Incumbents’ diversification and cross-sectorial energy industry dynamics

Markus Steen () and Tyson Weaver

Research Policy, 2017, vol. 46, issue 6, 1071-1086

Abstract: Within the sustainability transitions literature, established, mature or incumbent firms have been stereotyped as ‘locked-in’ to socio-technical regimes. However, we believe regimes have been black-boxed, and few studies have explored incumbents’ responses to transition processes. This article aims to achieve an improved understanding of incumbents in established energy sectors and their extent of involvement in other (niche) energy sectors. To this avail, we analyze data from a first-of-its-kind survey of 133 incumbent firms in Norway's two main energy sectors, namely oil/gas and hydropower. Providing inter-temporal dimensions, our data covers incumbents’ diversification activities beyond their primary sector both in the past (cancelled activities), present (ongoing activity in secondary sectors) and future (ambitions of diversification), and also distinguishes between producers and product/service suppliers. By incorporating insights on firm diversification, our analysis sheds new light on the complex transformation processes associated with sustainability transitions. Empirical results show considerable heterogeneity in incumbents’ responses to changing selection pressures, which can be explained by recognition that windows of opportunity are opening and some incumbents see potential to leverage their resources and capabilities to capture value in new niche energy sectors in both domestic and international markets.

Keywords: Incumbent; Diversification; Sustainability transition; Multi-level perspective; Selection pressure; Strategy (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (30)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:46:y:2017:i:6:p:1071-1086

DOI: 10.1016/j.respol.2017.04.001

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