Diffusion Analysis of Eco-Innovations in B2B Markets using the Example of Hybrid Materials from Renewable Resources
(Topic C.3)

– Environmentally beneficial innovations cannot always compete economically. They are "pushed" through by legislation, unless further drivers diffuse them in the market. Is there a market pull not only by the demand from consumers but from companies?–

In order to satisfy the future demand of industrial (capital) as well as consumer (final) goods, production processes need to efficiently employ resources. Moreover, climate change challenges traditional technologies. One way to overcome these obstacles is the usage of hybrid materials from renewable resources in the business-to-business (B2B) sector, especially biocomposites like Wood Polymer Composites (WPC). Besides being a novelty and a materially superior combination to plastic and wood, WPC offers an alternative raw material base with a reduced share of petrochemicals. Most intriguingly, it fulfills two criteria of sustainable production: Cascade utilization and resource efficiency.
WPC is composed of polymers and wood-based couple products like sawdust. It prolongs the life cycle of its resource, since wood is not directly consumed energetically, but in a sequence, or cascade, which gives priority to material use. The sequential multiple material resource use is central to cascade utilization. In the case of WPC, the first cascades comprise the material use in mostly intermediary products, e.g. deckings and sidings (veneer and boarding elements in construction), as well as interior paneling (automotive sector). The last cascade is the energetic consumption, and with it, the emission of carbon dioxide.
Beyond, WPC is not fully dependent on fossil fuels and benefits from the characteristics of renewable materials- conventional and biopolymers or recycled plastics are useable. Wood is processed in a most efficient fashion, since waste and by-products serve as a raw material.

Since finite resources majorly affect the economy, political agendas strongly promote resource efficient production systems. Ecologically friendly innovations in processes and technologies either are enforced to a minimum by legislation or are driven by intra- and inter-organizational mechanisms. Since costs mostly dominate decisions on innovation adoption, corporate inhibitors to innovation include the economic uncertainty on the success of a novel technology and best are addressed with a mix of private and public financing instruments. Beyond such well examined, intra-organizational mechanisms spreading innovations, industrial determinants for the market diffusion of novelties easily have been traded off against legislative measures.

The contribution of the research project would be the identification of drivers leveraging the commercialization of eco-innovations. In pursuit of overcoming barriers to innovation, a better visibility and understanding of technologies through industry associations, norms and certificates are one lever. However, the specific type of B2B eco-friendly innovations may be a major reason for the prominent need for information.

The research objective is based on two methodologies. An international market study is intended to reveal determinants of market development on three continents (US, Germany, China). By investigating countries with different time periods since product introduction and extremely contrary production behavior, structural heterogeneities are considered. A further method is the collection of qualitative data from biocomposites producing and purchasing companies. In this manner, information on the corporate perception of diffusion mechanisms lacking and worth intensifying for technological novelties in the industry is provided.

Predecessors? work established foundations in consumer segmentation of products made from hybrid materials (topic C.4) and the analysis of B2B relationships in the German wood industry (topic C.3). The research project is linked to wood technology (topic A.6), since specifics on product properties from conventional and hybrid materials is indispensable. Furthermore, a joint examination of the advantages of WPC compared to traditional materials in the course of a life cycle assessment (topic B.7) is possible.