RTOs and the Industry

Scenario Pathway 7: Green Enablers

20151214 Green Enablers

In this pathway, the dominant logic is that of Environmental Sustainability, meaning that RTOs’ mission is to support industry’s efforts to transition to more environmentally friendly technologies, products and systems.

The green paradigm of the RTOs is based on Life Cycle Analysis. While politics and values drive the environmental movement at higher levels, RTOs seek to provide a sound scientific basis upon which industry can make technology development and investment choices.

RTOs do have a political role, as they are expected to act as Leaders with respect to environmental technology, rather than responding to industry demand. Only in some cases is this expectation accompanied by additional public funding to provide flexibility for the RTOs, but in all cases, RTOs are backed by political credibility and work closer with governments on environmental technology issues.

The most important policies for RTOs are Green Innovation Agendas. Though ‘market pull’ instruments are generally technology-neutral, ‘technology push’ agendas are developed in many countries looking to develop robust R&D portfolios. RTOs are perceived as particularly knowledgeable in the bioeconomy and have an important role in shaping the Bioeconomy Innovation Agendas.

In line with the goal of large-scale fossil substitution, the RTOs employ the technological paradigm of Footprint Reduction. To the RTOs this paradigm means that novel environmentally-friendly technology systems must compete with technologies to reduce the impact of existing large-scale technology systems. Technology potential is explicitly evaluated with respect to political goals for CO2 reduction and resource efficiency.

Markets in innovation services see Advantages for Public Entities and both RTOs and universities are attractive to industry based in part on their linkages to government environmental policies and implementing agencies. The ability to sustain work over longer time frames is another key advantage for these entities.

Value chains in the industry create a Flow of Research Opportunities for RTOs, as innovation agendas filter through to different actors in the value chain, and new actors successively identify opportunities for footprint reduction.

Scenario Pathway 8: Bio Workshop

20151214 Bio Workshop

In this pathway, the dominant logic is that of Competitive Innovation, and RTOs seek to support industry clients in their efforts to secure competitive advantage in the emerging bioeconomy.

For RTOs the green paradigm has shifted towards Green Consumption, as the driving force for adoption of bio-based processes and products is early adoption by green consumers and public procurement.

The political expectation is that RTOs can function as effective, competitive Consultants to industry, and to a lesser extent to governments. RTOs are expected to be responsive to the marketplace and help advance the innovations that appear most promising to their clients and deliver growth to Member State economies.

In terms of policies, this pathway sees Commercial Agendas dominating the innovation space. Policy is focused on opening markets, both domestic and abroad, and RTO activities are pushed down the innovation chain while primary and pre-commercial research is undertaken at universities.

As RTOs and industries search for the bioeconomy’s higher margin opportunities, the emerging technological paradigm is focused on High-Performance products. Properties and functionality are considered more defensible advantages than cost, and chemicals and specialty materials from bio-based feedstocks are prioritized when they can be sold as functionally and environmentally superior.

Markets in bio-based research and innovation services create advantages for SMEs and startups. Focused firms with protected, specialized expertise are the feeder system for industrial plays in the bioeconomy, with the broader scope of knowledge at the RTOs proving less important.

Value chain formation creates Little Space for RTOs – the institutes are not needed as a facilitator and the commercial drivers of value chains do not per se generate incremental innovation needs as new players get involved. RTOs struggle to expand their client base.

Scenario Pathway 9: Efficiency Engines

20151214 Efficiency Engines

In this pathway, the dominant logic is that of Resource Utilization, and RTOs work with industries to maximize the valorization of raw materials and waste and the efficiency of existing capital assets.

At the level of concrete action, the dominant green paradigm is Reduce, Re-use, Recycle, and in the bio-economy RTOs find themselves working ‘outwards from the middle.’ Starting with the focus on the valorization of industrial side-streams, the RTOs over time increase research into both the recyclability of bio-based products and the reduction of resource requirements through new circular business models.

The political expectation for RTOs is that they serve as the Workhorses of the bioeconomy, tackling challenges related to process design, energy and water efficiency, and systems integration that prove difficult for individual companies, since they require long research, development and demonstration cycles and successive incremental improvements.

To achieve this, innovation policies create a Partnership Context for work on the bioeconomy, with RTOs and industry jointly influencing national bioeconomy agendas. RTOs are virtually embedded in the bioeconomy work that large industry undertakes.

The dominant technological paradigm for RTOs is Process and Systems Optimization. With political focus on extracting value from assets, RTOs can afford to take address incremental improvements in energy and resource efficiency and process intensity.

The markets for innovation services in this pathway are less competitive, and create Advantages for Insiders including, in this case, RTOs. The exception is in software development, where industry works with small private firms more regularly than RTOs.

In this pathway, value chain formation is centred around large, incumbent companies, and as such RTOs face a Stable Context for their ongoing work in the bioeconomy.


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