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The role of governments in uncertainty orchestration in market formation for sustainability transitions

2022; Elsevier BV; Volume: 43; Linguagem: Inglês

10.1016/j.eist.2022.03.006

2210-4232

Leonardo Augusto de Vasconcelos Gomes, Lidyane Stephane da Silva Barros,

Innovation and Knowledge Management

Market formation in sustainability transitions is characterised by deep and longstanding uncertainty. Albeit prior research provides a rich repertoire of theoretical frameworks on how incumbent firms and entrepreneurs deal with uncertainty, there is still scant literature on the role of the government in orchestrating uncertainty concerning market formation. By studying multiple cases involving an innovation agency and municipalities in Brazil, we propose a new framework composed of a distinguishing typology of uncertainties and patterns of actions regarding how the government can orchestrate the mitigation of these uncertainties in market formation in sustainability transitions. Government actors cope with configurational uncertainty through boundary experimentation, affiliation uncertainty by removing barriers, and interdependence uncertainty by setting long-term mechanisms (nurturing, facilitating and driving interdependence). Our framework suggests that government actors adopt strategies to increase their legitimacy in driving market formation under uncertainty and use epistemic regulation to mitigate hypes. Implications and opportunities for further research are also discussed.