The following piece will analyze Karma's driving forces and how clusters in the Swedish national innovation system (NTS) have allowed for Karma to flourish as an eco-innovation. Tn addition, this piece will investigate how the growth of these innovation clusters is related to cross-clustering, the close-knit interconnectedness between Stockholm's clusters.
142,000 tonnes of food waste was generated in Sweden in 2012, equivalent to 15 kg per person. At the same time, the food industry is accountable for approximately 8% of global greenhouse emissions. Although conflicting numbers on both global and regional food waste data exist, it is crystal clear that food waste is a crucial problem. Karma, a youthful start-up that focuses on turning surplus food into a business opportunity, was founded in the heart of Stockholm in 2016. The sustainable business model builds upon turning soon-to-be expired food into profit, allowing for partnering businesses to catch an additional revenue stream. A connection between consumers and businesses has been solidified through technological solutions, with one of the world's largest issues in mind; food waste.
Introduction
142,000 tonnes of food waste was generated in Sweden in 2012, equivalent to 15 kg per person (Naturvârdsverket, 2016). Atthe same time, the food industry is accountable for approximately 8% of global greenhouse emissions (UN Environment, 2020). Although conflicting numbers on both global and regional food waste data exist (Dorward, 2012; Gustavsson et al., 2011; Godfray et al., 2010; Stuart, 2009; Quested & Johnson, 2009), it is crystal clear that food waste is a crucial problem. Karma, a youthful start-up that focuses on turning surplus food into a business opportunity, was founded in the heart of Stockholm in 2016 (Karma, 2020). The sustainable business model builds upon turning soon-to- be expired food into profit, allowing forpartnering businesses to catch an additional revenue stream. A connection between consumers and businesses has been solidified through technological solutions, with one ofthe world’s largest issues in mind; food waste. The following piece will analyze Karma’s driving forces and how clusters in the Swedish national innovation system (NIS) have allowed for Karma to flourish as an eco-innovation. In addition, this piece will investigate how the growth of these innovation clusters is related to cross-clustering, the close-knit interconnectedness between Stockholm’s clusters.
Sweden’s National Innovation System & Clusters
Sweden is at the forefront of innovation, being known as one of the most advanced countries in terms of displaying innovative practices, as indicated by high ranks in Science and Technology (S&T) indicators via OECD and Eurostat (Chaminade, Zabala & Treccani, 2010). National innovation systems (NIS) are loosely defined by Lundvall (2016) as the encompassment of infrastructure and institutions which allow for individuals, organizations and interorganizational learning to take place and be linked to innovation and economic growth. Sweden’s NIS consists oflarge multinational firms with a strong international profile and dependence on research and development (R&D) (Chaminade, Lundvall & Haneef, 2018; Edquist and Lundvall, 1993). Sweden spent 3.5% of its GDP on R&D in 2008, whilst the OECD average expenditure on R&D accounted for only 2.3% of respective GDP (OECD Data, 2020). Although Sweden’s NIS consists predominantly oflarge firms that are responsible for most of the R&D conducted in Sweden, there also exists a high proportion of Small & Medium Sized Enterprises (SMEs) that have advanced innovative practices (Chaminade, Zabala & Treccani, 2010).
Clusters are broadly defined as the interconnection of industries and businesses located in close geographical proximity, which are commonly in close connection with institutions such as universities or research institutes (Porter, 1998). Swedish innovation agencies introduced cluster policies into the government policy, resulting in the clusterterminology being implemented into the national innovation strategy since 2004 (Ketels, 2009; Regeringkansliet, 2004). Clusters have three main advantages; they attract actors which interact with specialized suppliers more effectively (Ketels, 2009, p.8; Amiti & Cameron, 2007); they help provide more specialized skills on the labor market (Ketels, 2009, p. 8); and they generate knowledge spillovers (Ketels, 2009, p. 8; Thomson, 2006). Sweden’s dominant cluster specializations are within the industries of automotive, Information & Communication Technologies (ICTs), material sciences and life sciences (Chaminade, Zabala & Treccani, 2010). Table 1 illustrates the cluster formations in the Stockholm region between 1999 and 2006, revealing that Information Technologies and Communication Technologies are interconnected with several other clusters. These cluster formations illuminate strong cross-cluster interaction, indicating that knowledge clusters have been effectively spreading between industries.
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The European Union has shown a great commitment to implementing eco-innovations as a mainstream strategy in Europe, through the Eco-Innovation Programme founded in 2008 which fuses business and environmental capabilities (European Commision, 2016). Eco-innovation policies’ lack development in Sweden and the term itselfhas fallen into the umbrellaterm of sustainable growth (Nyqvist, 2017; Barsoumian et al., 2011). Nevertheless, this piece argues that a more updated cluster matrix of Stockholm would show an interconnectedness between ICTs and eco-innovation as knowledge clusters spread from industries and universities. A number of scholars have indicated that clustering promotes innovative strategies such as bridging environmental and sustainable perspectives to further cluster development (Nyqvist, 2017; Bridge etal.2013; McCauley & Stephens, 2012). This has led sectors in Sweden to consider sustainability at their core. Chaminade, Zabala & Treccani (2010) have illuminated that Sweden’s newest cluster is cleantech/green-technologies and is centralized within the Stockholm region. Thus, the innovation process ofKarma is suggested as an outcome of cross-clustering between Information and Communication Technologies as well as the new Green-Tech cluster. The effective interaction between institutions and industries, valuing sustainable growth, has led Karma to flourish as an eco-innovation.
Karma as an Eco-innovation
Karma operates as a mobile application and has the goal of allowing consumers to eat on a budget while also protecting the planet by reducing greenhouse gas emissions from food waste (Karma, 2020). Thus, Karma is considered an eco-innovation, as eco-innovations are defined as “technological, social and institutional innovations that improve not only the environmental but also the economic performance” (Chaminade, Lundvall & Haneef, 2018, p. 94; Ekins, 2010; Barbieri et al., 2016). Although Karma does not tackle the environmental impact of production, it tackles the environmental impact of the latter end of the chain, food waste. The OECD Synthesis Report ofEco-Innovation (2009) states that “...ecoinnovations focus mostly on technological development but are facilitated by non-technological changes” (OECD, 2009, p. 6). These changes may be enforced in the form of targeted governmental policies and systematic improvement of organization structuring which leads to more sustainable consumption behavior (OECD Synthesis Report ofEco-Innovation, 2009).
Driving forces of Karma
Considering Sweden’s national innovation system and clusters as setting the innovation paradigms in which Karma was invented, this section will address the driving forces that catalyzed the application. By analyzing the driving forces of innovation for Karma, one gets closer to understanding how the food-tech innovation flourished. In orderto maintain structure, the piece will make use ofTaalbi’s (2020) four levels of analysis; micro-level, industry level, technological system level and macro-level. This considers creative response and that there exist opportunities both in the form of positive opportunities and negative transformationpressure (Taalbi, 2020; Antonelli, 2015; Dahmén, 1988; Schumpeter 1947;).
Table 3: Frameworkfor drivingforces ofinnovation (Framework takenfrom Taalbi, 2020)
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Positive Driving Forces
Micro-level
A micro-perspective offers the reader insight regarding the driving forces on the firm level, which also allows one to understand which internal and external driving forces have allowed Karma to flourish. On a micro-level, Karma’s positive driving forces are considered technological opportunities, partnership opportunities and creative response. The technological opportunities through application development have been essential for Karma as they have provided a digital marketplace which connects the consumer with the product, in this case, cheaper food (Karma, 2020). Applications are low-cost solutions which connect real-time surplus food with hungry consumers, while bypassing the costs that non-digital platforms would entail such as rent of an office location (de Almeida Oroski, 2020, p. 367).
The notion that there exists a cluster, or specialization, ofICTs in Stockholm suggests that Sweden has extraordinary potential forthe thriving of digital businesses. In fact, Sweden’s ICTs industry has a close connection with their customers as Swedish consumers are amongst the quickest in the world to embrace new technologies and applications (Chaminade, Zabala & Treccani, 2010). Karma connects actors both on the supply and demand side, with a strong network effect which reinforces consumer behavior (de Almeida Oroski, 2020, p. 369; Gawer & Cusumano, 2014). Karma has allowed for greater connectivity between consumers and the food-industry, solidifying a greater understanding for macro-issues while also allowing for consumers to feel accountable for food waste from a micro-perspective.
Moreover, Karma can be seen as a creative response to market opportunity, as the application exploits a newly found market for food redistribution (Antonelli, 2015; Schumpeter, 1947). Karma’s creative response is aligned with Schumpeter’s idea of the entrepreneur as an innovator, “a destroyer of equilibrium situations, and thinks up ways of putting scarce resources to new uses by introducing new goods or a new quality of goods .. .by introducing new markets, by discovering new sources of supply of raw material or partly manufactured goods, and by reorganizing the structure of an industry” (Swan, 2014, p. 132; Schumpeter, 1947, p. 150). By locating new combinations and new production functions (Perez, 2009; Schumpeter, 1911, p. 132-6), Karmawas able to drive forwardtheirtechnological innovation. The market opportunity arose from localizing the existence of excess resources (surplus food from the food-industry) and connecting the resources with hungry consumers for a lower price, resulting in partnering businesses catching an additional revenue stream.
Karma makes use of another micro-level positive driving force, that is, partnership opportunities which solidify cooperation between actors. The partnership opportunities are vast as the food-industry consists of a diverse selection of grocery stores, cafes, restaurants in several geographical locations. Karma and several food-industry actors have built partnerships which foster social changes, or even larger movements, forthe sake of sustainability. These partnerships fosterthe availability of surplus food which, in the end, drives Karma forward.
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