Ecological Economics 70 (2011) 2020–2027

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Ecological Economics
j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / e c o l e c o n

Analysis

IT for green and green IT: A proposed typology of eco-innovation

S. Faucheux a, I. Nicolaï b,⁎
a
REEDS, Université de Versailles Saint-Quentin-en-Yvelines, 55 avenue de Paris, 78000 Versailles, France
b
REEDS, University of Versailles Saint-Quentin-en-Yvelines, 5 Boulevard d'Alembert, 78047 Guyancourt Cedex, France

a r t i c l e i n f o a b s t r a c t

Article history: This article is in support of the development of an ecological economic framework. It discusses, from an
Received 12 February 2011 interdisciplinary perspective, the increasing use of green IT and their applications (IT for green). IT and
Received in revised form 26 April 2011 sustainable development have had a concomitant rise and reach. The future world emerging from their respective
Accepted 24 May 2011
interpretations enables, in both cases, a shift from today's questionable industrial capitalism towards post-
Available online 5 July 2011
industrial capitalism. This paper addresses the following questions: What is known about green IT and IT for
Keywords:
green? Are smart solutions (buildings, energy grids, transport) always beneficial to an ecological economy? And,
IT if so, in what ways? In the first part of this article, we analyse the economic, social and environmental impact of IT
Ecological economics and argue for the need for green applications of green IT in order to achieve sustainable outcomes. The second part
Eco-innovation focuses on the managerial dimension of eco-innovation theory and presents one of the distinctive features of
Externalities green applications of green IT: the collective organisation of innovation. A typology of eco-innovation aimed at
Business ecosystem reconciling IT development and green growth is then proposed explicitly addressing four kinds of changes
Collective innovation towards sustainable development: technological, social, institutional and organisational innovation.
Smart grid
© 2011 Elsevier B.V. All rights reserved.

Since the late 1970s, with the increase of global threats to the IT are to the latter what the deployment of electricity was to the
environment, the idea that the economy can no longer be studied industrial model (Muet, 2006). It is not difficult to see how one might
independently from the reproduction of the natural environment has perceive the new paradigm of development or ecological economics
gradually spread. This is the very foundation of ecological economics as having entered its technological revolution stage. This became
(Costanza and Daly, 1987). It is in that context that the concept of evident in 2005 with the production of a plethora of government,
sustainable development, which gradually emerged as a new intergovernmental and sector-based reports, as well as scholarly work
development paradigm, arose in 1987. Though initially a constraint, combining IT and sustainable development (Faucheux et al., 2010). In
it has become an opportunity, as it combines three advantages in this respect, the Tunis Commitment, from the second World Summit
today's uncertain times: a response to climate and energy challenges; on the Information Society (WSIS), is revealing when it declares that it
a way out of a possible crisis; and a potential growth path. 1 “represents a unique opportunity to raise awareness about the
The radical technological breakthrough represented by the emergence benefits that IT can bring to humanity and the manner in which
of IT2 in the 1970's is now acknowledged by all. Its spreading in the 1990s they can transform people's activities, interaction and lives, and thus
to all areas of the economic and social spectra has led to many changes. Its increase confidence in the future”, 4 as the European Commission's
development is based on strong knowledge content and is based on announcement of its support of the use of IT to achieve energy
intangible capital. They are the source of the new economy, which is also efficiency targets across all economic sectors by 2015 (C(2009) 7604
referred to as the knowledge economy or the post-industrial economy.3 final).
Yet, if IT and sustainable development are closely intertwined,
rebound effects are, in many cases, a likely result (Greening et al.,
⁎ Corresponding author. Tel.: + 33 6 88 12 55. 2000). Their direct and indirect effects must be known, anticipated
E-mail addresses: [email protected] (S. Faucheux), [email protected] and evaluated. However, IT and their relationship to sustainable
(I. Nicolaï).
1 development are most often addressed in a broad way, which
According to HSBC Global Research (2009), 430 billion dollars in recovery plans
have been devoted to sustainable development, also called green energy: an average of sometimes lacks rigour when it comes to their relationship to
15% of the total world recovery plan, including 38% for China, 12% for the USA and 35% economic, social and environmental change.
for France.
2
Information technologies (IT) cover all the techniques used in the processing and
transmission of information, mainly information technology, telecommunications and
the Internet (OECD, 2009).
3
IT are the source of half the productivity gains of the EU between 2005 and 2009
4
and represent 25% of GDP growth in 2008. http://www.itu.int/wsis/docs2/tunis/off/7.html.

0921-8009/$ – see front matter © 2011 Elsevier B.V. All rights reserved.
doi:10.1016/j.ecolecon.2011.05.019
 S. Faucheux, I. Nicolaï / Ecological Economics 70 (2011) 2020–2027 2021

This article avoids this pitfall by integrating the following elements can, however, distinguish: first order effects, with an impact resulting
to its methodological framework: from all stages of production through to the end of IT equipment and
infrastructure's lifecycle, and second order effects, with an impact
i) Two concepts are used depending on the nature of IT: linked to the development of IT and their uses. This distinction will
- Green IT defined as IT sector's own activity and its impact on enable us to establish different types of sustainable impact according
environmental efficiency. to their effects, but also in relation to the position of various
- Green applications of IT or IT for green defined as the impact stakeholders in terms of responsibility and engagement. These
of IT on other sectors' environmental productivity, particu- different strategies are the basis of an analysis in terms of business
larly in terms of energy efficiency and carbon footprint. ecosystems that is discussed in the 2nd part of this article. Third order
ii) The hypothesis that green applications drive positive external- effects are systemic changes that emerge from the aggregated effects
ities, only when green IT is used. Given the study presented on of a large number of private or public IT stakeholders.
the impact of IT on sustainable development, we argue that
green IT can only lead to sustainable growth if IT themselves 1.1. The Economic Benefits of IT
are green. In that case, they can be understood as equivalent to
an eco-innovating contribution to ecological economics According to Pilat (OECD, 2008), investment in IT increases the
(Rennings, 2000). An eco-innovation is an innovation (as capital stock and improves labour productivity. Fast technological
defined by Schumpeter (1934)) that reduces environmental progress in the production of goods and services of IT can contribute
burdens and contributes to improving a situation according to towards the development of capital and labour efficiency, or
given sustainable targets. In addition to this, because demon- multifactor productivity (MFP) in the IT production sector as well as
strating the ways in which green IT has an impact on the in the global economy. IT are also likely to intensify the effects of
production and consumption of IT remains complex, the network/external effects, such as reducing transaction costs and
integration of elements of management of eco-innovation accelerating innovation, which can also improve MFP. They are also
systems to the economic analysis of eco-innovation is required. able to both rapidly create a crisis and be responsible for increased
iii) Methodological pluralism as established in ecological econom- market volatility.
ics with contributions of neoclassical and evolutionary ap-
proaches would be very valuable for IT eco-innovation research 1.1.1. First Order Effects Are Generally Positive, but Unevenly Distributed
(Witt, 2009). We intend to open up this framework to across Countries
managerial changes. Eco-innovation, which spreads concomi- The IT sector has contributed towards 16% of global GDP growth
tantly in clusters, is studied drawing on the theme of eco-city, between 2002 and 2007 and has seen its share in the latter year rise
and bringing together the sectors with the greatest impact in from 5.8 to 7.3%. This contribution is expected to reach 10% between
terms of CO 2 emissions, and significant social repercussions 2007 and 2020 (The Climate Group, 2008), with an increased weight
(construction, transport, energy). These sectors were chosen for emerging and developing countries.
based on about twenty surveys 5 (qualitative, of semi-direc- The digital economy is becoming the most dynamic sector of the
tional type) with stakeholders (in Europe and the USA) global economy. In most developed countries, its growth rate is
involved in major technological and environmental prospective double that of their total economy. This evolution is reflected in the
activities (ECF, 2010; IPTS, 2003). We argue that, in that increase in the number of jobs created in this sector (an average of
context, green IT belongs to a collective innovation perspective 20% between 1995 and 2005 in OECD countries).
(Allen 1983) referring to various stakeholders and internal and The IT sector has become in terms of R&D the greatest investor and
external factors influencing the process of eco-innovation. A employer in Europe, the USA and Japan. For OECD countries, it
neo-institutional approach has been used to explain this accounts for 26% of all private sector R&D, employs 32% of its
additional feature of eco-innovation with an emphasis on researchers and is responsible for 21% of all patents (Turlea et al.,
business ecosystems' interactions, social innovation and user 2009). In fact, total expenses of the private sector's IT R&D is even
acceptance. greater when outcomes generated by other R&D sectors (e.g.
transport) contributing to the IT sector are taken into account. The
This contribution discusses the increasing use of green IT and their weight of this additional expense is estimated at a third more than
green application in support of the development of ecological that of the IT sector per se. Given the weight of R&D in IT, businesses'
economics from an interdisciplinary perspective. In the first part, we positions within this sector are changing rapidly and significantly
analyse the economic, social and environmental impact of IT on with the emergence of new markets (e.g. mobile telecommunications
sustainable development. We argue that the complex effects IT have and fibre optics) and challenging established competitive positions.
on sustainable development leads us to an examination of IT as an
eco-innovation that experiences changes at technical, social and 1.1.2. Second Order Effects Are Both Providers of Opportunities and
institutional levels. The second part defines the different determi- Obstacles According to Sectors, Businesses and Countries
nants of eco-innovation, derived or generated by green IT as well as IT Investment in IT hardware and software has a significant impact on
for green. This article examines the ways in which eco-innovations' productivity (higher than in the industrial sector) (Clayton 2006).
determinants interrelate in ecological economics to explicitly address However, the use of electronic business processes, integrated or
technological, social, institutional and managerial changes. multiple, has a dual effect on manufacturing and services businesses:
in the first instance, positive effects come mainly from the management
1. The Arguable Effects of IT on Sustainable Development of purchases and supply chain; and the effects arise primarily from
customer relations (Legner and Schemm, 2008).
The effects of IT on the three dimensions of sustainable The 2006 survey conducted by Watch, the e-business observatory,
development can directly be assessed on the technology or indirectly gives an overview of IT for European businesses and underlines the
on IT's application as they occur at different stages of its lifecycle. persistent gap between SME and large companies (EC, 2006). The use of
Their real or estimated global impact is difficult to identify as it occurs IT in French SME and small businesses is significantly low (Eurostats
at different levels of influence. Drawing on Faucheux et al. (2010), we 2007).
The use of IT is changing the way businesses think about their
5
These surveys were conducted during the second quarter of 2009. markets. It is a source of inspiration for new business models turned
2022 S. Faucheux, I. Nicolaï / Ecological Economics 70 (2011) 2020–2027

Table 1
The main eco-innovations allowed by IT for green in the field of a sustainable city.

Areas of applications Applications Economic perspectives

Energy efficiency • Regulation, metering, remote management This area benefits from an economic, political and regulatory context which is
favourable at an international level, making it a very attractive market. The USA,
• Low consuming technologies
the countries of Northern Europe, Germany and Japan have gained a head start.
• Storage and management of micro-energy
• Efficient distribution
Sustainable building • Thermal modelling This is a huge market driven by an economic and a regulatory environment at
an international level. It implies that those in the building sector find new
• Thermal, acoustic insulation
technological partners.
• Intelligent building, home automation, remote management
Renewable energies • Solar and wind production The economic context is very favourable. These eco-innovations will start to be
widely distributed around 2020. Europe is less advanced than the USA or Japan
• Hydrogen
in this area.
• Electricity storage
• Energy conversion
• Decentralised distribution
Clean transport • Sensors The economic regulatory and political context is very favourable at an international
level. This market will expand rapidly from 2015. Europe, especially France, is in a
• Monitoring networks
good position, but not ahead of Japan.
• Flow model
• Regulation, metering, remote management.

towards virtual markets or customised markets. It gives consumers 1.2.1. The Main First Order Social Impacts Are Linked to Unequal
the opportunity to enhance their position and encourage greater Employment Opportunities in the IT Sector and to the Digital Split7
corporate social responsibility. Meanwhile, electronic commerce has In Europe, the annual IT sector employment growth rate is around
reduced transaction costs and improved the competitive functioning 8%. Each job created in this sector can be linked to the creation of four
of the market. others in the entire European economy, either upstream in the
According to stakeholders involved in major international pro- suppliers' sector or downstream in the software industry service
spective activities, a certain number of future innovations, eco- sector. At a macro-economic level, the increased use of IT leads to the
innovation, 6 will be linked to progresses in all sectors of IT. This refers creation of highly skilled jobs, and the loss of less skilled jobs in other
to IT for green defined in introduction and analysed in Section 2.1. This sectors. The marginalisation of unskilled workers is a significant threat
constitutes a lever for businesses' competitiveness to such an extent to social cohesion that may become more critical as IT's development
that many agree on the fact that new growth, often described as green, expends to all sectors of the economy. Owing to the application of IT
can only be generated by these eco-innovations, which are at the green, new skilled professions will be on the rise, in the construction
centre of a current economic race (Faucheux and Nicolai, 2006). or heritage management sectors for example, with the development
Table 1 summarises the main eco-innovations enabled by IT for green of intelligent buildings or in the car industry with the development of
in the context of eco-cities as well as their economic and competitive carbon-free cars (electric or hybrid) and other transport services. This
dimensions. implies anticipating and supporting an ambitious lifelong training
Eco-innovation is thus a real option in the fight against climate programme (Rennings and Zwick, 2002).
change and to foster economic recovery. Some specialists (California Obstacles to global access to IT (what is known as the digital split)
Clean Tech Open, 2008) describe the potential of IT for green as “the could also reinforce existing patterns of exclusion (Elie, 2001). The
biggest growth opportunity of the 21st century”. These are thus digital split is not just about access to the Internet and its use, but to all
proving inseparable from competitive advantage and international IT (computers, interactive digital television, multimedia, mobile
competitiveness, both at a micro and macro-economic level (Beise telecommunications, digital photography and digital video). There is
and Rennings, 2005). a pressing need for data and indicators to measure the level of access
as the currently available information on which international
comparisons is based pertains almost exclusively to the use of the
1.2. The Social Impact of IT Internet and, to a lesser degree, to the use of mobile phones
(Eurostats, 2010). For people, obstacles can range from inconvenience
The impact of IT on the social realm is less well defined and to more significant losses, such as unequal opportunities in the labour
probably more difficult to measure than its impact on the economic market. For countries or territories, obstacles include the lack of
realm. Separating economic and social impacts isn't always obvious. infrastructure, likely to result in greater economic gaps.
This is why IT are increasingly present in social surveys. These surveys
reveal that IT are changing the ways in which people act and work 1.2.2. Social Impacts Linked to the Use of IT (Second Order Effects)
(Statistics Finland, 2006), the jobs they do, their daily activities, such Should Not Be Overlooked Either
as their shopping and banking habits or their interactions with They transform lifestyles and the organisation of labour. This is
government services (ABS, 2006), their spending habits, their use of especially true of teleworking (Ecofys, 2008). Teleworkers represent
time and the ways in which they communicate with their families or an average of 13% of the workforce in Europe and 25% in the USA.
in groups (ONS, 2006). Furthermore, IT have an impact on health Denmark is the leader with nearly 20% of its workforce engaged in
(Pew, 2006), crime and education. regular or occasional teleworking. In France, the rate is only of 7%,
which is why “Digital France 2012”, the French government's digital
6
economy development plan, outlines a range of incentives to increase
“Any action taken by stakeholders aimed at developing new ideas, new
behaviours, products or processes, to apply and develop them so that they can
7
contribute to a reduction in environmental damage or pertain to objectives of The term “digital split” refers to the unequal access to IT between individuals,
sustainability” (Klemmer, Lehr and Lobbe, 1999). regions or countries in terms of
 S. Faucheux, I. Nicolaï / Ecological Economics 70 (2011) 2020–2027 2023

this rate (CGTI, 2008). If teleworking is linked to economic benefits (SVTC, 2004). In 2007, in France, it was estimated that 16 kg of
such as reduced overheads for businesses, it can also be linked to electrical and electronic products per capita/year were placed on the
social benefits, such as reduced commuting time, more flexible market, while only 2.5 kg per capita/year were recycled. The recycling
working hours, greater work-life balance, the inclusion of traditionally target imposed by the European Waste Electrical and Electronic
excluded groups (e.g. mobility impaired people for instance) and Equipment (WEEE) directive (2002/96/CE) requires that 4 kg per
opportunities to work from remote locations. However, it is not capita/year be recycled for each member country, with an obligation
without a negative impact: it suits a project-based work culture that is for producers to finance the recycling efforts. Some European
not yet mainstream; traditional hierarchical management models are countries are proactive in this area. This is the case for Scandinavian
replaced with other forms of control; and new structures may lead to countries (15 kg per capita/year), the UK (10 kg per capita/year) and
increased levels of stress due to unusual working hours (nightshifts, Germany (8 kg per capita/year). Several components of IT waste are
weekends, etc.) (Askenazy, 2005). The global impact is also very now recycled, but the organisations that collect and recycle these
difficult to define as the substitution effects vs. the induction effects products remain limited in terms of efficiency and structure. In the
linked to green applications have only partially been evaluated and USA, three quarters of computers are stacked in garages or in storage
are contingent upon the solution offered (Hilty, 2008). (PNUE, 2005). When computers are discarded, they end up in landfills
As the Internet reaches all nations and spheres of activity, many or in incinerators or, more recently, exported by some countries to
voices can be heard that challenge the socio-economic and political Asia or Africa. The report entitled “Exporting Harm: The High Tech
control of this technical device and request that it be managed trashing of Asia” 11 states that 50 to 80% of IT waste collected on the
internationally and in compliance with principles of Participatory West Coast of the USA 12 is placed in containers and loaded onto ships
Governance for Sustainable Development (Raboy and Landry, 2004). for China, Pakistan or India at a 10 times lower recycling cost, but with
Indeed, the Internet's physical core is only located within five drastic health and environmental consequences. In France, the
countries (the USA, Japan, the UK, Spain and Sweden). Information recycling processes are complex and involve a range of players. The
pertaining to objects, such as origin, place of production, technical or dismantling is often given to rehabilitation companies. The various
health checks, etc., is still traceable over the Internet. These are thus components are then handled by companies specialised in recycling
major issues, not only in terms of nations' sovereignty, but also in metals and plastics. Local organisations' participation is often difficult
terms of individual freedom. Thus, the social effects of IT linked to the to determine and environmental burdens are non-negligible.
production as well as to the use remain mostly undefined.

1.3. IT's Environmental and Health Effects 1.3.2. The IT Usage and Implementation Phase (Second Order Effects) Is
Not Free of Environmental Externalities Either, but These Are Less Well
1.3.1. Numerous Studies on the Environmental Impact of IT Production Defined than the First-order Effects
(First Degree Effect) Highlight the Following Elements In Europe, a significant percentage of domestic electricity
The over-consumption of non-renewable and toxic resources, consumption is linked to the use of IT. It was estimated at 8% of
especially of heavy metals 8 (lead, mercury, cadmium, beryllium, etc.), total electricity consumption in 2005, and will be increasing regularly
during the phase of extraction of raw materials used in the production till 2020 (BioIS, 2008).
of IT is frequently identified as a source of problem. In France, the share of electricity consumption of IT is estimated at
Production processes require the use of products that are highly 13.5% of the total level of consumption, and this despite the regular
toxic and dangerous for the environment and people's health. For improvement of energy efficiency equipment (IDATE, 2010; BCG,
example, brominated flame retardants 9 are linked to neurological and 2010). The carbon footprint 13 of IT in 2007 was 830 MtCO 2e, which
blood diseases or certain types of cancers (Hilty et al., 2005). High represents 2% of the estimated total emission from human activity
levels of energy and water consumption are also necessary. Although measured for the year, which represents a 6% increase per year until
much of this water can be recycled, none of the microchips producers 2020 (The Climate Group, 2008). The share of carbon footprint linked
seem to do so. It is not uncommon that newly built data centres to the use of IT is about four times greater than that linked to their
consume more energy than the cities where they are located. In 2008, production.
the total energy consumption of IT equipment and services repre- This footprint is expected to triple over the next 20 years according
sented about 8% of the electricity consumed in the EU. The IT sector to a “business as usual” scenario of economic development. The
itself generates 2% of carbon emissions in Europe, 1.75% resulting from exponential growth of data centres will be the main culprit.
the use of IT products and services and 0.25% from their production At the same time, the replacement of traditional technologies by IT
(BioIS, 2008). Material flow studies show that only 2% of them could leads to a reduction in the amount of resources consumed in
be found in IT products (Erdmann et al., 2004). manufacturing goods as described in the virtualisation or demater-
Similarly, according to several ACV studies, 10 the production phase ialisation of hardware (Haake and Gueorguievsky, 2010): music
represents between 15 and 25% of the total energy consumption for stored and transmitted on the web, digital photography, transaction
IT's lifecycles (based on agreed lifecycle spans). A number of via the Internet, e-commerce, etc. However, the consequences of the
manufacturers of computers and other electronic goods are no longer spread of e-commerce, and e-work, may also be the cause of rebound
satisfied with this situation. Aware that there is a genuine issue of effects 14 (Faucheux et al., 2002). For example, teleworking changes
acceptability and competitiveness for their products, they are rising to our relationship to urban and rural spaces and provides tertiary
the challenge, as evidenced by the emergence of green IT (see 2.1). industry sector workers with new opportunities, such as the choice of
Waste from electrical and electronic goods, linked to the end of IT
11
lifecycles, represents a significant environmental problem difficult to http://svtc.org/wp-content/uploads/technotrash.pdf.
12
The USA have also refused to ratify the Basel convention (adopted in 1989 that
manage because of its increasing volume and its very specific nature
came into force in 1992) which prohibits all exports of hazardous wastes to
developing countries.
8 13
That is why the European Commission developed the RoHs guidelines (Restriction The carbon footprint measures the amount of carbon dioxide (CO2) emitted by
of certain Hazardous Substances in electrical and electronic equipment) in 2002 to burning fossil fuels, by businesses or by living beings.
14
limit its use by 2006. Concerning the rebound effect, Pearce (1998) highlights that improving energy
9
Polybrominated biphenyls, PBB, polybrominated diphenylethers, PBDE, tetrabro- efficiency doesn't necessarily lead to reduced energy consumption (quite the contrary)
mobisphenol-A, TBBPA or TBBA. for a couple of combined reasons: the substitution effect (replacing cheaper energy
10
See for example Babbitt et al. (2009) ; Choi et al. (2006) for environmental impact with other energy commodities through a reallocation of income) and the income
assessments of the IT industry. effect (cheaper energy makes money available for other energy commodities).
2024 S. Faucheux, I. Nicolaï / Ecological Economics 70 (2011) 2020–2027

place of residence, which may have a negative impact on urban, town become more efficient by promoting dematerialisation, smart
and country planning and, thus, on transportation energy costs. logistics, smart buildings and smart grids for instance.
Finally, IT has an important role to play in promoting eco- As a case in point, a key motivation for the implementation of a
innovation in other sectors such as transport, building or energy smart grid is a more efficient use of existing electrical generation,
distribution, and thus enabling greater energy and environmental transmission and distribution infrastructures. This could help the
efficiency within those sectors that are amongst the largest contrib- distribution sector improve its management of energy supply and
utors to greenhouse gas emission. That is why, although an increase in demand. 15 A smart grid is presented as a set of software and hardware
CO 2 emission is expected for the IT sector, this should be offset over tools that allows generators to deliver energy more efficiently by
time, by a drop generated by their implementation across all sectors. reducing the need of surplus and enabling two-way paths and
The overall environmental effects are generally extremely difficult to information exchange with consumers to address requests in real
assess and are largely dependent on third order effects (i.e. users' time. According to Rifkin (2008), the key to the future of energy lies in
behaviour). The networked development of eco-innovations becomes local decentralised energy production from renewable energy
a defining aspect of IT when taken into consideration within the sources, which the smart grid integrates. Finally, the smart grid's
managerial approach of the analytical framework of eco-innovation. third objective is to control demand. Within the context of a collective
platform developed around the management of incremental and
2. Green IT and IT for Green: Catalysers and Drivers of radical innovations, industries, local authorities and individuals would
Eco-innovation then become producers as well as consumers of their own energy.
This would occur based on given pathways, irreversibility and
IT are thus increasingly exerting pressure on the environment discontinuous sources and unpredictable events. Electric Power
while also being a source of potential social problems. Furthermore, Research Institute (EPRI), an American electricity sector think tank,
they significantly alter the economic structures and contribute to concluded in its “Perspectives for the future” that this type of
economic growth in an ambivalent manner. The medium to long term distributed production is bound to bloom in the same way the
aggregated impacts (which can be described as cumulative effects) computer industry did. In future, producers and energy processors
linked to their mainstreaming in most parts of economic and social will have to work with IT specialists. For example, Intel invested over
sectors are difficult to identify, because at each level of sustainable $100 million in 5 industrial electric grid industry companies to
development the first and second order effects vary according to the provide solutions for individuals and businesses with data centres
country, the era, the sector, etc., as well as the scope of analysis and or in the delivery of electricity and metres management. Intel is thus
the type of IT innovations examined. positioning itself at all levels of the energy sector, from energy
However, in view of the above, it appears that many positive production to its distribution and use. But how can heterogeneous
externalities, not only at an environmental but also at an economic parties, producing and using green IT, be defined as collective eco-
and social level, are to be expected from the mainstreaming of IT for innovation managers?
green, and to a greater extent if green IT is to become mainstream too.
If we are to combine IT for green with green IT to achieve an ecological 2.2. A Typology of Eco-innovation Stemming from an Economic
economy (OECD, 2009), it is important to better understand the Approach to Green IT for Green
nature of eco-innovations that are likely to be generated from it.
The definition of eco-innovation most commonly used within the
2.1. Green IT and IT for Green: What Are We Talking about? ecological economics movement focuses on three points: an issue of
double externality; the importance of a regulating framework; and
2.1.1. Green IT Refers to IT with Low Environmental Impacts (in Terms of the importance of social and institutional aspects of eco-innovation.
First and/or Second-order Effects) The methodological pluralism drawn from ecological economics
We expect the IT sector to innovate in order to reduce its use of enables us to highlight eco-innovating green IT's following
toxic substances and consumption of natural resources, especially characteristics:
energetic resources throughout their products and services' lifecycle.
The European Commission is encouraging IT businesses to use eco- ▪ Type of innovation (or intensity). A spectrum of innovations
efficiency and eco-design processes (IP-09-393, March 2009) by ranging from incremental to radical, based on the degree of
implementing eco-labels and standards in the form of voluntary codes novelty associated to new practices. These time-based modifica-
of conduct. Systemic improvements in production processes are tions are evaluated in terms of incremental or radical changes
sought throughout IT sector's entire value chain, including operations, (Freeman, 1992).
manufacturing, service delivery and management of the supply chain. ▪ The scope of innovation. Taking into account changes in produc-
Increasingly, computer manufacturers are playing the green card and tion processes such as added eco-innovation, which intervenes in a
many of them have achieved the environmental standard ISO 14 004 curative manner, and integrated eco-innovation, which avoids
(renovated in 2004). In France, collaborative projects have emerged environmental degradation (Frosh, 1995). Lock-in effect of
between NGOs, local authorities and IT companies. This is the case technological trajectories, irreversibility and path dependencies
with lifecycle extension policies based on the recycling of computers or given technological trajectory are some of the different aspects
and mobile phones. that need to be taken into account in green IT.
The term “IT for green” refers to the mainstreaming of IT in other ▪ The nature of skills to be developed. Depending on the level and
sectors with, if we limit ourselves to the main applications within eco- scope of innovation, the need for knowledge and new skills differs,
city, smart buildings, intelligent transport or intelligent energy grids. thereby influencing the innovation process (Nonaka and Takeuchi,
It is these green applications, provided they resort to green IT, which 1997). With the dissemination of IT, skills are developed at a
are truly able to reduce the overall environmental footprint and distance and change the ways in which we acquire knowledge
especially to create structural change, enabling the well-known (Miles and Snow 1986) within dynamic capabilities 16 networks
decoupling between economic growth and climate change. According
15
to The Climate Group (2008), IT for green could significantly increase See the document referring to the European Technology Platform Smart Grid on
http://www.smartgrids.eu.
efficiency across all sectors of the economy and deliver CO 2 emission 16
Dynamic capabilities are defined as a business's capacity to integrate, build and
savings of 15% of the total of “business as usual” emissions in 2020. reorganise internal and external competencies in order to better deal with changing
The IT sector has a powerful role to play by enabling other sectors to environments.
 S. Faucheux, I. Nicolaï / Ecological Economics 70 (2011) 2020–2027 2025

Table 2
Characteristics of eco-innovations applied to green IT and IT for green.

Typology criteria Green IT IT for Green

Scope of innovation. Columns A and B for process dimension Integrated Added and integrated throughout the lifecycle product
(with a rating scale of 1 to 5)
Innovation intensity. In these two categories (incremental or Still predominantly incremental with Incremental, radical with tacit skills brought into question.
radical), learning mechanisms are specific depending on codifiable knowledge New trade-off between degree of codification and speed of
product improvement. Columns C and D for taking into knowledge dissemination (O'Callaghan and Andreu, 2006)
account temporal dimension
Support of innovation: which kind of strategy firms are going to Regulatory compliance. Need for legitimacy Voluntary innovation with competitive advantage (Dal Bo,
implement: defensive (compliance) or proactive (DiMaggio and Powell, 1983) 2006). Networked development and business ecosystems.
(differentiation)? Column H
Application field that describes two options: 1) classical about Technological Technological, organisational of use and strategic (service
technological or organisational innovation; and 2) that economy)
mentions evolution towards product service dimensions.
Columns E and F
User acceptance. Generation of eco-innovation depends on the Participation of businesses or users in the User development and acceptance. Appropriation of
benefits received by the innovator. Column G dissemination of eco-innovation. Ethical eco-innovation by users is essential
motivation and energy efficiency

(as defined in Teece, 2007). This implies the need to develop Within that context, an analysis of eco-innovation highlights the
organisations' coordination capacities as well as their ability to dynamics pertaining to the organisation of innovation systems. The
integrate mixed inputs into a group system through mindful analysis of eco-innovation's determinants must be able to integrate
contributions and representations (Weick and Roberts, 1993). the analysis of dynamic clusters of capabilities between producers and
▪ Field of application. The scope of innovations' applications is consumers of IT. A business ecosystems' theoretical framework
analysed based on the need to take organisational, behavioural and (Moore, 1996) is a useful tool to analyse additional characteristics of
institutional change into consideration, beyond the simple green IT, such as the “collective” eco-innovation, in as far as the added
definition of technological innovation. As such, strategic innova- value comes from the proliferation of relationships, interactions
tions pertaining to green IT objectives or new modes of amongst heterogeneous stakeholders with specific skills (Cowan and
consumption as well as methods of production are defined Jonard, 2003) and able to intervene at different levels and stages of
(service economy). IT's lifecycle. These exchanges between producers and consumers of
eco-innovation are the basis of a business ecosystem drawing on solid
Eco-innovation can effectively take on different forms and Table 2 co-evolution processes between partners and a strategic approach
presents these characteristics for IT for green with green IT. that goes beyond a simple competitive business approach (Freeman,
The impact analysis of green applications of green IT has enabled 1995; Lundvall, 1992). Two additional criteria have been included in
the identification of other key elements essential in defining eco- the typology of the so-called collective eco-innovations enabling the
innovation in a management approach: definition of a “platform” integrating rebound, substitutions and
inductions effects linked to users' acceptance of IT:
▪ User dimension of eco-innovation. In order to develop eco-
Fig. 1 summarises the position of some eco-innovations based on
innovations, businesses should be able to anticipate the accep-
green IT and green applications for IT depending on all these criteria.
tance of innovations in the market. The conditions of acceptance
We assess the dimensions of the selected eco-innovations by using a 1
can be seen at the production-diffusion of technology level as well
to 5 rating Likert scale (where 0 means no change, 1 marginal and 5
in users' behaviour (Pujari, 2006). This dimension is drawn from a
radical change). Each eco-innovation could be characterised by these
neo-institutional theoretical framework based on the develop-
criteria as a mix of green IT and IT for green. Two eco-city examples
ment of collective agreements around the agreed upon dissemi-
are included in Fig. 1 to illustrate this typology and highlight the
nation of goods and services. Substitution/induction and rebound
changing profiles of eco-innovations' determinants in relation to
effects controlled or at least understood in order to provide a
given digital business systems: Building Management System (BMS),
global impact assessment of IT. Within that context, the kinds of
smart grid.
relationships between green IT producers and consumers must be
BMS aims to automate and take control of services in order to
taken into consideration in the economic analysis of eco-
provide facilities in the most efficient way possible for businesses,
innovation.
within the constraints of an installed plant. BMS is a “stand alone”
▪ Support for innovation. In some cases, eco-innovation is triggered
computer system that can calculate the pre-set requirements of a
by regulations through social pressure. In other cases, different
building and control the connected plant to meet those needs.
competitive motivations prevail (Azzone and Noci, 1998; Porter
In terms of eco-innovation determinants, the profile examined
and Kramer, 2006). Standard management of eco-innovation's
highlights an innovation added in terms of production process and
double externality gives rise to technology that is dependent on
evolving through time with an issue of double externality (environ-
technology push, market pull and regulatory push. All these
mental externality's eco-efficiency and interoperable standards for
elements have been identified in green IT, with an additional
R&D spill overs). But in relation to different stakeholders' acceptance
response to technological development: the development of a
criteria or those of other heterogeneous stakeholders' emerging
network that voluntarily combines actions and change their
business model, this eco-innovation significantly lags behind. BMS is a
environment through regulatory mechanisms (Astley and Fom-
holistic management system that offers tools that enable the
brun, 1983). Collective strategies thus defined can be seen as IT
reduction of energy consumption not reliant on users' behavioural
platforms.17
transformation. Thus, according to the international studies already
17
undertaken, the economic gains made won't be able to meet
Gawer (2009) defines industry platforms as technological building blocks that act
as a foundation on top of which a group of businesses organised in a set of
ecological economics' objectives.
interdependent businesses sometimes called an industry ecosystem, develop a set of A smart grid is an electricity grid that can intelligently integrate
inter-related products, technologies and services. the actions of all the users connected to it – grid managers, IT
2026 S. Faucheux, I. Nicolaï / Ecological Economics 70 (2011) 2020–2027

Scope of innovation Innovation intensity Application field

Column A. Column B. Column C. Column D. Column E. Column F. Column, G. Column H.

Case studies End of pipe Integrated Incremental Radical Technological, Change in User Support of

(rating 0 to (rating 0 to 5) (rating 0 to 5) (rating 0 to 5) organisational service acceptance innovation

5) (from 0 to 5) economy (from 0 to 5) (from 0 to 5)

(from 0 to 5)

Building Management System : Installation Marginal Modelling Open New sensors, Create a Users A way to

IT for green building of an changes and standards for chips for connected behaviour create

A electronic simulating interoperability remote urban plays a crucial competitive

H 4 B
management energy between monitoring, environment role in the advantage.
2

G 0 C system in consumption different measures where application of Induction

order to technology (eco- buildings are eco- effects vs.

F D
rationalise sets. efficiency) adjustable to innovation substitution
E

energy human and in its effects

consumption behaviour. efficiency

Project EEGI, a smart grid Decentralised Smart meters Integration of Technological Vision for the The active New

implementation energy renewables and electricity participation reflections

http://www.smartgrids.eu/ production energies organisational grids of the of SMEs and about active

A system challenges future that are consumers in demand and

H 4 B management flexible, power system new business

2
accessible, markets. The models for
G 0 C

reliable and management market

F D
economic. of consumers’ players.
E
behaviour Rebound

must be effects.

included in New markets

the business development.

model.

Fig. 1. A variety of eco-innovation based on green IT and IT for green: some case studies (extract from Faucheux et al. (2010)).

technicians (middleware such as telecom or embedded systems), 3. Conclusion

energy production experts, car manufacturers, builders, energy
providers, unions, consumers and those that do both – in order to Defining green applications of IT green as eco-innovation within a
efficiently deliver secure electricity supplies and greater control of digital business ecosystem framework has highlighted new eco-
energy needs. It does pertain to an organised cooperation between innovations' determinants. Defining “user acceptance” and “innova-
different sector parties, from a range of professions and with various tion support” has enabled the description of new eco-innovation
strategic approaches enabling a better control of energy demand and profiles linked to the creation of collective “platforms” for the
supply. This collective innovation is also called open (as defined by collaboration of heterogeneous stakeholders. It is essential to
Chesbrough (2003)) in as far as a shared invention amongst integrate a management dimension within the theory of eco-
competitors or other partners leads to sharing results and create innovation if we are to be better understand third order systemic
new opportunities. For example, in the medium-term, the electric car effects.
will take an important position within the smart grid market with a Thus, based on our example, smart grids will foster change
building-block development, probably within the construction sector. amongst grid managers to include relationship management of new
It is worth noting that smart grids find a natural place within users' economic partners (especially those from the IT sector) and a
technological ecosystems that are situated at different levels of the valorisation of their expertise that will lead to new services. However,
energy supply chain: in the building industry, in the domestic sector the theoretical and empirical work on business ecosystems in the
as well as at the level of production means. Thus, a collective context of green IT is still in its infancy. These platforms impose new
technological eco-innovation necessarily requires a social innovation business models as well as a finer analysis of what fosters user
reliant on the significant transformation of a particular way of life. acceptance, which will help better holistically assess these new
 S. Faucheux, I. Nicolaï / Ecological Economics 70 (2011) 2020–2027 2027

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