“Yes it can”: state support for renewable energy innovations in Finland - assessing the need for an "entrepreneurial state"

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Journal Title
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Volume Title
School of Business | Master's thesis
Date
2017
Major/Subject
Mcode
Degree programme
Creative Sustainability
Language
en
Pages
91
Series
Abstract
This qualitative interview study focuses on the role of the state in supporting the development of renewable energy innovations in Finland. The study aims to answer the question of how the government can support such innovations from the private sector’s point of view. The main objective of the thesis is to develop a set of recommendations for Finnish policymakers on improving energy and innovation activities, policies and support tools to help businesses develop new renewable energy technologies. The study also aims to make an empirical contribution to Mariana Mazzucato’s recent concept of the “entrepreneurial state” by applying it to the energy sector in the Finnish context. The main subjects of the study are innovation and energy policies and the role of the state in innovation. The thesis is based on alternative evolutionary economics concepts on innovation development. The empirical part of the study was based on qualitative semi-structured interviews. Several Finnish companies engaged in the development of innovations in the field of solar, wind, geothermal energy and biofuels were interviewed to identify the private sector’s needs for public support for innovation. Additional interviews were conducted with organisations directly related to the Finnish energy market and innovation policymaking to collect sector-specific information on Finnish innovation environment. The interviews generated findings on a multitude of challenges and concerns of the private sector related to the development of new renewable energy technologies and products in Finland: absence of sufficient private venture capital, rigidity of the Finnish energy market, investment unattractiveness of renewable energy due to low energy prices and politicisation of energy issues. The interviewees have also produced critique of the current renewable energy policies and tools and pointed out at Finland’s potential in utilising its expertise in various energy technologies to develop valuable export goods. Based on the interviews, a list of recommendations for policymakers was developed and compared to the conceptualisations of the “entrepreneurial state”. Overall, the findings point at the need for a government that is actively involved in supporting renewable energy development with policies, regulations and tools. However, the leading role should be played by markets. The state needs to be ambitious and creative in setting targets, think long-term and stick to its strategies. It needs to depoliticise energy issues and be technology neutral in renewable energy policies, support pilot projects and utilise Finnish natural context and energy know-how. The study has shown that in Finland the government has already been quite instrumental in helping the development of renewables so there is not a big need to apply the “entrepreneurial state” rhetoric. However, in practice it is still important to unpack and reconsider the role of the state in supporting innovations, especially within the energy transition imperative where states may play an increasingly important role.
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Thesis advisor
Lovio, Raimo
Keywords
innovation, innovation policy, renewable energy, energy policy, entrepreneurial state
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