Innovation Systems for Sustainability An empirical analysis of the role of domestic and Swedish MNCs inBrazil's innovation system

Abstract: The intellectual roots of the innovation system (IS) approach lie in attempts tounderstand the complexities of interactive relations in the innovation process. Thisthesis departs from the systemic view that ISs rest on a co-evolutionary process, inwhich on the one hand technical and economic spheres interact with policies andinstitutions, and, on the other, those spheres affect the natural environment. There isalso evidence that ISs have access to the state-of-the-art flows of knowledge, which isperceived positively in terms of international or trans-border scientific andtechnological cooperation.Comprised of a covering essay and a set of publications, this thesis is structured as acombination of five papers containing findings of the research carried out. Thequalitative research design analyzes sustainability as a desirable theoretical constructtowards which the development of ISs should be oriented. As such, special attentionwas given to both the theoretical arguments that relate to sustainability and theimportance of a shift into a new technological regime oriented towards environmentalissues in ISs. A systematization of the two main theoretical analyses of ISs has beenalso emphasized in the thesis as interactive learning and evolutionary technologicalchange theories, which originate respectively from Schumpeterian and neoevolutionarySchumpeterian views.In Edquist’s view (2001, p.35) "there is a strong need for further conceptual andtheoretical development of the IS approach. The best way of doing this is by actuallyusing the approach in empirical research". How the shift of ISs to environmentalsustainability can come about and how they can be brought together systematically isstill a largely unexplored field of research. Accordingly, the aim of this thesis is toconceptually advance an understanding of the IS as a flexible and useful approach toencompass the environmental sustainability dimension.To address this, the thesis develops a conceptual framework for ISs that is orientedtoward sustainability; based on the interactive, resource, and environmental views;and tested empirically. The conceptual framework is illustrated empirically in the casestudies of the Brazilian subsidiary of the Swedish multinational Ericsson and and the Brazilian multinational USIMINAS, with focus placed on their interactionswith the Brazilian innovation system. Since the cases belong to different sectors, thereare variables between the multinationals in terms of the nature of innovation capacity.The contrast between the two cases in terms of technological regimes provedvery interesting, and hence formed the core of the thesis.The IS approach has been gaining ground in academic circles, as well as in the fieldof public innovation policy-making in industrialized and newly industrializedcountries. The findings of the current study suggest that ISs for environmentalsustainability can be categorized as evolutionary, natural resource based, andinternationally oriented. In the context of newly industrialized countries, theinternalization of ISs has been perceived through effects of research and developmentin multinational firms, technology transfer and the international trade of capital goods.The understanding of ISs and the internationalization phenomenon in relation tosustainability warrants further studies; notably studies are required that examine theinternationalization of ISs, empirically viewing this from the perspective of bothindustrialized and newly industrialized economies.