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Discuss the relative merits of top-down and bottom-up approaches to the diffusion of renewable energy technologies. †Word count: 1300 Introduction The question of whether an Initiative Is considered top-down or bottom-up Is a question of perspective, so a local council Annihilative can be viewed as a bottom up If you view It from a central government perspective, whereas you could view It as top down If you were one of the residents.Diffusion follows the innovation phase, and is all about uptake of new products by consumers, how new products enter the market and spread across. Therefore, diffusion is a measure of how successfully a new product has spread through society. In his book ‘Diffusion of Innovations' ref) Everett Rogers espouses that there are four mall elements that Influence the spread of a new Idea: the innovation Itself, communication channels, time, and a social system.In order to self-sustain, the Innovation must be widely adopted. The diffusion of Innovati ons according to Rogers. With successive groups of consumers adopting the new technology (shown in blue), its market share (yellow) will eventually reach the saturation level. Diffusion doesn't happen by itself, as it squires element of the marketing mix: product price place promotion. Process physical evidence properties pleasure people. ND Rogers' criteria for diffusion: relative advantage (offering a competitive advantage) complexity (being easy to use) compatibility (matching existing products) Absorbability (seeing the product in use) Tractability (trying the product out) Diffusion is also significantly affected by such factors as the efforts companies and organizations put into achieving those marketing mix elements and criteria for diffusion: government Initiatives aimed at Influencing the take up of new cosmologies (top-down, technology push); and the characteristics of the consumers In that market place.In the conventional depictions of consumer responses to products, consu mers are seen as passive – simply selecting from what Is on offer. However, some consumers are becoming more selective and are concerned about accordingly In his book ‘Enabling Innovation', Boor Outwitted describes innovation as involving a Darwinian process of selection. New ideas are tested and tried, but adopted only if they are seen as valuable by consumers (*ref) Top down *See â€Å"what makes renewable energy work. UDF† in 30TH folder Any technology signed to be used by society on the macro level (larger scale) needs to be integrated into existing technical and social structures. This means that these structures must be adapted to support an efficient use of the technology. The task of managing this adaptation requires the finance and support of governments.Key elements of technology support systems for renewable energy systems are: Public awareness and acceptance Qualification of everyone that interacts with the system (Installation, Maintenance and Operat ion) Quality control: every new technology goes through a number of iterations until reliable and efficient operation is achieved. If products entering the market do not meet a minimum standard confidence will be affected and diffusion may be prematurely halted. Organizational infrastructures supporting the technology must be in place to guarantee that a deficient device can be repaired quickly, and that spare parts are available.Logistical infrastructures are in place to provide fuels (in the case of Biomass) efficiently and in sufficient quantities – this may require the use of financial incentives for farmers to switch to alternative crops to support the technology. Development of standards regarding the renewable technology and fuels seed by them – this will encourage more manufacturers to enter the market thus driving performance up, and costs down, enabling further diffusion. Qualification of those indirectly confronted by the technology – architects, plan ners, public decision makers.They have special interests and create new markets with their purchasing choices. They influence the market in a bottom-up way.. Level 5 developer consumers. They develop new or modified products to meet their needs or concerns. They become more proactive in a bottom-up way in terms of technological innovation, and sometimes operate in niche markets. Level 6 Consumer innovators. Consumer initiatives lead to success and diffusion. The products transcend the niche markets created by these proactive consumers, and these products and the enterprises that have created them may become part of the mainstream. These consumers change the market and the products, and these changes may become part of the new order.At each successive level in this list, the influence of businesses on innovation and effusion decreases, as consumer influence and involvement increases. However, in all categories, business involvement is still strong and ultimately, at level 6, any succ essful products emerging from the bottom-up process are likely to be taken up by conventional companies. ‘The levels of consumer involvement shown above apply to individual consumers and small grass-roots user groups. However, these are not the only sources of external influence on the rate of technological development and diffusion. Consumers can also be part of wider consumer organizations and environmental pressure groups. Placements through the lobbying power and public influence of large numbers of members. For example, green groups may oppose nuclear power and support solar power. Clearly, given the involvement of grass-roots activists, this is a bottom-up approach, although some pressure groups have national and international roles and can be major players in the high-level political processes. ‘ The DVD includes illustrative examples which are relevant to your discussion on the relative merits of each aspect of the top-down and bottom-up approaches. They include the Hector Housing project, the Austrian DID solar case study, SamÃ'‘, Local generation in Waking etc. Ochs your attention to the good aspects of each approach. Think about such things as where these approaches might be best suited (and examples thereof), and also how whether they are mutually exclusive. Argue the case for and against various strategies for supporting diffusion for specific technologies or programmers. – Identify in general terms the key factors likely to influence the successful diffusion of new technological developments – Assess the relative merits of top-down and bottom-up approaches to diffusion and to the wider innovation process. Http://nun. Du/publications/articles/policy-innovation-for-technology-diffusion- Japanese-renewable-energy. HTML – Bottom up driving top-down: â€Å"Prior to the adoption of RPR, there were vociferous calls from the civil society requesting that the government introduce another policy model instead. The Feed-i n Tariff (FIT) is a policy generally proven to be successful in the member states of the European Union† Learning outcome 1 . 1: The way in which market, environmental and economic factors influence the consumer take-up (diffusion) of new products. – Block 4, page : key points of section 1 Block 4, page : key points of section 2 http://www. Warwick. AC. UK/face/cross_face/low_carbon/conference/programmer/low- carbon_conference_king_Wang_final_comma. PDF Diffusion theory is a collection of concepts that attempt to explain how new ideas, products or practices are taken up into use by domestic, commercial and industrial consumers.According to Everett Rogers (1983), a leading theoretician, diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system' leading to its subsequent adoption into widespread use. Rogers identifies five factors that influence diffusion. He suggests the ease and rate performan ce and/or cost terms, compared with existing products compatibility – with existing products, and with consumers' values and lifestyles complexity – by contrast, he argues that complexity is a negative attribute absorbability – seeing it in action, including seeing how others get on using it Tractability – availability for personally checking out its merits.In addition, perceived risk or danger in use could be added to the list as another potential disincentive. Consumers have increasingly become active in making complaints about the quality of products and services. In parallel, and more positively, consumers increasingly seem to be willing to put effort into searching for what they want. This is not to do simply with price. With a generally more affluent population, the focus is increasingly on performance and quality as well as value. Block 4, pig 15 For the present, it should simply be noticed that not all of this enhanced consumer selectivity is rela ted to self-interested personal utility concerns such as performance, quality or technical advantages, or even a desire for more things.Some consumers have adopted wider ethical stances in relation to what they buy and what they will tot buy, and sometimes, how much they will buy. In practice, only a few people opt for frugal denial, but many more are concerned about the sheer volume of their personal consumption and may seek to cut back on things they feel are frivolous or in some way undesirable. According to research for the Co-operative Banks Ethical Purchasing Index, in the period from 1999 to 2002, 52 per cent of I-J consumers boycotted at least one product because they disapproved of the practices of the company concerned. It was estimated that E. 6 billion had been lost by firms in 2002 due to consumers switching brands on ethical grounds.A survey in 2004 of potential consumer attitudes to companies that did not comply with the new environmental legislation requiring compani es to reduce carbon dioxide emissions -introduced under the EX. Emissions trading scheme(Elk TEST) – found that consumers would vote with their feet if companies failed to comply with this new green legislation. One in three respondents to the survey said they would switch brand allegiance on environmental grounds if a company they regularly buy goods and services from failed to comply (Illogical, 2004). Moreover, consumer responses are not simply negative – some consumers will costively select products which comply with environmental legislation or which are marketed as, for example, involving fair trading with producers in developing countries, or which avoid testing on animals.Block 4, pig 16 environmental sensitivities that influence their purchasing decisions; some companies have responded to this new market; and the government seems keen that the public should do more, particularly in relation to selecting environmentally appropriate products. Learning outcome 1. 2: The role of consumers in supporting new product lines, resisting unwanted options and, on occasion, stimulating the production of, or even actually developing, desired products and services. – Block 4, page : key points of section 1 Block 4, page : Key points of section 2 Block 4, page : key points of section 4 Block 4, page : Key points of Section 5 Block 4, page : key points of section 6 Learning outcome 1. : The difference between top-down and bottom-up approaches to innovation and diffusion and the potential role of consumers and users in aiding diffusion and innovation. Block 4, page : key points of section 1 Block 4, page : key points of section 5 (Bottom -up) Block 4, page : key points of Section 6 (Bottom-up) Block 4, page : key points of Section 7 (Top-down) Learning outcome 1. 4: Consumer involvement with innovation and diffusion in the renewable energy sector and the problems that such activity may come up against. Block 4, : key points of section 1 Block 4, pa ge : key points of Section 2 Block 4, page : Impact on technology diffusion Block 4, page : key points of section 3 : key points of section 5 page page Block 4, page Consumer involvement classification.I have identified six levels of consumer involvement: At each successive level in this list, the influence of businesses on innovation and diffusion decreases, as consumer influence and involvement increases. However, in all categories, business involvement is still strong and ultimately, at level 6, any successful products emerging from the bottom-up process Block 4, page Governments influence the mix of products and systems in ways often beyond the control of consumers, through regulation, taxes and other policy mechanisms. They seek to stimulate the development and diffusion of selected technologies in line with wider national or international strategic priorities. For example, based on environmental policy, governments may seek to phase out the use of coal for electricity generati on and to back wind, wave or tidal power.Clearly this sort of influence involves a top-down approach, although one moderated by democratic processes. Learning outcomes 1. 5: The role of government in influencing the direction and effectiveness of the innovation process and the strategic development of technology in the context of trying to move to the environmentally sustainable use of energy. Block 4, page : Government energy options Block 4, page : Conclusions Block 4, page : key points of section 7 Block 4, pig 10 : key points of section 8 Block 4, piggy : key points of section 9 Learning outcome 1. 10: The role of diffusion and the part played by consumers in paving to a more sustainable approach to energy use.SAA 14: It is true that most innovations are the result of efforts by companies to develop products that will sell to consumers, with governments perhaps providing support for specific lines of development deemed strategically important. However, as has been argued in this block, the diffusion process can be greatly aided if consumers and users are involved in some way. Indeed, motivated consumers and users can sometimes create markets for new areas of innovation. Even when it comes to Just responding to innovations developed by others, the social and community context is important for diffusion. Certainly diffusion may be delayed or prevented if the community opposes the innovation – as was illustrated in the case of wind power.More positively, bottom-up initiatives from the grass-roots can sometimes throw up original ideas that can be diffused widely. Indeed, in some sectors this can be a major source of innovation in terms of new product development, as well as aiding Block 4, pig 23 Diffusion is the final stage of the innovation process, and is concerned with the take-up of new products by consumers. The rate of diffusion at any one time depends on how consumers react to new products. Some will adopt them quickly, most others will take the ir time, and a few will remain hesitant until there is no other option. In the conventional depictions of consumer responses to products, consumers are seen as passive – simply selecting from what is on offer.However, some consumers are becoming more selective and some are concerned about ethical, social and environmental issues and are adjusting their purchasing choices accordingly. A bottom-up grass-roots approach to innovation may offer some advantages over a top-down approach, by ensuring involvement of users in both reduce development and diffusion. A technology â€Å"push,† also known as top down transfer, is diffusion from higher levels of authority to lower levels. An example of â€Å"push† is Federal efforts at technology transfer through legislation, regulation, or policy. Entrepreneurs and other individuals or organizations whose objectives are to implement a technology typically â€Å"push† in order to do so. In marketing terms, the client is â€Å"sold† the technology.A transfer â€Å"pull† is Just the opposite, a bottom-up form of diffusion. The client demands the technology. The search for innovation moves up from the lower levels f an organization until it is accepted or addressed and resolved by higher authorities. Two systems exist for diffusion of innovation: centralized or decentralized. Decision making in centralized systems is concentrated at a high level, while decentralized systems feature wide sharing of power within the diffusion network. In centralized systems diffusion is vertical – from the top down, as innovations emerge from formal R&D projects. Centralized systems favor technology push, where â€Å"needs† are defined at a high level.Innovations which cannot be easily modified, or re-invented, re best diffused using a centralized system. Decentralized systems use horizontal diffusion, as local experimentation is often the innovation source and use technology pull, where need s are defined locally. Innovations which lend themselves to modification are best diffused by a decentralized approach because such an approach allows local adaptation of innovations to reflect local needs. There are, as a general rule, two types of projects. Projects following top-down procedures where large projects are conceived and announced by the Ministry of Scientific Research and Information or Ministry of Environment. Those commissioned projects are rewarded with large amount of money.The second type of project concerns smaller ones and follows a bottom-up approach with three different types of grants: grants for public research (PRO or Universities), SEEM projects and projects supported by the EX. Framework programmer. Http://sustainabledevelopment. UN. Org/content/documents/Kandahar. PDF top down monitoring and audit process to ensure that the quality standards are strictly met and the Company policies and procedures are being properly followed Top-down Definition  œ A development or change initiated and managed from above by overspent or companies: the conventional approach macroeconomic measures Block 4, pig 82 governments can ensure the successful development and spread of strategically selected technologies.This will include a look at new technology development as well as at diffusion because the successful diffusion of new products frequently rests on how well those products have been developed. For example, the UK government's 2003 innovation review identified environmental issues, and the need for improved, lower impact products and services, as a key driver for future innovation. The review suggested that some of the new developments would be specific environmental goods and services, such as technologies to minimize pollutants or promote resource efficiency, or renewable energy sources Block 4, pig 86 Nevertheless, in order to achieve its aim of increasing the contribution from renewable, the I-J government found it necessary to provi de support to enable the newly emerging technologies to enter the marketplace.New technologies usually face a challenge in trying to get established in markets dominated by the existing range of products, and this was clearly a problem for renewable faced with the nominate fossil fuel and nuclear industries. So the government decided to provide extra support to stimulate diffusion, by adjusting the market. As noted earlier, this is sometimes called market ennoblement – enabling key new technologies to be taken up by the market. Block 4, pig 90 By contrast, the subsidy systems for wind projects in Germany, Denmark and elsewhere meant they could make use of locations with much lower wind speeds – indeed they often had little choice because, for example, Denmark is mostly flat and wind speeds there and in Germany are generally much lower than in the I-J. Block 4, pig 93

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