User:Olivia.Scheibel/sandbox

Imposed Innovation (abbreviation of imposed innovation project) is a form of innovation that takes place when strong nonmarket stakeholder pressures force an incumbent firm or industry to undertake an innovation project that does not improve its economic value creation or capture.

Framework
When solely non-economic stimuli coming from nonmarket stakeholders, such as governments, NGO s, activists, and other public interest groups, lead an innovation project, such as the alteration of business practices or creation of new products and services, then a firm or industry encounters an imposed innovation project. These projects are usually associated with high costs for the incumbents. Thereby, the nonmarket stakeholders see an enterprise as a social system that should serve societal and environmental needs and that interacts on an ethical, social, and environmental level rather than an entrepreneurial organization that engages in capitalistic operations to create and capture economic value. Nonmarket stakeholders achieve these changes by using pressure tools, such as threats and coercion, that could temporarily or permanently deprive the incumbents of their social license to operate. In this sense, the firms have three options: proactively engage, reactively comply, or actively resist.

Examples
Imposed innovation was studied on the example of carbon capture storage (CCS) technology in the Alberta oil sands industry. The Alberta provincial government forces the industry to engage in CCS innovation to minimize greehouse gas emissions.

PSD2, a EU directive that allows third party porivders (TPPs) to access financial data held at a bank with the prior constent of the account holder, imposed innovation on the incumbent banking industry.

Furthermore, imposed service innovation was studied during the COVID-19 pandemic.