DILC Phase 5 Spillovers to the task environment and industry‘recreation’

Problem-related pressures:

(1) In this phase, the problem begin to affect consumer preferences, which creates markets for radical alternatives and economic opportunities towards which firm can reorient. Consumer preferences may change because public debates alter views about appropriate behaviour.

(2) Public policies(e.g. adoption subsidies, taxes, regulations) may also incentivise consumers to change practices and adopt new technologies.

Industry responses:

(1) The emergence of new markets changes the economic (task) environment and incentivizes firms to re-orient more wholeheartedly. Firms change economic positioning strategies towards the new technology, possibly giving rise to innovation races.

(2) The problem becomes part of the industry’s core beliefs and mission, leading to further transformation of the industry regime (Tushman and Romanelli, 1985). These changes are unlikely, however, unless it also makes economic sense to address the social problem.

(Geels and Penna, 2015: 72)

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