Modules

The assembly of finished modules is the last step of the production process. Here wafers are manufactured into units of different size, scale and design to meet the needs of users. The wafers that have been texture treated chemically now become assembled into usable entities.

A central issue is the design and how it is fitted to usage. Although modules are produced in the Norwegian PV-industry, this is not a focus area for the organizations within the innovation system. Therefore weight will be put on the innovation processes related to the two first levels of the value chain. This is not intended to undermine the importance of the last level, but is a natural choice based on the characteristic of the Norwegian industry.

Chapter 4

4 The Systemic Nature of Innovation:

An understanding of technology development and innovation processes leads to an understanding of the contribution of the Norwegian industry related to economization of processes, which is a key factor to increased diffusion of the technology. This chapter intends to show how various innovation processes increase economization and thereby increase technological diffusion.

Kline & Rosenberg (1986) point toward the importance of not viewing innovation as a simple linear process spanning from research and development to market application. Innovation should rather be viewed as a highly complex and sometimes almost invisible process.

Invisible in the sense that what is often seen as a single innovation in fact consists of several small, intangible innovations. It is therefore important to underline that PV-technology is not a single innovation, but consists of numerous and equally important steps descried above.

Small incremental steps and numerous processes in this context stand for a decisive economization of production.

Furthermore; firms operate and exist within a context and do not innovate in isolation

(Edquist 2005: 182). This notion has inspired a systemic approach to innovation that analyses economic and technical change as existing within a broader context (Carlsson et al. 2002:

233). An innovation system is comprised of a set of organizations and institutions.

Organizations are formal structures such as firms or research organizations, while institutions

are norms, rules, routines and established practises that regulate the interactions among the organizations within the system (Edquist 2005: 188). A set of systemic approaches exist at different levels of aggregation, and can be delineated from a national, regional, sectoral or technological perspective (Carlsson et al. 2002: 233). Following Edquist (2005) I will in this paper use the systems of innovation (SI) concept as a wide and open approach, including both process and product innovations. Important issues regarding the SI concept to be elaborated on in the following are the role of knowledge and learning and the role of organizations and institutions.

This chapter intends to give an overview of central technological developments and innovation processes related to the technological foundations presented above. The central issue of this chapter is to point out that a new combination of separate existing entities can arise to something new. The PV-industry in Norway is here argued to have origins related to the exploitation and manufacturing of natural resources, especially the Silicon industry, both in technological and systemic sense. Aluminium and Silicon⁹ have been produced for a long time in Norway. The historical linkages to this production can be said to be of importance for the innovations brought forth by the companies producing PV-technology presented in this study. This is much because of the knowledge bases that seem to be embedded within actors innovating in the industry. At the same time new kinds of knowledge are needed and are sought outside of the national system. The PV-industry sector has provided much of this knowledge. This gives rise to the assumption that different systemic contexts interact and are important for the establishment of this industry in Norway.

9 Aluminium and Silicon to some extent share production methods. Additionally Silicon is used as an alloy in Aluminium production. Parts of Elkem`s Metallurgical Silicon is used for this purpose.

The chapter will argue that an understanding of the different levels of systemic aggregation as interacting is fruitful. The levels of aggregation do not have to be seen as conflicting, but rather as complementing. I will use the SI approach on both the sectoral as well as the national level of analysis, to portray interactions amongst the two systems. Segments of a sectoral system of innovation (SIS) in some way or another have relations to their respective national system of innovation (NIS). Following Malerba (2004) the characteristics of the national system influence the features of the sectoral system. Important elements of the national system that are seen as influential are institutions and policies of a national character that determine behaviour of the organizations within the system. The national system can be seen as a contextual frame into which sectoral systems are embedded. Any given part of a sectoral innovation system does belong to some national system. Furthermore a sector can cross national boundaries, at the same time as the different actors within the sector all have national links and connections. In this case the national influence on the industry is seen primarily on the setup of mode of production. I argue that the focus on upstream levels of production is explained by path dependency issues related to the NIS. The sectoral

composition and mode of production of the PV-industry is therefore argued to be influenced by paths and trajectories originating within the national system. At the same time knowledge and technology transfer with origins in SIS are highly central. Therefore the sectoral

composition, and eventual changes, also affects the national system. The PV-industry is therefore seen as having strong linkages to both the sectoral, as well as the national system of innovation.

The Norwegian PV-industry consists of several actors producing elements of the value chain for photovoltaic technology. In figure 4.1 the three main technological levels described previously; silicon, wafers and modules, are linked to the organizations within the sectoral

system. The figure displays the central organizations in Norway and shows that all producing organizations are related to Silicon production. REC and its subsidiaries are the only

producers of wafers and modules in Norway, but are at the same time well established within this field. They are also the largest company globally producing all elements of the value chain. The research organizations within the system are to a large extent focused on Silicon and wafer technology. Hence a concentration and focus on upstream elements; Silicon feedstock, ingots and wafers is seen in the Norwegian part of the sector. This is the case presently, and especially so historically.

Figure 4.1: The Norwegian Photovoltaic Industry Sector