proposes some institutional changes

• Allow integrated local energy systems up to 100.000

connections, as adopted in EU-regulations
• Contract flexibility for consumers
• Abolish obligations DSOs to expand networks, offer
incentives for cost reduction and flexibility
- First come, first get, solar parks connections
• No energy taxes on sustainable energy

• See: http://fuse.eu/FUSE.pdf

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How?

• Organise platform of “visionaries”: FUSE

• Lobby:
- Invite politicians (01-02-2017)
- Participate in expert hearings
- Become institutional entrepreneurs!

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Other examples
STRETCH strategies to deal with barriers

Regulative barrier:
Net metering not allowed for PV systems 

on apartment roofs
.
Strategy:
Development of new technological device 

for splitting of electricity to individual

apartments
https://www.youtube.com/watch?v=M9rdbJ43G7Q

Regulative barrier:
Maximum cap in PV tax deduction per year in
Belgium

Strategy:
Spreading invoice over two years

Huijben, 2015
FIT & STRECH - SPV in NL

Regulative (financial) barrier:

High purchasing price of PV systems

Strategy:
• Foundation ‘We want sun’ – 

Initiative of Urgenda and 

Beter Wereld
• Public purchase of A grade panels & accessories

produced sustainably
• Network of small & large installers
• Energy companies finance, repayment per kWh
used or fixed amount per month
FIT & STRETCH - SPV in NL

Cognitive barrier:

End user perceives PV investment as risky and

complex.

Strategy?
• Caring for customer: 

Collective buying initiatives with 

external party selecting supplier

and assisting in buying process

Fit & Stretch: Cycle rickshaws New Delhi

• Non-motorised intermediate means of transport

• Employment for millions of deprived and unskilled
• Slow, inefficient, inhumane, polluting, causing chronic
health problems
Ghosh, Sengers, Wieczorek and Raven, 2016
E-rickshaws New Delhi, 2008

Regulatory barrier
• Motor (<250 W)+ manual power=> non motorised
• No insurance, no licence, reduced costs
• Negotiated universality, larger service area
• FIT AND CONFORM

Normative barrier
• Clean pedicab, sustainable, low cost
• Income benefits (speed, more
passenger km)
• 2010 replacement of cycle rickshaws
• STRECH AND TRANSFORM

Ghosh, Sengers, Wieczorek and Raven, 2016

Unavoidable controversies

• Untrained and unlicensed drivers + motor power

exceeded => accidents => no insurance => no
compensation for victims

Ghosh, Sengers, Wieczorek and Raven, 2016

Entrepreneurship

• Schumpeter: creative destruction

- Transition as a wave of creative destruction on system level
• Entrepreneurship implies deviations from some dominant
rule
- Usually contested, losers
- More active creation than discovery
- Combination of ideas
• Emergence of novelty esp. with radical potential is not
easy process but highly political
- Agency, interests and power (resources)

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Institutional entrepreneurship
Summary

• A paradox:
- Institutional analysis focuses on continuity and stability
- Entrepreneurship is about bringing about change
• About changing institutionalised rules while being restrained by them
• Structure vs agency / stability vs change debate
- Emphasis on structure: deterministic models
- Emphasis on agency: heroic, de-contextualised, a-historic models
• Focus on actors that have capacity & interest in specific institutional
arrangements & leverage resources
- Strategic (distributed) vs embedded agency: exploring how actors shape &
change institutions vs how actors maintain them (institutional work)
• Major topic in Transition Studies
- Understanding inertia, promoting change

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Assignment institutional entrepreneurship


• Select one or set of rule(s) that need to be changed for your

case (also normative/cognitive rules)
• Using insights from the lecture and the readings, develop a
strategy for enacting this rule change (who, how, when?)
• Evaluate this strategy from a moral perspective: is it morally
acceptable?

25-3-2019