Systems of environmental innovation: sectoral and technological perspectives on ballast water treatment systems

WMU Journal of Maritime Affairs https://doi.org/10.1007/s13437-021-00226-2 ARTICLE Open Access Systems of environmental innovation: sectoral and technological perspectives on ballast water treatment systems Teemu Makkonen 1 & Tommi Inkinen 2 Received: 21 October 2020 / Accepted: 5 January 2021/ # The Author(s) 2021 Abstract The research on innovation in the maritime sector has commonly focused on the implementation of innovation rather than on more complex issues such as the interplay between technological aspects, market conditions, and, particularly, regulatory regimes in shaping the emergence and growth of global systems involved with the development, production, and use of environmental innovation. Therefore, this paper sets out to analyze—by combining insights from sectoral (SSI) and technological (TIS) systems of innovation concepts—ballast water treatment systems (BWTS), designed to prevent the negative impacts of invasive species, as an example of such complex interaction. The results show how public policy and institutional acceptance have shaped the market for BWTS. First, BWTS were induced by environmental regulations mandating their use. Second, the demand for BWTS increases substantially when the implementation date of the regulations approaches. Third, differences in regulatory regimes shape the demand for various available technologies. Without coordinated regulations, this unclear operating environment remains a definite concern for shipowners when choosing the specific type of BWTS technology for onboard installation. The results also underline that the combined SSI/TIS framework, utilized in this paper, is a feasible analytical framework for studying environmental innovation. Keywords Ballast water management . Ballast water treatment systems . Environmental innovation . Public policy . Sectoral systems of innovation . Technological systems of innovation * Teemu Makkonen 1 Karelian Institute, University of Eastern Finland, P.O. BOX 111, FI-80101 Joensuu, Finland 2 Department of Geography and Geology, University of Turku, Turku, Finland Makkonen T., Inkinen T. 1 Introduction As stated by Shi et al. (2018: p. 863), “there have been growing concerns on the environmental impacts of maritime transportation, which have attracted great attention from both academia and practitioners.” The environmental impacts of ballast water are among these pressing concerns. Ballast water is essential to keep ships’ stability and trim to ensure the vessel’s seaworthiness. As a result, water is being moved as ballast from one area to another (Rivas-Hermann et al. 2015). This water might contain nonindigenous invasive species (Flagella and Abdulla 2005) that, when introduced into a new habitat, can have negative economic and health impacts and, particularly, place severe ecological strain to the local marine ecosystem and adjacent coastal regions. Therefore, the International Maritime Organization (IMO) has set up regulations, namely the “Ballast Water Management Convention” (BWMC), to prevent these types of environmental crisis. BWMC mandates that before releasing the ballast water to the sea, ships need to clean it (David and Gollasch 2015, 2018). As stated by Hu and Liu (2019: p. 1739): “global environmental problems will require the development of new technologies.” Thus, also BWMC created a need for new technologies that are able to clean the ballast water, commonly referred to as “ballast water treatment systems” (BWTS) or “ballast water management systems” (BWMS) (IMO 2019a), of which we have chosen to use the former. BWTS technology aims at reducing the negative environmental impacts of shipping by preventing invasive species from spreading, which is a major threat to global biodiversity (Bax et al. 2003). As such, BWTS have been described as a text-book example of environmental innovation induced by more stringent environmental regulations (Rivas-Hermann et al. 2015; Lam and Chang 2019; Raza 2020). Moreover, BWTS constitute a significant market globally. BWMC entered into force in September 2017 (12 months after ratification by a minimum of thirty countries representing at least 35% of the global merchant fleet as stated in Article 18 of the convention). By the end of 2019, according to IMO (2019b), 81 countries had already ratified BWMC (Fig. 1). This constitutes a global market of ca. 70.000 vessels—accounting for (in tonnage) over 80% of the global merchant fleet—to be fitted with BWTS and adding up to an estimated turn-over of 50–74 billion US dollars for their installation (excluding maintenance) (King et al. 2012). Additionally, environmental technologies have been at the heart of the green growth strategies of countries and, e.g., the European Union for the last decade (European Commission 2010). Therefore, there is also a significant policy interest on environmental innovation of which BWTS is an example of. The literature on innovation in the maritime sector has generally focused on the implementation rather than on the development phase (Koukari and Tei 2020). Relatedly, the research on BWTS has commonly approached the issue one-sidedly as a technical problem comparing the costs and efficacy of different technologies utilized in BWTS (e.g., Stehouwer et al. 2015; Batista et al. 2017; Wang and Corbett 2020)—to ease the decision-making processes of shipowners contemplating on which BWTS to install onboard—while paying lesser attention to the wider economic and social implications of this environmental innovation. That is, to date, there are no systematic investigations into the systemic nature of this environmental innovation that would combine the commonly studied technological aspects of BWTS with an analysis of the policy “push” that paved the way for their development and the market demand for this Systems of environmental innovation: sectoral and technological... Fig. 1 The countries that had ratified BWMC by the end of 2019. Source: based on data from IMO (2019b) group of technologies facilitating sustainable development, a research gap that this paper seeks to address by answering the following research questions: 1. What knowledge base is BWTS technology built upon? 2. What role did market demand play in the development of BWTS technology? 3. What role did public policy play in the development of BWTS technology? Earlier studies on environmental innovation, or its close synonyms “eco-innovation,” “sustainable innovation,” and “clean-tech innovation,” have commonly approached the issue either through the literature on sectoral (SSI) (Galliano and Nadel 2015) or technological (TIS) (Gosens et al. 2015) systems of innovation. Makkonen and Inkinen (2018) have noticed similarities between these two approaches (notably their focus on explaining system dynamics through knowledge bases or technological regimes, market formation and demand as well as institutional and policy support), combined them into a unified conceptual framework and (...truncated)