Eco Industries: Analysis of Industry-Specific Framework Conditions Relevant For The Development of World-Class Clusters

European Cluster Observatory
Eco industries
Analysis of industry-specific
framework conditions relevant
for the development of
world-class clusters
September 2013
Enterprise
and Industry
The views expressed in this report, as well as the information included in it, do not necessarily reflect the
opinion or position of the European Commission and in no way commit the institution.
Extension of the European Cluster Observatory,

Promoting better policies to develop world-class clusters in Europe
Contract N° 71/PP/ENT/CIP/11/N04C031
Eco industries
Analysis of industry-specific framework conditions
relevant for the development of world-class clusters
Authors: Kristina Dervojeda, Fabian Nagtegaal, Mark Lengton & Peyoush Datta, PwC Netherlands.
Contacts: Kristina Dervojeda, PwC Netherlands, and Erica Monfardini, PwC Luxembourg.
Coordination: Enterprise and Industry Directorate-General, Directorate D – “SMEs and

Entrepreneurship”, Unit D5 – “SMEs: Clusters & Emerging Industries”.
European Union, September 2013.
This work is part of a service contract for the

Enterprise and Industry Directorate-General
of the European Commission.
This report is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to
encourage the competitiveness of European enterprises.
Eco industries Framework conditions for world-class clusters in emerging industries
Table of contents
Executive Summary 5
1. Objectives, scope and methodology 11
1.1. Rationale and objectives of the case study analysis 11

1.2. Definition and scope 12
1.3. Methodology 15
1.4. Structure of the report 19
2. Specifics of eco industries 20
2.1. Introduction 20
2.2. Key actors of the value chain 21
2.3. Key challenges of eco industries 23
2.4. Clusters in eco industries 25
3. Precursor stage: first interest in the emerging industry 26
3.2. Proximity of companies in traditional industries in transition towards environmentally friendly solutions
26
3.3. Critical mass of private consumers of eco industries 28
3.4. Social attitude supporting eco industries 29
4. Embryonic stage: entering a market environment 30
4.2. Availability of environment-related R&D subsidies 30
4.3. Availability of ‘green’ lending through banks 32
4.4. Availability of seed and venture capital for eco-innovative companies 33
4.5. Green public procurement 35
4.6. Environmental focus of university research programmes 37
4.7. Availability of environment-related R&D and other tax measures 39
4.8. Existence of eco-regulation 40
4.9. Availability of eco-innovative infrastructure 42
5. Nurture stage: demonstrating sustainable business potential 44
5.2. Critical mass of eco-companies 44
5.3. Critical mass of supply chain actors 46
5.4. Presence of environmental education in the school curricula and vocational training 48
5.5. Supporting IP conditions related to green technologies 49
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5.6. Policy measures supporting the internationalisation of eco-innovative clusters 51

5.7. Strategy documents and roadmaps for the development of eco industries in the region 52
5.8. Dedicated cluster organisation 54
5.9. Well-functioning technology transfer offices within academic institutes facilitating the adoption of eco
industry solutions 56
6. Growth stage: sustainable industrial growth 58
6.2. Investments in industry growth 59
7. Survey on industry specific framework conditions 60
7.1. Cross-regional comparison of general framework conditions 60

7.2. Industry specific framework conditions 62
8. Conclusions and Policy recommendations 64
8.1. Key conclusions from case study analysis 64

8.2. Policy recommendations 65
Annex A: Questionnaire 70
Annex B: Sample of analysed regions 78
4
Executive Summary
The current report represents a detailed case study description for eco industries prepared by PwC for
Enterprise and Industry Directorate General of the European Commission within the “Extension of the
European Cluster Observatory: Promoting better policies to develop world-class clusters in Europe” (contract
nr 71/PP/ENT/CIP/11/N04C031).
Eco industries have a central role in enabling Europe to become a smart and sustainable economy and, as a
result, have a great potential for contributing to the goals of Europe 2020 Strategy. Eco industries offer added
value and reduced costs through the integration of measures such as, for example, water purification, energy
production and heat capture. It is a rapidly growing industrial sector producing goods and services to measure,
prevent, limit, minimise or correct environmental damage to water, air, soil and ecosystems, as well as
addressing problems related to waste and noise. It is therefore crucial to identify and analyse the framework
conditions that are key to the competitiveness of eco industries in European regions.
The objective of the case study analysis is to demonstrate which framework conditions are favourable for the
emergence of eco industries in regions, and specifically how policy makers can influence the development of
this industry. The analysis aims to maximise policy relevance and produce practical policy recommendations on
how to support the development of eco industries in Europe.
In order to obtain a realistic picture of the framework conditions relevant for the emergence and development
of eco industries, the notion of industry’s dynamic nature was put in the centre of the analysis. This notion
implies that the role and importance of the relevant framework conditions is likely to change with every new
stage of the industry’s life cycle. To be effective, supporting measures thus need to be tailored to the various
stages of the life cycle. The current analysis is built along the first four stages of the industry’s life cycle, i.e.
stages relevant for emerging industries: (1) Precursor, (2) Embryonic; (3) Nurture; and (4) Growth. Key data
sources include extensive desk-research, online questionnaire and validation interviews with industry experts
(representatives of ten European hotspots in eco industries).
The analysis confirmed that the role and importance of the relevant framework conditions changes with new
stages of the industry’s life cycle. However, all identified framework conditions prove to have a long-term
impact and are relevant for more than one stage. Figure 0-1 on the following page presents the result of the
mapping exercise of the analysed framework conditions for eco industries.
This case study is part of a number of reports prepared in the framework of the extension of the European
Cluster Observatory. Two additional case studies also present results for the creative industries and for mobile
services. The methodology for the case studies is described in more detail in a separate methodology report on
the identification and benchmarking of ideal framework conditions. The definitions of emerging industries are
detailed in the methodology report for the classification of the most active, significant and relevant new
emerging industrial sectors. Emerging industries can be defined as the establishment of an entirely new
industrial value chain, or the radical reconfiguration of an existing one, driven by a disruptive idea (or
convergence of ideas), leading to turning these ideas/opportunities into new products/services with higher
added value. The European Cluster Excellence Scoreboard Pilot Version measures regional strength in
emerging industries and presents results in the fields of creative industries, eco industries and mobile services.
The methodology applied by this scoreboard is described in more detail in a separate methodology report.
Furthermore, a policy roadmap prepared by the European Forum for Clusters in Emerging Industries (EFCEI)
introduces recommendations for actions for new linkages to promote the development of emerging industries
through clusters in Europe. All reports – together with further maps by country, industry and indicators – can
be found at http://www.clusterobservatory.eu/index.html#!view=aboutobservatory;url=/about-observatory
/emerging-industries/ and http://www.emergingindustries.eu/.
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Key policy recommendations per industry development stage are as follows.
Policy recommendations for Precursor stage
Policy makers can stimulate the development of eco industries at the Precursor stage in the following ways:
1) Stimulating the transition of traditional industries of the region towards environmentally

friendly solutions (and thus creating a demand for the products and services of eco industries) by means
of eco-friendly regulations and standards;
2) Influencing the engagement of traditional industries with eco industries by implementing
policies that incentivise joint networks and multi-stakeholder research platforms; such
initiatives can give rise to entrepreneurial activities in which novel ideas are developed and commercially
applied;
3) Organising social marketing and advertising campaigns promoting eco industries and green
products in the region, as well as incentivising the purchase of eco products (e.g., financial
benefits for the users of solar panels).
FIGURE 0-1: Mapping of identified framework conditions for eco industries
Policy recommendations for Embryonic stage
Policy makers can stimulate the development of eco industries at the Embryonic stage by ensuring:
1) Availability of environment-related R&D subsidies:

a) R&D subsidies, either through direct government funding of R&D or through tax credits for private
R&D activity, can help raise private R&D levels to a socially desirable level;
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b) While R&D subsidies address market failures in the invention of new technologies, they do not provide
incentives to adopt new technologies;
c) When setting the level of R&D subsidies, policy makers need to consider the opportunity cost of
additional R&D since ignoring the costs of reducing these R&D efforts would result in overly generous
subsidies for eco R&D, and could have negative impacts on the economy as a whole.
2) Availability of ‘green’ lending through banks:

a) Policy makers can use two main options to induce a change within eco industries regarding their
emergence and access to “green” financing options: direct access to capital through Public Investment
Banks; and preferential credit;
b) Public Investment Banks should aim at giving SMEs better access to credit, supporting entrepreneurs
at all stages of their project, helping enterprises to expand their market and their export activities;
c) Low-cost credit lines and partial risk guarantees can incentivise banks to invest in higher risk-bearing
projects.
3) Availability of seed and venture capital for eco-innovative companies:

a) By providing targeted and increased support to the industry from EU Community Budget, the
European Investment Fund and European Investment Bank, private investments could be triggered.
b) This support from EU government bodies can take the form of providing a package of financial
instruments to cover different company sizes and structures (e.g., loans, guarantees, grants and tax
incentives) aimed at increasing the attractiveness for the private sector to invest in European eco
industry product development activities.
4) Green public procurement:

a) Regional authorities should put green public procurement on the political agenda of the region;
b) Regional authorities should set clear targets (e.g., developing green public procurement action plans
focussing on: certain product groups and due dates for these products; certain types of public
organisations and due dates for these organisations etc.);
c) Regional authorities should create green public procurement knowledge base (e.g., linked databases,
websites containing information on “green” criteria, specifications, best practices, eco-labels etc. on
products and procurement procedures, including legal information, procurement regulation);
d) Regional authorities should offer training opportunities for the purchasers of green public
procurement.
5) Environmental focus of university research programmes:

a) Regional authorities should introduce programmes that provide financial support for conducting
collaborative research within the environment-related disciplines (including multidisciplinary research
addressing complex issues, problem-solving research; international cooperation; addressing global and
local challenges; dissemination of knowledge and research results);
b) Regional authorities should introduce programmes dedicated to strengthening the innovative capacity
of SMEs by providing financial support for outsourcing research critical to their core business activities;
c) Regional authorities should introduce programmes that stimulate industry-academia partnerships in
order to stimulate research collaboration between public research organisations and private
commercial enterprises, including SMEs;
d) Regional authorities should introduce programmes that offer initial training of researchers, lifelong
training and career development, and international fellowships;
e) Regional authorities should create a dedicated helpdesk that would inform cluster members about calls
for proposals for the relevant EU subsidies and grants and assist cluster members with preparing
proposals.
6) Availability of environment-related R&D and other tax measures:

a) To influence the consumer’s behaviour and thereby trigger the demand for eco products in the region,
direct fiscal incentives can take a form of a subsidy or rebate provided after the purchase of an eco
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product or paid directly at the check-out, in some cases delivered in case of replacement of the old
appliance etc.;
b) The environment-related R&D tax credit can be an effective tool for boosting innovation,
competitiveness and creating high-wage employment in the region.
7) Adoption of eco-regulation:
a) There is a need to create an environmental policy regime that is consistent with an industrial policy
focusing on innovations with sufficiently large international selling opportunities.
b) For the EU eco industries to be able to successfully develop in the future, a long-term stable policy
framework with greater harmonisation or coordination across the Member States, together with
simplification of national regulations is needed;
c) The development of a more coherent intellectual property rights (IPR) policy and legal framework is
crucial, not just within the EU, but also at the international level.
8) Availability of environmental and research & innovation infrastructure:

a) Besides large investments in the environmental infrastructure of the region, the role of policy makers is
to support the concept of public-private partnerships vital for the development of research & innovation
infrastructure.
The abovementioned policy actions are relevant also for the next two stages of industry’s development: Nurture
and Growth stage.
Policy recommendations for Nurture stage
Policy makers can stimulate the development of eco industries at the Nurture stage by ensuring/supporting the
presence of:
1) Critical mass of eco-companies:

a) The key task of policy makers is to create an environment favourable for setting up and expanding
businesses in the region.
b) The relevant measures should among others aim at ensuring easier access to funding, making
legislation clearer and more effective and developing an entrepreneurial culture and support networks
for businesses.
2) Critical mass of supply chain actors:

a) A specific role in supporting the establishment of a structured eco industries supply chain belongs to
dedicated cluster initiatives.
b) Policy makers need to promote and support cluster initiatives in their regions by financing the creation
of cluster organisations and the associated cluster-level initiatives (e.g., networking events, match-
making etc.).
3) Environmental education in the school curricula and vocational training:

a) Policy makers should include the groups targeted as beneficiaries in the programme development
process (NGOs, associations of teachers, network of environment education, etc.);
b) Policy makers should include environmental education and sustainable development experts in the
programme development process;
c) Policy makers should provide capacity-building in environmental education issues to the programme
management authorities at all levels;
d) Policy makers should ensure shorter payment periods, pre-financing possibilities and negotiating
assured national co-financing;
e) Policy makers should support organisations in developing the project proposals and managing the
projects;
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f) Policy makers should inform potential project promoters of funding opportunities and coordinating
exchange of experiences between existing projects.
4) Supporting IP conditions related to green technologies:

a) There is a clear need for a unitary patent system. Unitary patent protection would foster scientific and
technological advances and the functioning of the internal market by making access to the patent
system easier, less costly and legally secure.
b) For the national and EU R&D funding programmes, more clear and streamlined rules for IP and access
rights need to be defined, and the necessary measures need to be taken to ensure their implementation.
c) This may be achieved through mandatory Consortium Agreement templates that may depend on the
type of project and the phase of the innovation cycle, with which the participants will be acquainted in
advance, and which will avoid spending disproportionate amounts of time and efforts for preparing the
Consortium Agreements of publicly-funded projects.
5) Policy measures supporting the internationalisation of eco-innovative clusters:

a) Examples of the policy measures supporting internationalisation include regional support in
representing the cluster abroad; regional support for inward investment activities; removal of custom
duties on green products, as well as training and coaching etc.
b) Policy makers can develop a knowledge sharing system in which eco-companies, traditional companies
and research institutes can exchange information (inter)nationally and possibly collaborate on project
for international markets.
6) Strategy documents and roadmaps for the development of eco-industries in the region:
a) Strategy documents and roadmaps should target companies of all sizes in the region, not only SMEs, as
well as universities and research institutes, i.e., there is a need for involvement of all actors of the value
chain.
b) Objectives set in strategy documents and roadmaps need to be continuously monitored and periodically
evaluated which implies appointing a responsible managing authority, monitoring committee, as well
as carrying out interviews with beneficiaries, reporting by beneficiaries etc.
c) Interest in the actions set in strategy documents and roadmaps from the company side is crucial for
their success. Higher interest is likely to be achieved if the documents are developed in close
cooperation with the key stakeholders (by means of, for example, public consultations, workshop
sessions, interviews etc.).
d) There is a constant need to adjust the strategic direction due to changes in the interests of the partners
regarding general economic situation, international investment decisions (e.g., focus on Asia), changes
in political focus etc., as well as difficulties in integrating interests of different stakeholder groups.
7) Dedicated cluster organisation:

a) Regional, national and EU authorities need to offer dedicated cluster policies that typically include
grants for cluster management activities and specific collaboration projects.
b) The level of bureaucracy related to application and implementation of cluster policies in the region
needs to be minimised (i.e., complicated management procedures; long approval procedures for
projects and excessive administrative workload need to be removed).
c) Since eco industry clusters represent highly complex systems with multiple stakeholders involved,
cluster policy measures should not be applied on a solely basis. It is rather a combination of various
complementary measures that need to be applied simultaneously (e.g., education & skills, logistics &
infrastructure etc.).
d) At the EU level, in close cooperation with national governments and regions, there is a need to support
the efforts of cluster organisations to improve their performance and reach excellence (e.g., European
Cluster Excellence Initiative and the organisation of further “train-the-trainers” activities for cluster
managers).
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8) Well-functioning technology transfer offices within academic institutes facilitating the

adoption of eco-industries solutions:
a) Policy makers need to promote close cooperation of academia with industry, for example by having
students working in eco companies while engineers from companies engage in projects in universities
and research institutes.
b) The emergence of joint labs that are on industry premises but shared with universities and research
organisations, as well as improvements in the sharing of expensive equipment and infrastructure inside
and between clusters could be of high benefit.
The abovementioned policy actions are relevant also for the Growth stage.
Policy recommendations for Growth stage
Finally, besides the measures already mentioned above, the key measures to be taken by policy makers at the
Growth stage include:
1) Making strengthening of PPPs a core priority of research and innovation policies at this stage;
2) Advancing the rules applicable to the consortia agreements (including the IP rules);
3) Ensuring that PPPs are driven by the industry to enable bringing the results of research efforts to
industrialisation and to the market.
Concluding remarks
1) While favourable policy measures cannot solve all the challenges on their own, their presence can
significantly accelerate the development of eco industry clusters.
2) There is no generic ‘silver bullet’ across all eco industry clusters in terms of policy measures that have to be
applied. What works in one region does not necessarily have to work in another one, as myriads of
contextual factors (including historical, economic, demographic, cultural and other developments)
determine the success of the applied policy measures.
3) The critical task is to ensure that policy interventions first support an effective process of identifying the
action priorities and then provide the right tools to address whatever those priorities are.
4) Policy interventions supporting industry development should always be discussed with local companies,
and designed in a way that captures the interest of those companies. Consequently, industry’s involvement
in policy making is crucial from the very early stages, including the design stage of a policy intervention
(joint objective setting), but also its monitoring and evaluation.
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1. Objectives, scope and

methodology
The current chapter summarises the objectives, scope and methodology of the case study analysis. The purpose
of the chapter is to familiarise the reader with the applied approach and the rationale behind it. In the end of
the chapter, we also elaborate on the structure of the current report.
1.1. Rationale and objectives of the case study analysis
The current report represents a detailed case study description for eco industries prepared by PwC for
Enterprise and Industry Directorate General of the European Commission within the “Extension of the
European Cluster Observatory: Promoting better policies to develop world-class clusters in Europe” (contract
nr 71/PP/ENT/CIP/11/N04C031).
Key objectives of the analysis
The analysis on industry specific framework conditions for the development of world-class clusters in eco
industries implies the development of a suitable, feasible and robust methodology for the identification and
analysis of cluster-specific framework conditions that are considered to be conductive to the development of
world-class clusters in emerging industries. The methodology then needs to be applied to a selection of
European regions in three emerging industries: creative, mobile services and eco industries. This exercise
among others is expected to lead to detailed case study descriptions demonstrating how emerging industries
come to and evolve in regions, and specifically how policy makers can influence the development of these
industries. The case study analysis therefore aims to maximise policy relevance and produce evidence-based
policy recommendations on how to support the development of specific emerging industries in European
regions.
Strategic importance of eco industries for Europe
The European eco industries have a great potential for contributing to the goals of Europe 2020 Strategy, the
EU’s growth strategy for the coming decade. Eco industries have a central role in enabling Europe to
become a smart and sustainable economy, which implies achieving high levels of employment and
productivity1.
Eco industries is a rapidly growing industrial sector producing goods and services to measure, prevent, limit,
minimise or correct environmental damage to water, air, soil and ecosystems, as well as addressing problems
related to waste and noise. By 2020, the market share of eco industries is projected to reach 2,200 billion EUR 2.
Furthermore, eco industries should not be viewed in isolation. Strong interdependencies have emerged
between eco and traditional industries. These interdependencies will increase as traditional industries
adopt green business strategies. Eco industries have the potential to contribute to these strategies by offering
added value and reduced costs through the integration of measures such as, for example, water purification,
energy production and heat capture3.
1 http://ec.europa.eu/europe2020/index_en.htm
2 http://ec.europa.eu/dgs/jrc/downloads/jrc_2012_eco_industry_leaflet.pdf
3 http://ec.europa.eu/environment/ecoap/about-eco-innovation/policies-matters/eu/489_en.htm
11
It is therefore crucial to identify and analyse the framework conditions that are key to the competitiveness of
eco industries in European regions4.
The role of policy makers in supporting eco industries
Existing research suggests that policies and regulations are among the key drivers for
competitiveness of European eco industries5. The early adoption of environmental policies and
regulations has given Europe a global competitive advantage; however, at this moment, the eco industries are
under high pressure from global competitors. While the EU focuses on pollution reduction, waste management
and integrated chain management, Japan and the United States concentrate on hardware development and eco-
design, enabling them to have a leader position in hybrid cars, cradle-to-cradle approach and eco-design.
Furthermore, emerging nations such as China have been particularly successful in developing high-tech sub-
sectors through foreign direct investment. Therefore, adequate industrial policy initiatives for eco industries
require a careful analysis of the relevant framework conditions and the identification of potential obstacles that
have negative influence on the industry’s competitiveness6.
1.2. Definition and scope

In this sub-section, we address the definition and scope of eco industries.
Employed definition of eco industries
As a starting point, we use the OECD - Eurostat definition of eco industries and build on the distinction
between the core and connected eco industries introduced by the “Study on the Competitiveness of the EU eco-
industry” (2009) 7. The core eco industries can be defined as “those [identifiable] sectors within which the main
– or a substantial part of – activities are undertaken with the primary purpose of the production of goods and
services to measure, prevent, limit, minimise or correct environmental damage to water, air and soil, as well
as problems related to waste, noise and eco-systems.” 8
Core eco industries therefore comprise all enterprises, including service enterprises, having energy and
environment issues as the core source of income. Two broad categories of core eco industries can be identified 9:
 small and innovative companies acting in the field of, for example, renewable energy, waste recycling,
environmental auditing and consultancy;
 capital intensive enterprises providing goods and services in specific areas, e.g., waste, wastewater,
transport.
Figure 1-1 provides an overview of activities falling under the core eco industries.
4 See also ECORYS Netherlands and IDEA Consult (2009) “Study on the Competitiveness of the EU eco-industry”, Study
within the Framework Contract of Sectoral Competitiveness Studies – ENTR/06/054 for DG ENTR of the European
Commission, Final Report – Part 1, available at
http://ec.europa.eu/enterprise/newsroom/cf/_getdocument.cfm?doc_id=5416
5 http://ec.europa.eu/environment/ecoap/about-eco-innovation/policies-matters/eu/489_en.htm
6 ECORYS Netherlands and IDEA Consult (2009) “Study on the Competitiveness of the EU eco-industry”, Study within the
Framework Contract of Sectoral Competitiveness Studies – ENTR/06/054 for DG ENTR of the European Commission,
Final Report – Part 1, available at
7 Ibid.
8 The Environmental Goods and Services industry, Manual for Data Collection and Analysis, OECD and EUROSTAT, 1999
9 http://ec.europa.eu/enterprise/policies/sustainable-business/eco-industries/index_en.htm
12
FIGURE 1-1: The structure of the core eco industries
Source: Hohmeyer and Koschel (1995) (quoted in Rennings, K. (2000, p.323)10
Activities that do not fit this selection criterion will not be the main focus of the analysis. These activities fall
under the industries that are referred to as connected eco industries. Examples of connected eco industries
include automotive industry, ICT, paper industry, chemicals, eco construction. Many connected activities
depend on the core eco industries for the supply of specific technologies. Examples include the development of
environmentally friendly cars, mechanical engineering, ICT opportunities for eco industries and environmental
innovation, the relationship between eco industries and energy intensive industries; the effect of the
competitiveness of the energy markets for the renewable energy etc.11.
Building on the “Study on the Competitiveness of the EU eco-industry” (2009), within the core eco industries,
activities can be categorised alongside two dimensions: environmental classes and business activities. The
environmental classes include12:
(1) Pollution management:

 Air pollution control;
 Waste water treatment;
 Solid waste treatment;
 Soil & groundwater remediation;
 Noise and vibration control;
10 Rennings, K. (2000), ‘Redefining Innovation-Eco-innovation Research and the Contribution from Ecological Economics,
Ecological Economics, 32, pp. 319-322
12 Ibid.
13
(2) Resource management:

 Recycled materials;
 Renewable energy production;
 Water supply;
 Nature protection.
The relevant business activities include13:
 Production of equipment and specific materials;

 Provision of operational services (including monitoring);
 Provision of management services;
 Construction and installation of facilities;
 Innovation and technological development;
 Provision of environmental consulting services;
 General public administration.
Eco industries are often associated with eco-innovation. An important conceptual distinction needs to be made
between eco-innovation as innovation in eco industries and eco-innovation in traditional industries such as
manufacturing or the textiles sector. Eco-innovations refer to solutions that are novel to the company and to the
market, whereas eco industries aim to produce ‘green products and technologies’ and generate ‘green energy’,
eco-innovation also encompasses goods or processes that are produced without an explicit aim to improve the
state of the environment. In many cases, the motivation to invest in eco-innovation is driven by the objective of
reducing costs for materials and/or energy, and thus increasing competitiveness and economic success14.
Scope of eco industries
Both core and connected eco industries have an immense spread over many sub-categories. These categories
are listed in Table 1-1. The connected eco industries are highlighted in Italic.
TABLE 1-1: Scoping of eco industries (based on the outputs of WP3; additional codes not included in the Eco-
Innovation Report15 of the European Cluster Observatory are highlighted in Italic)
NACE code Level 4 NACE description

0620 Extraction of natural gas
0910 Support activities for petroleum and natural gas extraction
1621 Manufacture of veneer sheets and wood-based panels
1629 Manufacture of other products of wood; manufacture of articles of cork, straw and
plaiting materials
1722 Manufacture of household and sanitary goods and of toilet requisites
2014 Manufacture of other organic basic chemicals
2015 Manufacture of fertilisers and nitrogen compounds
2016 Manufacture of plastics in primary forms
2059 Manufacture of other chemical products n.e.c.
2229 Manufacture of other plastic products
2349 Manufacture of other ceramic products
2351 Manufacture of cement
2410 Manufacture of basic iron and steel and of ferro-alloys
14 “Eco-innovation and national cluster policies in Europe”, 1 July 2011, the study performed by Greenovate! Europe EEIG
for the European Cluster Observatory managed by the Center for Strategy and Competitiveness at the Stockholm School
of Economics
15 Barsoumian, S., Severin, A. & Van der Spek, T., 2011, Eco-innovation and national cluster policies in Europe: a
qualitative review, The European Cluster Observatory, http://www.europe-innova.eu/c/document_library/

get_file?folderId=148901&name=DLFE-12846.pdf
14
NACE code Level 4 NACE description

2521 Manufacture of central heating radiators and boilers
2530 Manufacture of steam generators, except central heating hot water boilers
2599 Manufacture of other fabricated metal products n.e.c.
2651 Manufacture of instruments and appliances for measuring, testing and navigation
2811 Manufacture of engines and turbines, except aircraft, vehicle and cycle engines
2829 Manufacture of other general-purpose machinery n.e.c.
2899 Manufacture of other special-purpose machinery n.e.c.
3511 Production of electricity
3513 Distribution of electricity
3514 Trade of electricity
3521 Manufacture of gas
3522 Distribution of gaseous fuels through mains
3600 Water collection, treatment and supply
3700 Sewerage
3811 Collection of non-hazardous waste
3812 Collection of hazardous waste
3821 Treatment and disposal of non-hazardous waste
3822 Treatment and disposal of hazardous waste
3832 Recovery of sorted materials
3900 Remediation activities and other waste management services
4312 Site preparation
4621 Wholesale of grain, unmanufactured tobacco, seeds and animal feeds
4622 Wholesale of flowers and plants
4677 Wholesale of waste and scrap
4776 Retail sale of flowers, plants, seeds, fertilisers, pet animals and pet food in
specialised stores
4950 Transport via pipeline
5222 Service activities incidental to water transportation
5229 Other transportation support activities
7112 Engineering activities and related technical consultancy
7211 Research and experimental development on biotechnology
7219 Other research and experimental development on natural sciences and engineering
8122 Other building and industrial cleaning activities
The NACE codes listed in Table 1-1 stem from both the Eco-Innovation Report16 and the definition of eco
industries in the classification methodology of WP3 of this study. The additional codes identified for the eco
industries relate to: extraction, production and distribution of natural gas; the manufacturing of materials,
components and products which can have a positive impact on the natural environment (either directly or
through improvements in the manufacturing process itself); the production and distribution of electricity;
transportation; and technical consultancy and research and development.
1.3. Methodology
In the current sub-section, we highlight the key aspects of the methodology. For a detailed description of the
methodology, the reader is advised to consult the Methodology Report of the analysis on industry specific
framework condition for the development of world-class clusters in eco industries17.
Analytical framework
When studying emerging industries, their dynamic nature should not be ignored. The dynamic nature here
refers to a continuous evolution of an industry and its periodical transitions from one stage to another.
Therefore, in order to obtain a realistic picture of the framework conditions relevant for the emergence and
16 Barsoumian, S., Severin, A. & Van der Spek, T. (2011) “Eco-innovation and national cluster policies in Europe: a
qualitative review”, European Cluster Observatory
17 http://www.clusterobservatory.eu/eco/uploaded/pdf/1368193004637.pdf
15
development of the industries in question, the notion of their dynamic nature should be put in the centre of the
analysis, since the role and importance of the relevant framework conditions is likely to change with every new
stage of the industry’s life cycle. To be effective, supporting measures thus need to be tailored to the various
stages of the life cycle. Furthermore, policies that aim to foster the development of clusters in emerging
industries should differ from policies that aim to strengthen clusters in mature industries.
Figure 1-2 presents the employed analytical framework for characterising different stages of the development of
emerging industries. The framework illustrates the growth/decline of an industry while it goes through the six
main stages of its life cycle ((1) precursor, (2) embryonic; (3) nurture; (4) growth; (5) mature; and (6)
decline/renewal), including three transition periods (Science -> Technology; Technology -> Application, and
Application -> Market). The framework was adapted from Phaal et al. (2011) because of its comprehensive
structure and high relevance to the scope of the current study. As can be seen from the Figure, sometimes an
emerging industry’s first stage builds on the last stage of a mature industry.
FIGURE 1-2: Life cycle of regional industrial emergence
Source: adapted from Phaal R., O’Sullivan E., Routley M., Ford S., Probert D. (2011) A framework for mapping
industrial emergence, Technological Forecasting and Social Change, Volume 78, Issue 2, February pp. 217-230
Below we elaborate on each of the stages and transition periods.
 Stage 1 Precursor implies activities that support the development of a certain scientific
phenomenon, business concept and/or underpinning service/technology platform in
the region, which stimulate industrial interest and investment in particular market-directed
feasibility studies.
 Science - Technology Transition includes activities that support the demonstration of the
feasibility of a scientific phenomenon, business concept and/or underpinning
service/technology platform, helping the technology or service to be integrated into an
application-oriented system.
 Stage 2 Embryonic refers to activities that support the improvement of the reliability and
performance of technology and services to a point where it can be demonstrated in a market
environment.
16
 Technology – Application Transition implies activities that help to demonstrate the commercial
potential of technology and services in the region through revenue generation.
 Stage 3 Nurture includes activities that help to improve the price and performance of
applications to a point where sustainable business potential can be demonstrated.
 Application – Market Transition refers to activities that help to develop a market with mass
growth potential.
 Stage 4 Growth implies activities that support marketing, commercial and business
development leading to sustainable industrial growth in the region.
 Stage 5 Mature includes activities that help to refine established applications, production
processes and business models.
 Stage 6 Renewal refers to activities that help to renew the industry trough the
development/adoption of new technologies that repeat the above phases.
For the analysis, the focus has been placed on the first stages and transition periods up to the Maturity stage
(Stage 5), since the study aims to analyse the framework conditions helping to foster the development of
exclusively emerging industries. Once the maturity stage has been reached, the industry per definition cannot
be considered ‘emerging’ anymore, and becomes a mature one, which, in turn, is beyond the scope of the
current study.
Key activities
Based on extensive desk-research and in-depth interviews with experts and industry representatives, the
approach implies developing a pool of relevant industry-specific framework conditions, and assigning them to
specific stages and transition periods of the regional industrial emergence.
The abovementioned activities were carried out in several steps:
(1) Step 1: developing a comprehensive overview of the relevant framework conditions

from available sources (desk-research): this sub-task included an in-depth analysis of
information on cluster framework conditions from existing sources such as EC publications (including
ECO reports), business publications, academic articles and other relevant sources. This sub-task led to
an extensive list of relevant industry-specific framework conditions.
(2) Step 2: compiling and structuring framework conditions: this sub-task implied the grouping
of identified framework conditions into categories based on commonality patterns among those
framework conditions thereby creating a nomological net of factors. The commonality patterns here
refer to specific stages and transition periods of the life cycle. Furthermore, potential causal
relationships between various groups of framework conditions were extracted from the desk-research
analysis.
(3) Step 3: collecting evidence from a selection of European regions: this sub-task included
additional desk-research on the regions in question complemented by an online questionnaire and in-
depth interview rounds with the regional representatives of the industry in question. A complete
overview of the content of the online questionnaire is provided in Annex A. For each region included
in the analysis, a sample of key stakeholders was drawn, with a helicopter view on the development
of the industry in the region. The helicopter view in this case means understanding the overall picture
of the industry’s development in the region rather than having a one-sided perspective. The included
groups of stakeholders were: (1) cluster managers; (2) policy makers (regional/national); and (3)
industry associations/chamber of commerce or similar. We aimed at developing a list of 5-10
17
stakeholders per hotspot and then to make a shortlist with 3 key stakeholders to be involved in an in-
depth analysis.
(4) Consolidating the collected evidence and developing detailed case study descriptions:
the final step implied putting all the collected evidence together into one integrated case study
description, and, based on the key findings and conclusions, extracting practical policy
recommendations.
Analysed framework conditions
The results of the first two steps of the analysis are presented in Table 1-2.
TABLE 1-2: Consolidated overview of the identified framework conditions for eco industries (the acronyms in
the table refer to the specific stages of the industry lifecycle: P = Precursor Stage; E = Embryonic Stage; N =
Nurture Stage; G = Growth Stage; M = Maturity Stage).
Framework conditions Relevant stages

1. Financial framework conditions P E N G M
1.1. Availability of environment-related R&D subsidies   
1.2. Availability of ‘green’ lending through banks (lower interest rate   
on environmentally-friendly investments)
1.3. Availability of seed and venture capital for eco-innovative   
companies
2. Industrial framework conditions P E N G M
2.1 Critical mass of eco-companies (e.g., companies in air pollution   
control, cleaner technologies and processes (CTP), energy management,
monitoring and instrumentation, landscape services, marine pollution control,
noise and vibration control, recovery and recycling, renewable energy,
transport pollution control, waste management, water and wastewater
treatment etc.)
2.2. Critical mass of supply chain actors: presence of eco-innovation   
consultancy services, presence of research centres for eco-innovation, presence
of equipment suppliers, presence of utility companies
3. Market framework conditions P E N G M
3.1. Proximity of companies in traditional industries in transition     
towards environmentally friendly solutions -> Critical mass of business
consumers of eco-industries
3.2. Critical mass of private consumers of eco industries     
3.3. Green public procurement (i.e., public authorities use their    
purchasing power to support goods and services with lower impact on the
environment)
4. Cultural framework conditions P E N G M
4.1. Social attitude supporting eco industries (e.g., attitude of citizens     
towards environment, public awareness of environmental problems,
perception of green brands by consumers, perception of eco-innovation by
business)
5. Knowledge framework conditions P E N G M
5.1. Environmental focus of university research programmes    
5.2. Presence of environmental education in the school curricula   
and vocational training
6. Regulatory and policy framework conditions P E N G M
6.1. Availability of environment-related R&D and other tax    
measures18
18E.g., CO2 carbon tax; severance taxes on the extraction of mineral, energy, and forestry products; specific taxes on
technologies and products which are associated with substantial negative externalities; waste disposal taxes and refundable
fees; taxes on effluents, pollution and other hazardous wastes etc.
18
Framework conditions Relevant stages

6.2. Existence of eco-regulation (i.e., rules and regulations prescribing    
eco-efficient standards such as green procurement19)
6.3. Supporting IP conditions related to green technologies (e.g.,   
accelerated examination process for patent applications relating to green
technologies; green patent database and other green patent tools)
6.4. Policy measures supporting the internationalisation of eco-   
innovative clusters (e.g., regional support in representing the cluster
abroad; regional support for inward investment activities; removal of custom
duties on green products)
7. Support framework conditions P E N G M
7.1. Availability of eco-innovative infrastructure (e.g., new fuelling    
systems, sophisticated traffic control, diffused energy distribution systems)
7.2. Strategy documents and roadmaps for the development of eco-  
industries in the region
7.3. Dedicated cluster organisation (cluster manager or similar) to  
coordinate the development of eco-industries in the region
7.4. Well-functioning technology transfer offices within academic  
institutes facilitating the adoption of eco-industries solutions
1.4. Structure of the report
The structure of the report is organised following the dynamic model of industry’s development in the region.
Chapter 2 addresses the framework conditions relevant for the Precursor stage. Chapter 3 focuses on the
framework conditions important at the Embryonic stage. Chapter 4 elaborates on the framework conditions
relevant for the Nurture stage. Finally, Chapter 5 addresses the Growth stage. As shown in the Table 1-2, a
framework condition is often relevant for more than one stage of industry’s development. In Chapters 3-6, we
elaborate on framework conditions per stage, but to avoid repetition, if one framework condition is relevant for
more than one stage, we specify it in the text where this framework condition first appears. In case there are
considerable differences with other stages, we mention the same framework condition in the chapters dedicated
to those other stages. In Chapter 7, we integrate the analyses of specific stages, draw the key conclusions and
formulate policy recommendations. Annex A of the report contains the questions from the online questionnaire
relevant for eco industries. Annex B provides an overview of the analysed regions and key data on eco
industries-related clusters in those regions.
19Green procurement requires a company or organisation to carry out an assessment of the environmental consequences of
a product at all the various stages of its lifecycle. This means considering the costs of securing raw materials, and
manufacturing, transporting, storing, handling, using and disposing of the product. For more information, see
http://www.iisd.org/business/tools/bt_green_pro.aspx
19
2. Specifics of eco industries

In this chapter, we elaborate on the specifics of eco industries, and particularly the key actors of the value chain,
key challenges of the industry and the formation of clusters in eco industries.
2.1. Introduction
Eco industries mainly emerged on the basis of traditional, now mature, industries driven by
the demand for essential commodities such as water supply or services like waste collection 20.
A trend can be observed of former traditional industries increasingly focusing on eco activities and gradually
transforming into eco industries. Examples of this transformation are found in the recycling industries where
former mining companies have refocused on recycling, and in the renewable energy sector, where traditional
energy suppliers are increasingly incorporating green energy supply into their business models 21. The
emergence and development of eco industries is further accelerated by new environmental legislation setting
strict requirements and specific timeframes to comply with new regulatory standards and targets. It includes
compliance with the EU legislation and national legal requirements, for example, water quality targets and
production targets for energy from renewable sources 22.
There is hardly any other industry where growth, competitiveness and performance are more strongly linked to
the (environmental) policy agendas and regulatory framework conditions. Regulations aiming to minimise the
negative environmental and social impacts create business opportunities that allow for development of a whole
new industry. Besides regulations, eco industries are driven by technology, and the abovementioned business
opportunities can only be exploited if technology permits doing so23.
The demand for eco industries-related products and services comes from both private and public (i.e., cities and
municipalities, local and regional agencies, and national and international authorities) sectors. In some sectors,
a trend can be observed of increasing service offerings. Such a development can be explained by high
competition within manufacturing markets and higher profitability of service-related activities. Furthermore,
there is an increasing need for integrated solutions, and customers (for example, industrial sites and water
treatment plants) increasingly prefer to outsource environmental management and monitoring 24.
Due to increasing global awareness about environmental issues and the need for energy efficiency and
emissions control, public budgets available for eco industries worldwide keep growing, particularly in
developed countries. A significant part of these budgets targets technological developments (R&D). Public
budgets, in turn, trigger the investments from the private sector. These developments resulted in a new type of
investors, so called ‘green’ investors. Interestingly, in the United States, the investments into eco industries
until recently were mainly inspired by economic rather than environmental considerations. In Japan,
20 Ernst & Young (2006) “Study on Eco-industry, its size, employment, perspectives and barriers to growth in an enlarged
EU”, Final report, August 2006, available at
http://ec.europa.eu/environment/enveco/eco_industry/pdf/ecoindustry2006.pdf

23 Ibid.
20
commercial banks have started playing an important role in supporting eco industries. The EU eco industries
have a global competitive advantage thanks to the early adoption of environmental policies and regulations and
the fact that earlier than elsewhere Europe was confronted with the negative effects of environmental pollution.
Nevertheless, this competitive position is threatened by emerging countries like China 25.
One of the key characteristics of eco industries is diversity. The types of activities falling under the
core eco industries vary from high-tech complex services in, for example, renewable energy and air pollution
control to mature and well established applications in recycling and waste treatment. Such diversity implies
considerable differences within the sub-sectors of eco industries with regard to innovation and technological
potential, and with regard to finding and validating new opportunities for creating value added. While SMEs
play a major role in regulation-driven markets such as air pollution control and eco-construction, older sub-
sectors such as waste treatment and collection are dominated by large multinational companies. In case of
recycling, large companies are at the top of the collection and processing chain, while SMEs are at the base and
have a role of collecting, sorting and processing at smaller scale and feeding their output into the production of
large companies26.
2.2. Key actors of the value chain
Existing studies clearly demonstrate the complexity of interactions within and across the value chain of eco
industries. This complexity can partially be explained by the fact that the boundaries between eco industries
and traditional industries are blurring, and a strong interdependence exists between eco industries and
traditional manufacturing activities. Since traditional industries are increasingly moving towards green
business strategies and adopting environmental technologies to improve resource efficiency and reduce
emissions, the abovementioned interdependence and convergence of eco industries and traditional industries is
expected to increase even more in the future 27.
Companies in eco industries considerably vary in size and form, from international multi-
utilities groups, state industrial companies, public administration, R&D groups and SMEs, to
niche firms specialised in one market segment and private expert consultants. Furthermore,
significant differences in company size and form can be observed between sub-sectors and across countries28.
Companies operating within eco industries often emerge from industrial manufacturing companies. In mature
markets, such companies tend to be subsidiaries of larger corporations, particularly in the waste management,
water supply, waste water treatment and air pollution control sectors. In case of eco-construction and vibration
control, activities tend to originate with small firms, some of which are then integrated into larger firms. Many
of these companies have expanded their activities to operate at the European or global level and have become
worldwide industry leaders in, for example, waste management, water supply, waste water treatment and wind
turbine manufacturing. At the same time, newer, regulatory-driven markets, like environmental monitoring,
are dominated by more specialised SMEs29.
The general structure of the EU eco industries reflects the abovementioned general industry trends.
New “regulation driven” EU markets are usually formed by SMEs, while older and established eco industries
markets tend to consist mainly from larger and international firms. As the new markets grow, firms tend to
26 Ibid.
27 Ibid.

29 Ibid.
21
grow in size, and concentration trends can be observed over time. Additionally, the integration of activities of a
firm proves to depend on its size. For example, large waste management firms tend to integrate all activities
within the firm with hardly any external suppliers or sub-contractors involved. At the same time, environmental
monitoring activities are often (at least partially) outsourced to external parties 30.
Table 2-1 provides a non-exhaustive overview of the eco industries supply chain for the main sub-sectors
identified by the “Study on the Competitiveness of the EU eco-industry” (2009)31.
TABLE 2-1: Overview of eco industries supply chain for the main sub-sectors32
Upstream: supplying Core eco industries Downstream: client Competitiveness aspects

sectors sectors
 Steel, Glass, Textiles &  Recovery and recycling  Steel, Glass, Textiles,  Consumer demand/
 clothing, ICT ICT awareness
(hardware),  (hardware), electronic  Global competition for
 electronic equipment,  equipment, Automotive, materials and prices of
 Automotive,  Publishing and printing commodities in world
Publishing and / markets
printing/paper,  paper production,  Policy / regulations;
Petrochemicals/plastic Petrochemicals/plastics,  International and EU
s, chemicals  packaging industry, (e.g. REACH, WEEE,
 chemicals, special alloys life cycle strategies, etc.)
 Competition from
developing countries in
dismantling activities.
 Innovation &  Air pollution control  Steel and other energy  Innovation, ability to
Technology intensive industries, provide small scale
 Raw materials supply automotive, aerospace, solutions
for chemistry, cement, (nanotechnology),
 equipment offices, hospitals, transfer of knowledge
households
 Suppliers of wind,  Renewable energy  Energy intensive  Policy / regulations (EU
solar, heat, and other production industries, and international
technologies &  Automotive, agreements)
equipment. Transportation,  Global competition for
 Bio-fuels supplying  Aerospace, Households,  resources
sectors, public sector, eco-  Access to finance
 e.g. agriculture (sugar, buildings  Technology
 wheat, maize, rape-  Energy prices
seed)
 Mechanical
engineering
 services
 Mechanical  Waste water treatment  All industries  Consumer demand basic
engineering  and water supply households commodities and
 Machinery and  public sector services
equipment  Industry standards
 New investment
opportunities
 Building materials  Eco-construction  Real estate developers,  Access to finance
(wood, institutional investors,  Green procurement
 cement, glass) commissioners of public policies
 Plastics (bioplastics)  buildings construction  Divergence of regulation
 Chemicals (insulation and standards (internal
32 Ibid.
22
Upstream: supplying Core eco industries Downstream: client Competitiveness aspects

sectors sectors
 materials) market)
 Electronics sector
 Energy saving lighting
 producers
 Climate control
equipment
 (heat and energy
saving)
 Renewable energy
sector
 Households, public  Waste management  Industry, renewable  Industry standards,

sector, energy regulations, renewable
 services sector (e.g.  sector and energy energy (bio-mass)
etailing) and industry suppliers.
2.3. Key challenges of eco industries
The main challenges that the EU eco industries have to face include the following 33:
 The absence of a strong organising entity (lead firm) in most eco industries supply
chains: such organising entities or lead firms can, for example, be found in the supply chains of
traditional industries such as automotive industry, where original equipment manufacturers are strong
organisers and integrators of supply chains, retaining control over the processes within it. Given the
absence of strong organisers, public policy may have a role in mobilising and further integrating the
supply chain of eco industries.
 Various barriers in the process of technology transfer: examples of such barriers include
limited adoption and application capacity of environmental technologies in specific supply chains (i.e.,
weak innovation systems, where the technologies are available, but not reaching key clients and end-
users) and the need for further development of capital markets for eco industries in traditional sectors.
Furthermore, technology transfer needs to take place between firms but also between countries. In this
respect, the heterogeneous implementation of the various regulations at a country level is a point of
attention.
 Lack of a uniform implementation and enforcement of relevant directives, standards

and certification procedures at the level of the Member States: it creates an uncertain and
non-transparent business environment, which in turn increases the costs of doing business across
Europe. These factors are unfavourable for investments and growth of the industry. Therefore, for the
EU eco industries to be able to successfully develop in the future, a long-term stable policy framework
with greater harmonisation or coordination across the Member States, together with simplification of
national regulations is needed. Furthermore, the development of a more coherent intellectual property
rights (IPR) policy and legal framework is crucial, not just within the EU, but also at the international
level.
 Absence of an open global market for the attraction of non-EU talent: the technological
evolution and progress in the field of eco innovation have altered the required labour skills. There is an
increased need for new skills and a higher skill level. This factor is putting pressure on the competitive
33 Based on the results of ECORYS Netherlands and IDEA Consult (2009) “Study on the Competitiveness of the EU eco-
industry”, Study within the Framework Contract of Sectoral Competitiveness Studies – ENTR/06/054 for DG ENTR of the
European Commission, Final Report – Part 1, available at
23
position of the European companies. Therefore, educating and training the current labour force and
revising the inflexible labour market regulations are required for the EU industries to stay competitive.
 Limited access to finance in some of the capital-intensive sub-sectors of eco-industries:

Several aspects can be highlighted within this point.
o The extent to which access to finance represents a challenge differs per sub-sector. In the
recycling industry, for example, access to finance for innovation is not what constitutes a
barrier for the sector’s development. The main challenge in this sub-sector is related to the
absence of collaboration to get the necessary funds. In the environmental technologies
industry, however, investments are often considered to be riskier than investments in other
technologies. These perceived risks negatively influence capital injections.
o Besides the sub-sector, also the size of the firm matters as regards access to finance. Venture
capitalists active in the market mainly focus on larger companies and projects. SMEs, in turn,
have to rely on traditional local banks for funding. At the same time, banks are rather risk-
averse and are not specialised enough in the technological specifications of eco industries
projects to be able to fully evaluate the risks involved.
o Additionally, long pay-back periods, a relatively high level of uncertainty, and the financial
crisis all have a negative impact on the level of availability of funding.
 Increasing global competition from emerging economies: global competition within eco
industries becomes increasingly stronger. Europe’s position is threatened by the development of
emerging economies such as China and India:
o The EU has managed to retain its role as world leader in specific sectors such as chemicals,
pharmaceuticals, food processing and petrochemical industries through a strong focus on
higher value added and technologically advanced products and processes. However, the
dominance of its global position in most of these sectors has declined.
o Demand for environmental goods and services increasingly depends on the question whether
eco industries can add value to products, processes or brands. Where they are seen exclusively
as required by regulations and as adding costs, demand for such goods and services is likely to
be strongly based on cost considerations and lower cost competitors with similar technologies
(for example, from China) are likely to be chosen over European producers.
 Technological limitations: the current state of technology development does not always allow eco
industries to satisfy the needs of their customers in traditional industries. For example, energy
intensive sectors such as the steel and non-ferrous metals heavily depend on stable energy supply and
prices. However, at this moment, energy supply from renewables is not able to provide the kind of
steady supply needed for this traditional industry. Similarly the chemicals sector needs high quality and
pure inputs for certain products and processes. Currently, the eco industries sector is not yet able to
ensure this kind of quality to allow for a substantial increase in recycled materials in chemical products.
 Information asymmetry: potential clients are often not aware about the eco industries-related
technologies that exist and applications that may increase their competitiveness. It can partially be
explained by a high diversity of applications of eco industries and a high level of technical complexity of
these applications. For potential customers, the cost of searching for potential solutions might
overweight the long-term benefits of such solutions due to their relatively uncertain benefits. It is
particularly the case for SMEs.
24
2.4. Clusters in eco industries
A high diversity of eco industries makes it rather difficult to identify general trends in terms of geographical
concentration and integration of activities in clusters. Nevertheless, a trend can be observed of the integration
of specialised eco industries-related companies into larger industrial groups. This trend involves both large
companies and SMEs. The main motives of companies to engage in such integration include their desire to
expand their geographical coverage, extend the range of their activities, penetrate broader markets and reach
certain critical size in order to be able to bear higher R&D costs 34.
Existing studies suggest that the geographic location of eco industries and their range of operations are linked 35.
In the EU, eco industries are therefore often geographically concentrated in certain areas, even in sub-sectors
dominated by large international firms such as waste management. However, in certain sub-sectors, less
geographical concentration can be observed. These are the sub-sectors that are not constrained by the need for
local resources and which operate on a global scale, for example, air pollution control, consolidated water
supply and waste water treatment36.
As mentioned before, strategic partnerships are evolving between traditional and eco industries, aimed
specifically at tackling environmental issues. For example, waste management and recycling companies partner
with automotive and airplane manufacturers to develop closed chain management. Since core eco industry
companies are often more aware about evolving policies and legislation, for instance, in the field of recycling
they may advise traditional industries on strategies to prepare for upcoming regulations. Examples of such
partnerships can be found in materials recycling, where eco industries companies provide advisory services to
clients in, for example, electronics or ICT sectors37.
The abovementioned developments lead to the emergence and growth of clusters in eco industries. Clusters are
generally seen as fostering technology and knowledge transfer among industry players and their suppliers and
clients, thus contributing to the competitiveness of the sector. Geographically concentrated clusters may offer
advantages in terms of more efficient use of resources and reduction in emissions due to reduced transportation
needs. Clusters often emerge as a result of private initiatives. However, there are also various examples of
clusters driven by policy initiatives or public-private partnerships38. In any case, public policy may provide an
enabling environment, which can further strengthen the cluster and the competitiveness of companies within
it39.

37 Ibid.
38 Public-private partnerships can have distinct structures (contracts or partnerships) and modes of operation (e.g.
“coproduction” and consensus building between public and private actors, risk-sharing arrangements, decision making,
criteria used to select projects). They can add value in different ways: synergies, cost reductions, transaction costs,
mobilisation of private resources etc. They need to be coordinated with other policy instruments (e.g., public R&D,
financing, creation of markets for eco-innovation). Source: OECD (2011) “Better Policies to Support Eco-innovation, OECD
Studies on Environmental Innovation”, OECD Publishing, available at http://dx.doi.org/10.1787/9789264096684-en
25
3. Precursor stage: first interest

in the emerging industry
In this chapter, we elaborate on the framework conditions relevant to the development of eco industries in the
region at the Precursor stage, the first stage of the industry’s lifecycle. We first address each specific framework
condition in detail and then discuss the implications for policy makers at this stage of industry’s development.
3.1. Introduction
The Precursor stage corresponds to the activities that demonstrate the first interest of the region in a
particular emerging industry. Specifically, this stage implies activities that support the initial
development of a phenomenon of eco industries in the region, i.e., a business concept and/or underpinning
service/technology platform, which stimulate industrial interest and investment in particular market-directed
feasibility studies.
The following framework conditions have been identified as particularly relevant for this stage of industry’s
development:
 Proximity of companies in traditional industries in transition towards environmentally friendly

solutions (market; relevant for all stages);
 Critical mass of private consumers of eco industries (market; relevant for all stages);
 Social attitude supporting eco industries (cultural; relevant for all stages).
3.2. Proximity of companies in traditional industries in transition

towards environmentally friendly solutions
This framework condition implies the proximity to companies in traditional industries which are in transition
towards environmentally friendly solutions, driven by trends such as new environmental regulation, cost
reduction and/or consumer awareness. This group of companies constitutes the business customer base of eco
industries. This framework condition is particularly relevant for a part of eco industries formed by small and
innovative companies acting in the field of, for example, renewable energy, waste recycling, environmental
auditing and consultancy.
Essence of framework condition
Examples of the relevant traditional industries include construction, textile, automotive, chemicals. Traditional
industries are now looking more and more into sustainable solutions for their businesses, as they move more
towards green business strategies or greener manufacturing processes. Provided eco industry companies are
located close to traditional industries, opportunities arise such as knowledge sharing, development of
integrated platform solutions etc., resulting in the increased ability of eco industry companies to better satisfy
the needs of their business customers. The interactions across the value chains between eco and traditional
industries become closer and more intensive, with integrated approaches being put forth the most.
Role of framework condition
For eco industries, being in close proximity to the relevant traditional industries has a number of benefits. First,
it allows for achieving stronger informal ties and higher levels of trust between eco industry companies and
26
their business customers. Second, it significantly reduces logistics costs. Third, by initially supplying only
within the close proximity of the company facilities, any problem can be followed up quicker and ultimately
solved to ensure a full functioning product in order to proceed to a large-scale roll out. Finally, link to
traditional industries allows eco industry companies to advance their products and ensure their differentiation.
The latter is possible by developing dedicated functions and technologies focused on specific application areas.
Therefore, already at the Precursor stage, eco industry companies strongly benefit from access to, and proximity
of traditional industries. At later stages of industry’s development, it is essential for eco industry companies to
engage in clusters or centres of excellence that include suppliers and end-users, and focus on new applications
and solutions. Forming such centres of excellence enables IP generation and capturing new market
opportunities.
Influence of policy makers
Traditional industries are typically developed over a large time span. This development often has deep historical
roots, and it is quite hard for policy makers to influence this factor. However, by means of adopting eco-
oriented regulations and standards, policy makers can stimulate the transition of traditional industries towards
environmentally friendly solutions, thus creating a demand for the products and services of eco industries.
Additionally, policy makers can influence the engagement of traditional industries with eco industries by
implementing policies that incentivise joint networks and multi-stakeholder research platforms. Such
applied.
Capital region of Denmark: Copenhagen District Energy Partnership 40
This example shows how policy makers can stimulate the transition of traditional industries towards environmentally
friendly solutions.
Copenhagen is an example of a highly efficient energy system which considerably reduces CO2 emissions, and at the
same time reduces costs for both society and the individual consumer. By combining production of heat and power and
using all available types of fuels, including waste and biomass, Copenhagen has a world-class energy efficient heating
system. Copenhagen has recently launched an ambitious and comprehensive plan aiming at 100% CO2 neutrality.
Since the 1980’s, Copenhagen has used heat planning to achieve long term energy savings. Before the implementation of
heat planning, Copenhagen citizens were supplied with heat from electricity, individual natural gas and oil boilers and
district heating based on coal.
The Danish legal framework governing power and heat production, environmental standards and energy planning
requirements are in the historical context considered dominant drivers for this transition. Today, subsidies and energy
taxes are the main drivers of the ongoing process of getting more biomass to the (Combined Heat and Power) CHP
plants of greater Copenhagen. Subsidies are given to electricity production based on biomass, and heat production based
on fossil fuels is taxed heavily. There is no tax on heat produced from biomass. Like the exchanges of CO2-quotas on the
European emission market, these subsidies and taxes make CHP production based on biomass more economically
feasible than CHP production based on fossil fuels41.
40http://www.districtenergypartnership.com/da-DK/CASES/CASES-COPENHAGEN.aspx
41http://www.copenhagenenergysummit.org/applications/Copenhagen,%20Denmark-
District%20Energy%20Climate%20Award.pdf
27
3.3. Critical mass of private consumers of eco industries
This framework condition implies the presence of a sufficient mass of private consumers of eco industries in the
region.
Critical mass of private consumers, and more specifically local demand conditions are crucial for the
emergence of eco industries. Demand conditions refer to the type of users and size of the market. Firms that
face a sophisticated domestic market are likely to sell superior products because the market demands higher
quality, and a close proximity to such consumers enables the firm to better understand the needs and desires of
the customers42.
Private consumers are highly sensitive to factors such as price, quality and reliability. There are, however,
numerous other factors that play an important role in the purchasing behaviour of consumers, all embodying
the cultural capital index of a particular region. Examples of relevant eco industry products for private
consumers include solar panels and water-saving systems.
Not all eco products require the presence of a critical mass of private consumers in the region, as some may be
easier exportable than the others. A straw enabling the filtration of contaminated water is an example when
having a critical mass of consumers in a region is less important. A European device that enables the filtration
of any water source and provides the user with clean filtered water, essentially removing the bacteria and other
harmful substances43 is an export product for the third world countries. Such a product does not have a large
scope within Europe, since the infrastructure and water purifying installations provide households with
relatively clean drinking water from the tap. In the third world countries however, similar systems are often
non-existent, especially in rural areas. At the same time, in the area of eco-construction, acquiring international
consumers, despite their interest could prove to be hard, since transportation costs can make purchasing
unattractive. For that sub-sector, the importance of having a critical mass of consumers in their own region is
highly important.
Policy makers can stimulate the creation of a critical mass of private consumers by stimulating the demand for
eco products. Examples of measures stimulating the demand include social marketing and advertising
campaigns promoting eco industries and green products in the region, as well as incentivising the purchase of
eco products (e.g., financial benefits for the users of solar panels).
Capital region of Denmark: Europe’s leader in the adoption of electric cars
The biggest Danish power company has partnered with a California start-up company, Better Place, to build a
nationwide grid to support electric cars, composed of thousands of charging poles in towns and cities and service
stations along highways where depleted batteries can be swapped for fresh ones on long trips. The project is strongly
supported by the Danish government. The support includes tax breaks for electric car buyers and free parking
for the drivers of electric cars in downtown Copenhagen44.
42 Kemp R. & Horbach J. (2008) “Measurement of competitiveness of eco-innovation”, Deliverable of the MEI project
43 http://www.vestergaard-frandsen.com/lifestraw
44 http://www.time.com/time/world/article/0,8599,1960423,00.html
28
3.4. Social attitude supporting eco industries

This framework condition implies the presence of positive social attitude supporting eco industries in the
region.
Social attitude towards eco industries in the region refers to the general level of consciousness of people in the
region about the environment and the role they can play in solving the global environmental challenges. The
more environmentally-friendly is the orientation of people in the region, the higher the demand for eco industry
products and services. The so called “going green” movement is continuing to build momentum, especially in
developed countries45. Diverse stakeholder groups become more and more eco-friendly, which stimulates the
emergence and development of eco industries in various regions of the world.
Positive social attitude towards eco industries creates the demand for eco products in the region.
Efforts to develop awareness of private and business consumers on the availability of technologies and services
offered by eco industries, as well as on their costs and potential benefits, are required to stimulate the demand
and industrial emergence. Several existing instruments such as eco-labels have proven effective to raise
awareness and build consumer trust in the quality of the goods and services delivered.
Specifically, positive social attitude towards eco industries leads to the following benefits for the industry:
 Continuously increasing local demand for green (or greener) products and services;
 Extension and/or diversification of product choices (e.g., dedicated products with eco-labels);
 Shift in spending of consumers towards greener brands within the same product category;
 Readiness of consumers to pay a premium price for green products.
Social attitudes often have deep historical roots and are relatively difficult to change. Nevertheless, policy
makers can play an important role in stimulating the region to engage in a transition towards a greener way of
life. Examples of the relevant stimulating measures include social marketing and advertising campaigns
promoting eco industries and green products in the region, as well as incentivising the purchase of eco
products.
Capital region of Denmark: promoting climate-friendly policies
A clean environment is reported to be particularly important to the Danes. Denmark is currently ranked as the most
climate-friendly country the world, with the most efficient policies to reduce greenhouse gas emissions and prevent
climate-change. This is the verdict of the United Nations’ Climate Change Performance Index 2013. Thirty years of
focused energy policy has placed Denmark at the forefront in the development and use of renewable energy, such as
biofuels, wind, wave and solar power46.
45 Sarkar A.N. (2013) “Promoting Eco-innovations to Leverage Sustainable Development of Eco-industry and Green
Growth”, European Journal of Sustainable Development, 2, 1, pp. 171-224
46 http://studyindenmark.dk/news/denmark-the-most-climate-friendly-country
29
4. Embryonic stage: entering a

market environment
region at the Embryonic stage, the second stage of the industry’s lifecycle. Similar to the previous chapter, we
first address each specific framework condition in detail and then discuss the implications for policy makers at
this stage of industry’s development.
4.1. Introduction
The Embryonic stage corresponds to the activities that support the improvement of the reliability and
performance of technology and services to a point where it can be demonstrated in a market
environment. Specifically, this stage implies activities that help to demonstrate the commercial potential of
technology and services in the region through revenue generation.
development:
 Availability of environment-related R&D subsidies (financial; relevant also for Nurture and Growth
stages);
 Availability of ‘green’ lending through banks (financial; relevant also for Nurture and Growth stages);
 Availability of seed and venture capital for eco-innovative companies (financial; relevant also for
Nurture and Growth stages);
 Green public procurement (market; relevant also for Nurture and Growth stages);
 Environmental focus of university research programmes (knowledge; relevant also for Nurture and
Growth stages);
 Availability of environment-related R&D and other tax measures (regulatory and policy; relevant also
for Nurture and Growth stages);
 Existence of eco-regulation (regulatory and policy; relevant also for Nurture and Growth stages);
 Availability of eco-innovative infrastructure (support; relevant also for Nurture and Growth stages).
4.2. Availability of environment-related R&D subsidies
Government funding is often an important prerequisite for industry to be able to enter the market. Eco-
products often are more expensive than traditional solutions. The specific needs of some projects, for example,
in the renewable energy sector, sometimes imply long pay-back periods and high risk or uncertainties regarding
market potential which make it difficult to obtain adequate private financing at limited costs.
A substantial amount of new eco industries-related knowledge is produced in innovation projects conducted by
firms in the private sector. However, due to high costs and high uncertainty about the success of such
innovation projects, firms may engage in less R&D activities than is socially desirable. In order to foster
30
innovative activities and economic growth, governments often use R&D support programs aimed at increasing
R&D effort in the private sector47.
Direct government subsidies can stimulate firms to perform R&D that without the support would be privately
unprofitable. However, the effectiveness of the support program heavily depends on the quality of the projects
that are covered by it. Program managers may be encouraged to support projects with the best technical merits
and the highest potential for commercial success, i.e., projects that have high private returns and would have
been undertaken even in the absence of the government support48.
The availability of environment-related R&D subsidies is reported to be most effective for SME’s49, who
otherwise would not be able to uptake R&D activities. The latter can be explained by the fact that, as mentioned
above, many eco technologies require extensive R&D which, in turn, implies high costs. The availability of R&D
subsidies can motivate small businesses to continue with the development of the technology.
R&D subsidies, either through direct government funding of R&D or through tax credits for private R&D
activity, can help raise private R&D levels to a socially desirable level. Therefore R&D subsidies are reported to
be a useful measure to complement other eco-related policies; however, they do not have the ability to stimulate
the development of the industry on their own. While R&D subsidies address market failures in the invention of
new technologies, they do not provide incentives to adopt new technologies 50.
Furthermore, when setting the level of R&D subsidies, policy makers need to consider the opportunity cost of
additional R&D. Since R&D requires highly trained personnel, at least some new eco-related R&D efforts will
come at the expense of other R&D. Just as spillovers make the social returns to eco R&D high, they also make
the social returns to other types of R&D high. Thus, some of the large social benefits of additional eco R&D are
offset by large opportunity costs from giving up other types of R&D spending. Ignoring the costs of reducing
these R&D efforts would result in overly generous subsidies for eco R&D, and could have negative impacts on
the economy as a whole51.
Lombardia (Italy): regional calls through Finlombarda52
Finlombarda S.p.A. is the holding company of Lombardy Region. It was established in 1971 upon initiative of the major
banks operating in Lombardy (Cariplo Mediocredito Lombardo, Banca Popolare di Milano, Banca Commerciale
Italiana) and Lombardy Region, which then acquires 30% of the shares. It is a public-private venture.
Finlombarda’s aim is to support regional economic and social development initiatives through financial and managerial
tools. Finlombarda operates under regional government's mandate, having as a mission to promote the development of
the regional economy and provide consultancy services. Finlombarda provides economic and financial assistance to
build financial models for the financing of specific renewable energy plants.
Finlombarda’s specific activities in the renewable energies sector are:

 Investigation of suitable instruments;
47 Einiö E. (2013) “R&D Subsidies and Company Performance: Evidence from Geographic Variation in Government
Funding Based on the ERDF Population-Density Rule”, Government Institute for Economic Research (VATT), and Spatial
Economics Research Centre (SERC), London School of Economics (LSE). Available at:
http://personal.lse.ac.uk/einio/RetD_Subsidies.pdf
48 Idem.
49 Bérubé C., & Mohnen, P. (2007) “Are Firms that Received R&D Subsidies more Innovative?”, CIRANO - Scientific
Publication No. 2007s-13; available at SSRN: http://ssrn.com/abstract=1123632

50 Based on Popp D. (2004) “R&D subsidies and climate policy: Is there a “free lunch”?”, Working Paper 10880,
http://www.nber.org/papers/w10880
51 Idem.
52 http://www.ensure-project.eu/partners/finlombarda/
31
 Direct investments in the equity of firms operating in clean technologies sector;

 Participation in co-financing with financial institutions;
 Subscription of shares of investment funds dedicated to clean technologies;
 Credit facilities for the purchase of equipment with high efficiency.
Capital region of Denmark: The Energy Technology Development and Demonstration

Program (EUDP)53
The main objective of the EUDP is to ensure the development and demonstration of new energy technologies, which can
reduce dependency on fossil energy, and which can contribute to minimising the CO2 burden and the environmental
impact of energy consumption. Applications can be submitted for funding for projects regarding all types of energy
technologies which meet the above objective.
The EUDP especially encourages submission of innovative projects within energy efficiency (construction, processes,
appliances etc.) with significant commercial potential. The projects must focus on developments in relation to existing
technologies and solutions, the possibility of solutions that can be replicated and scaled up/down, as well as financial
competitiveness.
Furthermore, this call for applications provides the option of applying for funding for preliminary projects to participate
in EU development and demonstration projects launched through realisation of “New Entrants Reserve” allowances.
EUDP funding is awarded with an expectation that the projects funded will lead to market implementation of the new
products and technologies developed by the project. An important objective is to ensure involvement of private investors
in projects. It is important to concentrate on functionally delineated projects, with innovative and patentable
technological content that is deemed technically practicable and which meets a market demand and has a well-defined
customer target.
4.3. Availability of ‘green’ lending through banks
While governmental funding is an important prerequisite for the emergence of eco-industries, private funding
is increasingly important in the development of the industries in later phases of the industry’s lifecycle. Private
funding in this context includes an array of solutions such as green lending by banks, availability of venture
capital and private equity.
“Green” lending refers to tailored loans by banks intended for environment-related projects. Generally, these
loans are different from regular loans in terms of interest rates, flexibility, duration and governmental
guarantees54. Green lending is more attractive for eco companies than traditional lending due to its higher
flexibility, lowered risks and lower financial burdens. The availability of green loans can enable businesses to
fund future projects or to further advance existing products.
Green lending is particularly important for capital-intensive projects, such as, for example, offshore wind power
(OWP) generators. Such projects need a long term backing in terms of finance and support. However, recent
economic developments, namely the financial crisis, drastically affected the availability of funding for eco
industries. Taking the example of OWP generators, financing from commercial banks became non-existent and
the only financing deal to be made by 2010 was with the support of the European Investment Bank. Prior to the
53 http://www.ens.dk/en-
US/policy/Energy_technology/Danish_Funding_Programmes/Documents/Energy%20Technology%20Development%20a
nd%20Demonstration%20Programme.pdf
54 Ghosh, A., & Himani, G. (2012). Governing Clean Energy Subsidies : What , Why , and How Legal?, (August).
32
2008 crisis, there were 45 public equity funds for green investments. In 2008 and 2010 however, there were 20
and 3, respectively. The repercussions of the onset of the crisis were particularly noticed by SMEs55.
Policy makers have some options to induce a change within eco industries regarding their emergence and access
to “green” financing options. Two primary options that policy makers can deploy are56:
 Direct access to capital through Public Investment Banks;

 Preferential credit.
Public Investment Banks represent financial companies owned by the state aiming to offer SMEs and mid-cap
enterprises better access to finance. Such banks typically provide investments through venture capital, loan and
debt instruments. They often aim to constitute a “one-stop-shop” for SMEs and mid-cap enterprises in their
search of funding. The Public Investment Banks are expected to:
 Give to SMEs better access to credit;

 Support entrepreneurs at all stages of their project;
 Help enterprises to expand their market and their export activities.
Preferential credit, in turn, refers to investments coming from commercial or development banks. Investing in
renewable energies entails slightly higher risks relative to products of traditional industries. To encourage the
banks to invest in eco industries, various options could be offered. Low-cost credit lines and partial risk
guarantees can incentivise banks to invest in higher risk-bearing projects57.
4.4. Availability of seed and venture capital for eco-innovative

companies
As FUNDETEC research highlights 58: “The financing difficulties are perceived to be much more salient
regarding environmental technologies, which are often considered riskier than other technology investments,
and as they are more subject to regulatory risk, and experience greater competitive disadvantages within
current market structures”. The research found that problems of access to finance mainly relate to two aspects:
an expectation gap between technology developers, private investors and policy makers; and an existing gap
59
between early-stage innovation and commercialisation leading to the so-called “valley of death” .
In the high tech industry such as eco industries, capital in general and seed and venture capital in particular are
often regarded as essential. Young firms in high tech areas only expand some time after they have been set up,
but when they do so, these firms belong to the principal generators of economic growth and employment. These
innovative firms should therefore be assisted in their initial phase of development with capital in order to reach
the high development level successfully. According to empirical studies, firms that can profit from venture
55 Jacobsson, R., & Jacobsson, S. (2012). Environmental Innovation and Societal Transitions The emerging funding gap for
the European Energy Sector — Will the financial sector deliver ? Environmental Innovation and Societal Transitions, 5,
49–59.
56 Idem.
57 Ghosh, A., & Himani, G. (2012). Governing Clean Energy Subsidies: What, Why, and How Legal? ICTSD, available at:
http://ictsd.org/downloads/2012/09/governing-clean-energy-subsidies-what-why-and-how-legal.pdf
58 FUNDETEC (February 2008), “Funding environmental technologies – final report”
33
capital achieve much higher innovation performance. The increased competition which accompanies the
increased importance of innovative firms is highly beneficial and can also help the old enterprises to increase
their level of innovating and thus contribute to the growth more intensely. Another empirical study for Europe
indicates that firms assisted with venture capital achieve substantially higher growth rates than old enterprises
that have not experienced such assistance 60.
An extensive body of academic research suggests that access to finance plays a crucial role in boosting
innovation. This role has two dimensions: accelerating growth and ensuring long-run success. First, investors
provide the capital to speed the development of companies. Second, the evidence suggests that the early
participation of venture firms helps innovators sustain their success long after their company goes public and
61
the venture capitalists move on .
In recent years, companies in several sub-sectors of eco industries (e.g., waste management and established
renewable energy companies) have been able to attract venture capital and obtain stock listings. In general, the
interest in the emerging eco industries on the part of venture capitalists is reported to be increasing, and they
actively seek opportunities in the sector, although the availability of venture capital for green investments is
62
reported to be more prominent in the US and even China than in the EU .
Although there are venture capitalists active on the European eco industries market, they mainly focus on the
larger companies and projects. Most SMEs have to rely on traditional local banks for their funding. However,
traditional banks are not specialised enough in the technological specifications of innovation projects in eco
industries to be able to adequately evaluate the risks involved. Moreover, as mentioned above, traditional banks
mostly have a rather risk averse profile, which makes it difficult for environmental technology suppliers to get
the funds needed. It is especially the case for larger projects involving higher investments, often already in the
63
demonstration phase .
The revenues in the eco industries sector are earned much later after the initial investment has been done.
Therefore, there is a need for substantial and long-term financing. There is however insufficient level of venture
capital available in the European clusters in general. This leads to deprivation of the innovative activities and
slower growth of SMEs, and the whole financing burden is often placed on the public funding 64. Therefore, in
Europe, the public authorities have a role to play in ensuring growth in this type of private financing,
particularly in the high-tech sectors. One of the biggest challenges in the clusters is suggested to be the need to
increase the level of private venture capital.
Access to European funding is especially hampered because of the complicated administrative requirements for
companies in the clusters. Especially smaller companies have difficulties to cope with these requirements.
Furthermore, it is often difficult to strike a balance between what the founders/owners demand for their
60 “The market for venture capital in Germany”, Deutsche Bundesbank, Monthly Report October 2000 available at
http://www.bundesbank.de/download/volkswirtschaft/mba/2000/200010mba_art01_venturecapital.pdf
61 http://www.freakonomics.com/2009/12/28/can-public-funded-entrepreneurship-work-a-qa-with-the-author-of-
boulevard-of-broken-dreams/
64 OECD (2009) “Clusters, Innovation and Entrepreneurship”, ed. Potter J. and Miranda G., Chapter 2 “The micro-
nanotechnology cluster of Grenoble, France”, Centre of Entrepreneurship, SMEs and Local Development
34
shares and what the venture capitalists are willing to pay. This often creates delay in the process of financing.
Finally, some companies complain that the subsidy landscape in Europe is too fragmented to be of any support.
By providing targeted and increased support to the industry from EU Community Budget, the European
Investment Fund and European Investment Bank, this challenge could be countered. This support from EU
government bodies can take the form of providing a package of financial instruments to cover different
company sizes and structures (e.g., loans, guarantees, grants and tax incentives) aimed at increasing the
attractiveness for the private sector to invest in European eco industry product development activities.
Capital region of Denmark: Vækstfonden
Vækstfonden is a state investment fund, which aims at creating new growth companies by providing venture capital and
competence. Since 1992 Vækstfonden has, in cooperation with private investors, co-financed growth in 4,100 Danish
companies with a total commitment of approx. 11.4 billion DKK. Vækstfonden invests equity or provides loans and
guarantees in collaboration with private partners and Danish financial institutions. The companies which Vækstfonden
has co-financed since 2001 represent a total turnover of approx. 27 billion DKK and employ approx. 22,000 people all
over the country65.
4.5. Green public procurement
Green public procurement is another major driver of eco industries. By means of green public procurement,
public authorities can execute a significant element of demand for eco products and services through their
purchasing practices66.
Green public procurement can be formally defined as “a process whereby public authorities seek to procure
goods, services and works with a reduced environmental impact throughout their life cycle when compared to
goods, services and works with the same primary function that would otherwise be procured”67. The core
objective of green public procurement is to encourage public authorities to purchase goods, services, and works
with a lower impact on environment. The integration of ‘green’ policy into public procurement procedure
contributes to sustainable consumption and fosters economic growth. The European Commission has actively
promoted the idea of ‘green procurement’; however, it still remains a voluntary instrument for Member States.
The extent of ‘green’ purchasing practice differs significantly within European Union 68.
Green public procurement is reported to be a powerful instrument for stimulating innovation and encouraging
companies to develop new products with enhanced environmental performance 69. It stimulates a more
sustainable use of natural resources and raw materials, and thereby creates opportunities for emerging eco
industries70. It can shape production and consumption trends, and a significant demand from public authorities
for “greener” goods creates or enlarges markets for environmentally friendly products and services. By doing so,
green public procurement also provides incentives for companies to develop environmental technologies 71.
65 http://www.vf.dk/?sc_lang=en
66 Reid, A. & Miedzinski, M. (2008): SYSTEMATIC Innovation Panel on eco-innovation. Final report for sectoral innovation
watch; http://www.europe-innova.org
67 European Commission’s Communication “Public procurement for a better environment”, COM(2008) 400
68 “Green public procurement in the European Union”, www.maastrichtuniversity.nl/web/
70 UNEP Year Book 2008, available at:
http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=528&ArticleID=5748&l=en
35
Existing studies have confirmed that in European regions, there is a considerable market for cost-effective
green public procurement, in particular in sectors where green products are not more expensive than the non-
green alternatives (taking into account the life cycle cost of the product). Furthermore, green public
procurement affects the whole supply chain and also stimulates the use of green standards in private
procurement72.
The main obstacles for policy makers to take up green public procurement are reported to be as follows 73:
 Limited established environmental criteria for products/services or ineffective mechanisms of

communication of these criteria;
 Insufficient information on the relative costs of environmentally-friendly products compared to similar
products with no or limited environmental benefits; and, as a result, low awareness of the benefits of
environmentally friendly products and services;
 Low awareness about legal possibilities to include environmental criteria in tender documents;
 Lack of political support and, as a result, limited resources for implementing/promoting green public
procurement in the region;
 Lack of coordinated exchange of best practices and information between regions.
The following measures need to be taken by policy makers to ensure active use of green public procurement in
the region74:
 Putting green public procurement on the political agenda of the region;

 Setting clear targets (e.g., developing green public procurement action plans focussing on: certain
product groups and due dates for these products; certain types of public organisations and due dates for
these organisations etc.);
 Creating green public procurement knowledge base (e.g., linked databases, websites containing
information on “green” criteria, specifications, best practices, eco-labels etc. on products and
procurement procedures, including legal information, procurement regulation);
 Offering training opportunities for the purchasers of green public procurement.
Capital region of Denmark: Strategic partnership for Green Public Procurement 75
The City of Copenhagen and Copenhagen Cleantech Cluster have established an innovation platform to involve
stakeholders in the development of the smart city. The innovation platform method is based on experiences with public–
private innovation from the U.S., the Netherlands and Finland, where intelligent public demand has been tested as a
tool to solving some of modern society’s grand challenges that call for radical innovation and very active participation
from the public sector.
The process can be divided into four phases:
 Identifying and prioritising challenges: The process starts with the identification and prioritisation of
important challenges by the public authorities. In this phase, it is crucial that the public authority is committed
to invest time and resources in developing the solutions to the challenge.
 From grand challenge to specific problems: The next step is to collect knowledge about the challenge and ideas
about how the challenge can be solved. Concrete solutions are not explored in this phase, which instead
addresses in which strategic direction the solution could be found. It is important to be open to many ideas and
explore alternatives.
In the case of the “smart city” platform, experts, entrepreneurs and other stakeholders were invited to help understand
the grand challenge in more detail, and break it down into more specific problem areas. The first finding was that citizen
72 Idem.
73 Idem.
74 “Green public procurement in Europe” (2006), Virage, Centre for Environmental Studies, Global to Local, Macroscopio,
SYKE
75 http://www.iisd.org/pdf/2012/procurement_innovation_green_growth_continues.pdf
36
engagement and data availability are the most important issues, and, based on this finding, the focus of the platform
became more specific: to identify how existing and new data can be made available through a digital infrastructure.
This challenge was discussed at a series of meetings between the city and the cluster, where city representatives
presented obstacles and opportunities for a solution. Based on these discussions, it became clear that it would be of
great benefit to explore further how a digital infrastructure could be established, and it was decided to move to the next
phase.
 Innovation teams: Partners and stakeholders with the competencies to contribute to solving this more specific
challenge are identified, and possible solutions and barriers are explored in more detail. It is important that the
public sector is actively engaged throughout the process, since they are ultimately procuring a solution.
In this case, the more specific challenge of establishing a digital infrastructure was explored in more than 20 meetings,
six workshops and a digital workshop with more than 200 experts involved. Topics addressed included data availability,
open vs. closed standards, business models for establishing a digital infrastructure, waste management, water
management, transportation, energy consumption etc. Over a period of six months, these interactive elements provided
substantial knowledge and input for how to establish a digital infrastructure for a smart city.
 Procurement and Implementation: Based on knowledge and input, the next step is to put out a tender for a new
solution. The identity of the procurer is not given; it might be a public authority, but it could also be an
association with public sector backing.
In the Copenhagen case, a test case has been developed in the area of traffic. The City wishes to reduce CO2 emissions
from traffic looking for available parking spots. The Copenhagen Cleantech Cluster has facilitated a three-month process
to develop different scenarios to solve this challenge. The scenarios will be handed over to the City of Copenhagen,
which can use them for inspiration to develop the final procurement material/criteria. This way, the City will be a very
qualified buyer, which has received the best possible input from leading researchers, companies, entrepreneurs and
citizens before defining what they wish to buy.
4.6. Environmental focus of university research programmes

The current framework condition implies the integration of environmental focus into the research programmes
of local universities and other relevant research institutions.
Environmental research among others includes areas like climate change, natural hazards, environment and
health, natural resources management, biodiversity, marine environment, land and urban management,
environmental technologies, earth observation, and tools for sustainable development 76. A central role in
conducting environmental research in European regions belongs to regional environmental technology
development centres. The latter are formed by universities, administrative agencies, research institutes,
industries and non-governmental organisations with a common objective to solve unique local environmental
problems collectively. The responsibilities of such centres include analysis and research of local environmental
pollution, development of environmental technology, environmental education and technical support to
enterprises coping with environmental management problems, dissemination of new environmental
technologies, and promotion and education regarding new environmental technologies to people in the
region77.
Environmental research is closely linked to the environmental economy, encompassing firms from all areas of
business – from the construction industry to mechanical engineering, electrical engineering and metalworking,
to trade and service companies. A particular role in environmental research belongs to SMEs. SMEs have a role
76http://ec.europa.eu/research/environment/index_en.cfm?pg=about
77OECD (2011) “Better Policies to Support Eco-innovation, OECD Studies on Environmental
Innovation”, OECD Publishing, available at http://dx.doi.org/10.1787/9789264096684-en
37
in a whole range of environmental research topics, for example, waste management and recycling, water saving
and purification, energy saving and use, air purification, the development of environmentally friendly products
and noise reduction78.
Environmental research allows for promoting the sustainable management of the environment and its
resources through increasing knowledge about the interactions between the climate, biosphere, ecosystems and
human activities. It also enables developing new technologies, tools and services that address environmental
issues, e.g., prediction tools and technologies for monitoring, prevention, mitigation of and adaptation to
environmental challenges and risks. Finally, environmental research is crucial for informing decision-makers in
their design of environmental policy, as well as business leaders and citizens about the challenges and
opportunities they face79.
Policy makers can stimulate the development of environmental research in the region by:
 Introducing programmes that provide financial support for conducting collaborative research within
the environment-related disciplines (including multidisciplinary research addressing complex issues,
problem-solving research; international cooperation; addressing global and local challenges;
dissemination of knowledge and research results 80);
 Introducing programmes dedicated to strengthening the innovative capacity of SMEs by providing
financial support for outsourcing research critical to their core business activities 81;
 Introducing programmes that stimulate industry-academia partnerships in order to stimulate research
collaboration between public research organisations and private commercial enterprises, including
SMEs82;
 Introducing programmes that offer initial training of researchers, lifelong training and career
development, and international fellowships83;
 Creating a dedicated helpdesk that would inform cluster members about calls for proposals for the
relevant EU subsidies and grants and assist cluster members with preparing proposals.
Another important policy action is public investment in basic research. Such research has a public good
character and is therefore unlikely to be undertaken by the private sector. At the same time, it helps address
fundamental scientific challenges and fosters technologies that are considered too risky, uncertain or long-
gestating for the private sector. Furthermore, governments can influence the direction of the existing research
effort, for example, by prioritising thematic and mission-oriented research programmes aimed at addressing
environmental challenges, though without necessarily specifying the nature of the research required. Finally,
governments can take action in improving the process of translating research into innovation, for example, by
strengthening the links between science and business 84.
Capital region of Denmark: Green Campus of the University of Copenhagen
The University of Copenhagen has opened the Green Campus Office to facilitate the process of incorporating
sustainability into the overall development, operation and general conduct. The University is prioritising sustainability,
and its goals are ambitious: “The University of Copenhagen will work towards becoming one of Europe’s
most green campus areas”. Focus of The Green Campus initiative is reducing the University’s environmental
78 http://ec.europa.eu/research/environment/index_en.cfm?pg=sme
79 Based on http://ec.europa.eu/research/environment/index_en.cfm?pg=environment
80 http://ec.europa.eu/research/environment/pdf/summary-leaflet_en.pdf
81 http://ec.europa.eu/research/environment/index_en.cfm?pg=sme
82 Idem.
83 Idem.
84 OECD (2011) “Fostering Innovation for Green Growth”, OECD Green Growth Studies, OECD Publishing
38
impact, especially concerning energy consumption and CO2 emissions. The efforts include global collaboration and
involvement of employees and students85.
The employees and students of the university have a vital role in the efforts to turn the university into one of the
greenest campus areas in Europe. Green Action is the headline of the university’s work for energy efficient
habits among the employees and students. Through campaigns and information, the energy consumption and
CO2 emission of the university has been reduced significantly. During the latest campaign in 2012, the employees and
students of managed to save 2,5 % in electricity consumption. This corresponds to about 2,5 million DKK on an annual
basis86.
The focal point in Green Action is more than 260 Green Ambassadors. The Green Ambassadors are employees who
have volunteered to help their colleagues to promote good energy habits at divisions and institutes: remembering to turn
off unused equipment and by making agreements with colleagues about turning off the light, closing fume cupboards
and tidying up refrigerators regularly87.
4.7. Availability of environment-related R&D and other tax

measures
Environment-related R&D and other tax measures represent another framework condition supporting the
development of eco industries in the region. This framework condition becomes increasingly popular. Besides
stimulating (or discouraging) certain types of activities, the advantage of tax measures compared to regulatory
instruments refers to their efficiency and the fact that they can raise public revenues to be used elsewhere in the
economy88.
Environment-related fiscal measures can be divided into two main categories: tax instruments and subsidies.
Taxes are levied on goods directly or indirectly linked to environment-related activities. Taxes are often labelled
pricing instruments, as they impose a price on the environmentally harmful aspects of production or
consumption and thus aim at influencing consumer behaviour by increasing prices (including emissions trading
schemes). Subsidies, in turn, aim to encourage producers and consumers to choose the inputs and goods that
have favourable properties from the environmental perspective. In contrast to taxes, they provide incentives by
decreasing the price or purchasing costs of a product89. The use of environment-related fiscal measures has
increased throughout Europe during the past two decades, and existing tax schemes have been revised and
refined90.
In general, the main advantage of fiscal measures is efficiency. The costs of reaching a given environmental
target are minimised. Imposing fiscal measures generally requires less detailed information than regulation and
thus entails lower administrative costs. Furthermore, tax measures set a price on each unit of
pollution/emissions and thus induce firms to constantly seek new pollution reduction possibilities and to invest
in less-polluting technologies. Consequently, this is a powerful incentive for innovation. Finally, fiscal
instruments are also effective for shifting consumers’ behaviour towards a more sustainable direction. They give
85 http://introduction.ku.dk/campus/green_campus/
86 http://introduction.ku.dk/campus/green_campus/
87 http://groengerning.ku.dk/info-eng/
88 Kosonen K., & Nicodème G. (2009) “The role of fiscal instruments in environmental policy”, Working Paper June 2009,
available at:
http://ec.europa.eu/taxation_customs/resources/documents/taxation/gen_info/economic_analysis/tax_papers/taxation_
paper_19.pdf
89 Idem.
90 European Environment Agency (2006) Market-based Instruments for Environmental Policy in Europe, pp. 41-49
39
price signals that change the relative prices of “dirty” and “clean” consumption goods and encourage consumers
to choose environmentally-friendly goods91.
A particular role in the development of eco industries refers to R&D-related fiscal measures. Generous
incentives through R&D tax incentives can make a region a relatively more attractive location for R&D
investments than other regions. Furthermore, R&D investments are risky, which means that firms, and mostly
small firms and start-ups, are more likely to face financial challenges when investing in R&D, and tax incentives
can offer an attractive solution. Finally, the R&D tax incentives contribute to knowledge spillovers to other
firms and organisations, making the industry as a whole more competitive 92.
Regional and national governments can use a wide range of different tax measures to support the development
of eco industries. To influence the consumer’s behaviour and thereby trigger the demand for eco products in the
region, direct fiscal incentives can take a form of a subsidy or rebate provided after the purchase of an eco
product or paid directly at the check-out, in some cases delivered in case of replacement of the old appliance
etc.
The environment-related R&D tax credit can be an effective tool for boosting innovation, competitiveness and
creating high-wage employment in the region, by:
 Creating an incentive for public-private partnerships to fuel innovation and economic activity;
 Spurring innovation and start-up companies;
 Seeding surrounding areas with additional investment in not only scientific research but also indirect
business benefits;
 Anchoring high-tech business investments near research facilities; and
 Enabling rapid time-to-market production when manufacturing plants are located close to research.
However, tax measures alone may be insufficient to boost the development of eco industries in the region, and
need to be complemented with other policy instruments 93.
Capital region of Denmark: Exemption from registration tax for electric vehicles
In Denmark, the adoption of green vehicles is incentivised by abolishing the registration tax for electric vehicles that
weigh less than 2,000 kg. Fossil fuel vehicles, on the other hand, are taxed heavily, thus making the adoption of electric
vehicles more attractive94.
4.8. Existence of eco-regulation

The current framework condition refers to rules and regulations prescribing eco-efficient standards.
As mentioned before, there is hardly any other industry where growth, competitiveness and performance are
more strongly linked to the (environmental) policy agendas and regulatory framework conditions. Regulations
91 European Environment Agency (2006) Market-based Instruments for Environmental Policy in Europe, pp. 41-49
92 “R&D tax incentives: rationale, design, evaluation” OECD, November 2010, available at
http://www.oecd.org/dataoecd/61/13/46352862.pdf
93 Kosonen K., & Nicodème G. (2009) “The role of fiscal instruments in environmental policy”, Working Paper June 2009,
available at:
http://ec.europa.eu/taxation_customs/resources/documents/taxation/gen_info/economic_analysis/tax_papers/taxation_
paper_19.pdf
94 http://www.acea.be/images/uploads/files/20100420_EV_tax_overview.pdf
40
aiming to minimise the negative environmental and social impacts create business opportunities that allow for
development of a whole new industry 95.
There is a wide range of EU regulations in force concerning the environment. The main areas covered are 96:
 Nature and biodiversity;

 Integrated pollution control;
 Waste management;
 Air pollution;
 Water pollution;
 Noise pollution;
 Environmental impact assessment;
 Genetically modified organisms.
Much of the EU legislation to protect the environment is quite technical, as it sets out detailed technical and
scientific standards. It is also usual for the legislation to require Member States to provide information to the
European Commission about how they are implementing the rules and about how effective they have been. In
addition, there are several international conventions on environmental protection. In general, these are ratified
by the EU and then implemented through EU legislation97.
Various empirical studies have confirmed that complying with environmental regulation is one of the key
motives to innovate among eco industry companies. Research data indicate that eco industry firms rank
meeting regulation requirements as having a highly important effect on their innovation activities, more often
than any other sector98. Moreover, standardisation is important in enabling the uptake of eco-innovation and
environmental technologies and facilitating their dissemination 99.
The enforcement of environmental regulations is reported to be a key driving factor for some sub-sectors of eco
industries such as the recycling, waste management sectors and a number of sub-segments of the renewable
energy sector (wind energy and biomass) 100. Increasingly strict regulations worldwide (e.g., in China) are likely
to lead to new opportunities for pollution control technologies and services, as well as waste management and
recycling. The environmental regulations are expected to have a positive influence on the production of eco
products and services in the future. Nevertheless, the international competitiveness of the EU eco industries
depends on avoiding the fragmentation of markets by ensuring that environmental regulation does not lock the
EU eco industries in the domestic market101.
96 http://www.citizensinformation.ie/en/environment/environmental_law/eu_environmental_law.html#la82be
97 Ibid.
98 2008 Centre for European Economic Research (ZEW) report quoted in ECORYS Netherlands and IDEA Consult (2009)
“Study on the Competitiveness of the EU eco-industry”, Study within the Framework Contract of Sectoral Competitiveness
Studies – ENTR/06/054 for DG ENTR of the European Commission, Final Report – Part 1, available at
99 Reid, A. & Miedzinski, M. (2008): SYSTEMATIC Innovation Panel on eco-innovation. Final report for sectoral innovation
watch; http://www.europe-innova.org
41
At the same time, when regulations and standards are excessively strict, they may become barriers to
competitiveness of eco firms. Such effects differ per sub-sector of eco industries and are suggested to be
particularly strong for connected eco industries (eco-construction, automotive etc.). The need to comply with
overly strict regulations may force eco companies to move their activities abroad 102.
An important task for policy makers in the longer term is to create an environmental policy regime that is
consistent with an industrial policy focusing on innovations with sufficiently large international selling
opportunities. Furthermore, there is a need to remove certain regulatory barriers to market development
through international agreements, or by agreeing on international standards. These activities, however, need to
be performed at the EU level. Regional policy makers may play a role in lobbying for specific parts of
regulation103.
One of the key challenges related to eco industries in Europe refers to a lack of a uniform implementation and
enforcement of relevant directives, standards and certification procedures at the level of the Member States and
regions. It creates an uncertain and non-transparent business environment, which, in turn, increases the costs
of doing business across Europe. These factors are unfavourable for investments and growth of the industry.
Therefore, for the EU eco industries to be able to successfully develop in the future, a long-term stable policy
framework with greater harmonisation or coordination across the Member States, together with simplification
of national regulations is needed. Furthermore, the development of a more coherent intellectual property rights
(IPR) policy and legal framework is crucial, not just within the EU, but also at the international level 104.
Capital region of Denmark: Emission Free Zone Copenhagen
Particle pollution was, as is in many big cities, a significant problem in Copenhagen, resulting in almost 500 deaths
annually. As a result, environmental zones were implemented in September 2008. The zones cover 65% of Copenhagen’s
inhabitants, which was further extended in 2009. The zones require vehicles to meet minimum standards, which have
to be displayed on the windscreen. As a result, as of 1 July 2010 there were 150 less deaths, 750 fewer cases of bronchitis
and fewer cases of asthma and respiratory illnesses105.
4.9. Availability of eco-innovative infrastructure

The current framework condition implies the presence of infrastructure that facilitates the development of eco
industries.
Two types of infrastructure are relevant for the development of eco industries: environmental infrastructure
that creates a general demand for eco products and services, and research & innovation infrastructure that
allows for developing new technological solutions and translating them into practical applications.
Environmental infrastructure can be defined as “any capital asset that utilises environmental resources to
provide a community service”. The relevant fields are drinking water, energy efficiency, environmental
planning, waste management etc. The design and location of environmental infrastructure can have a
significant effect on a region’s economic growth and environmental health. Environmental infrastructure is
associated with considerable building and maintenance costs. These high costs force regional governments to
look for innovative and sustainable ways of dealing with infrastructural issues 106.
102 Idem.
103 Idem.
104 Idem.
105 http://www.eltis.org/index.php?id=13&study_id=2175
106 http://www.cscd.gov.bc.ca/lgd/pathfinder-environment.htm
42
Research & innovation infrastructure, in turn, implies the presence of appropriate R&D facilities (e.g.,
universities, research centres, private laboratories, conceptual design centres etc.) and technology transfer
offices, incubators or similar organisations facilitating the development and commercialisation of eco
technologies in the region. Such infrastructure often takes a form of a science park with all the abovementioned
institutions concentrated in one area. Additionally, some other specific types of infrastructure are essential for
innovation activities. Particularly transport and communication infrastructures are increasingly considered a
critical factor for economic success and raising productivity. Hence innovation related to alternative fuel
vehicles, user-friendly public transport or renewable energy relies on infrastructure for new fuelling systems,
sophisticated traffic control, diffused energy distribution systems etc.107.
Both types of infrastructure play central and complementary roles in the development of eco industries in the
region. As mentioned above, while environmental infrastructure creates market demand and business
opportunities for eco industry companies, eco-related research & innovation infrastructure is crucial for
discovering, testing, piloting and commercialising eco products and services.
Public-private partnerships can play a vital role in providing strong investments into the research & innovation
infrastructure and are essential for meeting the needs of the clusters. The partnerships between the firms and
research centres are essential for collaborative research, training initiatives and knowledge transfer within the
cluster. The geographical proximity of different cluster actors also strengthens and encourages the public-
private partnerships and allows easier collaboration. Moreover, more active collaboration between research
institutions and SMEs benefits both sides. It allows public research bodies to ensure they secure the best
possible economic benefits, while at the same time allowing SMEs to obtain the support they need to refine the
technologies they develop108. Besides large investments in the environmental infrastructure of the region, the
role of policy makers in this respect would therefore be to support the concept of public-private partnerships.
Capital region of Denmark: Better Place electric vehicle infrastructure
This EIB funded project implies financing of electric vehicle infrastructure and service scheme and associated R&D costs
in Denmark. Specifically, the project concerns investments in R&D expected to be carried out in existing facilities, and
the roll-out of a demonstration infrastructure network for recharging and swapping of batteries for the Electric Vehicle.
The total budget granted by the EIB is 29,200,000 EUR109.
107 OECD (2009) “Sustainable Manufacturing and Eco Innovation: Framework, Practices and Measurement”, OECD
Synthesis Report
108 OECD (2009) “Clusters, Innovation and Entrepreneurship”, ed. Potter J. and Miranda G., Chapter 2 “The micro-
nanotechnology cluster of Grenoble, France”, Centre of Entrepreneurship, SMEs and Local Development
109 http://www.eib.europa.eu/projects/pipeline/2010/20100310.htm
43
5. Nurture stage:
demonstrating sustainable
business potential
region at the Nurture stage, the third stage of the industry’s lifecycle. Similar to the previous chapters, we first
address each specific framework condition in detail and then discuss the implications for policy makers at this
stage of industry’s development.
5.1. Introduction
The Nurture stage corresponds to the activities that help to improve the price and performance of applications
to a point where sustainable business potential can be demonstrated. Specifically, this stage implies developing
a market with mass growth potential.
development:
 Critical mass of eco-companies (industrial; relevant also for Growth stage);

 Critical mass of supply chain actors (industrial; relevant also for Growth stage);
 Presence of environmental education in the school curricula and vocational training (knowledge;
relevant also for Growth stage);
 Supporting IP conditions related to green technologies (regulatory and policy; relevant also for Growth
stage);
 Policy measures supporting the internationalisation of eco-innovative clusters (regulatory and policy;
 Strategy documents and roadmaps for the development of eco-industries in the region (support;
 Dedicated cluster organisation (support; relevant also for Growth stage);
 Well-functioning technology transfer offices within academic institutes facilitating the adoption of eco-
industries solutions (support; relevant also for Growth stage).
5.2. Critical mass of eco-companies

The current framework condition implies the presence of a sufficient mass of companies active in eco
industries, for example, in the areas of air pollution control; cleaner technologies and processes (CTP); energy
management, monitoring and instrumentation; landscape services; marine pollution control; noise and
vibration control; recovery and recycling; renewable energy; transport pollution control; waste management;
water and wastewater treatment etc.
As mentioned above, eco industry companies can be split into two broad categories: one of small and
innovative companies acting in the field of, e.g. renewable energy, waste recycling, environmental auditing
and consultancy; the other of more capital intensive enterprises providing goods and services in specific
44
areas, e.g. waste, wastewater, transport 110. Both types of companies play a vital role in the development of eco
industries in the region. Eco industry clusters need thriving start-ups as well as more mature companies that
can act as role models.
Large firms can play a catalytic role in a number of ways. First of all, they create a critical mass of experienced
managers and workers. Secondly, they can provide a customer and supplier base. Thirdly, large companies
provide ideal conditions for high technology firms to grow and develop. Finally, large companies have
multiplier effects in terms of a region’s local economy for materials and services (these can range from
university graduates to office supply services to raw materials’ production). Therefore, large firms can play a key
role in diffusing knowledge and technology to SMEs, nurturing future entrepreneurs and inspiring spin-outs.
They can be important in terms of stimulating innovation sales and exports and provide a critical ‘route to
market’ for SMEs, both directly and as a base for access to world markets. Where firms do not take forward
innovative ideas themselves, employees of large firms sometimes choose to start-up their own businesses to fill
a perceived gap in the market111.
At the same time, many innovative ideas usually come from small dedicated firms. As large firms become even
larger (e.g., due to mergers and acquisitions), they usually do not increase their amount of scientific discoveries
with the same pace. In fact, existing research shows that large firms typically experience a decreasing number of
discoveries112. The proximity of small companies to large firms provides partnering opportunities for product
development, manufacturing and marketing, and a source of management expertise for small companies.
The key task of policy makers is to create an environment favourable for setting up and expanding
businesses in the region. The relevant measures should among others aim at ensuring easier access to
funding, making legislation clearer and more effective and developing an entrepreneurial culture and support
networks for businesses113.
A vibrant business climate for eco companies in the region is a highly complex phenomenon resulting from a
wide variety of factors. Key relevant measures can be summarised as follows:
 Promoting the concept of eco industries in the region (e.g., social marketing and advertising campaigns
promoting eco industries and green products in the region, as well as incentivising the purchase of eco
products);
 Promoting eco-entrepreneurship in schools and universities;
 Developing public-private partnerships;
 Simplifying access to finance for eco companies;
 Introducing programmes that support SME growth (financial support; training and coaching) etc.
These measures are explained in detail throughout the report.
110 http://ec.europa.eu/enterprise/policies/sustainable-business/eco-industries/index_en.htm
111 DTI Report (2004) “A Practical Guide to Cluster Development”, a report to the Department of Trade and Industry and the
English RDAs by Ecotec Research & Consulting
112 Anderson T., Schwaag Serger S., Sorvik J., and Wise Hansson E. (2004) “The Cluster Policies Whitebook”, International
Organisation for Knowledge Economy and Enterprise Development (IKED)

113 http://europa.eu/legislation_summaries/enterprise/business_environment/index_en.htm
45
Capital region of Denmark: Number of Green Growth companies in the Greater

Copenhagen Area, year 2010114
The numbers below demonstrate the presence of a sufficient critical mass of eco companies in the region of Copenhagen.
Core (more than 33% green activity of total industry activity): 559 Companies
Intermediate (between 10% and 33% green activity of total industry activities): 5.510 Companies
Peripheral (between 5% and 10% green activity of total industry activities): 5.687 Companies
Annexed (less than 5% green activity of total industry activities): 17.918 Companies
5.3. Critical mass of supply chain actors

The current framework condition implies the presence of a sufficient mass of supply chain actors in the region
including eco-innovation consultancy services, research centres for eco-innovation, equipment suppliers, utility
companies etc.
The presence of a supply chain implies that parts of value added are provided by external partners. This process
is driven by transaction/switching cost and deals with the bilateral dependency between suppliers and
producers. Strategic alliances and joint ventures are becoming increasingly important for eco industries, since
business environment is becoming more and more competitive. Knowledge is transferred among partners in the
network and thereby the importance of partnerships in the chain increases since it allows to maximise value
and to optimally overcome business challenges. By identifying value adding moments in the chain
and ensuring a better fit and collaboration between partners in the chain, common higher
gains are expected for the whole supply chain as well as for its individual partners 115.
In European regions, however, an established supply chain of eco industries is often absent. There is reported to
be a lack of homogeneity, and there are not enough drivers for the supply chain to organise itself. Because of
weak linkages throughout the supply chain, eco innovations with market potential often fail to reach the
market, or reach the market too late. Furthermore, specific eco industry players such as SMEs working in
certain niches are often spread across different European countries, which leads to poorer communication
channels in the supply chains. As a result, such companies fail to fully take advantage of the internal European
market and the opportunities provided by it116.
The presence of a critical mass of supply chain actors is beneficial for nurturing and growth. The companies
might be able to set up a powerful lobby that would pave the way for political decisions; demonstration and field
testing is better possible when there is a critical mass, and cooperations between research institutes and
industry can be set up and be more effective117. It is important to note, however, that a large part of the relevant
supply chain is not part of eco industries (i.e., it is formed by connected industries).
114 http://www.cphcleantech.com/media/1477642/damvad_green_growth_in_copenhagen.pdf, Source: DAMVAD 2011,

retrieval from Experian, based on the industry weights calculated from the register data from Statistics Denmark
115 EIM (2011) “Business models of eco-innovations”. An explorative study into the value network of the business models of
eco-innovations and some Dutch case studies

http://ec.europa.eu/enterprise/newsroom/cf/_getdocument.cfm?doc_id=5416 quoted in
Barsoumian S., Severin A. and Van der Spek T. (2011) “Eco-innovation and national cluster policies in Europe”, A
qualitative review, the study performed by Greenovate! Europe EEIG for the European Cluster Observatory managed by the
Center for Strategy and Competitiveness at the Stockholm School of Economics
117 OECD (2011) “Better Policies to Support Eco-innovation”, OECD Publishing
46
Cooperation and partnerships within a supply chain flourish in a healthy business environment. Such an
environment can be provided and sustained by government institutions and policies 118. In the previous sub-
section, we already highlighted the key measures leading to the creation of a favourable business climate in the
region.
Furthermore, a specific role in supporting the establishment of a structured eco industries supply chain belongs
to dedicated cluster initiatives. Clusters foster the establishment of formal and informal networks and are
reported to be useful instruments to support the streamlining of supply chains. Clusters help ensuring that
supply chains are more integrated, cooperation is formalised, and that eco companies with their products and
services are in close contact with actors across the whole supply chain119. Consequently, policy makers need to
promote and support cluster initiatives in their regions by financing the creation of cluster organisations and
the associated cluster-level initiatives (e.g., networking events, match-making etc.). We will elaborate on this
aspect in Sub-section 5.8 of the Report.
Strong supply chains in turn lead to the situations when public authorities have a stronger incentive to propose
generous public funding schemes that would benefit the entire industry 120.
Lombardy (Italy): Green Supply Chain121
The Green Economy Network is an informal grouping of companies based in Lombardy, set up by Assolombarda in
mid-2011 to improve information flows, foster cooperation, accelerate international growth and boost business
opportunities. The Green Economy Network now involves around 400 SMEs, Italian groups and multinationals, for
aggregate revenues of 50 billion euro and 25,000 employees in the Province of Milan alone, active in a variety of
manufacturing industries and sectors, from water treatment to renewables, from energy efficiency to eco-compatible
products. Today metalworking companies account for half of the network, while 26% of the sample are innovative
service providers.
Ten specialisations feature in the network, with strong representation of companies active in renewable energy (43%),
water (38%) and waste (33%).
The Green Economy Network is growing continually, thanks to innovative projects, the appeal of the green sector (also
due to the growing sustainability requirements of the former emerging economies) and networking capability: 78% of
the firms in the network say they are ready to form alliances or groupings, with the percentage rising to 83% for joint
projects. The most popular form of cooperation is working groups, chosen by 77% of the companies, followed by
temporary company associations (66%) and network contracts (43%).
118 EIM (2011) “Business models of eco-innovations”. An explorative study into the value network of the business models of
eco-innovations and some Dutch case studies
http://ec.europa.eu/enterprise/newsroom/cf/_getdocument.cfm?doc_id=5416 quoted in
Barsoumian S., Severin A. and Van der Spek T. (2011) “Eco-innovation and national cluster policies in Europe”, A
qualitative review, the study performed by Greenovate! Europe EEIG for the European Cluster Observatory managed by the
Center for Strategy and Competitiveness at the Stockholm School of Economics
120 OECD (2011) “Better Policies to Support Eco-innovation”, OECD Publishing
121 http://www.amapola.it/the-green-supply-chain-in-lombardy/
47
5.4. Presence of environmental education in the school curricula

and vocational training
The current framework condition implies the integration of environment-related issues into the school
curricula and vocational training.
Environmental education can be integrated into school curricula as an interdisciplinary goal of formal
education. It can also be part of informal education, and a part of daily life during leisure time activities, as well
as a substitute for or extension to the formal education sector122.
Environmental education implies experiencing, sharing, creativity, and sensitivity. Environmental education
activities can include informing the population, discovery activities (e.g., guided visits, games, outings), but can
also consist of the active participation of the public (e.g., workshops, volunteering, excursions, role plays, field
trips or holidays). Materials and guidelines on environmental education are typically provided by the public
sector, as well as NGOs123.
Education and training programmes are essential for developing the human capital needed to deliver eco-
innovative solutions and create a potential labour force for “green jobs”. A number of European regions have
taken measures to mainstream environmental education in the school curricula or vocational training. A few
regions have also started to focus on creating specific skills and a knowledgeable workforce for emerging
environmental industries124.
The demand and supply of eco industries-relevant skills in Europe will mainly be affected by globalisation, as
well as technological and demographical change (including population ageing and migration). Eco industries
will need employees with new skills and with a higher skill-level125. Furthermore, numerous existing skills will
become obsolete and therefore educating the current labour force is crucial to maintain a competitive
advantage. However, also low skilled people will always be needed for some sub-sectors within eco industries126.
Policy makers play a central role in ensuring that environmental education is embedded in school curricula and
vocational training. The following measures can be proposed 127:
 Including the groups targeted as beneficiaries in the programme development process (NGOs,
associations of teachers, network of environment education, etc.);
 Including environmental education and sustainable development experts in the programme
development process;
122 Wagner M. et al. (2011) “Environmental Education: Contribution to a Sustainable Future”, Nationalpark Donau-Auen
GmbH, Surf Nature project, funded by the European Regional Development Fund through the INTERREG IVC programme
123 Idem.
124 OECD (2011) Better Policies to Support Eco-innovation, OECD Publishing
125 Strietska-IIlina (2008), Skills net, Enterprise surveys as a tool for skill needs analysis,
http://agora.cedefop.europa.eu/skillsnet2008innet/UsersFiles/sa/documents/Presentetion2/12_Strietska.ppt#273,3
127 based on Wagner M. et al. (2011) “Environmental Education: Contribution to a Sustainable Future”, Nationalpark
Donau-Auen GmbH, Surf Nature project, funded by the European Regional Development Fund through the INTERREG IVC
programme
48
 Providing capacity-building in environmental education issues to the programme management

authorities at all levels;
 Simplifying the application and reporting procedures;
 Ensuring shorter payment periods, pre-financing possibilities and negotiating assured national co-
financing;
 Supporting organisations in developing the project proposals and managing the projects;
 Informing potential project promoters of funding opportunities and coordinating exchange of
experiences between existing projects.
Capital region of Denmark: “A new climate generation” project128
The project “A new climate generation” involves four Copenhagen schools and the idea is to train
nursery and school teachers to teach about the environment and 1500 school students as climate
ambassadors. The project is part of Copenhagen's Climate Plan, which also includes a number of other initiatives,
such as the Children’s Climate Forest project which has already resulted in school students planting 8111 trees.
The object of Copenhagen’s Climate Plan is to contribute to a greener environment and a carbon neutral Copenhagen in
2025.
5.5. Supporting IP conditions related to green technologies

Supporting IP conditions related to green technologies include accelerated examination process for patent
applications relating to green technologies; green patent database and other green patent tools.
An important characteristic of many eco goods and services is the fact that they involve integrated systems. To
develop such integrated systems, multidisciplinary skills are needed. The required skills are not always
available within one company, and collaboration with other stakeholders in the supply chain allows overcoming
the lack of specific skills 129. Such collaborations, however, require clear agreements regarding Intellectual
Property Rights (IPR).
Over the last few years, several initiatives have been developed in Europe, aiming at promoting collaboration
between research institutions and businesses by means of creating the appropriate IP conditions (for example,
new IPR regimes, guidelines or model contracts), and many Member States plan to intensify their efforts in this
direction. However, these initiatives are often designed with a national perspective, and fail to address the
transnational dimension of knowledge transfer130. Therefore, there is a need for a more level playing field
regarding IPR protection in Europe. A major barrier is the inconsistent and often inadequate rules and
approaches for managing IPR resulting from public funding131.
The current European patent system, including the phase after granting a patent, is characterised as highly
expensive, fragmented and complex. The lack of a unitary patent protection system has so far constituted a
128 http://www.dac.dk/en/dac-cities/sustainable-cities-2/all-cases/education/copenhagen-the-new-climate-generation/
129 IDEA Consult and ECORYS Netherlands (2009) “Scoping Study on completing the European Single Market for
environmental goods and services”, a study prepared for DG Environment of the European Commission, available at:
http://ec.europa.eu/environment/enveco/economics_policy/pdf/sm_egs_july2010.pdf
49
market barrier for European entrepreneurs to an effective functioning in both the EU internal market and on
the world markets132. It is also widely recognised as a hindrance to innovation in Europe 133.
IP plays an important role in the development of eco industries. Eco industries are often high-tech in nature
and therefore depend more on codified and science-based knowledge and the formal protection of IPR while
many other less high-tech sectors rely more on experimentation and interactive learning with suppliers and
customers.
At the same time, IP issues are often mentioned as a barrier to the diffusion of eco-innovation. On the one
hand, technology developers claim that more strict IP protection stimulates innovation and its wider diffusion.
On the other hand, technology adopters view IP as increasing the cost of technology and making access to eco-
innovation more difficult. This debate is particularly active in the field of environmental technologies as eco-
innovation has some public good characteristics, i.e., the diffusion of environmentally superior products
benefits the wider community134.
If Europe wants to stay competitive, there is a clear need for a unitary patent system. Unitary patent protection
would foster scientific and technological advances and the functioning of the internal market by making access
to the patent system easier, less costly and legally secure. It would also improve the level of patent protection by
making it possible to obtain uniform patent protection in the participating Member States and eliminate costs
and complexity for undertakings throughout the Union, especially for SMEs 135.
On 17 December 2012, the Council of the European Union, adopted two regulations with a view to
implementing enhanced cooperation in the area of the creation of unitary patent protection (PE-CO_S 72/11)
and its translation arrangements (18855/2/11 REV 2) 136. The two regulations entered into force on 20 January
2013137. The new unitary patent aims to radically reduce, by up to 80%, translation and related costs for
obtaining patent protection in the EU 138. The regulations will apply from 1 January 2014 or the date of entry
into force of the Agreement on a Unified Patent Court 139.
Furthermore, rules for IPR management are a fundamental aspect of publicly-funded R&D projects, defining
the success of dissemination and utilisation activities. It is therefore vital that these rules take into account the
mission and legitimate interests of both public research institutes and participating industrial partners. For the
national and EU R&D funding programmes, more clear and streamlined rules for IP and access rights need to
be defined, and the necessary measures need to be taken to ensure their implementation. This may be achieved
through mandatory Consortium Agreement templates that may depend on the type of project and the phase of
the innovation cycle, with which the participants will be acquainted in advance, and which will avoid spending
disproportionate amounts of time and efforts for preparing the Consortium Agreements of publicly-funded
projects140.
132 http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/intm/134394.pdf
133 http://ec.europa.eu/unitedkingdom/press/press_releases/2011/pr1138_en.htm
134 OECD (2011) “Better Policies to Support Eco-innovation, OECD Studies on Environmental
137 http://www.epo.org/news-issues/news/2013/20130219.html
138 http://ec.europa.eu/commission_2010-2014/barnier/headlines/news/2012/12/20121211-2_en.htm
139 http://www.epo.org/news-issues/news/2013/20130219.html
140EC (30/11/2011), Public Consultation for Horizon 2020: Written contributions from European organisations received in
response to the Green Paper, cross-document analysis of Question 20
50
5.6. Policy measures supporting the internationalisation of eco-

innovative clusters
The current framework condition includes policy measures supporting the internationalisation of eco
industries.
As a regional eco industry matures, the strongest growth opportunities for most sectors are considered to be in
outside the regional or national market, in fast growing emerging economies. For this reason, EU and
Member State initiatives to support eco industries in understanding and accessing export
markets should be pursued and expanded to stimulate growth.
Internationalisation in many sub-sectors takes place through trade in services and investments as opposed to
trade in goods. Given the increasing environmental pressures, emerging legislation and international
commitments, there are many opportunities for the internationalisation of the EU eco industries, particularly in
the areas of waste management, recycling (integrated chain management) and specific segments of the
renewable energy sub-sector141.
Although a large number of European SMEs are reported to be engaged in international activities, only a small
part is involved in activities outside the Internal Market. At the same time, the potential customers are likely to
be located in the international market. Many European eco-innovators may find that it is easier to find
customers in international markets than in their home market, which is often overcrowded and highly
competitive. With this in mind, eco companies have a strong motivation to internationalise, but for a growing
business this can be difficult due to constraints on staff, time, skills, market intelligence and finance 142.
In order to support the internationalisation of SMEs, the clusters themselves need to have their own
internationalisation strategy. This not only ensures transparency for their members but also helps keep the
cluster “on-track” when it comes to delivering internationalisation support. These strategies need to refer to
specific markets and specific eco-innovation focus areas in order for them to be effective 143.
Examples of the policy measures supporting internationalisation include regional support in representing the
cluster abroad; regional support for inward investment activities; removal of custom duties on green products,
as well as training and coaching etc.
Furthermore, there is a role for public authorities in promoting the international cooperation in the field of
public research. Joint investment in pre-competitive research, mapping of R&D needs, multilateral science &
technology cooperation, and pooled knowledge make it possible to share costs and effectively and efficiently
142 Interview with Gareth Jones, the Operations Manager at the UK Centre for Economic & Environmental Development
(UK CEED) “Internationalization for eco-innovative companies & the ECOCLUP Project”, 22 March 2012, available at:
http://www.ecopol-project.eu/en/media_material/highlights/?itemid=127&a=viewItem
143 Interview with Gareth Jones, the Operations Manager at the UK Centre for Economic & Environmental Development
(UK CEED) “Internationalization for eco-innovative companies & the ECOCLUP Project”, 22 March 2012, available at:
http://www.ecopol-project.eu/en/media_material/highlights/?itemid=127&a=viewItem
51
stimulate eco-innovation at world scale. Such cooperation facilitates outreach and access to funding and can
contribute to technology transfer and capacity building144.
Finally, policy makers can develop a knowledge sharing system in which eco-companies, traditional companies
and research institutes can exchange information (inter)nationally and possibly collaborate on project for
international markets.
Capital region of Denmark: International Cleantech Network145
Being the first network of its kind, the International Cleantech Network (ICN) aims to connect selected cleantech
clusters around the world and to create a whole new way for companies and knowledge institutions to go international.
ICN was founded in Copenhagen in 2009 as collaboration between Copenhagen Cleantech Cluster and the Colorado
Clean Energy Cluster with the mission to connect the world's leading cleantech clusters and exchange competencies so
as to add value and knowledge to the companies and research institutions in the partner clusters.
The aim for ICN is to reach 15 clusters, especially leading clusters from emerging markets, i.e. Brazil, China and Russia,
where it can be difficult for foreign companies to gain a foothold. ICN provides the foundation for this. The network's
services for its member companies and knowledge institutions span from initial market insights and opportunity
spotting in each cluster through education, research, exchange programs and entrepreneurship and incubation
collaboration to tailor-made partnership building.
5.7. Strategy documents and roadmaps for the development of eco

industries in the region
The current framework condition implies the presence of strategy documents and roadmaps for the
development of eco industries in the region.
Many Member States and European regions have developed strategies and roadmaps to support the
development of eco industries 146. These documents can be characterised as consisting of the following key
dimensions.
 Direction: where the industry is trying to get in the long term;

 Scope: what the key activities are that the industry should focus on;
 Competitive advantage: what the key strengths of the local industry are and how those can be best
utilised;
 Resources: what resources (i.e., skills, assets, finance, relationships, technical competence, facilities)
are required to realise the strategy;
 Climate: what external factors are likely to affect industry’s development (e.g., political, economic,
legal factors);
 Stakeholders: what the values and expectations of the key industry stakeholders are and how those
can affect industry’s development.
Strategy documents to support eco industries provide opportunities to coordinate a policy dialogue on this
complex and multifaceted issue in a whole-of-government approach. Strategies are also useful as benchmark
documents. The knowledge base made from roadmaps and country profiles has proven highly useful for
145 http://www.cphcleantech.com/ccj2-bridgingclusters
52
benchmarking exercises. However, some information is missing on policy measures that would make the
assessment and comparisons even more useful. For instance, more qualitative information on the status and
design of instruments would be needed to characterise them further and assess their potential impact on eco
industries; additional information on target, budget (annual or total when appropriate) would be desired as
well. In addition, it would be useful for regions to report on policies that were successful and lessons that have
been learned from the use of particular policies147.
When developing strategy documents and roadmaps, policy makers need to take into account several aspects:
 Strategy documents and roadmaps should target companies of all sizes in the region, not only SMEs, as
chain. Examples of other relevant stakeholder groups include industry associations, regional
development agencies, chambers of commerce, employers’ associations, municipalities, business
networks, schools and training centres etc.
 Objectives set in strategy documents and roadmaps need to be continuously monitored and periodically
 Interest in the actions set in strategy documents and roadmaps from the company side is crucial for
 There is a constant need to adjust the strategic direction due to changes in the interests of the partners
Capital region of Denmark: Roadmap for Smart Grid R&D148
In October 2011 Danish Ministry for Climate, Energy and Building published the “Main report - The Smart Grid
Network’s recommendations”. Following part-recommendation 25 of the Ministry’s main report, a research network has
submitted a roadmap for Smart Grid research focusing on:
 Strengthening and marketing of research infrastructure to positioning Denmark as a global hub for Smart Grid
development;
 Strengthening of basic research into complex relationships of electric systems with large quantities of
independent parties;
 Increased awareness/understanding of consumer behaviour and socio-economic factors.
The roadmap contributes to identifying needed focus efforts to strengthen research, development and demonstration
within the 2020 time frame. The research in preparation of the roadmap has been conducted by DTU Electrical
Engineering, Center for Electric Power and Energy with participation of Aalborg University, Aarhus University,
University of Southern Denmark, Technical University of Denmark, Alexandra Institute, DI Confederation of Danish
Industry, Danish Energy Association, Energinet.dk, Ministry for Climate, Energy and Building, Ministry of Foreign
Affairs of Denmark, and the Danish Energy Agency.
148 http://www.powerlab.dk/English/About_PowerLabDK/News_Press.aspx?guid=%7B5CE354C0-7FC3-48CE-86A8-
92D7B1C904A8%7D
53
5.8. Dedicated cluster organisation

The current framework condition implies the presence of cluster manager or a similar initiative to coordinate
the development of eco industries in the region.
Cluster initiatives are organised efforts to enhance the competitiveness of a cluster involving private business,
public bodies and/or academic institutions within a regional and sectoral system 149. Cluster initiatives are
increasingly managed by specialised organisations, so-called cluster organisations. By a cluster
organisation one should understand organised efforts to facilitate cluster development, which can take various
forms, ranging from non-profit associations, through public agencies to companies 150. A cluster organisation
typically functions as a mediator between various cluster members and adds value by stimulating collaboration
both within the cluster and between the cluster and the outside world 151.
Cluster organisations often engage in a wide set of activities, ranging from information provision, commercial
cooperation and innovation support, enhancing the business environment, human resources upgrading,
business development, to cluster expansion 152. Therefore, cluster organisations are not only promoting
networking, they are also providing information about the cluster, lobbying, facilitating collaborative
agreements, addressing education and training needs, and promoting the cluster nationally and internationally.
Existing studies show that specifically in case of eco industries, cluster organisations prove to add value in
terms of technology and knowledge transfer, and foster collaborative relationships between suppliers and
clients. Furthermore, they establish a close link between SMEs, large companies and R&D institutions and can
thus help overcome a lack of knowledge sharing and persisting information asymmetries153 in the eco industries
sector. The presence of cluster organisations are often highlighted as one of the key reasons to invest in, for
example, cleantech clusters. Finally, cluster organisations in eco industry clusters often help achieve integration
with traditional industries by facilitating cross-industry interactions (the interdependence trend described in
Chapter 2)154.
Cluster support helps maintain or create employment in regions, and allows firms to be more adaptive and
creative in their organisation restructuring efforts 155. Therefore, regional, national and EU authorities need to
offer dedicated cluster policies that typically include grants for cluster management activities and specific
149 Sölvell, O., Lindqvist, G., Ketels, C. 2003. The Cluster Initiative Greenbook:
http://www.cluster-research.org/greenbook.htm
150 Ecotec (2004) “A Practical Guide to Cluster Development”, a Report to the Department of Trade and Industry and the
English RDAs by Ecotec Research & Consulting

151 Dervojeda K. (2011) “Uncovering Excellence in Cluster Management”, PwC Thought Leadership Report, February 2011
152 The concept of clusters and cluster policies and their role for competitiveness and innovation: Main statistical results and
lessons learned. The Commission Staff Working Document, SEC (2008) 2637
153 Information asymmetries: In different European countries and overseas, there is insufficient awareness of the market
potential of eco-industrial products and services. Potential clients often lack knowledge about the available options there are
in a given market. The lack of awareness in the market decreases the competitiveness of these companies. This is especially
due to the diversity of applications in the eco industries and the relatively high level of technical complexity. It is not always
known which technologies are in reach of a company. From ECORYS Netherlands and IDEA Consult (2009) “Study on the
Competitiveness of the EU eco-industry”, Study within the Framework Contract of Sectoral Competitiveness Studies –
ENTR/06/054 for DG ENTR of the European Commission, Final Report – Part 2, available at
154 “Eco-innovation and national cluster policies in Europe”, 1 July 2011, the study performed by Greenovate! Europe EEIG
for the European Cluster Observatory managed by the Center for Strategy and Competitiveness at the Stockholm School
of Economics
155 OECD (2007) “Competitive regional clusters: National policy approaches”, Policy brief, Paris: OECD Observer, 2007
54
collaboration projects. The level of bureaucracy related to application and implementation of cluster policies in
the region needs to be minimised (i.e., complicated management procedures; long approval procedures for
Since eco industry clusters represent highly complex systems with multiple stakeholders involved, cluster policy
measures should not be applied on a solely basis. It is rather a combination of various complementary measures
that need to be applied simultaneously. Those complementary measures go beyond the scope of cluster policies,
and include other fields like education & skills, logistics & infrastructure etc.
Furthermore, at the EU level, in close cooperation with national governments and regions, there is a need to
support the efforts of cluster organisations to improve their performance and reach excellence. The relevant
initiatives among others refer to the maintenance and update of the repository of training materials as
developed by the European Cluster Excellence Initiative and the organisation of further “train-the-trainers”
activities for cluster managers156.
Another initiative at the EU level is establishment of a website called clustercollaboration.eu which can be
consulted by regional cluster managers for several purposes, such as mapping, getting project ideas and
establishing and accessing interactive communities. Up until the publication date of this report 68 cluster
organizations within the EU related to eco industries have been registered at this website157.
Capital region of Denmark: Copenhagen Cleantech Cluster158
Copenhagen Cleantech Cluster is one of the world’s leading cluster organisations, sponsored by two regional authorities
(Capital Region of Denmark and Region Zealand) and the European Union. The cluster initiative has a partner base
representing the entire value chain of Danish Cleantech, and 11 organisations drive activities on behalf of the cluster in a
decentralised organisational setup. The initiative can document concrete results on job creation, inward investments,
gap funding, international cooperation projects etc.
To develop the cluster even further and establish a sustainable cluster organisation, Copenhagen Cleantech Cluster has
been established as a non-profit association that launches new initiatives to foster innovation and green growth.
Over the last years, the cluster organisation in Copenhagen has become a strong alliance partner for the city authorities
in testing out new ways of driving green growth and the “smart city” agenda. The City benefits from the operational and
hands-on approach of the cluster, and the cluster benefits from a visionary City Hall, and a City that is ready to
implement (and procure) new solutions as well as play host to test and demonstration projects.
City authorities can benefit from using the cluster organisation as a neutral meeting place and a competent facilitator
that drives this process. The cluster organisation plays the role of arms-length innovation agent and is a driver of
innovation and concrete action in close collaboration with the City. The cluster organisation’s role is not to be compared
with a consultancy, as the cluster organisation is a non-profit member-based organisation. The cluster organisation has
the necessary partnerships with stakeholders across the triple helix to ensure the cluster remains a driver of innovation,
providing business opportunities to cluster companies.
156
Vienna Cluster Manifesto: Using Excellent Clusters to Strengthen and Restructure EU Industry, European Cluster
Conference 2012, April, Vienna
157 http://www.clustercollaboration.eu
158 http://www.iisd.org/pdf/2012/procurement_innovation_green_growth_continues.pdf
55
5.9. Well-functioning technology transfer offices within academic

institutes facilitating the adoption of eco industry solutions
The current framework condition implies the presence of well-functioning Technology Transfer Offices (TTOs)
within academic institutes facilitating the adoption of eco industry solutions.
Technology transfer is the process of transferring scientific findings from one organisation to another for the
purpose of further development and commercialisation. Technology transfer process typically includes159:
 Identifying new technologies;

 Protecting technologies through patents and copyrights;
 Forming development and commercialisation strategies such as marketing and licensing to existing
private sector companies or creating new startup companies based on the technology.
TTO refers to the department in a research institution or a separate entity which is responsible for managing
the transfer to a commercial environment of new inventions, creations, discoveries, innovations, processes and
the like which result from scientific research conducted at that research institution (or possibly at several
research institutions)160. Technology is not the only field of knowledge which can be transferred.
Commercialisation and economic impacts are complemented by social, cultural and personal benefits on the
output side, and there are other forms of knowledge transfer than those requiring strong IP protection. The
abovementioned fields are covered by a broader term of “knowledge transfer” 161.
Academic and research institutions engage in knowledge and technology transfer for a variety of reasons, such
as162:
 Recognition for discoveries made at the institution;

 Compliance with regulations;
 Attraction and retention of talent;
 Local economic development;
 Attraction of private funding;
 Licensing revenue to support further research and education.
The priority given to each of these factors varies from institution to institution. The ultimate benefits of
technology transfer, however, are the public benefits derived from the products that reach the market and the
jobs that result from the development and sale of products 163.
Barriers to technology transfer, such as limited adoption of environmental technologies, insufficient capital
markets for eco industries and inadequate cleantech investment in traditional sectors are reported to be
inhibiting the development of the eco industries supply chain164.
159 http://www.autm.net/Tech_Transfer.htm
160 Based on “Knowledge sharing in the European Research Area (ERA)” (2008), Report of the ERA Expert Group, available
at: http://www.eirma.org/sites/www.eirma.org/files/doc/documents/EU/ERA-consult/eg4-knowledgesharing.pdf
161 EUR 23894 (2009) “Metrics for knowledge transfer from public research organisations in Europe”, Report from the
European Commission's expert group on knowledge transfer metrics. Luxembourg: Office for official publications of the
European Communities
56
Policy makers need to promote close cooperation of academia with industry, for example by having students
working in eco companies while engineers from companies engage in projects in universities and research
institutes. In addition, the emergence of joint labs that are on industry premises but shared with universities
and research organisations, as well as improvements in the sharing of expensive equipment and infrastructure
inside and between clusters could be of high benefit.
Furthermore, technology transfer needs to take place not only between firms but also between countries. In this
respect, the heterogeneous implementation of the various regulations at Member State level is reported to be
hindering efficient and effective technology transfer. As mentioned above, the development of a more coherent
Intellectual Property Rights (IPR) policy and legal framework is crucial, not just at the EU, but also at the
international level165.
Capital region of Denmark: Technology Transfer collaboration between Copenhagen

Cleantech Cluster and The University of Copenhagen
The Tech Transfer Unit at the University of Copenhagen was established in 2003 as the main link between the world of
research and the world of business. Since 2008 the Tech Transfer Unit has been part of the division of Research &
Innovation. Main tasks are166:
 Identification of research results with commercial potential;
 Protection of University IP;
 Management of University IP portfolio;
 Commercialisation of research results;
 Facilitation of research collaboration agreements related to University IP.
The University of Copenhagen has a small fund under Copenhagen Cleantech Cluster (CCC) to support development of
promising inventions and research findings within cleantech. The intention is to provide funds for proof-of-concept and
maturing inventions/research findings to a level where existing businesses or investors can evaluate the commercial
possibilities of the invention, and thus equip them to decide to exploit the project commercially167.
The CCC GAP-Fund is open to researchers employed at the University of Copenhagen with projects anchored at the
University. Funding can only be granted to projects where Intellectual Property Rights to inventions/research results
belong to the University - at the time of application, or to pending inventions. Gap-funding may not be awarded to
projects in which companies or other private players have co-ownership of rights168.
Applicants may apply for max 400,000 DKK. Gap-funding resources are primarily for support of research/laboratory
technician time. There is a requirement for 20% co-financing in kind (hours worked). This means that applicants for
400,000 DKK need to put hours of work for 100,000 DKK extra into the project. Copenhagen Cleantech Cluster will also
cover the initial IPR costs for the selected Gap-funding projects (estimated to max 125,000 DKK) so that the total Gap-
funding support amounts to 525,000 DKK169.
164 ECORYS Netherlands and IDEA Consult (2009) “Study on the Competitiveness of the EU eco-industry”, Study within
the Framework Contract of Sectoral Competitiveness Studies – ENTR/06/054 for DG ENTR of the European Commission,
166 http://fi.ku.dk/english/tech_trans/om_tech_trans/
167 erhverv.ku.dk/english/ccc/assets/.../Gapfunding_guidelines.doc/
168 Idem.
169 Idem.
57
6. Growth stage: sustainable

industrial growth
region at the Growth stage, the fourth stage of the industry’s lifecycle. Similar to the previous chapters, we first
address each specific framework condition in detail and then discuss the implications for policy makers at this
stage of industry’s development.
6.1. Introduction
The Growth stage corresponds to the activities that support marketing, commercial and business
development leading to sustainable industrial growth in the region.
The following framework conditions have been identified as relevant for this stage of industry’s development:
 Proximity of companies in traditional industries in transition towards environmentally friendly

solutions (market; relevant for all stages);
 Critical mass of private consumers of eco industries (market; relevant for all stages);
 Social attitude supporting eco industries (cultural; relevant for all stages);
 Availability of environment-related R&D subsidies (financial; relevant also for Embryonic and Nurture
stages);
 Availability of ‘green’ lending through banks (financial; relevant also for Embryonic and Nurture
stages);
 Availability of seed and venture capital for eco-innovative companies (financial; relevant also for
Embryonic and Nurture stages);
 Green public procurement (market; relevant also for Embryonic and Nurture stages);
 Environmental focus of university research programmes (knowledge; relevant also for Embryonic and
Nurture stages);
 Availability of environment-related R&D and other tax measures (regulatory and policy; relevant also
for Embryonic and Nurture stages);
 Existence of eco-regulation (regulatory and policy; relevant also for Embryonic and Nurture stages);
 Availability of eco-innovative infrastructure (support; relevant also for Embryonic and Nurture stages);
 Critical mass of eco-companies (industrial; relevant also for Nurture stage);
 Critical mass of supply chain actors (industrial; relevant also for Nurture stage);
 Presence of environmental education in the school curricula and vocational training (knowledge;
relevant also for Nurture stage);
 Supporting IP conditions related to green technologies (regulatory and policy; relevant also for Nurture
stage);
 Policy measures supporting the internationalisation of eco-innovative clusters (regulatory and policy;
 Strategy documents and roadmaps for the development of eco-industries in the region (support;
 Dedicated cluster organisation (support; relevant also for Nurture stage);
 Well-functioning technology transfer offices within academic institutes facilitating the adoption of eco-
industries solutions (support; relevant also for Nurture stage).
It can thus be concluded that the relevant framework conditions are already present at earlier stages of
industry’s development, and at Growth stage, they continue to play a role in further industry’s evolution. To
58
avoid repetition, below we exclusively elaborate on the aspects that are specifically relevant to the Growth stage,
i.e., framework conditions related to the investments in further industry growth. For detailed
descriptions of other relevant framework conditions, the reader is advised to consult Chapters 3-5 of the Report.
6.2. Investments in industry growth
At the Growth stage, more and more investments tend to be oriented towards technological development and
commercialisation of eco innovations, as well as market expansion for existing technologies.
At the Growth stage, consolidation is typically taking place leading to larger firm size and capacity to invest and
attract funding. Companies are merging, and a growing number of companies is listed on the stock exchange.
This larger size and access to capital is likely to give companies a competitive edge over external competitors
given substantial capital needs and investments needed for industry’s further development. Investments are
further triggered by the need to comply with (new) regulations 170.
The investment opportunities are reported to be a major driving force for expansion and internationalisation of
the sector and for the development of a level playing field both within the EU and outside 171.
This stage of industry’s development is associated with a growing role of public-private partnerships (PPPs).
These partnerships create a platform for extensive knowledge sharing, innovative spin offs and leading-edge
R&D. PPPs help to expand the cluster and keep it competitive in several different ways. First, collaboration in
research and consultancy helps small companies to keep initial costs low and build a strong business case.
Second, free provision of services like IP lawyers and accountants, by, for example, universities, also helps to
keep costs for start-ups low. Third, incubation of start-ups and spinoffs helps start-ups to build a strong
business case in a protected environment. This business case can be built using the knowledge base at
universities, IP licensing and support in development of new products and services. Companies that have
surpassed the stage of start-up can also still benefit from knowledge at research institutes through the
connection that has been established between regional companies and knowledge bases present in higher
educational communities172. All these conditions allow for further growth of eco industries in the region.
Therefore, strengthening of PPPs needs to be a core priority of research and innovation policies at this stage.
Specifically, there is a need to advance the rules applicable to the consortia agreements (including the IP rules).
Secondly, it is crucial to ensure that such partnerships are driven by the industry to enable bringing the results
of research efforts to industrialisation and to the market.
172 Marston L., Shanmugalingam S., and Westlake S. (2010) “Chips with everything: Lessons for effective government
support for clusters from the South West semiconductors industry”, NESTA, available at:
http://www.nesta.org.uk/library/documents/Semiconductorsv10.pdf
59
7. Survey on industry specific

framework conditions
This chapter presents and discusses the survey responses amongst stakeholders with a helicopter view on the
emergence of eco industries in the region.
Whereas in the previous chapters we have discussed relevant framework conditions for industry
emergence, the objective of this analysis is to develop a snapshot picture of the presence of the analysed
framework conditions in eco industries. Such an analysis enables policy makers to assess gaps between
relevant framework conditions and the presence of these conditions in the region.
The data for the analysis has been collected by means of an online survey amongst 15 stakeholders within the
regions of the Capital region of Denmark (5), Provence-Alpes-Côte d'Azur (5) and Lombardy (5). The collected
data was used for comparisons between regions within one industry category (cross-regional). The survey
results were analysed and compared across and between the regions. As a result the eco industries represented
in the survey can be characterised by the relative presence of framework conditions.
7.1. Cross-regional comparison of general framework

conditions
The chosen method for analysing and comparing the presence of framework conditions in the regions was
performed per category of framework conditions. In order to compare the responses across the regions, we first
averaged the results per individual framework condition and subsequently averaged the results per type of
framework condition. This computation was performed at the regional level. Figure 7-1 presents the results as a
spider diagram.
FIGURE 7-1: Presence of framework conditions in the selected regions for eco industries
60
The selected regions each show a rather different presence of framework conditions. Overall, we can
observe a particular presence of support, knowledge and cultural framework conditions.
Nevertheless, substantial variations between the regions can be observed. Whereas the Lombardy region shows
a relatively high presence in knowledge framework conditions, the PACA region shows a relatively high
presence in support framework conditions. Moreover, the stakeholders from the Capital region of Denmark
suggest an overall high presence of framework conditions in their region compared to what is observed in the
other regions. These differences will be further explored in the sections below.
The eco industries are therefore best characterised by a relatively high presence of support, knowledge
and cultural framework conditions. Table 7-1 presents the averages per type of framework condition for
each of the regions.
TABLE 7-1: Mean values for framework conditions per region
Type of framework condition Capital region of PACA (FR) Lombardy (IT)

Denmark
Financial 5.53 5.87 5.47
Industrial 7.20 5.50 5.80
Market 6.93 5.87 5.60
Cultural 8.00 6.20 5.80
Knowledge 7.10 6.50 6.60
Regulatory 6.85 5.60 5.65

Support 7.00 7.10 5.95
Regional observations
On the basis of the results discussed above, a number of observations can also be made with regard to the
specific regions. Each region showcases a (slightly) different pattern in the presence of framework conditions,
which is further explored below.
The Capital region of Denmark showcases a larger presence for almost all of the framework conditions when
compared to the average across the selected regions. Especially the cultural framework conditions were
perceived to be highly present in the region. Furthermore, stakeholders noted a particular presence of the
market, regulatory, industrial and support framework conditions. The financial framework conditions were
perceived to be present in the region to a lesser extent. The latter, however, corresponds with the average across
the regions. The Capital region of Denmark is therefore best characterised as having a high presence of
cultural, industrial and market framework conditions, followed by a presence of regulatory,
knowledge and support framework conditions. Financial framework conditions relatively lack presence.
The presence of the framework conditions in the PACA region follows a more distinctive pattern than the
industry average. Similar to the Capital region of Denmark, there is a relatively high presence of support
framework conditions. This is consistent with both the hypothesised importance of these framework conditions
for eco industries to emerge and, to some extent, the average across the regions. Particularly the industrial,
cultural and regulatory framework conditions, however, were perceived to be present to a lesser extent in the
region. Based on the survey results, the PACA region is best characterised as having a relatively high
presence of support and financial framework conditions, followed closely by the presence of market
and knowledge framework conditions. The regulatory, cultural and industrial framework conditions were
perceived to be present in the region to a lesser extent.
61
Overall, stakeholders from the Lombardy region noted a relatively high presence of the knowledge framework
conditions. Moreover, they on average rated all framework conditions to be present to a lesser degree than what
we observe across the regions. It is especially striking to see a relative lack of presence of the support framework
conditions, as this contrasts with our earlier findings for the Capital region of Denmark and PACA region.
Furthermore, the cultural framework conditions were also perceived to be relatively less present in the region
compared to the other framework conditions. The Lombardy region is therefore best characterised by a
relatively higher presence of knowledge, financial and industrial framework conditions,
followed by presence of regulatory, market, support and cultural framework conditions.
7.2. Industry specific framework conditions

Underlying the general framework condition categories are a set of industry specific sub-level framework
conditions. To get a better grasp of the presence of these industry specific framework conditions, it is
worthwhile to consider the results of each of these conditions in more detail. Table 7-2 presents the detailed
summary statistics of the survey responses for each of the sub-level framework conditions across the regions 173.
TABLE 7-2: Detailed summary statistics of survey responses for the eco industries
Framework conditions n Mean Std. dev. Min Max
1. Financial framework conditions

- Availability of environment-related R&D subsidies 15 6.87 2.10 3 10
- Availability of ‘green’ lending through banks 15 4.40 1.84 2 7
- Availability of seed and venture capital for eco-innovative companies 15 5.60 1.76 3 8
2. Industrial framework conditions
- Critical mass of eco-companies 15 6.00 2.04 3 10
- Critical mass of supply chain actors 15 6.33 1.45 4 8
3. Market framework conditions
- Proximity of companies in traditional industries in transition towards
15 6.13 1.64 3 8
environmentally friendly solutions
- Critical mass of private consumers of eco-industries 15 6.40 1.64 4 9
- Green public procurement 15 5.87 1.96 2 9
4. Cultural framework conditions
- Social attitude supporting eco-innovation 15 6.67 2.41 1 10
5. Knowledge framework conditions
- Environmental focus of university research programmes 15 7.33 1.68 4 9
- Presence of environmental education in the school curricula and vocational
15 6.13 1.77 3 9
training
6. Regulatory framework conditions
- Availability of environment-related R&D and other tax measures 15 5.60 1.72 2 9
- Existence of eco-regulation 15 6.60 2.06 2 9
- Supporting IP conditions related to green technologies 15 5.33 2.09 1 10
- Policy measures supporting the internationalisation of eco-innovative
15 6.60 2.29 2 10
clusters
7. Support framework conditions
- Availability of eco-innovative infrastructure 15 6.60 2.38 1 10
For this analysis we have chosen to aggregate the results as this increases the explanatory power by having more
173
observations available to us.
62
- Strategy documents and roadmaps for the development of eco-industries in

15 6.93 1.83 3 10
the region
- Dedicated cluster organisation (cluster manager or similar) to coordinate
15 7.13 2.20 2 10
the development of eco-industries in the region
- Well-functioning technology transfer offices within academic institutes
15 6.07 2.19 2 10
facilitating the adoption of eco-industries solutions
From Table 7-2 follows that the specific framework conditions relating to eco innovation are not perceived to be
highly present in the regions. Across the various categories of framework conditions, it can be observed that
particularly the availability of “green” lending, green public procurement, and environment-related R&D and
other tax measures relatively lack presence in the regions. In contrast to the latter, environment-related R&D
subsidies were perceived to be relatively more present in the regions.
Furthermore, the support framework conditions generally show a relatively high presence in the regions.
Nevertheless, well-functioning technology transfer offices that facilitate the adoption of eco-industries solutions
were noted to lack relative presence in the regions. The regions are, however, characterised by a relatively high
presence of dedicated cluster organisations and the presence of strategy documents and roadmaps, both
supporting the development of eco-industries in the region.
Finally, the knowledge framework conditions showcase an interesting contrast. Whereas

stakeholders commended the environmental focus of university research programmes in the regions, they
noted a relative lack of presence of environmental education in the school curricula and vocational training. In
other words, whereas some university research programmes are perceived to have an environmental focus,
there is relatively less focus on specific education within the field.
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8. Conclusions and Policy

recommendations
In the current chapter, we elaborate on specific recommendations with regard to how policy makers can
support the development of eco industries in European regions at each stage of industry’s development. We
begin by mapping the identified framework conditions based on the stage of industry’s development these
framework conditions refer to.
8.1. Key conclusions from case study analysis
The current case study analysis was built on the notion of the dynamic nature of emerging industries, i.e., a
continuous evolution of an industry and its periodical transitions from one stage to another. The analysis
confirmed that the role and importance of the relevant framework conditions changes with new stages of the
industry’s life cycle. However, all identified framework conditions prove to have a long-term impact and are
relevant for more than one stage. Figure 8-1 presents the result of the mapping exercise of the analysed
framework conditions for eco industries.
FIGURE 8-1: Mapping of identified framework conditions for eco industries
64
8.2. Policy recommendations
In this sub-section, we elaborate on specific recommendations for regional, and, whenever relevant, national
and EU policy makers on how to support the development of eco industries in European regions. We continue
building on the dynamic approach forming the core of our methodology, and tailor the relevant
supporting measures to the specific stages of the industry’s life cycle. In all cases, the proposed
measures are relevant for more than one stage, which is specified in the description of the measures below.
Policy recommendations for Precursor stage
The Precursor stage is the first stage in the industry’s lifecycle implying the first interest in the emerging
industry in the region. While in practice, the first initiatives introducing eco industries to the region often come
from the private sector, the role of policy makers at this initial stage should not be underestimated. Policy
makers can stimulate the development of eco industries at the Precursor stage in the following ways:
1) Stimulating the transition of traditional industries of the region towards environmentally

friendly solutions (and thus creating a demand for the products and services of eco industries) by means
of eco-friendly regulations and standards;
2) Influencing the engagement of traditional industries with eco industries by implementing
policies that incentivise joint networks and multi-stakeholder research platforms; such
applied;
3) Organising social marketing and advertising campaigns promoting eco industries and green
products in the region, as well as incentivising the purchase of eco products (e.g., financial
benefits for the users of solar panels).
Policy recommendations for Embryonic stage
The Embryonic stage is the second stage in the industry’s lifecycle implying the activities that support the
improvement of the reliability and performance of technology and services to a point where it can be
demonstrated in a market environment. Specifically, this stage implies activities that help to demonstrate the
commercial potential of technology and services in the region through revenue generation. This stage is
associated with an even higher role of policy makers than during the Precursor stage. Policy makers can
stimulate the development of eco industries by ensuring:
1) Availability of environment-related R&D subsidies:

a) R&D subsidies, either through direct government funding of R&D or through tax credits for private
R&D activity, can help raise private R&D levels to a socially desirable level;
b) While R&D subsidies address market failures in the invention of new technologies, they do not provide
incentives to adopt new technologies;
c) When setting the level of R&D subsidies, policy makers need to consider the opportunity cost of
additional R&D since ignoring the costs of reducing these R&D efforts would result in overly generous
subsidies for eco R&D, and could have negative impacts on the economy as a whole.
2) Availability of ‘green’ lending through banks:

a) Policy makers can use two main options to induce a change within eco industries regarding their
emergence and access to “green” financing options: direct access to capital through Public Investment
Banks; and preferential credit;
b) Public Investment Banks should aim at giving SMEs better access to credit, supporting entrepreneurs
at all stages of their project, helping enterprises to expand their market and their export activities;
c) Low-cost credit lines and partial risk guarantees can incentivise banks to invest in higher risk-bearing
projects.
65
3) Availability of seed and venture capital for eco-innovative companies:

a) By providing targeted and increased support to the industry from EU Community Budget, the
European Investment Fund and European Investment Bank, private investments could be triggered.
b) This support from EU government bodies can take the form of providing a package of financial
instruments to cover different company sizes and structures (e.g., loans, guarantees, grants and tax
incentives) aimed at increasing the attractiveness for the private sector to invest in European eco
industry product development activities.
4) Green public procurement:

a) Regional authorities should put green public procurement on the political agenda of the region;
b) Regional authorities should set clear targets (e.g., developing green public procurement action plans
focussing on: certain product groups and due dates for these products; certain types of public
organisations and due dates for these organisations etc.);
c) Regional authorities should create green public procurement knowledge base (e.g., linked databases,
websites containing information on “green” criteria, specifications, best practices, eco-labels etc. on
products and procurement procedures, including legal information, procurement regulation);
d) Regional authorities should offer training opportunities for the purchasers of green public
procurement.
5) Environmental focus of university research programmes:

a) Regional authorities should introduce programmes that provide financial support for conducting
collaborative research within the environment-related disciplines (including multidisciplinary research
addressing complex issues, problem-solving research; international cooperation; addressing global and
local challenges; dissemination of knowledge and research results);
b) Regional authorities should introduce programmes dedicated to strengthening the innovative capacity
of SMEs by providing financial support for outsourcing research critical to their core business activities;
c) Regional authorities should introduce programmes that stimulate industry-academia partnerships in
order to stimulate research collaboration between public research organisations and private
commercial enterprises, including SMEs;
d) Regional authorities should introduce programmes that offer initial training of researchers, lifelong
training and career development, and international fellowships;
e) Regional authorities should create a dedicated helpdesk that would inform cluster members about calls
for proposals for the relevant EU subsidies and grants and assist cluster members with preparing
proposals.
6) Availability of environment-related R&D and other tax measures:

a) To influence the consumer’s behaviour and thereby trigger the demand for eco products in the region,
direct fiscal incentives can take a form of a subsidy or rebate provided after the purchase of an eco
product or paid directly at the check-out, in some cases delivered in case of replacement of the old
appliance etc.;
b) The environment-related R&D tax credit can be an effective tool for boosting innovation,
competitiveness and creating high-wage employment in the region.
7) Adoption of eco-regulation:
a) There is a need to create an environmental policy regime that is consistent with an industrial policy
focusing on innovations with sufficiently large international selling opportunities.
b) For the EU eco industries to be able to successfully develop in the future, a long-term stable policy
framework with greater harmonisation or coordination across the Member States, together with
simplification of national regulations is needed;
c) The development of a more coherent intellectual property rights (IPR) policy and legal framework is
crucial, not just within the EU, but also at the international level.
66
8) Availability of environmental and research & innovation infrastructure:

a) Besides large investments in the environmental infrastructure of the region, the role of policy makers is
to support the concept of public-private partnerships vital for the development of research & innovation
infrastructure.
The abovementioned policy actions are relevant also for the next two stages of industry’s development: Nurture
and Growth stage.
Policy recommendations for Nurture stage
The Nurture stage corresponds to the activities that help to improve the price and performance of applications
to a point where sustainable business potential can be demonstrated. Specifically, this stage implies developing
a market with mass growth potential. Also at the Nurture stage, the role of policy makers is of fundamental
importance. Policy makers can stimulate the development of eco industries at this stage by ensuring/supporting
the presence of:
1) Critical mass of eco-companies:

a) The key task of policy makers is to create an environment favourable for setting up and expanding
businesses in the region.
b) The relevant measures should among others aim at ensuring easier access to funding, making
legislation clearer and more effective and developing an entrepreneurial culture and support networks
for businesses.
2) Critical mass of supply chain actors:

a) A specific role in supporting the establishment of a structured eco industries supply chain belongs to
dedicated cluster initiatives.
b) Policy makers need to promote and support cluster initiatives in their regions by financing the creation
of cluster organisations and the associated cluster-level initiatives (e.g., networking events, match-
making etc.).
3) Environmental education in the school curricula and vocational training:

a) Policy makers should include the groups targeted as beneficiaries in the programme development
process (NGOs, associations of teachers, network of environment education, etc.);
b) Policy makers should include environmental education and sustainable development experts in the
programme development process;
c) Policy makers should provide capacity-building in environmental education issues to the programme
management authorities at all levels;
d) Policy makers should ensure shorter payment periods, pre-financing possibilities and negotiating
assured national co-financing;
e) Policy makers should support organisations in developing the project proposals and managing the
projects;
f) Policy makers should inform potential project promoters of funding opportunities and coordinating
exchange of experiences between existing projects.
4) Supporting IP conditions related to green technologies:

a) There is a clear need for a unitary patent system. Unitary patent protection would foster scientific and
technological advances and the functioning of the internal market by making access to the patent
system easier, less costly and legally secure.
b) For the national and EU R&D funding programmes, more clear and streamlined rules for IP and access
rights need to be defined, and the necessary measures need to be taken to ensure their implementation.
c) This may be achieved through mandatory Consortium Agreement templates that may depend on the
type of project and the phase of the innovation cycle, with which the participants will be acquainted in
67
advance, and which will avoid spending disproportionate amounts of time and efforts for preparing the
Consortium Agreements of publicly-funded projects.
5) Policy measures supporting the internationalisation of eco-innovative clusters:

a) Examples of the policy measures supporting internationalisation include regional support in
representing the cluster abroad; regional support for inward investment activities; removal of custom
duties on green products, as well as training and coaching etc.
b) Policy makers can develop a knowledge sharing system in which eco-companies, traditional companies
and research institutes can exchange information (inter)nationally and possibly collaborate on project
for international markets.
6) Strategy documents and roadmaps for the development of eco-industries in the region:
a) Strategy documents and roadmaps should target companies of all sizes in the region, not only SMEs, as
chain.
b) Objectives set in strategy documents and roadmaps need to be continuously monitored and periodically
c) Interest in the actions set in strategy documents and roadmaps from the company side is crucial for
d) There is a constant need to adjust the strategic direction due to changes in the interests of the partners
7) Dedicated cluster organisation:

a) Regional, national and EU authorities need to offer dedicated cluster policies that typically include
grants for cluster management activities and specific collaboration projects.
b) The level of bureaucracy related to application and implementation of cluster policies in the region
needs to be minimised (i.e., complicated management procedures; long approval procedures for
c) Since eco industry clusters represent highly complex systems with multiple stakeholders involved,
cluster policy measures should not be applied on a solely basis. It is rather a combination of various
complementary measures that need to be applied simultaneously (e.g., education & skills, logistics &
infrastructure etc.).
d) At the EU level, in close cooperation with national governments and regions, there is a need to support
the efforts of cluster organisations to improve their performance and reach excellence (e.g., European
Cluster Excellence Initiative and the organisation of further “train-the-trainers” activities for cluster
managers).
8) Well-functioning technology transfer offices within academic institutes facilitating the

adoption of eco-industries solutions:
a) Policy makers need to promote close cooperation of academia with industry, for example by having
students working in eco companies while engineers from companies engage in projects in universities
and research institutes.
b) The emergence of joint labs that are on industry premises but shared with universities and research
organisations, as well as improvements in the sharing of expensive equipment and infrastructure inside
and between clusters could be of high benefit.
The abovementioned policy actions are relevant also for the Growth stage.
68
Policy recommendations for Growth stage
Finally, besides the measures already mentioned above, the key measures to be taken by policy makers at the
Growth stage include:
1) Making strengthening of PPPs a core priority of research and innovation policies at this stage;
2) Advancing the rules applicable to the consortia agreements (including the IP rules);
3) Ensuring that PPPs are driven by the industry to enable bringing the results of research efforts to
industrialisation and to the market.
Concluding remarks
The current case study analysis has shown that policy makers play a vital role in the development of eco
industries from the very beginning of industry’s emergence in the region. However, as mentioned before, eco
industry clusters represent highly complex phenomena consisting of multiple other stakeholder groups besides
policy makers (i.e., small and large firms from both core and connected industries; academic institutions;
various supporting structures including cluster organisations; investors etc.). All these stakeholder groups are
crucial for the development of eco industries in the region. Nevertheless, while favourable policy
measures cannot solve all the challenges on their own, their presence can significantly
accelerate the development of eco industry clusters.
There is no generic ‘silver bullet’ across all eco industry clusters in terms of policy measures that have to be
applied. The list of measures above provides a general overview of the relevant measures that are reported to be
favourable for the development of eco industries. However, what works in one region does not necessarily have
to work in another one, as myriads of contextual factors (including historical, economic, demographic, cultural
and other developments) determine the success of the applied policy measures. In this respect, policy makers
and cluster organisations play a particularly fundamental role. It is crucial to make sure that the specific
activities of cluster initiatives are aligned with the unique set of challenges and opportunities the cluster is
facing. The critical task is to ensure that policy interventions first support an effective process
of identifying the action priorities and then provide the right tools to address whatever those
priorities are. Examples of such priorities include specific business environment dimensions to upgrade, the
need to address specific weaknesses in company development, specific market opportunities to leverage
through collaboration etc.174.
Finally, policy interventions supporting industry development should always be discussed with local companies,
and designed in a way that captures the interest of those companies. Consequently, industry’s involvement in
policy making is crucial from the very early stages, including the design stage of a policy intervention (joint
objective setting), but also its monitoring and evaluation.
174
Dervojeda K. (2013) “Towards sustainable chemical clusters: The role of policy interventions. Chemical Industry Digest,
February 2013 Issue
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Annex A: Questionnaire
Introduction
Welcome to the online survey on the industry-specific framework conditions for the world-class clusters in
emerging industries. Framework conditions here refer to factors that are vital for cluster development.
The survey aims to collect inputs for the evidence-based policy recommendations that would allow regional,
national and European policy makers to develop effective measures in order to create, expand and
keep the European clusters in emerging industries competitive.
The survey is conducted in the context of the “Extension of the European Cluster Observatory: Promoting better
policies to develop world-class clusters in Europe” carried out by PwC for Enterprise and Industry Directorate
General of the European Commission.
We highly appreciate your participation and we would like to thank you in advance for your time and inputs.
Please click on the “Next” button to start the survey.
1 General information
Item Response
1.1 First Name
1.2 Last Name
1.3 Position
1.4 Organisation
1.5 Type of stakeholder  Cluster manager or similar

 Policy maker (regional/national)
 Industry association
 Chamber of commerce or similar
 Other (please specify)
1.6 Please indicate the industry you represent.
Options (drop down menu)
Creative industries
Eco-industries
Mobile services industries
70
1.7 Please indicate the region you represent.
Options (drop down menu)
Capital region of Denmark (Denmark)
Provence-Alpes-Côte d'Azur (France)
Lombardia (Italy)
The remainder of the survey focuses on seven types of framework conditions in your region: (1) financial; (2)
industrial; (3) market; (4) cultural; (5) knowledge; (6) regulatory and policy; and (7) support.
2 Financial framework conditions
Please indicate to what extent the following financial framework conditions are applicable to
your region (1 = the condition is hardly applicable to the region; 5 = the condition is to some
extent applicable to the region; and 10 = the condition is highly applicable to the region).
2.1 Availability of environment-related R&D subsidies
1 2 3 4 5 6 7 8 9 10
2.2 If relevant, please provide an example of a good practice from your region (i.e., specific
tools, programmes, measures etc. that aim to support this framework condition).
[open question]
2.3 Availability of ‘green’ lending through banks [pop up text: e.g., interest rate on
environmentally-friendly investments]
1 2 3 4 5 6 7 8 9 10
[open question]
2.5 Availability of seed and venture capital for eco-innovative companies
1 2 3 4 5 6 7 8 9 10
71
[open question]
3 Industrial framework conditions
Please indicate to what extent the following industrial framework conditions are applicable to
3.1 Critical mass of eco-companies [pop up text: e.g., companies in air pollution control,
cleaner technologies and processes (CTP), energy management, monitoring and
instrumentation, landscape services, marine pollution control, noise and vibration control,
recovery and recycling, renewable energy, transport pollution control, waste management,
water and wastewater treatment etc.)]
1 2 3 4 5 6 7 8 9 10
[open question]
3.3 Critical mass of supply chain actors [pop up text: presence of eco-innovation
consultancy services, presence of research centres for eco-innovation, presence of
equipment suppliers, presence of utility companies]
1 2 3 4 5 6 7 8 9 10
[open question]
72
4 Market framework conditions
Please indicate to what extent the following market framework condition is applicable to your
region (1 = the condition is hardly applicable to the region; 5 = the condition is to some extent
applicable to the region; and 10 = the condition is highly applicable to the region).
4.1 Proximity of companies in traditional industries in transition towards environmentally

friendly solutions (i.e. critical mass of business consumers of eco-industries)
1 2 3 4 5 6 7 8 9 10
[open question]
4.3 Critical mass of private consumers of eco-industries
1 2 3 4 5 6 7 8 9 10
[open question]
4.5 Green public procurement [pop up text: e.g., public authorities use their purchasing
power to support goods and services with lower impact on the environment]
1 2 3 4 5 6 7 8 9 10
[open question]
73
5 Cultural framework conditions
Please indicate to what extent the following cultural framework conditions are applicable to
5.1 Social attitude supporting eco-innovation [pop up text: e.g., attitude of citizens towards
environment, public awareness of environmental problems, perception of green brands by
consumers, perception of eco-innovation by business]
1 2 3 4 5 6 7 8 9 10
[open question]
6 Knowledge framework conditions
Please indicate to what extent the following knowledge framework conditions are applicable to
6.1 Environmental focus of university research programmes
1 2 3 4 5 6 7 8 9 10
[open question]
6.3 Presence of environmental education in the school curricula and vocational training
1 2 3 4 5 6 7 8 9 10
[open question]
74
7 Regulatory and policy framework conditions
Please indicate to what extent the following regulatory and policy framework conditions are
applicable to your region (1 = the condition is hardly applicable to the region; 5 = the condition
is to some extent applicable to the region; and 10 = the condition is highly applicable to the
region).
7.1 Availability of environment-related R&D and other tax measures
1 2 3 4 5 6 7 8 9 10
tools, programmes, measures etc.).
[open question]
7.3 Existence of eco-regulation [pop up text: e.g., rules and regulations prescribing eco-
efficient standards such as green procurement]
1 2 3 4 5 6 7 8 9 10
[open question]
Please indicate to what extent the following regulatory and policy framework conditions are
applicable to your region (1 = the condition is hardly applicable to the region; 5 = the condition
is to some extent applicable to the region; and 10 = the condition is highly applicable to the
region).
7.5 Supporting IP conditions related to green technologies [pop up text: e.g., accelerated
examination process for patent applications relating to green technologies; green patent
database and other green patent tools]
1 2 3 4 5 6 7 8 9 10
[open question]
75
7.7 Policy measures supporting the internationalisation of eco-innovative clusters [pop up

text: e.g., regional support in representing the cluster abroad; regional support for inward
investment activities; removal of custom duties on green products]
1 2 3 4 5 6 7 8 9 10
[open question]
8 Support framework conditions
Please indicate to what extent the following support framework conditions are applicable to
8.1 Availability of eco-innovative infrastructure [pop up text: e.g., new fuelling systems,
sophisticated traffic control, diffused energy distribution systems]
1 2 3 4 5 6 7 8 9 10
[open question]
8.3 Strategy documents and roadmaps for the development of eco-industries in the region
1 2 3 4 5 6 7 8 9 10
[open question]
76
Please indicate to what extent the following support framework conditions are applicable to
8.5 Dedicated cluster organisation (cluster manager or similar) to coordinate the

development of eco-industries in the region
1 2 3 4 5 6 7 8 9 10
[open question]
8.7 Well-functioning technology transfer offices within academic institutes facilitating the
adoption of eco-industries solutions
1 2 3 4 5 6 7 8 9 10
[open question]
9 Additional framework conditions
9.1 Please indicate the framework conditions that were not mentioned in this survey but that
you find vital for the development of the emerging industry in your region.
Whenever possible, please accompany your remarks with examples from your region of
good practices supporting those framework conditions.
[open question]
77
Annex B: Sample of analysed

regions
Based on the empirical analysis within WP3, the following three regions were selected for detailed case study
descriptions for eco industries:
(1) Capital Region of Denmark;

(2) Provence-Alpes-Côte d'Azur (France);
(3) Lombardy (Italy).
Below we provide concise descriptions of each of the three regions.
Criteria Data
Region name 1 Capital region of Denmark
Short description The Copenhagen metropolitan area – the Capital Region – is among the richest
regions in Europe and is one of the leading regions with regards to
innovation and economic performance. Nevertheless, compared to other similar
metropolitan regions for instance Stockholm, Helsinki or Amsterdam, the Capital Region
is losing ground on important parameters such as growth in labour
productivity and educational level. Most notably, the Capital Region experienced
a decreasing growth in labour productivity over the last decade. Therefore, the main
challenge for the Capital Region is to ensure that the good framework conditions for
innovation manifest itself in a better innovation performance in the coming years175.
Relevant cluster(s) Copenhagen Cleantech Cluster
Picture
176
Website http://www.cphcleantech.com
Establishment year of the A dedicated cluster initiative was launched in spring 2010 in cooperation with public
cluster authorities and research institutions, to ensure growth, innovation and collaboration
among Danish cleantech companies.
Size of the cluster About 750 companies and about 47,000 employees working in eco industries177
Main areas of activity The cluster focuses on the activities which develop (including consultancy and research),
produce or implement new or improved processes or products, that contribute to 178:
 Production of renewable energy or sustainable materials;
 Reduction of the use of natural resources by exploiting the resources or energy
more efficiently;
 Reduction of the harm caused by fossil fuels;
 Reduction of pollution problems through products, processes and/or
consultation.
175 “Regional Innovation Monitor: Regional Innovation Report (Danish Capital Region)”, 22 August 2011, prepared by a
consortium led by Technopolis Group for the European Commission Enterprise and Industry Directorate-General
Directorate D – Industrial Innovation and Mobility Industries
176 http://www.internationalcleantechnetwork.com/partners/partners/copenhagen-cleantech-cluster-(ccc),-denmark.aspx
177 Monitor Copenhagen Cleantech Cluster 2012
178 http://www.cphcleantech.com/about/what-is-cleantech
78
Criteria Data
Noteworthy  A unique set of actors stand up behind Copenhagen Cleantech Cluster -
including Copenhagen Capacity, Scion DTU, Confederation of Danish Industry
(DI), Risø DTU and the University of Copenhagen as well as companies like
Vestas, Dong Energy, Haldor Topsøe, Novozymes and Better Place. The broad
foundation of partners ensures that the initiative embraces the entire value
chain to benefit cleantech companies, researchers and entrepreneurs in
Denmark179.
 Today the long-term goal for Danish energy policy is as follows: the entire
energy supply – electricity, heating, industry and transport – is to be
covered by renewable energy by 2050180.
 To complete this green transition, Denmark has passed one of the world’s
most ambitious energy agreements, encompassing a number of targets to
be achieved already by 2020181:
o more than 35 % of the final energy consumption will be renewable;
o approx. 50 % of electricity consumption is to be supplied by wind
power;
o greenhouse gas emissions will be 34 % lower than in 1990;
o by 2025, Copenhagen aims to be the first carbon neutral
capital in the world.
Region name 2 Provence-Alpes-Côte d'Azur (France)
Short description The Provence-Alpes-Côte d’Azur (PACA) region is one of the three leading
economic regions in France and is also the leading region for business creation,
besides the region of Ile de France. The strong economic attractiveness resulted in the
PACA region having one of the largest resources consisting of diverse
knowledge and technologies. Two operations which are of national interest are
located in the PACA region. The PACA region has also been chosen as the location for the
ITER (nuclear fusion power plant) project182.
Relevant cluster(s) Capenergies: is a cluster organisation which has more than 500 members, who work
on projects that aim to create innovative opportunities for the energy industry.
Picture
183 184
Website http://www.capenergies.fr/
Establishment year of the The Capenergies cluster was certified by the French government in 2005.
cluster
179 http://www.stateofgreen.com/en/Profiles/Copenhagen-Cleantech-Cluster
180 http://www.copcap.com/BusinessOpportunities/Cleantech/Background
181 Ibid.
182 http://www.invest-in-france.org/us/why-choose-france/provence--alpes-cote-d-azur.html
183 http://www.capenergies.fr
184 http://tinyurl.com/cy9up55
79
Criteria Data
Size of the cluster Capenergies is the cluster for all future energy related businesses and counts
approximately 536 members and 50,000 employees185. The members are
categorised as the following:
 317 Companies
 87 R&D centres
 30 Member associations
 15 Finance institutions
 55 Institutional partners
 19 Professional training organisations
 13 Training and research organisations
Main areas of activity Capenergies focusses on energies of the future and provides its members with the
possibility of setting up joint projects and provides them full access to all information
and knowledge. Capenergies also has a financers committee, which helps companies
prepare their fund raising campaign, enabling them to go through a fast track to
investors.
To stimulate innovation and experimentation, there are also 6 industrial

and R&D hubs. These cover all 6 areas regarding green energies, such as, smart grids,
nuclear fusion, solar energy and hydrogen storage186.
Noteworthy This cluster has attracted large multinationals as well as several organisations
targeting certain intrinsic aspects of businesses operations within the eco industries.
Therefore they are able to assess various projects and play an important role in whether
projects receive public funding187.
Region name 3 Lombardy (Italy)
Short description Lombardy has the second highest GDP among European regions188. Nationally,
Lombardy alone contributes 20.6% to the national added value, being
number one in Italy.
Lombardy is among the four most advanced European regions, with approximately
800,000 businesses, spread over 16 industrial districts. This also makes Lombardy
one of the four Motors of Europe, also being known as the ideal location for further
growth, for small and medium sized firms189.
However, the Lombardy region does have some challenges to overcome to sustain its
strong position within the European Union. The demand for globalisation and
greater competition requires the implementation of a better infrastructure,
so that further growth is not hindered, as well as the continuation of transforming
towards value-added industries.
Relevant cluster(s) Energy Cluster: an industrial cluster which is supported by firms which are leaders in
the energy industry.
Website
190 191
185 http://www.capenergies.fr/index.php?Polechiffresclefs
186 http://www.capenergies.fr/fichiers/anglais/gbv5.pdf
187 http://www.capenergies.fr/fichiers/anglais/gbv5.pdf
188 http://www.investinlombardy.com/LOMBARDY_REGION/103
189 http://www.worldreport-ind.com/lombardy/introduction.htm
190 http://www.energycluster.it
80
Criteria Data
Establishment year of the Website: www.energycluster.it
cluster
Size of the cluster Officially considered a cleantech cluster from 2009 onwards.192
Main areas of activity Energy Cluster Lombardy counts more than 100 companies and has 8 university
and research centres along with 10 public sector organisations which
operate on a non-profit basis. A total of approximately 20,390 people are employed
under the cluster193.
Noteworthy The Energy Cluster is there to support its members in order to become more
competitive. It helps its members in gaining international exposure,
increasing market knowledge for national and international markets. Since
there is a variety of companies in the cluster, the cluster aims to streamline effective
synergies in order to improve product quality and efficiency194.
191 http://en.wikipedia.org/wiki/Lombardia_(wine)
192 http://www.internationalcleantechnetwork.com/partners/partners.aspx
193 http://www.energycluster.it/eng/default.aspx
194 http://www.energycluster.it/eng/default.aspx
81

Eco Industries: Analysis of Industry-Specific Framework Conditions Relevant For The Development of World-Class Clusters

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European Cluster Observatory

Extension of the European Cluster Observatory,

Coordination: Enterprise and Industry Directorate-General, Directorate D – “SMEs and

European Union, September 2013.

This work is part of a service contract for the

This report is financed under the Competitiveness and

1.1. Rationale and objectives of the case study analysis 11

2. Specifics of eco industries 20

3. Precursor stage: first interest in the emerging industry 26

4. Embryonic stage: entering a market environment 30

5. Nurture stage: demonstrating sustainable business potential 44

5.6. Policy measures supporting the internationalisation of eco-innovative clusters 51

6. Growth stage: sustainable industrial growth 58

7. Survey on industry specific framework conditions 60

7.1. Cross-regional comparison of general framework conditions 60

8. Conclusions and Policy recommendations 64

8.1. Key conclusions from case study analysis 64

Key policy recommendations per industry development stage are as follows.

Policy recommendations for Precursor stage

1) Stimulating the transition of traditional industries of the region towards environmentally

FIGURE 0-1: Mapping of identified framework conditions for eco industries

Policy recommendations for Embryonic stage

1) Availability of environment-related R&D subsidies:

2) Availability of ‘green’ lending through banks:

3) Availability of seed and venture capital for eco-innovative companies:

4) Green public procurement:

5) Environmental focus of university research programmes:

6) Availability of environment-related R&D and other tax measures:

8) Availability of environmental and research & innovation infrastructure:

Policy recommendations for Nurture stage

1) Critical mass of eco-companies:

2) Critical mass of supply chain actors:

3) Environmental education in the school curricula and vocational training:

4) Supporting IP conditions related to green technologies:

5) Policy measures supporting the internationalisation of eco-innovative clusters:

7) Dedicated cluster organisation:

8) Well-functioning technology transfer offices within academic institutes facilitating the

Policy recommendations for Growth stage

1. Objectives, scope and

1.1. Rationale and objectives of the case study analysis

Key objectives of the analysis

Strategic importance of eco industries for Europe

The role of policy makers in supporting eco industries

1.2. Definition and scope

Employed definition of eco industries

FIGURE 1-1: The structure of the core eco industries

Source: Hohmeyer and Koschel (1995) (quoted in Rennings, K. (2000, p.323)10

(1) Pollution management:

(2) Resource management:

The relevant business activities include13:

 Production of equipment and specific materials;

Scope of eco industries

NACE code Level 4 NACE description

qualitative review, The European Cluster Observatory, http://www.europe-innova.eu/c/document_library/

NACE code Level 4 NACE description

FIGURE 1-2: Life cycle of regional industrial emergence

Below we elaborate on each of the stages and transition periods.

The abovementioned activities were carried out in several steps:

(1) Step 1: developing a comprehensive overview of the relevant framework conditions

Analysed framework conditions

Framework conditions Relevant stages

Framework conditions Relevant stages

1.4. Structure of the report