Analysing the interaction of an innovation field and its context

for exploring different innovation pathways:

the case of Smart Building
Kornelia Konrad1, Jochen Markard & Bernhard Truffer
Cirus - Innovation Research in Utility Sectors
Eawag - Swiss Federal Institute of Aquatic Sciences and Technology

Paper presented at the SPRU 40th Anniversary Conference:

The Future of Science, Technology & Innovation Policy: Linking Research and Practice,
September 11-13, 2006, Brighton
Draft version, do not cite without permission!

1 Introduction
Innovations tend to develop in a non-linear way as they are subject to a complex interplay of
structures and processes within a specific innovation field as well as within its socio-technical
context. These are, for instance, specific actor constellations and institutional settings at the
producer and consumer side, developments in complementary innovation fields or developments at a societal level. Innovation processes are also characterized by cumulative or learning effects, which may lead to path-dependencies and lock-in effects. As a result of this
complex interplay, it is often uncertain, which pathway an innovation will take in the future.
This holds particularly for innovations at an early development stage and which at the same
time present a potentially radical innovation with respect to existing socio-technical structures. This is all the more true, if long-term developments are considered. Uncertainty may
refer to the technical characteristics of an innovation, to the future application fields and the
user segments and to the interpretation a society or different actor groups may attribute to a
technology or service (Pinch & Bijker 1987), that is, to the future shape, function and meaning of an innovation. As a result, it is often uncertain, if an innovation will turn out as a sustainable innovation. This is to say, an innovation may not be considered as sustainable as
such, but rather it depends on the specific variation of an innovation as well as its embedding
in a specific context, if it will turn out as more or less sustainable.
In this paper we present a future-oriented approach for exploring a range of alternative innovation pathways an innovation may take. These pathways are characterised by different variations of the shape, function and meaning of an innovation and by specific developments
within as well as in the context of the innovation field at hand, which may contribute to the
prevalence of one variation rather than another. The approach draws on the multi-level concept (Rip & Kemp 1998; Geels 2005). This multi-level concept is particularly well suited for
the analysis of long-term developments. It has so far largely been applied for the analysis of
transition processes in which a dominant socio-technical system - or regime - is gradually

1 Corresponding Address: berlandstr. 133, P.O. Box 611, CH-8600 Dbendorf, Phone: ++41 44 823 56 72;
kornelia.konrad@eawag.ch

displaced by a different regime, either in a historical perspective or, in a future-oriented perspective, searching for possibilities to bring about a desired regime change. In this paper we
propose to apply the multi-level framework with an analytical perspective that puts an innovation field centre stage and explores, what are relevant regimes, complementary and competing
innovations and developments at the macro level that may influence, which pathway an innovation field will take.
The approach has been developed as a step within the broader methodology Sustainability
Foresight (Vo et al. 2006b). Sustainability foresight consists of three major steps. It starts
with the participative development of explorative scenarios at the level of sectors, followed by
a discursive sustainability assessment and the development of shaping strategies for a number
of innovation fields. These innovation fields have been identified as particularly important for
the future development of the sector at hand in the course of the preceding steps. The third
step consists of the analysis of innovation pathways, following the approach presented in this
paper, and, based on this, the development of strategies by a group of stakeholders (Vo et al.
2006a).
The approach is exemplified for the innovation field of Smart Buildings. Under the heading of
Smart Building we subsume an innovation field consisting of a group of technologies and
applications, which has the potential to become a sustainable innovation, e.g. by contributing
to the efficient energy use in buildings. However, it may just as well take a different pathway
with only a marginal effect or even the opposite effect resulting in an increase in the energy
consumption of buildings. Smart Building allows for the regulation of and communication
between building services and appliances within buildings from within the building and
outside. As an implication, Smart Building is located at the intersection of different regimes.
Accordingly, there is a large variety of heterogeneous actors involved in the innovation field
and developments in various adjacent innovation fields and regimes may have an effect for
the pathway Smart Building may take in the future.
We will first explore different socio-technical variations considering the shape of the innovation as well as different role models on how Smart Building may be provided. Furthermore,
different constellations of innovation actors are presented that may become dominant in the
field. Then, we will consider, in how far developments in a number of complementary innovations, in the housing and building as well as in the electricity regime and developments at the
societal macro level may influence the future pathway of Smart Building. Building on this, we
will develop four alternative pathways on how Smart Building may develop until 2025. We
will conclude by summarising central findings and by giving an outlook on how the pathways
have been used for developing a set of measures within the Sustainability Foresight methodology.

2 Exploring innovation pathways: the approach

In this section, we will first describe central building blocks of the multi-level concept and
give a short overview of how this has been applied so far. Then, we will present the method
we use for developing innovation pathways.
According to Geels (2002b: 14) a socio-technical regime is defined as a socio-technical configuration, which fulfils a societal function, such as transport, energy provision or housing,
consisting of artefacts, user practices, markets and distribution networks, infrastructures, policy, laws, regulation, capital and finance. The interrelations of the elements of a regime provide on the one hand a stabilising function for the whole complex. Stabilisation does not exclude change, but it gives a direction to change which makes certain changes much more
likely than others and incremental changes more likely than radical changes. On the other
hand, if changes in parts of the regime occur, due to the interrelations further changes may be
induced.
2

Figure 1: The Multi-level framework (Geels, 2002a: 1261)

Rather inflexible or slowly changing structures external to a socio-technical regime are defined as part of the socio-technical landscape at the macro level (see figure 1). External structures are for example macro economic developments, demographic trends, cultural changes,
broad political changes or environmental problems (Geels, 2002b: 109). They may have a
considerable impact on the transformation dynamics of a regime, yet they cannot easily be
influenced by the regime actors.
In contrast to incremental innovations, which may emerge within established regimes, radical
innovations are typically generated in niches at the micro level. Niches are defined as sociotechnical environments, for instance application domains, which are characterized by specific
selection conditions diverging from the dominant regime (Hoogma, 2000: 80ff.). Niches are
important for socio-technical change, because they provide a space for learning about design
specifications, possible ways of using and user requirements, new meanings, societal and environmental impacts, production and maintenance and the adequate regulatory framework
(Hoogma et al., 2002: 28). Furthermore, niches allow for the build-up of supporting actornetworks. Major socio-technical changes as regime shifts typically start from niches and rely
on a dynamic of niches: an expansion of niches, which eventually leads to the replacement of
the old regime; a technology may also be implemented in a succession of different niches or
the emergence of a new regime relies on the interaction of multiple niches (Schot, 1998;
Geels, 2002a; 2002b: 121ff., 326f.).
In addition to transformation dynamics rising up from the bottom of niches, transformation
pressures may also result from dynamics at the level of regimes or dynamics at the landscape
level. The interplay of these internal dynamics, e.g. concerning user practices, technology,
policy or industry structure, may lead to tensions in the regime, which will open up windows
of opportunities for novelties and thereby may also lead to broader changes (Geels, 2002b:
104).
The multi-level concept has been the basis of a number of approaches that analyse innovation
and transformation processes. Firstly, it has been applied for the historical analysis of transition processes by which a dominant socio-technical regime is gradually replaced by another
regime (Schot 1998; Geels 2002). Secondly, in a policy-oriented perspective, transition management aims at bringing about regime changes which are supposed to lead to radically more
3

sustainable ways of fulfilling a societal function (Kemp & Loorbach 2006). Thirdly, the
method of socio-technical scenarios aims at exploring potential future transitions of a specific
socio-technical regime, e.g. the electricity or transport regime. Drawing on various mechanisms and patterns that have been identified in historical studies of transition processes, diverging paths are developed, which may lead from todays regime structures to radically different structures (Elzen et al. 2002).
With respect to specific innovation fields, as opposed to a focus on a specific regime, two
approaches have been developed. Strategic Niche Management deliberately creates or supports protected spaces to foster niches for sustainable innovations. To that end it has developed a concept of how to set up innovation experiments, in order to exploit the learning potential necessary for the further development of an innovation (Hoogma 2000; Hoogma et al.
2002). Finally, drawing on an actor-network-theory-based approach of Jolivet et al. (2002),
Hofman (2003: 53) has proposed an analytical procedure, which aims at supporting the societal embedding of sustainable radical innovations. An analysis of the evolution of an innovation or a specific innovation project in terms of actors, networks, technologies and expected
functions is followed by an analysis of the existing regime the innovation is related to. Then, a
future regime is sketched, in which the innovation may function, and the necessary changes
this implies for the existing regime. Ultimately, current factors and actors are identified,
which may contribute to the realization of these changes, and supporting strategies are developed.
The approach we want to present shows a number of similarities to the last approach and to
the socio-technical scenarios approach. It shares the interest in exploring future longer-term
developments and, as the latter approach, it puts an innovation respectively innovation field
centre stage. In addition, it focuses on innovations, which - at least in certain variations are
radical innovations that may contribute to regime changes. However, unlike the approaches
above, a regime change or the wider diffusion of the innovation is not set as a normative starting point for the analysis. Rather we are interested in exploring a range of possible futures,
which may turn out more or less favourable for the innovation, allowing for developing strategic options which are prepared also for these less favourable developments. Moreover, the
former approaches presume that an innovation is desirable from a societal point of view respectively that it is sustainable. In contrast to this, we assume that an innovation may turn out
more or less sustainable depending on the concrete variation and depending on the context it
is embedded.
For developing different innovation pathways, we have developed a methodology, innovation
system analysis, which consists in the following steps:
1. Basic analysis of the innovation field
As a very first step the innovation field has to be identified. This may not be a straightforward
task for an emerging innovation field, where technologies, applications and innovation actors
are still very much in flux. Even more so, if we are considering long-term developments,
which may result in significant changes. Thus, the delineation may have to be adjusted in the
course of the analysis. Then, the current status of the innovation field is characterised. This
includes the description of current technologies, functions, applications, application contexts
and users of the innovation. Furthermore, the actor groups which participate in the innovation
process and their respective roles are analysed. A fully fledged analysis should also be complemented by an overview of supportive institutions like specific R&D programs, intermediaries or legal frame-conditions. Finally, innovation networks including the relationships
among actors and between actors and institutions can be identified as well as concrete innovation projects.

2. Context analysis: regimes, landscape, complementary and competing innovations

The second step focuses on the context of the innovation field. Regimes and regime structures
are identified, which may influence the development of the innovation, in which the innovation has to be integrated, or which may not be compatible with the innovation. Based on this,
we are able to assess, if the innovation or specific variants of the innovation should be considered as radical or incremental with respect to these regimes. Furthermore, adjacent innovation
fields are identified, which may have an impact on the development of the innovation field,
either because they may exert a complementary function or because they may compete with
the innovation at hand. Finally, developments at the landscape level are identified, which may
have an impact on the innovation field.
3. Variation analysis: socio-technical and organizational configurations
In the third step we explore the range of different possible variations in the shape and the provision of the innovation. We distinguish two dimensions along which to study variation. On
the one hand, we look at variations in the socio-technical design of the innovation. These are
different technological designs and different applications of the novel product in terms of
functions, purposes of use, customer segments etc. On the other hand, we ask how the different roles in the provision of the product are distributed, that is, how the project is manufactured, distributed, operated and maintained, and which actors may fulfil these roles. Socialconstructivist approaches have analysed the variability in the socio-technical design of technologies and how these are shaped by the specific perceptions, problems and interests of different actor groups (Pinch & Bijker 1987). More specifically, models of the user and the use
of a technology and how these shape a technology have been analysed by a large body of literature (Woolgar 1991; Oudshoorn et al. 2004), while scenarios including also the roles of
how a technology will be provided have received less attention (Akrich 1992; Callon 1993;
Konrad accepted). We propose to take these models of provision into account as a further
important element, which as such is shaped in the innovation process, and which at the same
time influences the socio-technical design. We may also conceptualise this as a coevolutionary process. Based on this, plausible combinations of variations in the sociotechnical design and the models of provision are explored. Each socio-technical configuration
has certain characteristics, which lend themselves more or less easily to different systems of
provision. Finally, different actor constellations or potential innovation networks - are considered, which may favour certain socio-technical designs and certain models of provision
over others. If necessary, the analysis may also be specified for different application domains.2 For a more comprehensive variation analysis, one may take into account further roles,
actors and institutions along the value chain, which make up the innovation system (Markard
et al. 2006; Markard et al. in preparation). For the case of Smart Building, we concentrated on
the models of provision.
Thus, we will draw a picture of the future playing field indicating a well structured variety of
development options. On this basis we can provide preliminary answers to a couple of future
oriented questions: Will the success of a particular technological configuration favour the
emergence of specific market structures and vice versa? Under which circumstances are particular actors or actor groups likely to play a crucial role in the field? Can we expect organizational lock-in effects due to an early dominance of particular actors?

In the case of Smart Building we differentiated between office buildings, factories, hotels, upper-class houses
and apartments, prefabricated houses, building societies and homes of the elderly (Konrad 2006). However, this
analysis is not part of this paper.

4. Scenario and transformation analysis

Part 4 of the analysis is dedicated to the elaboration of scenarios on how the innovation, the
socio-technical regimes and the landscape may developed in the middle- to longer-term future, e.g. 10 to 20 years ahead. The intention is not only to illustrate potential scenarios but
also to make explicit, which processes and events could have played a major role in realizing
these scenarios.
These scenarios and pathways may be developed in different ways. The scenario-building
process may differ with respect to the sequence of scenario-building and backcasting steps
and to the degree of participation of experts and stakeholders. However, in any case, different
variants, processes within the innovation field and in the context of the innovation field at
different levels should be part of the procedure. In the Smart Building example we were able
to draw on a group of four so-called macro scenarios, which had been developed in a participatory process in a preceding step within the project our study was part of. These scenarios
focused on the future of German utility systems (electricity, gas, water, telecom) in 2025.
Smart Building had been just one, though an important element within these scenarios.3 Besides giving a picture of different ways of how the utility systems may be structured in the
future and giving information on the diffusion of Smart Building in general and specific applications, these scenarios also provided information on various societal context developments. Basically, these macro scenarios provided coherent sets of factor constellations on the
landscape level in combination with particular configurations of a number of socio-technical
regimes and, at a rudimentary level, variations of Smart Building. Building on these macro
scenarios, we elaborated, how the socio-technical design and the models of provision of Smart
Building may look like for each scenario and which context developments may have contributed to its realisation. Context developments included both elements provided by the macro
scenarios and additional ones. The necessary expertise for doing this was gained from desktop research and expert interviews. If macro scenarios are not readily available, one may also
develop scenarios bottom-up by systematically varying socio-technical design characteristics,
models of provision or context developments. By this, one may even be able to explore the
range of possible variations more thoroughly.
In the following we will exemplify the approach with respect to the innovation field Smart
Building. Since we are not able to present a fully fledged analysis within this paper, we will
concentrate on the variation analysis and the scenario and transformation analysis.

3 Variation analysis
3.1 Variation of socio-technical design
Smart Building comprises a group of applications based on a wired or wireless network,
which connects various appliances within a building. In addition, appliances may also be connected externally. Networks, communication standards as well as applications may look quite
different. Physical networks may be twisted pair (phone), coaxial cable (TV), fibre-optic,
powerline or wireless, and various proprietary and non-proprietary communication protocols,
e.g. EIB, LON, TCP/IP (internet), are used. The spectrum of established and potential applications is very broad. These applications may be grouped according to the more general purposes they are serving. A first group of applications is linked to energy management. These
are efficiency-oriented control of heating, ventilation and lighting, the control of appliances
taking into account changing tariffs, remote metering or the analysis of energy consumption. A
second group is linked to security and access to buildings. These are door access systems,
3

Smart Building was one of a group of innovation fields, which had been identified as decisive for the future
provision and consumption of utility services and the sustainability of both.

alarm systems, simulation of presence by lighting, blinds etc. when inhabitants are not at
home or the signalling to security or maintenance services in case of irregularities. Among
convenience-oriented applications we find the control of blinds, windows and lighting, partly
grouped to complex scenarios. Also household appliances may be integrated into the systems
and remotely accessed, either by the inhabitants or by external actors like utilities, with a focus on convenience or energy efficient use. Furthermore, services may be offered and provided, e.g. health care or specific support services for the elderly. Finally, entertainment and
communication devices may be integrated, which allows to use audio, TV or other media
throughout the house and to access external content.
These applications influence directly or indirectly the energy consumption within a building.
This is most obvious for the regulation of heating, ventilation and lighting. The potential increase or decrease cannot be exactly quantified, because it varies strongly according to the
specific technologies, applications and its use. However, a number of studies suggest that effects can be substantial. A large-scale experiment in rented flats led to an 18% reduction of
heating energy by room-specific heating control (Balzer & Happ 1999). Feedback experiments showed a reduction of about 20% (Chappells et al. 2000: 169). A particularly high reduction potential can be found in some office buildings and factories. For office buildings
these can typically be about 20-30%, for the latter in some cases even a reduction up to 8090% has been reported.4 Furthermore, applications in other application domains, e.g. communication and entertainment, structure to some extent the energy consumption of the appliances
involved. This may just as well result in an increase of energy consumption. Finally, the smart
building equipment itself consumes energy, which, according to some projections, may be
quite important (Aebischer & Huser 2000). In sum, Smart Building may contribute to an
overall decrease as well as increase of energy consumption within buildings.
In addition, Smart Building may also play a role in restructuring energy supply. A combination of internal and external networks allows for a coupling between the provision and consumption of energy. On this basis different forms of demand side management in the form of
load management, consumption analysis or differentiated tariffs are possible. Furthermore,
decentral generation plants as solar panels or micro combined heat and power plants (micro CHP) may be integrated into the system and the operation of these plants may be regulated, in order to optimise it, on a local level as well as on a grid level.
The high variability in the socio-technical design of Smart Building is accompanied by a
strong interpretative flexibility as to what are central functions of Smart Building and who are
the most promising future user groups and customer segments. Is Smart Building a sophisticated form of electrical installations of buildings, is it an essential part of the infrastructure of
and amongst buildings more generally, or is it rather a continuation of todays multimedia
equipment in offices and homes? These diverging interpretations of Smart Building imply
also different assumptions as to which actors are supposed to participate in the innovation
process and what are appropriate models of provision.

3.2 Variation of models of provision

In this section we explore different models of how Smart Building may be provided focusing
on two aspects. These models differ with respect to two important institutional arrangements:
the arrangement of ownership and financing of Smart Building technologies and appliances
and the arrangement for operation and maintenance. Similar variations of role models could
be explored for the manufacturing of technologies or the different roles to be fulfilled in the
innovation process. However, this is beyond the scope of this paper.

Expert interviews.

Today, the models of how building services and appliances in homes and offices are provided
differ according to the type of appliance. Fixed appliances as heating, ventilation, electrical
installations and sanitary equipment are mostly owned by the owners of a building or flat and
installed by the builders; for organising maintenance and operation both owner and user of the
building may be responsible, or some mixed model may be applied. More or less mobile
appliances as household appliances are often owned and maintained by the users and they are
installed after the building phase.5 This holds most usually also for entertainment and communication devices. Finally, though so far only of minor importance, installations and appliances may be provided, maintained and sometimes also operated by service providers.
Smart Building systems and smart appliances cannot clearly be categorized as fixed or mobile
installations. Networks are partly fixed (wired systems) and partly mobile (wireless systems);
more or less the same holds for components of the systems. Hence, elements of the building
infrastructure that so far have been considered part of the fixed installations may be considered part of the mobile equipment and, accordingly, the responsibility of tenants in the future.
Moreover, Smart Building systems are more flexible and, thus, adaptable to different users or
changing user preferences. Also, with the introduction of information and communication
technologies innovation cycles of the systems and appliances tend to become much shorter
and thereby increasingly detached from the lifecycle of buildings. New buildings may therefore be equipped with empty pipes, in order to allow for future additional networking. All this
adds to the ambiguity. On the other hand, smart household appliances which would be integrated into decentralised supply systems and in load management might be perceived as part
of a buildings infrastructure.
We expect that future models of provision will not only be a function of how fixed or mobile
systems will be in the end, but also via which paths Smart Building would move into the
buildings. If Smart Building systems would be installed primarily to connect entertainment
media, that is, appliances are owned and maintained by the users of the building, the development would rather be driven by the users. This may result in path dependencies, even if the
systems may later on be used for a much wider set of applications. On the other hand, if they
would be installed with the primary aim to connect building technologies as heating or blinds,
we would rather expect owners or builders to adopt this role.
Landlord model, Smart Building is part of a buildings infrastructure: The owner (landlord)
of a house, flat, office etc. provides Smart buildings systems. In addition, the owner provides
appliances, components, sometimes also local generation plants, and organises maintenance.
In some cases, e.g. certain office buildings, also the operation of part of the appliances is
taken over. In the case of homesteads or condominiums, the systems, (household) appliances
and generation plants are provided by the builders, particularly in the case of highly standardised buildings like prefabricated houses. Smart Building is considered as part of a buildings
infrastructure, more or less as electrical installations and sanitary equipment today.
Tenant model, Smart Building is part of the interior equipment: In this model the users of the
buildings are responsible for equipping the houses, flats, offices etc. with Smart Building systems as well as the majority of the appliances, and they are responsible for organising operation and maintenance. Smart Building is considered as part of the interior equipment of a
house or office just as wireless networks for data transmission, entertainment media or, in
some countries6, household appliances are today.

It should be noted though, that there are substantial national differences for these models.

In Germany washing machines, dishwashers, refrigerators, stoves etc. are usually provided for by the tenant,
whereas in Switzerland these appliances are typically provided by the landlord.

Split model: This is an intermediary model. The owner respectively builder of a house provides a basic installation, e.g. a Smart Building system, maybe also empty pipes for future
extensions of the system and some appliances. The users of the buildings acquire further appliances, they may extend the system and they are responsible for operation and maintenance.
Contracting: Appliances and partly also Smart Building systems are installed by a third party:
the contractor. Appliances and the operation and maintenance are then provided by the contractor, typically at a fixed rate. Installation costs amortise by efficiency gains over a certain
period of time. Also in this case Smart building is considered as part of a buildings infrastructure.
Mixed service model: Smart Building systems are provided by either owners or users of buildings. This will largely depend on the interpretation of Smart Building as infrastructure or interior equipment. Smart appliances and decentral generation plants as micro CHP are then provided, maintained and, if necessary, upgraded by service providers. Customers will be either
owners or users of the buildings.
The following table provides an overview as to which models of provision are more or less
appropriate for different variations in socio-technical design. To reduce complexity, the table
refers only to application bundles.
Table 2: Variations of socio-technical design and models of provision

models of provision

application bundles

energy

security

convenience

organisation

entertainment,
comm.

landlord model

tenant model

split model
contracting

mixed service model

3.3 Variation of actor constellations

Which actor groups will take the lead and which innovation system will emerge? At the present state we may hardly speak of an innovation system Smart Building; rather the innovation field Smart Building is located at the intersection of various innovation systems. These
innovation systems are part of different regimes and sectors, e.g. in the housing and building
sector, in the IT sector, entertainment media, household appliances, sanitary equipment or
medical technologies. We expect that Smart Building will take a different shape, if actors
from the entertainment, multimedia, telecommunication and software branches will take the
lead, as in the case that actors from the building and housing sector should take over this role.
We expect that different interpretations of the technology will prevail, different applications
9

and technologies and different models of provision will get major support. We identified four
potential actor constellations. Within each constellation actors are characterised by a similar
conception of Smart Building and similar innovation patterns, e.g. innovation cycles.
Installation cluster (specialised installation firms, manufacturers of installation components):
These actors offer (wired) Smart Building systems for functional as well as residential buildings already today, based on proprietary standards. Customers are typically the owners of the
buildings. Application bundles are diverse; however, these actors will rather not be able to
push services.
Residential buildings cluster (building societies, manufacturers of prefabricated houses, actors
from HVAC, sanitary equipment, household appliances): Common to this group of actors is
the focus on residential buildings, rather long innovation cycles and, with the exception of
manufacturers of household appliances, on building services. These actors are likely to advocate the landlord or the split model. Some building societies are experimenting with the provision of services within Smart Building projects.
Multimedia cluster (manufacturers of consumer electronics, software companies, telecommunication companies, media companies): These actors put an emphasis on entertainment and
communication applications as a potential driver for Smart Building, the internet is a central
technological reference point and they have so far largely focused on the (end) users within
residential buildings. We expect them to rather support the tenant model, because of the
dominant customer segments and favoured network technologies.
Service cluster (providers of energy services, facility management, e.g. utilities): they have
focused on functional buildings and energy management. Customer segments for these specific services have mainly been owners and managers / administrators of buildings. However,
considering products more generally, particularly utilities, serve a much broader group of customers.
Table 3: Variation of socio-technical design and actor constellations
Application bundles

housing,
building, HVAC

security

convenience

services

Actor constallations

entert., media, telcom,

software
utilities

installers

entertainment

energy

10

, comm.

4 Context analysis
In this section we give a short overview of socio-technical regimes, landscape developments
and adjacent innovation fields, which may take an influence on the future development of
Smart Building.

4.1 Regime dynamics

Smart Building as an innovation field is not only related to the dynamics within one regime,
but rather it is located at the intersection of multiple regimes. This is due to the large variety
of heterogeneous applications. Thus, some regime dynamics may be relevant for Smart Building in general, while others concern primarily specific variations. However, what at a first
step may be relevant for specific variations only, may have wider implications in the long run,
if specific applications serve as a stepping stone for a broader application.
Most importantly, the building and housing regime constitutes a point of reference for virtually all variations.7 Smart Building implies a number of changes to the established structures
in the building, operation and use of buildings. Technologically, Smart Building requires
different installations, that is, networks and components, and it follows a different functional
principle compared to conventional cabling. At an organisational level, Smart Building requires the coordination or dissolution of the established division of maintenance groups (electricians, HVAC, sanitary engineering). This, again, affects qualification structures. As for
institutional arrangements, we have already elaborated how this may affect ownership and
financing arrangements. A closer look, however, reveals that we may hardly speak of THE
housing and building regime. We rather find different subregimes characterised by different
actor constellations and different building, operation and use structures, if a large office building, a prefabricated home or a singular, solidly built home is concerned. Hence, a thorough
analysis has to consider these different conditions.8
Dynamics within the electricity regime will play an important role for some applications. If
the electricity regime should become more decentralized, Smart Building may be used for or
even enable the building up of virtual power plants or for implementing Demand Side Management.
There are further regimes, which may affect specific applications like those related to telecommunications or health care. In the following, to reduce complexity, we will concentrate on
the first two.

4.2 Landscape developments

As for influences at the landscape level, we have considered the following trends and processes, which have mostly been parts of the macro scenarios (see above): macro-economic and
regional economic developments, settlement structures, demographic changes, energy prices,
societal ecological values, regional migration, liberalisation of utility markets. Different combinations of these developments may open up windows of opportunity for Smart Building in
general and for specific variations.

This may not hold, if we think of a variation of Smart Building, which would be based on wireless networks
and restricted to entertainment, multimedia and communications applications.
8

This is beyond the scope of this paper. In a more elaborated analysis, we tackled this variety by considering
specific dynamics in different niches as office buildings, prefabricated houses etc. (Konrad et al. 2006).

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4.3 Complementary and competing innovations

Innovations9 support or compete with each other at different levels. At a functional level, innovations may support each other in fulfilling a specific function, an innovation may create
necessary prerequisites for another or innovations may compete by fulfilling a similar function. Secondly, in the course of the development and diffusion of an innovation, institutional
arrangements may be created, which result in a more or less favourable framework for others.
Thirdly, learning processes may be transferable or, on the other hand, specific learning processes may create path dependencies at the expense of learning capacity necessary for other
innovations. Fourthly, attention for a specific innovation among a group of innovation actors
or at a societal level may shed light on similar innovations or, on the contrary, may distract
attention from others. Finally, innovation networks may be established, which create path
dependencies that are more or less apt to support other innovations.
In the case of Smart Building, a number of socio-technical innovations may support Smart
Building in general or specific variations by creating various types of synergies.
Remote maintenance and monitoring of various appliances opens up a potential for optimizing energy (and water) consumption of a building. The driving factor for remote maintenance
will probably be rather the reduction of personnel costs, but quasi as a side effect remote
maintenance may support the exploitation of the efficiency potential of Smart Building under
specific circumstances (functional synergy, learning processes).
Contracting, which has been presented as a specific model of provision, may also serve as a
supportive innovation. Contracting measures partly include the installation of Smart Building
systems. This supports Smart Building in general and, in particular, efficiency-enhancing applications (functional synergy).
Facility management aims at the holistic and transparent administration of buildings. Smart
Building systems may be part of this approach, enabling e.g. flexible installations and energy
management. Therefore, a further diffusion of facility management in organisations may be
supportive to Smart Building in general and, under certain circumstances, efficiencyenhancing applications (creation of favourable institutional arrangements).
Smart Building applications: We may find similar dynamics between different applications,
we may also say innovation elements, of Smart Building. These applications may complement
and compete with each other at the same time, but at different levels. While, at a functional
level, the diffusion of certain applications of Smart Building may serve as a stepping stone
for other applications, if in the course of the implementation networks are installed, which
may be used for both applications. On the other hand, if models of provision, actor networks
etc. are established, which rather impede other applications, competitive effects may be
stronger.

5 Scenario and transformation analysis

In this section we present short versions of the Smart Building scenarios and pathways developed on the basis of the macro scenarios, which had been built with a focus on German utility
systems in 2025. By this, we were able to draw on coherent sets of potential context developments for the Smart Building innovation field. As an implication, these developments are to
some extent specific for the German context.

We refer to innovations in the broad sense encompassing technical, organizational or institutional innovations
or some hybrid of these.

12

5.1 Smart Building is part of infrastructure services

This scenario is characterised by a high diffusion of Smart Building10 and a relatively high
importance of convenience-oriented applications, energy management and the coupling of
energy consumption and provision (micro CHP11, Demand Side Management). New and
renovated buildings are regularly equipped with basic Smart Building systems, partly empty
tubes, and a couple of basic applications. For standard residential buildings these are door
systems and control of blinds, windows and lights. Further applications and standardised application packages may be added, customized to changing user needs and changing users
(split model). As micro-CHPs as well as loadmanagement of appliances and also partly remote operation of micro CHP are introduced in an increasing number of households and functional buildings, also the landlord model and mixed service model are applied, though only in
a smaller number of cases. In functional buildings contracting and mixed service models have
gained in importance. Similar to network-bound utility services today, basic systems and applications are considered as part of the expected infrastructure of a modern building. This becomes manifest in the perception of people, and also in institutional frameworks, e.g. Smart
Building equipment is part of standardized assessment procedures as rent indexes or standardised building assessments.
The residential buildings cluster, particularly building societies and manufacturers of prefabricated houses, have taken a leading role for the diffusion of Smart Building in standard residential buildings. Particularly in the early years, they fulfilled an important role as mediators
between users and installers and partly also manufacturers of Smart Building, because they
provided rather large experimental sites for gaining experience, not only technologies, but
also user preferences and practices as well as suitable models of provision.
Context developments
Regional migration, changing settlement structures and macro economic development create
favourable conditions for innovations in building installations: Developments at the landscape level are characterised by a rather positive macro economic development, a strong regional migration from economically weak regions, particularly in the Eastern part of Germany, to economically stronger regions and a migration from urban to less densely populated
areas. This results, on the one hand, in comparatively intense building activities in non-urban
areas, largely in the form of middle-class single-family houses. An increasing number is provided by manufacturers of prefabricated houses. On the other hand, in urban areas in the economically stronger regions, many building societies try to valorise their tenements by equipping them with Smart Building systems.
Building and housing regimes - integrated planning becomes normal practice, energy performance certificates and remote maintenance and contracting services support energy management applications: Energy performance certificates, which have been introduced in 2006
following an EU-Directive, have become a well-know instrument. The certificates assess the
energy performance of a building or flat and they provide recommendations for possible improvements. In combination with increasing energy prices this has made energy efficient appliances and systems a competitive advantage for buildings and flats. In the early years,
mainly conventional measures have been considered. Yet, with the second wave of certificates12, also measures based on Smart Building systems are among the recommendations, e.g.
to exploit the efficiency potential of Smart Building, if a system is already installed. This is to
10

30% of all buildings.

11

6% of all households providing 2,5% of electricity production; 22,5% of electricity production is produced by
decentralised generation technologies (including also generation plants at the district level).

12

A certificate is valid for max. 10 years.

13

some extent a result of the specific interpretation of Smart Building as part of a buildings infrastructure and a model of provision, according to which Smart Building is wholly or partly
provided by the owners of buildings. Until 2025 40% of the building stock is refurbished.
This is a result of the age structure of the building stock13, increased efficiency requirements14
and the positive economic development.
Integrated planning, though slowly, has become a normal practice, at least in parts of the
building sector. This development has been facilitated by the increasing importance of large
building companies functioning as general contractors and manufacturers of prefabricated
houses. Furthermore, institutional frameworks have changed, e.g. associations and standardising committees have been restructured and new tendering tools introduced.
Starting from the controlling of their own networks and facilities that required large investments, a number of utility companies are later on offering remote maintenance services also to
various types of customers and for various types of facilities. The primary motivation for introducing remote maintenance has mostly been the reduction of personnel costs. However,
remote maintenance also allows for detecting optimisation potentials in energy consumption,
which, against the background of rising energy prices, are more and more exploited. In addition, the maintenance of a large number of facilities facilitates the development of standards
of comparison and the professionalisation of facilities operation. Hence, providers of remote
maintenance are offering energy consulting and contracting services as well. On the other
hand, contracting measures are furthering remote maintenance, since contracting measures
largely entail remote maintenance.
Transformation of the electricity regime as a result of internal tensions creates window of
opportunity for micro CHP and Demand Side Management: The electricity regime is increasingly pressurised, because a large number of generation plants has reached the end of their
operation time and because of the political decision to phase out of nuclear energy and to
massively reduce coal-fired plants. This contributes to an increase in energy prices. As part of
the strategies to cope with this situation, utility companies support efficiency-enhancing
measures, Demand Side Management and decentralised energy production.
Complementary innovations: Demand Side Management, remote maintenance, micro CHP
and Smart Building are mutually supportive: Monitoring and controlling of local generation
plants as well as a number of efficiency measures require a network-based integration. Installing these networks in the course of larger efficiency and renovation measures in factories,
office buildings or other buildings of a certain size creates only limited additional costs. These
networks may then be used also for a larger set of applications.

5.2 Smart Building is part of the interior equipment

As in the preceding scenario, Smart Building has become quite diffused and it is considered
as part of the normal equipment of a modern building. However, Smart Building is not perceived as part of a buildings infrastructure, but rather of the interior equipment of a building
or flat. Accordingly, Smart Building systems are typically owned by the users of buildings
and quite often wireless networks are installed, particularly in tenant houses. In rented flats
and houses Smart Building is mostly used for communication and entertainment and sometimes for the control of housing appliances; those, who live in their own houses apply it also
for convenience-oriented applications (control of blinds, lighting, windows) and sometimes

13

In Germany, buildings from the 1950s to 1970s will go through a first renovation cycle, pre WWII buildings a
second renovation cycle. This results in a renovation potential up to 50% (DENA 2005).

14

The above mentioned EU Directive requires a revision of requirements after max. 5 years.

14

for energy management, since, in contrast to the former group, they are the owners of both
Smart building systems and most other appliances and systems.
This outcome is a result of, on the one hand, the specific context developments in the scenario
(see below) and, on the other hand, the specific actor constellations that have been formed in
the innovation field. In the residential building sector, actors from the entertainment, telecommunication, software and media sectors took a lead in implementing Smart Building in
various projects and, later on, the provision and marketing of Smart building. They started
with a focus on communication and entertainment applications, which shaped the societal
perception of Smart Building quite strongly. Moreover, learning effects of both providers and
users were mainly gained here and specific models of provisions became established, which
rather discriminated other applications (e.g. smart building services in tenant houses).
In the functional building sector a similar path is taken as in the preceding scenario. However,
largely due to moderate energy prices, facility managers are often more interested in the flexibility of smart installations than the energy saving potential. Remote maintenance is more
often used for maintenance only and not for analysing and optimising energy consumption.
The introduction of the energy performance certificate does not have a strong effect on Smart
Building. Recommendations are less frequently turned into action, because of moderate energy prices and less competition at the housing market (no migration into rural areas).
Old generation plants are largely replaced by new central generation plants and the fuel mix
remains by and large as before. There is no strong interaction with the development of Smart
Building.

5.3 Smart Building is a status symbol

In this scenario, largely because of unfavourable context developments, Smart Building is
much less diffused15 as in the preceding scenarios and the development within the field is split
up into two paths. Smart Building is most strongly diffused in functional buildings and residential buildings of the upper class. In the latter the spectrum of applications is very broad
with a certain bias towards convenience, security and entertainment and communication.
Smart Building has become a standard element of a buildings infrastructure, however, only
partly in a standardised form. Standardised packages are mainly offered for condominium
suites and for less sophisticated houses and flats. In the upper segment mostly individual systems are provided, largely by specialised installation companies.
In less sophisticated Smart Building is not considered as a standard element of the infrastructure. Firstly, it is not widely diffused and, secondly, in this segment actors of the multimedia
cluster have developed the market, while building societies did not have a strong interest in
valorising their building stock. This is largely due to an unfavourable economic development
in combination with a concentration of the population in urban areas.
The energy performance certificate has an impact for Smart Building mainly in the functional
building sector. In residential buildings Smart Building is mostly not considered as part of the
infrastructure and not enough diffused to be regularly taken into account for a standardised
assessment procedure.
Services as remote maintenance and contracting are less important than in the preceding scenarios and mostly offered for the functional buildings.

15

10% of all buildings are equipped with Smart Building systems.

15

5.4 Efficiency-oriented niche

Different actor constellations have tried to promote Smart Building. However, as a result of a
number of unfavourable developments within, and to some extent also in the context of the
innovation field, this scenario shows the least diffusion of Smart Building.16 In the residential
building sector it has largely remained a market niche. Single-family houses show the highest
diffusion; here, Smart Building systems are mostly cable-based. In functional buildings it is
much more common, yet still not widely diffused.
Wireless networks have not become very popular, since societal debates concerning potential
harms of mobile radio antennas have resulted in a general unease towards electromagnetic
radiation. This poses an important impediment for the diffusion of Smart Building in the existing building stock. Furthermore, many building societies have withdrawn from the field, as
more and more tenants took up a critical stance towards Smart Building systems, because of
an increasing number of legal disputes on the collection and use of user data, e.g. for the billing of heating etc. Accordingly, Smart Building systems do not necessarily serve to valorise a
building.
In office buildings, Smart Building systems have largely been implemented according to efficiency criteria and highly automatised, particularly, if they are implemented in the course of a
contracting measure. By this, quite a number of users felt constrained and did not perceive
Smart Building as a gain in convenience. Rather, Smart Building is perceived as part of technical building services, under control of specialised personnel, but not as something, one
would like to transfer to the private home.
Innovation policy and political regulation are strongly supporting efficiency measures in energy production and consumption and there are increasing requirements on the energy efficiency of buildings. The energy performance certificate refers to Smart Building mainly in the
functional building sector. In residential buildings, Smart Building is not enough diffused to
be regularly taken into account for a standardised assessment procedure.

6 Conclusion
The paper presented an attempt to exploit the multi-level concept and further insights from
technology studies for a future-oriented innovation analysis. This may be one way to make
use of analytical insights, largely gained in retrospective studies, in a more strategic and, ultimately, policy-oriented way. The different scenarios and paths showed that Smart Building
may take a very different shape, function and meaning in the future. It also showed that different variations of Smart Building may be equally successful in terms of diffusion, while
entailing quite diverging conceptions of the innovation and the models of provision. Which
one is more likely to be realised depends on processes within as well as in the context of the
innovation field. By considering both the socio-technical design as well as models of provision, we were able to identify potential weak path dependencies. While, from a perspective
focusing on functional aspects, different variations of Smart Building may rather mutually
support each other; each variation may entail specific models of provision more likely than
others, which may pose a barrier for other applications.
The different variations and scenarios may not only imply diverse forms of provision and use,
providers and users, but they may also have different effects for energy consumption. Thus,
from a sustainability-oriented perspective, Smart Building is not an innovation to be supported per se. Rather, one may aim to support certain variations and paths. In this case, the
analysis helps to identify starting points for different types of measures within as well as in
the context of the innovation field. What may be more important though, since we assume that
16

5% of all buildings.

16

the emergence of a specific path can only to a limited extent be willingly influenced, is to
develop measures that are either robust in the sense that they may be useful for different scenarios or that reflect the specific conditions in the scenarios. For instance, if a path should be
taken, which is rather efficiency driven with professional services like contracting as an important model of provision, it may be highly important to make sure that users interests are
taken into account. That is, certain social aspects of sustainability may need specific attention.
On the other hand, if an entertainment driven path is taken and the tenant model of provision
should prevail, this should be less of a problem, but rather the exploitation of the efficiency
potential has to be supported.
As part of the Sustainability Foresight methodology (see section 1), the scenarios and paths
served as a basis for the development of a set of measures by a group of stakeholders and experts (Vo et al. 2006a). The innovation paths were given as an input and partly modified by
the stakeholders. Each measure was assessed according to its robustness with respect to the
scenarios and the set of measures was integrated into an agenda for the sustainable shaping of
the innovation process. The agenda described how measures might be co-ordinated in terms
of appropriate time periods to be implemented and in terms of interactions between measures
to be taken into account. By this, a first step for creating a comprehensive innovation strategy
has been taken. In addition, mutual interactions with the sets of measures developed for two
other innovation fields (micro CHP and network regulation) have been identified.
The scenarios and paths presented here are surely not an exhaustive exploration of the range
of possibilities to be expected. More scenarios and paths may be created, e.g. by applying a
comprehensive bottom-up analysis by systematically varying elements of the variation and
context analysis. Moreover, one should always be aware that all variations, which are conceived today, are rooted in todays conceptions of contemporary technologies, models of provision etc. and, therefore, likely to have a conservative bias. However, a systematic variation,
if possible as part of an iterative procedure, seems to be a way to explore at least the range
knowable today.

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