The distinct value of demonstration projects to

large technology firms developing discontinuous

innovations
A Case Study in the Marine Industry

Degree: MSc Innovation Sciences

Department: Industrial Engineering & Innovation Sciences

Author: Broer A.M. Hulsen

Student ID: 2104303

Version: 6.0
Status: Final draft

Date: 28-06-2022
Eindhoven University of Technology, Industrial Engineering and Innovation Sciences:

First supervisor: Georgios Papachristos (g.papachristos@tue.nl)

Second supervisor: Bert Sadowski (b.m.sadowski@tue.nl)

External organization: SystCo Corporation

Firm supervisor: Teus van Beek (Ecosystem Innovation Manager)

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Preface

Dear reader,
As a mechanical engineer, I was educated to develop technological solutions. After
getting hands-on experience with innovation challenges in the minor Innovation
Management, I learned that innovation is so much more than technology itself and
enrolled in the master Innovation Sciences to learn more about it. The last two years
doing this master made me respect the complex environment that surrounds innovation
and the multidisciplinary dynamics involved in bringing it about in society.
With this thesis report, I aim to develop a better understanding of the challenges that lay
ahead of firms that innovate towards a sustainable future. My analysis of project-based
innovation aims to highlight the factors that enable the firm to engage creatively in
multidisciplinary innovation. I sincerely hope that my analysis of the challenges SystCo
experiences and the discussion that the case study offers give firms the confidence
needed to really set the marine shipping industry on a greener course.
This would not have been possible without the great supervision of Teus van Beek who
I’ve been in close contact with ever since that minor Innovation Management all those
years ago. Teus, you’ve taught me so much about innovation by challenging me and
giving me the responsibility to play a role in SystCo’s innovative work. My enthusiasm
for innovation and challenging even your decisions is partly to blame by the great things
you do yourself. I want to sincerely thank you for all the guidance, trust, and fun
conversations we have had over the years and during this thesis period. I regard you not
only as my supervisor or colleague, I regard you as a friend and for that, I want to thank
you and I hope we will keep in touch for a while longer.
I would also like to thank my university supervisor Georgios Papachristos for his great
feedback and ability to extract the crucial information out of everything I am bringing up.
George, your guidance was of great value to me and while my research period was
maybe messy at times, you have guided me to make the right decisions, appropriate
conclusions, and ensure the scientific value of this report. In this half-year, you have
taught me a lot and for that I am grateful.
Finally, I would like to thank my second university supervisor Bert Sadowski who
challenged me to really improve this scientific research. I am thankful for the criticism
because without that, I would not be on a learning trajectory. Your feedback has
improved this report greatly.

I learned a lot and I hope by sharing my expertise and enthusiasm for innovation and
sustainability in this report, you will too.

Broer Hulsen
Eindhoven, 27-06-2022

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Summary
Introduction – The marine transport industry runs on heavy fuel oils and is a

significant worldwide polluter as it accounts for 2.9% of global GHG emissions (IMO,
2020). Innovation to enable change toward sustainable alternatives is, however,
constrained by the complexity and scale of the industry (Sussman, 2000). The
discontinuous innovations that enable sustainable vessel operations need to be
implemented in the complex set of systems that make up the vessel. These types of
products are developed on a project-basis by many firms that deliver parts of the final,
interrelated system dubbed Complex Product and Systems (CoPS). Discontinuous
innovation in such CoPS and the transport industry is uncommon due to the need for
alignment of all interfacing systems and between many industry actors.
In this respect, the ecosystem innovation perspective on innovation is relevant. It
aims at an analysis of the actors that enable materialization of the innovation (Adner,
2017). However, the current set of literature on ecosystem innovation and project
management does not address thoroughly how a firm manages the uncertainty of
discontinuous innovation (Walrave, et al., 2018). Exploratory projects are recommended
to uncover and manage the unknown unknowns of discontinuous innovation but the
role of exploratory projects for discontinuous ecosystem innovation that is equally
uncertain, is not clearly addressed in literature (Lynn, Morone, & Paulson, 1996).
SystCo, a large marine and energy technology developing firm, engages in two
technology demonstration projects as part of a large, state-funded project with 45
partner organizations. In these two projects, two discontinuous innovations will be
developed and demonstrated in a real-life harbour environment. Both demonstrations
are to take place on the same inland waterway barge but are managed as independent
demonstration projects. Both demonstration projects are part of a larger Horizon project
funded by the European Union that aims to construct a masterplan for green ports in
Europe.
The researched cases are called SystProject A and SystProject B throughout the
thesis. The first will demonstrate the efficiency improvement of autonomous, intra-

4
terminal barge operation and automated cargo transhipment. The second will
demonstrate the use of green hydrogen and lithium-ion energy packs providing
electricity to an electric barge. The demonstration of a discontinuous technology to a
prospective market segment signals technology potential to customers via customer
exemplification and inquire feedback on the design through technology verification
(Gasparro et al., 2022). Motivated by a need for change, SystCo is believed to engage in
SystProject A and B to improve the technological design and appropriate value
proposition with customers, aiding the development of an improved business model.
Projects A and B were analysed as exploratory projects that address ecosystem-
related challenges. To increase the theoretical understanding of such exploratory
projects and their contribution to discontinuous innovation development, an exploratory
case study was undertaken to answer the following main research question: How do
demonstration projects contribute to the development of business models around
discontinuous innovations and why does an incumbent firm developing complex
systems engage in such projects?

Methodology – An exploratory case study for theory building was performed in

accordance to Yin’s (2018) five components of research design and the eight steps of
theory building by Eisenhardt (2007). The case will be studied to “create theoretical
constructs, and/or midrange theory from case based, empirical evidence” (Eisenhardt,
1989, p. 25).
Empirical evidence was gathered in 22 one-hour long, semi-structured interviews
based on a limited cursory study of project-based innovation. Based on this study, the
demonstration project was proposed to be part of the change process in a firm
mandated by an internal and external context (Pettigrew, 1987). The interviews were
taken with employees affiliated with SystProject A and B in SystCo ranging from project
engineers up to Board of Management members. Moreover, employees from external,
partnering firms in the demonstration projects and the coordinators of the Horizon
project were interviewed as well. This gave an extensive database of interview

5
transcripts, handmade notes, and additional empirical evidence like SystCo project
planning documentation and Horizon project proposals.
A structured, thematic analysis approach was developed based on the three
thematic analysis phases by Nowell et al. (2017) with the aim to construct a descriptive
analysis output (Braun & Clarke, 2006). First, a write-up method was followed to
construct a spreadsheet of notes that structurally covering each interview Gersinck
(1988). Second, an initial coding phase was performed on each note. Last, the set of
codes was used to construct inductive themes while ensuring relevance to the research
question. This resulted in a vast dataset with notes that are each attributed a code that
is linked to a specific theme. Each theme is built up of one or more codes and the
motivation for it can be traced back to the exact statement made by an interviewee.
Validity and reliability are addressed by ensuring the credibility, transferability,
dependability, and confirmability that ensures trustworthiness of qualitative research.

Findings –

By using a typical and well-defined new-product development (NPD) process as a

template to identify four characteristics of NPD projects after which the distinct value
of SystProject A and B can be inferred. The first project characteristic in this case
concerns the environment. Experimental laboratory projects take place inside SystCo in
a controlled environment with the goal of maturing technology for real-life application.
However, only continuous technologies that align with the current product portfolio can
be tested in SystCo laboratories due to the scale and capital intensity of the industry.
Second, if the technology is mature enough a pilot project takes place and
complements the laboratory project. A pilot project offers a real-world environment as
the technology will be installed on a commercially sailing vessel. This introduces the
customer as an external actor into the project offering distinct knowledge. The goal of
pilot projects is to uncover real-life and scale effects, develop standards, and inquire
customer feedback. Two additional project characteristics here are the commercial
focus and involved actors. SystProject A and B can be distinguished from both

6
laboratory and pilot projects as these demonstration projects include a diverse set of
external actors and take place in a light-rule environment. This gives the fourth project
characteristic: relation to regulation.
The demonstrations take place in a real-life environment like a pilot project but, like
laboratory experiments, are not commercially focussed. Combined with the possible
exemption of regulation and classification and inclusion of various ecosystem actors,
SystProject A and B classify as experimental ecosystem projects, as motivated by the
overview in Table 1.
The real-life environment allows demonstration project actors to determine the
technological and financial viability of the technology. Focus is, however, not on
uncovering scale-effects or standards like in pilot projects, but on defining the innovation
challenge, objectives and outlining the customer segment. By determining the right
value proposition and market segment on an ecosystem level, actors uncover what the
ecosystem of the appropriate innovation is. This improves the business case that was
insecure, ill-defined, and based on entrepreneurial expertise and technological
expectations. SystProject A and B are to improve the business model of a discontinuous
innovation by (1) technology and financial viability verification, (2) ecosystem definition,
(3) creation of ecosystem alignment, (4) removal of ecosystem bottlenecks, and (5)
signalling innovation potential to indirectly affected actors.
Internally, this is fed back into the organization as (1) technology & financial
verification and (2) ecosystem innovation both aiding the development of the
discontinuous innovation’s business case. This is based on an increased understanding
of the challenge, alignment of innovation requirements among directly affected actors,
and signalling to indirectly affected actors to create alignment with exogeneous actors
in the ecosystem environment.

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 The improved business case does not only serve to increase the chance of
materialization of the innovation in the ecosystem, but it also serves internal
communication. First, further commitment to the innovation requires support from
upper management who are persuaded with good business models to allocate budget.
Second, an improved business case shows employees working on old technologies that

Table 1. Characteristics of laboratory experiment, pilot project, and demonstration project in NPD process.

Laboratory Pilot project Demonstration project

experiment

Environment Confined, controlled Real-world environment Real-world environment

environment

Commercial Not commercial Commercial Demonstration itself is

focus not commercial

Relation to Not directly subject Subject to all regulation Possible exception from
regulation to regulation or and classification (some) regulation and
classification classification

Directly SystCo and suppliers SystCo, suppliers, and SystCo, suppliers,

involved customer customers, various
actors innovation ecosystem
actors, and (research)
institutes

Goals/ Mature technology Uncover real-life and Technology & financial

expectations for real-life scale effects, develop viability verification,
application, both standards, inquire define ecosystem, create
experimental as customer feedback ecosystem alignment
commercial and solve bottlenecks,
signal to indirectly
affected actors

Outputs Technology Technology Improved value

specifications, specifications, system proposition, supply chain
performance descriptions, standards, alignment, field
metrics, internal value proposition experience review,
technology verification improved brand image,
understanding influence regulation
change

Role of public
Decrease risk exposure for involved actors
funding

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the discontinuous innovation is an opportunity for them to have a future in the firm.
Moreover, a demonstration project also shows to actors inside the organization what
the actual product is and as such gets away from insecure, unverified visions of the
future or as employees internally regard it, ‘colourful PowerPoint talk’. So, in an
incumbent firm, a demonstration project is used to signal to external actors in the
ecosystem as well as to signal to internal decision and strategy makers. As such, the
demonstration project is part of the change-process of an incumbent firm.
Performance improving factors of a demonstration project as extracted from the
analysis of SystProject A and B relate to performance factors of exploratory projects.
First, a shared mutual goal among partners, diverse backgrounds of partaking actors,
and an experimental mindset aid collaborative, experimental performance. Second, to
aid actor collaboration, the demonstration project has to ensure that information can be
shared freely by ensuring that intellectual property remains with the sharing actor and
conflicting interests between actors should be avoided by avoided. Finally, while both
SystProject A and B are publicly funded, the funding is not a distinct characteristic of the
projects. It serves to reduce the risk exposure of actors that participate in the project.

Discussion Discontinuous innovation in firms that deliver to CoPS is complicated.

First, the ecosystem aspect of innovation demands significant alignment efforts to

enable the innovation to materialize (Adner, 2006). The challenge is to identify the value
proposition of the innovation that generates value for each member in the system while
also inducing co-innovation by those members such that the innovation can offer that
value proposition. Second, the extension of co-innovation risk beyond the directly
affected ecosystem actors in the case of discontinuous innovation highlights how
exogeneous factors like regulation can obstruct innovation as well as experimentation.
Experimentation by SystCo is restricted by the large scale and capital intensity of
the industry. An experiment can only take place in SystCo laboratories if it concerns
continuous innovation on the existing product line. If this is the case, the innovation is
developed in laboratory, pilot, and ecosystem projects to address distinct challenges of

9
the innovation. However, if the innovation is discontinuous, the existing laboratories are
not equipped to facilitate the innovation and thus no experiment with the assembled
system can take place. In such a case, an experimental project like SystProject A and B
offer a valuable solution. SystProject A and B show traits of the laboratory and pilot
project which label it as an exploratory ecosystem project (Lenfle, 2008). Herein, a
technology is developed in a collaborative partnership with many actors and
demonstrated in a real-life environment that is exempted of regulation and has no direct
commercial goal.
Three learning dynamics are distinguished in both SystProject A and B. First, the
innovation is showcased to verify the technological and financial viability with the
aspired customer segment. Second, the alignment of actors directly participating in the
ecosystem to exploit the innovation and improve overall ecosystem performance is
achieved and fed back into the value proposition of the innovation. Third, the
demonstration signals to indirectly affected actors that the innovation is safe and
motivates commitment to address regulation, standards, and infrastructure barriers of
innovation.
This understanding of the demonstration project dynamics is depicted in Figure
1. It shows that SystProjects A and B develop innovative technologies and test them in
the real-life ecosystem. The learning dynamics are similar to the user exemplification

Figure 1. Depiction of discontinuous innovation development dynamics in a demonstration

project.

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and technology verification dynamics that were expected but take place on an
ecosystem level. The conclusion based on the case study is thus developed by
combining the solutions proposed to the discontinuous innovation challenges on
technology, ecosystem, and exogeneous level (Adner, 2017; Lynn, Morone, & Paulson,
1996; Walrave, et al., 2018) with the expressed value of experimentation projects (Lenfle,
2008) to propose that a firm should engage in experimental demonstration projects to
develop and validate the technology on an ecosystem level. This encompasses the
development, validation, and adaptation of an ecosystem innovation strategy.
Learning is, however, limited by a similar paradox present in discontinuous
innovation experimentation with customer segments. The response by the ecosystem
namely depends on the design of the demonstrated innovation, but this in turn depends
on the observed demands of ecosystem actors. This paradox is believed to affect the
effectiveness of SystProjects A and B where the commercial goals of partners limit the
performance of the demonstration project. Each actor has shaped the innovation based
on an observed demand in the industry. Pursuing these commercial goals is not
inherently bad, but the experimental strong suit of the demonstration project should be
central. So, while SystProject A and B appear to aim for a discontinuous innovation, the
performance of the project is believed to be limited by commercial goals and can thus
be improved by focussing on experimentation rather than exploitation.
Future research is proposed to (1) address the ecosystem definition in complex
situations like CoPS, (2) identify and evaluate the distinct characteristics of exploratory
projects to better understand ecosystem exploration, (3) research ecosystem
exploration project characteristics that label them as policy tools that improve
discontinuous innovation, (4) uncover the dynamics of endogenous ecosystem
bottlenecks where an innovating incumbent is the bottleneck in an ecosystem of the
innovation it develops, and (5) uncover the network developing value of ecosystem
projects as strategic asset.
Managerial implications regard ecosystem innovation and the ability of a firm to
respect ecosystem exploration activities. Namely, in current business models, the

11
ecosystem view of innovation is not included by SystCo. So, while SystProject A and B
offer ecosystem exploration as distinct value, the firm is not able to fully acknowledge
this value. By adopting the ecosystem perspective on innovation, the firm can account
for ecosystem uncertainties in its innovation’s business model. In this way,
demonstration projects actively contribute to the business model and as such produce
greater benefit.
Finally, it is recommended that firms approach demonstration projects as
experimental projects, not as delivery projects. Since innovations are not developed in
one project, the firm should ensure that it participates in such projects with a low-cost,
flexible prototype that ensures that the aspired learning is performed. As such, a lineage
of demonstration – and other NPD projects – are believed to enable a firm to develop
discontinuous innovations (Koch-Ørvad, Thuesen, Koch, & Berker, 2019).

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Contents
PREFACE .............................................................................................................................................. 3

SUMMARY ........................................................................................................................................... 4

1 INTRODUCTION .......................................................................................................................... 15

2 THEORETICAL BACKGROUND ...................................................................................................... 19

2.1 DISCONTINUOUS INNOVATION ......................................................................................................... 19

2.2 ECOSYSTEM INNOVATION ................................................................................................................ 20
2.3 BOTTLENECKS IN- AND OUTSIDE THE ECOSYSTEM.................................................................................. 22
2.4 EXPLORATORY PROJECTS & EXPERIMENTATION .................................................................................... 23
2.5 PROJECTS AND COMPLEX PRODUCTS AND SYSTEMS INNOVATION ............................................................ 24
2.6 EXPLORATORY PROJECTS FOR DISCONTINUOUS COPS INNOVATION .......................................................... 26

3 METHODOLOGY ......................................................................................................................... 29

3.1 RESEARCH DESIGN ......................................................................................................................... 30

3.2 BACKGROUND TO THE CASE ............................................................................................................. 32
3.2.1 SystProject A and B ......................................................................................................... 33
3.3 DATA & DATA COLLECTION .............................................................................................................. 34
3.4 DATA ANALYSIS ............................................................................................................................. 37
3.5 TRUSTWORTHINESS........................................................................................................................ 40

4 CASE STUDY FINDINGS ............................................................................................................... 42

4.1 INTERNAL & EXTERNAL CONTEXT AND CONTENT OF CHANGE SYSTCO ....................................................... 42
4.2 POSITION OF ECOSYSTEM PROJECTS IN NEW PRODUCT DEVELOPMENT ...................................................... 46
4.2.1 Project-based development in SystCo: Innovation B ....................................................... 47
4.2.2 The challenges of discontinuous innovation in SystCo .................................................... 50
4.3 INCLUSION OF CUSTOMERS IN PROJECTS ............................................................................................. 53
4.4 THE DISTINCT VALUE OF SYSTPROJECT A AND B ................................................................................... 55
4.5 KNOWLEDGE CREATION IN HORIZON PROJECTS .................................................................................... 59
4.6 DEMONSTRATION PROJECT VALUE FOR BUSINESS CASE DEVELOPMENT IN SYSTCO ....................................... 65
4.7 DEMONSTRATION PROJECT PERFORMANCE FACTORS ............................................................................. 69
4.8 SUMMARY: THE CHARACTERISTICS OF SYSTPROJECTS IN SYSTCO ............................................................. 73

5 DISCUSSION ............................................................................................................................... 77

5.1 DEMONSTRATION PROJECTS FOR DISCONTINUOUS INNOVATION .............................................................. 77

5.2 LIMITATIONS AND FUTURE RESEARCH................................................................................................. 82
5.3 MANAGERIAL IMPLICATIONS ............................................................................................................ 85

6 LITERATURE ................................................................................................................................ 87

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APPENDIX 1: INTERVIEW OUTLINES SET 1 .......................................................................................... 91

APPENDIX 2: INTERVIEW OUTLINES SET 2 .......................................................................................... 96

APPENDIX 3: OVERVIEW OF THEMES AND CODES .............................................................................. 99

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1 Introduction
To ensure a sustainable future, the world must face the grave challenge to
eliminate environmental pollution including greenhouse gas (GHG) and other pollutants
like sulfur and nitrogen oxides. The marine transport industry, mostly based on heavy
fuel oils, is a significant worldwide polluter as it accounts for 2.9% of global GHG
emissions (IMO, 2020). However, due to the scale and complexity, the industry pace of
change lags behind that which is required to meet international goals (Sussman, 2000).
Not surprisingly, due to the historical record of slow change in the shipping industry, it
is regarded as very conservative (Sivadas, 2017).
Technological change in the marine industry sustainability transition includes
various types of vessels transporting cars and passengers across rivers, coal on inland
waterways, and avocados across the world. These vessels are each costly, complex,
and capital intensive. This type of product group is called Complex Products and
Systems (CoPS) and is developed in on a project-basis with many firms delivering parts
of the final, interrelated system (Hobday, 1998). Development in this global industry
takes place on a project basis with high customer centricity, high financial
commitments, and high collaboration posing a unique set of firm level challenges
regarding sustainability innovation.
An innovating firm has to implement the new technology in an existing
technological system in such a way that the performance of the CoPS rises. The
performance metrics depend on the industry a CoPS operates in. In the case of the
marine industry, performance concerns the transport of goods from point A to B at the
cheapest price possible. Radical innovation in a CoPS is rare because the interaction of
systems mandates the innovation to be in-line with the current systems. Only an effort
that aligns innovation of all systems into a radically redesigned CoPS allows the
introduction of discontinuous innovation (Van de Ven, 1986). In recent years, the
ecosystem perspective on innovation rose in prominence to analyse and handle such
questions (Adner, 2012).

15
 A proposed research direction regarding ecosystem innovation is how a firm
should manage more discontinuous innovations (Walrave, et al., 2018). The ecosystem
perspective aims at an analysis of the actors that enable the materialization of the
innovation, but the more discontinuous in character an innovation is, the less clear it the
outline of the ecosystem is (Adner, 2017). This is the uncertainty that is characteristic
of discontinuous innovation and a result of the degree of change that such an innovation
aspires to establish (Birkinshaw, Bessant, & Delbridge, 2007; Lynn, Morone, & Paulson,
1996). To overcome such uncertainty a firm can engage in exploratory projects to
explore the so-called unknown unknowns and overcome them. This project-based is,
however, not developed yet in the literature on ecosystems
Ecosystem-related innovation efforts were observed in a large project, funded by
the European Union’s Horizon program, where a wide variety of actors get together and
attempt to boost the uptake of logistic and technological innovations in port areas,
hereafter referred to as Horizon Project. In this 5-year long project, a variety of
innovations that aid sustainability of different modes of transport in a port are to be
developed and demonstrated. These kinds of projects are initiated to enable and spur
the transition of the logistics industry to a green future.
Part of the Horizon Project is a technology developing firm for the marine industry,
hereafter referred to as SystCo, that engaged in two demonstration projects. These two
demonstration projects are hereafter referred to as SystProject A and SystProject B.
SystProject A will develop and demonstrate an autonomously sailing barge and
SystProject B will develop and demonstrate an interchangeable, battery and hydrogen
powertrain solution for inland barges. Both projects take place simultaneously and have
a degree of interaction with each other.
SystProject A and B were considered to be demonstration projects that address
the challenges of discontinuous innovation that a firm in the large, complex marine
industry experiences. The project provides a case where a firm that develops
discontinuous innovations engages in a project to address certain challenges. By
observing this case, the aim is to uncover what exactly is the added value of SystProject

16
A and B, which are believed to address ecosystem challenges by demonstrating
technologies, for the materialization of the respective innovations. This research goal
was phrased as uncovering the value of demonstration projects for the development of
the business case around a discontinuous innovation.
This report aims to contribute to innovation sciences and project management
research area by uncovering how demonstration projects can contribute to the
development of discontinuous innovations for CoPS by an incumbent firm. It will namely
explore how the analysed project offers distinct opportunities to a firm that enable it to
develop discontinuous innovations in a complex and otherwise conservative industry.
The goal of this research is to develop an understanding of demonstration projects
and how incumbent firms like SystCo can deploy them appropriately to contribute to
their internal project-based innovation processes. This encompasses not only the
commercial value of the project but also the ability of the firm to create and absorb the
valuable knowledge out of it. It is believed that these types of projects can contribute to
the development of the radical innovations necessary to enable a sustainable marine
industry. As such, a good understanding of how the organization can best support
engagement in such projects and facilitate knowledge distribution and absorption is of
great strategic value for any firm.
The research question that was derived is as follows: How do demonstration
projects contribute to the development of business models around discontinuous
innovations and why does an incumbent firm developing complex systems engage in
such projects?
Answering this main research question will be done by answering the following
sub-questions in succession:
Sub-question 1: Why do firms struggle to develop the business model of discontinuous
innovations?
Sub-question 2: How does a demonstration project aim to address the struggles
experienced in the development of discontinuous innovations?

17
Sub-question 3: How does a demonstration project contribute to the development of
discontinuous innovations in an incumbent firm developing complex
systems?
Sub-question 4: What factors can be identified that affect the experimental
performance of a demonstration project?
The rest of the report as follows. Chapter 2 elaborates the theoretical background
of the study addressing the nature of discontinuous innovation, the ecosystem
perspective on innovation, exploratory projects, and innovation in CoPS. Chapter 3 will
state the methodology wherein the research design, case description, empirical data
collection method, and trustworthiness of research is addressed. Chapter 4 lays out the
case study findings in a structured manner to reach an understanding of SystProject
characteristics and proposes performance factors. The report is concluded in Chapter
5 where the case findings are discussed in relation with existing literature. This chapter
will provide limitations and future research as well as managerial implications
addressed at firms like SystCo.

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2 Theoretical Background
First, the concept of discontinuous innovation is introduced. Second, the
ecosystem innovation view is elaborated to address the collaborative nature of the
analysed demonstration project. Third, the distinct issues of discontinuous innovation
in relation to ecosystem innovation are introduced. Fourth, the value of exploratory
projects in the development of discontinuous innovation is addressed. Fifth, the
implications of CoPS on the innovative nature of an industry is given. The chapter will
conclude with an answer to the first sub-question: Why do firms struggle to define the
business model of discontinuous innovations?

2.1 Discontinuous innovation

Continuous and discontinuous innovation refer to the degree of change brought
about by the development of an entirely new technology, the emergence of a new
market, or a shift in the economic or political scene (Birkinshaw, Bessant, & Delbridge,
2007). Discontinuous innovations, typically developed by new entrants, can have a
significant impact on established firms that either scramble to catch up or lose
altogether (Gavetti & Tripsas, 2000). However, an incumbent firm should not regard
discontinuous innovation as a threat but rather as an essential part of its development
program to retain its competitive advantage. As Lynn, Morone, and Paulson (1996)
argue, competitive advantage is built and renewed with discontinuous innovation,
especially by firms in competitive, technology-intensive, global markets.
The management of discontinuous innovation is complex due to high uncertainty,
an ill-defined market, underdeveloped infrastructure, questions about timing, and
dependence on exogeneous factors like regulation (Lynn, Morone, & Paulson, 1996). To
further increase uncertainty, these characteristics interact to form a discontinuous
innovation paradox (Lynn, Morone, & Paulson, 1996, p. 10): “the form the developing
technology should take depends on how the developing market responds to early
versions of the technology; yet paradoxically, how the market responds depends on the
form the technology takes”.

19
 To overcome this problem, Lynn, Morone, and Paulson (1996) propose the probe-
and-learn process. Herein, an early version of the product is introduced into a potential
marketplace as a probe, learn from it, and probe again. By doing this with different
probes in varying market segments, the firm deploys a form of market experimentation.
The learning contributes to understanding the scale-up possibilities of the technology,
what market is most receptive, what applications are viable, and the influence of
exogeneous factors like changes in government regulation and need for regulatory
approval.

2.2 Ecosystem innovation

Innovation on the value proposition between supplier and customer requires the
alignment of a set of actors in a joint value proposition (Adner, 2017). This change in the
so-called ‘ecosystem’ can be a prerequisite for an innovation to be successful (Berkhout,
2014; Koch-Ørvad, Thuesen, Koch, & Berker, 2019). Achieving such change is difficult,
however, and the challenge grows as the ecosystem becomes more complex due to the
number of actors, product complexity, and geographic distribution of actors and
products for example (Sussman, 2000).
To understand this, a definition of the ‘ecosystem’ is necessary. A business
ecosystem, a term introduced by Moore (1993), is the network of organizations and
individuals, including customers, that work cooperatively and competitively to produce
goods and services valued by customers. An innovation ecosystem is focussed on the
creation, adoption, and implementation of an idea across multiple actors (Van de Ven,
1986). This ecosystem innovation view highlights that the success of a firm holding an
innovation does not only depend on the firm but on the supporting efforts for innovation
implementation by others as well (Adner, 2006; Von Pechman, Midler, Maniak, & Charue-
Duboq, 2015).
With this understanding of business and innovation ecosystems, the definition of
the ecosystem is adopted in accordance to Adner (2017, p. 40): “the alignment structure
of the multilateral set of actors that need to interact in order for a focal value proposition

20
to materialize”. This definition includes four important attributes of an ecosystem. First,
each member of the ecosystem has a position and activity and are aligned if each is
happy with it. Second, an ecosystem is multilateral i.e., not decomposable to a set of
bilateral relationships. Third, an ecosystem is not open-ended, but membership is
defined. This does not mean that the ecosystem is complete, but it means that
members consciously contribute to a joint value proposition. Last, the focal value
proposition what actors contribute to and shapes the boundaries of the ecosystem.
In his book ‘The Wide View, Adner (2012) proposes the ecosystem innovation view
as an extension to the regular developer-supplier innovation relationship. Typically, the
focus of an innovator is to determine what it takes to deliver the right product on time
to the customer and beat the competition. Ecosystem innovation offers a new
perspective on this classical relationship and proposes two extensions of scope. The
first concerns the actors that need to innovate as well to make the innovation a success
and is dubbed co-innovation risk. In practice, ecosystem innovation namely relates to
the rise of co-innovation where firms leverage each other’s power to develop something
better than they could do by themselves. The risk herein is that as a firm you become
dependent on the success of your co-innovators (Adner, 2012).
The second concerns the adoption risk of those who needs to adopt the innovation
before the customer can appreciate the entire value proposition (Adner, 2012). This can
best be visualized as a chain of ecosystem actors that link the technology developer
with the final customer. If one actor in this chain does not adopt the technology, the
entire value chain breaks.
Risk management in an ecosystem strategy is defined by Adner (2017, p. 47) as
“the way in which a focal firm approaches the alignment of partners and secures its role
in a competitive ecosystem”. Herein are four elements. First, the centre of strategy is the
focal firm meaning that each actor in the ecosystem has its own perspective and
corresponding strategy. Second, alignment from this perspective refers to the ability to
bring partners in a position and role corresponding to the firm’s ecosystem strategy.
Third, the role of the actor in the respective ecosystem can be to follow or to lead which

21
relates to the risk-benefit balance. The leader has the highest stake in affecting
ecosystem alignment but also bears the greatest risk. Last, the ecosystem
competitiveness addresses the stake of the firm in ecosystem performance introducing
the concept of ecosystem competition wherein different ecosystem configurations with
appropriate value propositions compete.

2.3 Bottlenecks in- and outside the ecosystem

Ecosystem innovation acknowledges that there can be severe constraints present
in the innovation ecosystem dubbed bottlenecks. Bottlenecks are, as defined by Koch-
Ørvad et al. (2019, p. 604), “components that constrain the overall performance and
alignment of the ecosystem”. This is a phenomenon where one or more actors in the
ecosystem constrain alignment efforts in it (Adner & Kapoor, 2010; Hannah &
Eisenhardt, 2018). Such bottlenecks relating to adoption risks can bring the demise of
an innovation despite of it being technologically wonderful (Adner, 2012).
Firms experience three different types of bottlenecks with with discontinuous
innovation. First, the possible gains of discontinuous innovation are uncertain, slow to
develop, and hard to make sense of (Birkinshaw, Bessant, & Delbridge, 2007). The
appropriate, coherent product offering around a discontinuous innovation does not
emerge at once but rather in incremental stages, for instance through several start-ups
(Garvin & March, 1996). Second, incumbent firms find it difficult to step out of the
familiar, proven routines that create revenue now, to adapt to the future revenue creating
routines. Third, the inertia that is difficult to break away from is also apparent in the
network and customer relations the firm has built up: the ties that bind are also the ties
that blind (Cohen & Prusak, 2001). It is therefore also the customers and the network of
the firm that prevent change in an industry.
Walrave et al. (2018) note that discontinuous innovations misalign with the
existing sociotechnical configuration and sometimes require sociotechnical
subsystems to change before the innovation can flourish (Nelson & Winter, 1982; Raven,
2007). Even though the sociotechnical perspective is excluded in this research for

22
complexity and relevance reasons, the viewpoint does address an important aspect of
discontinuous innovation that a product value proposition – and as such an ecosystem
value proposition – is subject to.
Bottlenecks are, as described, a product of path dependency, inertia, and
increasing appreciation over time. This addresses factors inside the ecosystem.
However, misalignment between the existing configuration of the sociotechnical
environment and the reforming demand of discontinuous innovation may require
external factors to be changed as well (Walrave, et al., 2018; Lie & Sørensen, 1996). For
example, public policies, infrastructure, culture, market segmentation, and user groups.
Walrave et al. (2018) propose that actors developing discontinuous innovations should
therefore seek feedback from the sociotechnical environment by experimentation in
pilot cases, living labs, user tests, and similar forms of sociotechnical experimentation.

2.4 Exploratory projects & experimentation

Transforming an ecosystem for the materialization of an innovation requires a
network-building effort in which multiple actors learn and align (Van de Ven, 1986). The
challenge of alignment is namely to learn how the ecosystem or innovation needs to
adapt for it to be mutually valuable i.e., for the innovation to become commercially viable
in the whole ecosystem. This is an alignment effort with a lot of uncertainties and
complexity hence exploratory projects have been considered a valuable method for
ecosystem innovation (Koch-Ørvad, Thuesen, Koch, & Berker, 2019). For example, Koch-
Ørvad et al. (2019) state in their case study of a sustainable firm in the Danish
construction industry that a lineage of exploratory projects can contribute to solve
bottleneck problems in the ecosystem.
Exploratory or experimental projects offer a learning environment for ecosystem
aspects like new practices, new technologies, new value propositions, new markets, and
so forth, can be developed in exploratory projects (Brady & Davies, 2004; Lenfle, 2008;
Loch, DeMeyer, & Pich, 2006). Such projects provide an environment in which an
organization can explore the unknown unknowns related to the innovation and, as such,

23
explore the new configurations of the ecosystem (Lenfle, 2008; Loch, DeMeyer, & Pich,
2006).
The following five characteristics of exploratory projects describe how such
project can uncover the unknown unknowns of radical innovations (Lenfle, 2008). First,
the project strategy is not defined up front but is gradually formed over the project
timeline. Second, an exploratory project is not linked to customer demand and thus does
not serve a clearly defined market. Third, the objectives of an exploratory project are
abstract, diffuse, and uncertain due to the absence customer involvement. Fourth, an
exploratory project aims to create new knowledge to fill a prior knowledge gap, hence
such a project is uncertain. Lastly, no clear urgency or horizon is present due to the high
uncertainty and abstractness of exploration.
Managing such a project should focus on directing efforts at identifying and
solving major knowledge gaps (Loch, DeMeyer, & Pich, 2006). This is a two-step
process. First, the knowledge gap with regards to the tasks, and stakeholders of the
project needs to be identified. Second, the identified unknown unknowns can be
managed by double-loop learning and selectionism (Argyris, 1977). In the double-loop
learning process the plan is adapted as learning from experiments takes place while
also implementing new policies for further learning. Selectionism is trying out several
plan configurations simultaneously and selecting the optimal one.

2.5 Projects and Complex Products and Systems innovation

Projects are typically understood as temporary organisational forms with a defined
set of resources, goals, and time limit (Davies & Hobday, 2005). However, a project
should not be observed as a stand-alone phenomenon as a project is never ‘an island’
(Engwall, 2003). It should be understood in the context it is in. Dynamics inside a project
can only be rightfully understood if the historical trajectory and simultaneous cross-

24
 Figure 2. Contingencies affecting theinterior process dynamics of a project (Engwall, 2003).

section of projects is known. Considering each project as an open system that interacts
with its context as depicted in Figure 2 allows for a greater understanding of project
dynamics and better management decisions.
When observing a project, a researcher therefore needs to be aware that it is a part
of a variety of projects, undertakings, activities, and solutions that pass through the
organisation (Engwall, 2003). This also allows an understanding of projects being part
of the continuous business operations rather than standalone phenomenon in time
(Kreiner, 1995). Especially projects engaged in the development of complex products
and systems (CoPS) have a high degree of interfacing with neighbouring systems and
partnering firms (Gann & Salter, 2000). Such CoPS, defined as high-cost, engineering-
intensive products, systems, networks, and constructs (e.g., bulk carriers, helicopters,
nuclear power plants, sewage treatment plants, and yachts) are developed on a project-
basis crossing firm boundaries (Hobday, 1998). CoPS are developed by many firms
cooperating to develop and deliver parts of the final, interrelated system that each
perform a specific task to realize a common goal (Hobday, 1998).
CoPS are typically made as one-offs or produced in small batches for a customer,
not serially produced for a marketplace (Davies & Hobday, 2005). This is due to the
capital intensity and uniqueness of customer specifications with each project.
Management in CoPS projects is therefore engaged in managing interfaces in complex

25
networks (Gann & Salter, 2000). This can be a very time-intensive, elaborate process due
to the need to facilitate and ensure collaboration as well as alignment of actions
between many actors (Hobday, 1998). Managers need be able to respond to customer
needs by incorporating flexibility and responsiveness into the project while also
integrating multiple business functions into it (Davies & Hobday, 2005).
As each CoPS project has a degree of uniqueness, each project is innovative to a
certain extent. However, due to the complexity and scale of them, design and production
requires knowledge-intensive, non-routine tasks, and decision making in high-risk,
uncertain environments (Davies & Hobday, 2005). Therefore, innovation in CoPS
projects and industries is typically incremental in nature.

2.6 Exploratory projects for discontinuous CoPS innovation

Discontinuous innovation is a complex endeavour due to high uncertainty, an ill-
defined market, underdeveloped infrastructure, questions about timing, and
dependence on exogeneous factors like regulation (Lynn, Morone, & Paulson, 1996). The
relation between the customer and the developing firm is subject to the innovation
paradox between uncertain technology design and ill-defined customer demand.
In the ecosystem perspective, innovation is furthermore subject to co-innovation
risk which especially relevant for firms developing parts of a CoPS due to the high degree
of interfacing between systems (Adner, 2012; Hobday, 1998). Moreover, adoption risk in
the ecosystem can be the demise of innovations as uptake of it enables materialization
for the end customer (Adner, 2012). As innovation becomes more discontinuous, actors
are more reluctant to adopt it causing bottleneck problems in the innovation ecosystem
(Koch-Ørvad, Thuesen, Koch, & Berker, 2019).
The exogeneous factors affecting discontinuous innovation uptake affect the
materialization of the innovation from outside of the ecosystem (Walrave, et al., 2018;
Lynn, Morone, & Paulson, 1996). This sociotechnical view overlaps with the ecosystem
view on innovation but emphasizes the factors that are out of the direct control of
ecosystem actors and is more loosely defined (Walrave, et al., 2018). Table 2 provides

26
an overview of the challenges of discontinuous innovation on three levels with an
appropriate solution method.
The ecosystem innovation approach requires an ecosystem strategy to cope with
the respective implications. It is a strategy by a firm wherein it lays out how it will
influence the position and role of members in the ecosystem such that the firm can
secure the role it aspires (Adner, 2017). Walrave et al. (2018) and Lynn et al. (1996)
propose more experimental solutions to the discontinuous innovation challenges. The
probe-and-learn process to overcome the discontinuous innovation paradox (Lynn,
Morone, & Paulson, 1996) and sociotechnical experimentation to signal to important
Table 2. Overview of discontinuous innovation challenges from three perspectives with appropriate implications

and solution method.

Discontinuous innovation Practical implication Solution method:

challenges

Discontinuous innovation What shape should the Probe and learn with
paradox: ill-defined market innovation be and for who preliminary product
Technology

and technology (Lynn, should it be made? design to signal to

Morone, & Paulson, 1996) customers and inquire
feedback (Lynn, Morone,
& Paulson, 1996)

Questions about timing Who needs to innovate as Ecosystem Strategy to

(Adner, 2012; Lynn, well to make the influence positions and
Morone, & Paulson, 1996), innovation a success? roles of ecosystem
co-innovation risks (Adner, members as such that it
Ecosystem

Who needs to adopt the

2017), adoption risks is beneficial for the
innovation as well to
(Adner, 2017), bottlenecks aspired position of the
enable the customer to
(Koch-Ørvad, Thuesen, firm (Adner, 2017)
reap benefit?
Koch, & Berker, 2019)
When is the right moment
to introduce the product?

Regulation and What (future) changes in Sociotechnical

underdeveloped regulation and experimentation like pilot
Exogeneous factors

infrastructure (Lynn, infrastructure will impact cases, living labs, or user

Morone, & Paulson, 1996), the materialization of the tests to inquire feedback
demand for reform in innovation? from influential
sociotechnical ecosystem and
What is the ecosystem
subsystem(s) (Walrave, et exogeneous actors
that enables the value
al., 2018) (Walrave, et al., 2018)
proposition for the
customer?

27
actors to inquire feedback on what the situation is and what challenges are present
(Walrave, et al., 2018).
Both the probe-and-learn as sociotechnical experimental projects can be
considered exploratory activities to identify what the appropriate value proposition is,
what ecosystem actors enable the materialization of it for customers, and what
exogeneous actors impact the viability of it all. As such, experimentation or exploration
projects can be considered valuable projects to overcome discontinuous innovations of
which the five key characteristics are shown below in Table 3.
Missing in literature is, however, what exploratory actions a firm can take to
address the uncertainties of discontinuous innovation on an ecosystem level. An
ecosystem strategy namely demands a clear view of what that ecosystem is, which is
not clear in the case of discontinuous innovation. The ecosystem perspective on
innovation can open an array of innovation management approaches which mandates
exploratory research into the subject to uncover worthwhile directions of future
research.

Table 3. Characteristics of exploratory projects (Lenfle, 2008).

EXPLORATORY PROJECT

STRATEGY: Formed over the duration of the project, not clearly defined up front

CUSTOMER Not linked to customer demand or a clearly defined market

RELATION:

OBJECTIVES: Abstract, diffuse, and uncertain

GOAL: Aim to create knowledge to fill a prior knowledge gap

URGENCY: Not clearly present due to high uncertainty and abstractness

28
3 Methodology
An exploratory case study will be performed to understand how a technology
developing firm deploys demonstration projects to contribute to discontinuous
innovation business case development. Drawing on Yin’s work on case study research,
five components of a research design are covered. These are (1) questions, (2)
propositions, if any, (3) the case, (4) the logic linking the data to the questions or
propositions, and (5) the criteria for interpreting the findings (Yin, 2018, pp. 61, 62).
Since exploratory case study research can be used for theory building or affirming
(Eisenhardt & Graebner, 2007; Yin, 2018), the adopted research process was developed
based on the theory building process by Eisenhardt (1989). Herein, eight steps are
defined to guide the development of theory being (1) define research question, (2) select
cases, (3) craft instruments and protocols, (4) entering the field, (5) analyse data, (6)
shape hypothesis, (7) enfolding literature, (8) reaching closure (Eisenhardt, 1989).
However, the goal of this research is not to develop and test the entire
understanding, prediction, and control of theory. This research will focus on the first
aspect of it and contribute to the understanding of the phenomenon. This aligns with
the goal of an exploratory case study to provide constructing an in-depth description
(Yin, 2018). This is achievable within the timeframe of this research and is a form of
theory building where one or more cases are used to “create theoretical constructs,
propositions, and/or midrange theory from case based, empirical evidence” (p. 25). This
type of research may be used to give direction to future quantitative studies (Seaton &
Schwier, 2014).
Having covered the questions and propositions in chapter 1 and 2 respectively, this
chapter will elaborate the research design that implements the eight research steps by
Eisenhardt (1989) in chapter 3.1. chapter 3.2 will introduce and describe the researched
case. Chapter 3.3 explains the data to be collected and the data collection process. In
chapter 3.4, the data analysis process is given, and the chapter is concluded in chapter
3.5 with the viability and reliability of the research.

29
3.1 Research design
To understand the complex, real-life phenomenon as stated in section 1, a case
study of a large technology developing firm engaged in a demonstration project is done.
An empirical case study is a valuable tool to develop a rich understanding of a complex
phenomenon (Yin, 2018). As this research looks to answer an explorative research
question characterized by using ‘how’ in its phrasing, an exploratory case study was
decided upon.
As the subject of this research is complex, this study will be a success if a
structured theoretical understanding of Horizon projects in SystCo is achieved. Such a
structured understanding will allow the project to be placed in a context and compared
to similar phenomenon, for example with different types of innovation development
projects. From the firm’s perspective the research is a success if the increased
understanding of the value of demonstration projects can be effectively translated into
managerial implications that improve the firm’s innovative performance.
To structure the complex subject, a cursory literature study was performed to
understand incumbent firms engaging in discontinuous innovation and demonstration
projects in an appropriate context. Out of the pre-research literature analysis, two
profound insights were achieved: (1) the bi-directional learning process with customers
as important learning mechanism and (2) the context, content, and process view on
organizational change. Both insights were used to structure the interview process and
outlines.
First, literature on the interaction between customers uncovered the concepts of
technology verification and customer exemplification (Gasparro, Zerjav, Konstantinou,
& Casady, 2022). These two processes happen simultaneously and affect each other.
Technology verification tests whether a design meets the demands of a customer.
Customer exemplification is the signalling effect to customers of what an innovation
can enable them to do. In accordance with Lynn’s (1996) discontinuous innovation
paradox, the design of the innovation affects the signalling effect, and the perception of
customers affect the technology feedback. These effects were argued to be of

30
importance in publicly visible projects and were believed to be applicable to the Horizon
project in this case study.
Second, the context of organizational change describes how change can be
observed or explained by considering (a) the internal and external context of the firm, (b)
the content of change, and (c) the process of change (Pettigrew, 1987). With this
structuring, an understanding is developed of why (context) and how (process)
something (content) changes in a firm. Motivated by a prior understanding of
discontinuous innovations, the rich information of context and content of change were
expected to be valuable in explaining what knowledge was aspired to be gained from
the demonstration project. For this reason, this structuring was applied to define three
interview sets with different audiences from SystCo.
What is thus expected to be observed is a strategy of SystCo that is based on the
internal and external context of the firm and motivates the development of certain
discontinuous technologies. To enable this change, the firm goes through a variety of
simultaneous and subsequent processes of which the observed demonstration project
is one. It is expected that the demonstration project serves as a signalling project
showcasing the capabilities of SystCo and partners to relevant actors in the shipping
industry. The feedback on this demonstration about the value of the innovation for
various customers is a verification step of the value proposition developed prior to the
demonstration. So, the value of the demonstration project for SystCo was believed to
be to develop, show, and verify the technological design customer exemplification and
technology verification.
Exclusion of topics based on this hypothesis is, however, not strived for as this
limits the quality of exploratory research. However, any cursory study on a topic will
affect the topics addressed in research. So, while in principle no topic is omitted, a
distinct construct was developed that ensured that the expected topics were addressed.
Not included in the interview outline were therefore continuous innovation programs,
non-change related processes like customer delivery projects, contextual developments
outside of the ones affecting SystCo operations, contents of change irrelevant to the

31
development of discontinuous technologies, and discontinuous innovation projects
significantly different than SystProject A and B.
The lens with which the research is started is thus of demonstration projects being
part of the process of change in a firm, offering customer exemplification and
technology verification to the development of discontinuous innovations. Selecting
subjects for data inquiry in the case study therefore needs to cover these
exemplification and verification dynamics which play an important role in the knowledge
creating process. This was done by selecting subjects in the case study project that are
directly or indirectly involved and classifying them as knowledgeable on either context,
content, or process of change in SystCo. This is elaborated in more detail in chapter 3.3.
With this research design a rich, practical understanding of the way in which such
a project fits in a firm’s NPD processes will be developed. By inquiring information of the
context, content, and process of change, the project is not only regarded as an
innovation delivery project but as a part of the firm’s strategy to change. The interaction
between customers and SystCo is believed to be an important distinctive value of a
Horizon project and thus the distinct knowledge that such a project can deliver. The
research will be performed in a longitudinal way in accordance with Eisenhardt (1989)
by developing instruments and protocols, entering the field to gather data – see chapter
3.3 – and analyse that data – see chapter 3.4.

3.2 Background to the case

The subject of this research will be a large technology development firm engaged
in two demonstration projects that are part of one larger, Horizon project. By observing
such a firm and their implementation of demonstration projects in its new product
development (NPD) process, a contextual understanding of the practical application of
demonstration projects is achieved. Moreover, by ensuring that the research is rich of
context, valuable insights in the practical implications of exploiting demonstration
projects can be uncovered. Such understanding may help improve the innovative

32
performance of incumbent firms and demonstration projects, both contributing to
commercial success of sustainability innovations.

3.2.1 SystProject A and B

The European Commission recognizes that current ecosystem practices hamper
the efforts to tackle climate change and has therefore put the Horizon program in place
(European Commission, 2021a). Typically running seven years, each Horizon phase has
a budget that is allocated as subsidy to projects that facilitate collaboration to support
and create better dispersion of excellent knowledge and technologies (European
Commission, 2021b). This case study is performed on two demonstration projects,
dubbed SystProject A and SystProject B, that are part of a large Horizon project.
Responding to the European call ‘Green Airports and Ports as Multimodal Hubs for
Sustainable and Smart Mobility’, a group of 4 European ports formed a consortium with
9 research institutes and universities, 32 private companies, and 4 other institutes to
address the missing link between green energy supply and green energy use in port-
related transport. Moreover, the implementation of digitalisation automation, and
autonomy to increase transport efficiency is addressed. The aim is to accelerate the
introduction of green energy carriers along with the realisation of logistic optimisation
in ports. After submitting a proposal, largely written by the coordinating port in the
consortium, the European Union granted €25 million of subsidy to the project.
This Horizon project adopts a ‘living lab approach’ where technologies are
developed and demonstrated in a port environment to gather input and develop a
master plan for the future European port. With this masterplan that includes a green-
port roadmap, ports can take significant steps towards decarbonisation to achieve full
decarbonisation by 2050. In the living lab, the focus is to develop real-life
demonstrations of promising green energy carriers.
A port is more than only shipping, it is the hub where road, rail, and inland waterway
transport connect to deep-sea shipping. For this reason, the Horizon project addresses
the multimodal mix of transport in the port environment. Moreover, the project also

33
addresses the non-technological innovations that hamper innovation uptake as well as
the monitoring and impact evaluation of those new technologies.
There is thus a large and complicated set of efforts in the project. These are
structured in 10 work packages (WPs) of which four include a demonstration (demo).
This is the actual realization and operation in a port environment. SystCo is engaged in
demo 6 and 7 in WP5 that address intra-port and inland waterway shipping. In this WP,
SystCo is a technology developing partner working together with 17 other firms and
institutions. 6 of those are directly involved in demo 6 and 7.
Demo 6 is referred to as SystProject A and will demonstrate the efficiency
improvement of autonomous intra-terminal barge operation and automated cargo
transhipment. SystProject B is demo 7 of the Horizon project and will demonstrate the
use of green hydrogen and lithium-ion energy packs providing electricity to an e-barge.
Both demonstrations are to take place on the same inland waterway barge.
SystProject A and B are managed as independent demonstration projects with
their own project managers and a few deliverables. Budget of the Horizon Project has
been allocated per partner who each have a respective task in the demonstration.
Submitting deliverables is done by demonstration project managers to work package
leaders who in turn deliver to the Horizon project coordinator. The coordinator is the
European port that facilitates all the demonstration projects. This port is in the division
of tasks regarded as a regular partner as all the other firms and institutions. Writing of
the masterplan is, for instance, also ‘just’ a WP running alongside the other nine.

3.3 Data & data collection

Out of the prior research, the structuring of context, content, and process of
change was developed. This is used to develop the structure of the data collection
process. Namely, with the objective of establishing an understanding of all three facets
of organizational change, three distinct groups of employees are to be approached.
The first are employees aware of the context of the firm. This can be upper
management, strategy makers, or sales employees close to SystCo customers. Then

34
there are the process employees which are the engineers that are hands-on involved
with the technological development in both demonstration projects. Such employees
are system and project engineers for example. Then finally, there is an in-between group
of actors. These are the managers that coordinate the demonstration projects and
communicate with upper management.
The three groups are the primary subjects for data inquiry that will give a clear
overview of the internal NPD and change processes. However, SystProject A and B are
the focus of this research. It is therefore valuable to get a better understanding of that
project contributing to the ‘process of change’ facet. Therefore, a second set of subjects
was selected based on their involvement in the demonstration projects as part of the
overarching Horizon project.
Firstly, there are the actors active in the coordination in the Horizon project. These
are employees of the facilitating port and include Horizon project coordinators, WP
leaders, and consultants. Second are the partners in the demonstration projects that are
partnering in the development with SystCo. These are employees of the partnering firms
and can be considered the hands-on employees of partnering firms.
This array of interviewee groups was structured in two interview sets. Set 1
includes all employees in SystCo covering the context, content, and process of change.
In Set 2, the external actors are interviewed and focus on the operation of the
demonstration projects. With this overview, the subjects were selected for participation
in the data collection process. Data collection was done by semi-structured interviews.
They are particularly suitable if only one interview with each interview participant is to
be scheduled (Rose, 1994). So, there must be efficient discussion of all the topics that
need to be addressed but, the participant is free to ‘ramble’. The interest is namely in the
interviewee’s point of view and should not be pushed to reflect the researcher’s
constructs (Creswell & Creswell, 2018)
Those subjects were selected by the purposive sampling approach. This allows
non-random, purposive sampling by the researcher and ensures inclusion of a wide
range of characteristics of interviewees (Creswell & Creswell, 2018). In practice, this was

35
done by mapping all the involved internal actors in the demonstration project, both the
engineers as the ones they report to, all the way up to the board of management (BoM).
Simultaneously, the external actors in the demonstration and Horizon project were
mapped. This gave an initial set of 14 interviewee subjects. More potential subjects were
inquired by using the snowballing effect in which the interviewer asked at the end of
each interview what fellow employees would be valuable to include according to the
interviewee.
Ultimately, a list of 40 potential subjects was constructed using this approach. 32
of them were approached via email with a brief introduction of the research and the
request to participate in a 1-hour, online interview. Each interview followed, in
accordance with Bernard (2013), an interview outline that structures the general
subjects to be covered. These outlines were made for each type of interview giving three
outlines for internal interviews: 1A, 1B, and 1C (Set 1) focussing on the context, content,
and process respectively, and two outlines for external interviews: 2A and 2B (Set 2)
focussing on the project participants and coordinators respectively. The interview
outlines for interview Set 1 and Set 2 are attached in Appendix 1 and Appendix 2
respectively.
Each interview was approximately an hour and started with a verbal explanation of
the data processing, privacy, confidentiality, and the request to record the interview.
After approval, the recording was started. This recording was used to make transcripts
of the entire interview. During the interview, the interview guide was adhered to, and the
appropriate probing notes were performed. In some cases, a finding of an earlier
interview was brought up as a probe, deviating from the interview outline slightly. Each
interview was concluded by inquiring general information about the subject (age,
gender, years in firm, years in function) and the subject was asked whether any
colleagues should be approached for an interview as well.
Table 4 shows the list of 22 subjects that were ultimately interviewed. The average
participant was 41.4 years old and had 13.1 years of experience its current firm.
Combined, the interviews generated 224 pages transcripts out of approximately 23

36
hours of recording. Furthermore, written notes were made during each interview and
supporting documents like project outlines, presentations, and technical specifications
were inquired throughout the interview process. The interview transcripts were the
central set of data.

3.4 Data analysis

To analyse the vast amount of data gathered in the 22 interviews, a clearly
structured analysis plan was derived. Because no standard format for a theory building
case study exists, an adaptation of a thematic analysis was developed (Eisenhardt,
1989). Many of these complex types of study are namely analysed in a tailor-made
manner or as Eisenhardt (1989, p. 540) puts it “there are probably as many approaches
[to case study analysis] as researchers”.

Table 4. Overview of interviewed subjects with ID and function title.

Interview ID: Title: Interview ID: Title:

Set1_1A_4 General Manager Set1_1A_8 President

Set1_1A_5 Senior Director Set1_1A_10 Vice-President

Set1_1B_1 General Manager Set1_1B_7 Director

Set1_1B_2 Vice President Set1_1B_8 Senior Project Manager

Set1_1B_3 Vice President

Set1_1C_1 Senior System Engineer Set1_1C_5 Technology Manager

Set1_1C_2 Head of Division Set1_1C_6 Chief Technologist

Set1_1C_3 Project Engineer Set1_1C_8 Project Engineer

Set2_2A_1 Project Developer Set2_2A_4 Project Manager

Set2_2A_3 Project Partner

Set2_2B_1 Project Manager Set2_2B_4 Program Manager

Set2_2B_3 Innovation Consultant Set2_2B_5 Project Lead

37
 The key value of the analysis is getting a thorough understanding of the case and
add as much structure as possible. In this study, a thematic analysis of the interviews
will be performed as this method allows for descriptive analysis output (Braun & Clarke,
2006). By forcing the researcher to follow a well-structured analysis approach, the
structure of the report will be clearer and better organized (King, 2004).
In this analysis, one typical pitfall of case study analysis needs to be avoided:
jumping to conclusions. People namely have the tendency to jump to conclusions based
on only small segments of the dataset and ignore statistical properties in doing so
(Kahneman & Tversky, 1973). Good comparison of per-interview data requires the
researcher to counteract this tendency. The data analysis is therefore divided into three
steps following the three thematic analysis phases by Nowell et al. (2017): (1)
familiarization and listing independent notes, (2) initial coding phase, (3) theme
development and final coding.
First, one of the most important elements of qualitative case study analysis is good
familiarization with the data. The interview analysis therefore starts with reading
through each transcript and making one-sentence notes in a spreadsheet overview in
accordance with the write-up’s method described by Gersick (1988). Each note will be
linked to an interview ID and page number but will not refer to any other interview
characteristic but its content. This way, bias towards function or personal relationships
is removed from the dataset as notes are disconnected form the interviewee.
After this step, a spreadsheet is filled with one-sentence notes extracted out of all
the pages of transcripts that is categorized in a context, content, process, Horizon
coordinator, and Horizon participant list. This initial structuring aids the overall fluency
of the analysis but is explicitly not used to limit the analysis freedom. Each note of a
comment of any interviewee can be filled in either category, regardless of the initial
category the interview was assigned to. For instance, a comment by senior
management about the engineering process will be filled in the process category.
Likewise, comments by engineers about the context of the firm are included in the
context category.

38
 Second, an initial coding phase is performed. Each note in the spreadsheet is
revisited and attributed a code based on its content. This code will cover only the subject
and action of the note leaving for instance: ‘standards & market uptake’. By doing so,
important sections of text are assigned an index that relates to a theme or issue in the
data (King, 2004). This initial coding step allows for easy browsing through the dataset
by filtering the spreadsheet based on these codes, aiding familiarization of the dataset
once more and offering necessary input for the development of themes.
Third is the development of themes. According to DeSantis and Ugarriza (2000, p.
362), a theme is “an abstract entity that brings meaning and identity to a recurrent
experience and its variant manifestations. As such, a theme captures and unifies the
nature or basis of the experience into a meaningful whole. These are not necessarily
based on the frequency or any other quantifiable measure but on whether something
important is captured in relation to the research question (Braun & Clarke, 2006).
In this analysis, the themes are developed with an inductive approach meaning
that themes are based on the data, not on the research question (Braun & Clarke, 2006).
However, a degree of deductive thematic analysis is present in the initial structuring of
the research and the dataset. The categories context, content, and process of change
that were used to structure the research are included as theme categories but extended
with any other categories of themes that result out of the data.
Following King (2004), themes are developed by starting with the initial coding list
and the notes made during interviews. By selecting one or several codes, a set of relating
notes in the spreadsheet are filtered and analysed. If these cover a common theme, an
appropriate theme is made and linked to the selection of the codes. This gives a theme
with several codes on which the theme is based which can be traced back to the notes
and in turn to the interview transcript and page number where the original quote can be
traced back. Performing these three analysis steps has developed 191 codes and 72
themes. An overview of all themes and codes is attached in Appendix 3.

39
3.5 Trustworthiness
In quantitative research, the quality of research is often motivated by determining
the validity and reliability of the research. In qualitative research, however, such
measures are difficult to motivate. Lincoln and Guba (1985) introduced the concepts of
credibility, transferability, dependability, and confirmability as measures of
trustworthiness, an alternative measure of research quality.
Credibility addresses the fit between the respondents’ views and the
representation by the researcher (Tobin & Begley, 2004). In this research, two measures
are taken to ensure credibility. Firstly, notes taken during interviews aid the researcher’s
understanding of the subject and are used to probe or challenge interviewees in the next
interview. This way, findings are tested over the duration of the research. Care is taken
to prevent bringing these subjects too early in the discussion to prevent polluting the
views of interviewees. Interviewees need to be kept neutral and are not to be educated
by findings during the data inquiry process.
Secondly, several sessions with the firm coordinator will take place during the
writing up of findings. With over 40 years of experience in the firm and heavily involved
in innovation, the coordinator is considered a valuable representative of the firm able to
assess the fit between research output and firm dynamics. If possible and necessary,
other interviewees will be approached to test the credibility of certain themes or
conclusions.
Transferability has to do with generalizing the inquiry as such that findings are
applicable to other cases (Nowell, Norris, White, & Moules, 2017). This feature of
trustworthiness is subject to interpretation as the researcher cannot know the situations
to which the research is to be transferred. The researcher can, however, attribute thick
descriptions so that the ones transferring the research can judge the transferability
(Lincoln & Guba, 1985). This is done by the researcher in the final report by including rich
descriptions and attaching as much data as can practically be attached to the report as
appendices.

40
 Dependability is achieved when another researcher can clearly follow the decision
trail (Sandelowski, 2004). This is best achieved by keeping records of all inquired data,
including field notes, transcripts, and meeting notes. In this research, the decision was
made to include the first and second university supervisor as close as possible. Regular
meetings addressed the decisions and preliminary findings on which the researcher
received feedback. All transcripts and recordings were shared with both the university
and SystCo supervisors. However, due to practical reasons, these are not attached in
the report. The codebook with themes is considered sufficient to prove dependability.
Finally, confirmability is achieved by proving that decisions are clearly derived from
the data (Tobin & Begley, 2004). Including the reasoning behind theoretical,
methodological, and analytical choices throughout the study to create an understanding
of decision making with the reader (Koch, 2004). This has been included in this research
by elaborating decisions as clearly and rich of context as possible, limited by ensuring
readability of the report. Moreover, in the case study findings chapter, the storyline is
elaborated at the hand of quotes from interviews. This clearly shows that the findings
are closely linked to the raw data while also adding to the credibility of the report.

41
4 Case study findings
In this chapter, the case study findings are elaborated in a structured matter. First,
the internal and external context of SystCo is elaborated along with the need for changes
in and outside the firm. This gives an understanding of the environment in which the
innovative activities take place. Second, a typical NPD process is described in which a
project with ecosystem actors plays a distinct role. This covers the stepwise process
from idea to a commersialisable product and the position of pilot and a type of
ecosystem project therein. Third and based on the example in the second section, the
inclusion of customers in pilot projects is explained. This introduces the role of a
particular external actor that characterizes pilot projects. In the fourth part, the distinct
value of SystProject A and B are elaborated in relation to the yet-covered project types.
This is done by elaborating what challenges SystCo aims to overcome in the the two
demonstration projects. In section four, the role of demonstration projects as part of the
NPD process in SystCo is concluded. Fifth, the knowledge creating process in a
demonstration project is elaborated shedding light on how the distinct value of such a
project is realized. Sixth, the absorption and application of that knowledge in SystCo is
explained which concludes how SystProject A and B contribute to the change process
in the firm. Finally, the chapter is concluded with several demonstration project
performance impacting factors as identified in the case study.

4.1 Internal & external context and content of change SystCo

In 2021, SystCo has about 18.000 employees in 200 locations across 68 countries
worldwide. The firm is listed on Nasdaq Helsinki stock exchange and largely (±20%)
owned by a family-controlled, industrial holding company with the next-largest
shareholder owning 5% of shares. 80% of the €5 billion annual net sales is generated by
the Marine Power (40%) and Energy business units (40%). Marine Systems generates
almost 15% of net sales leaving the remaining 5% by Marine Voyage.
SystCo has grown from an engine developer into offering complete lifecycle
solutions for marine and energy industry. The firm is divided into four independently ran

42
business units: (1) energy business, (2) marine power, (3) marine voyage, and (4) marine
systems.

Set1_1A_8 President, translated from Dutch: “So, you see, I kind

of have a holding company with a few separate business units that
totally live their own life to do what is good for them.”

This report will focus on the marine affiliated business units mentioned in above
quote as both SystProjects take place in these units. These marine business units
deliver system solutions to both shipyards and shipowners in the merchant, cruise,
offshore, fishing, yachts, special vessel, ferry, and tug markets. One in three vessels
worldwide run with SystCo technology onboard as the firm has about 60% market share
in the medium-speed main engines. In this marine business, SystCo primarily competes
with a few large firms with at least 10.000 employees.
Among the three marine-related business units, the largest business operation is
still the production of diesel engines. However, being a system provider, SystCo also
delivers – as part of a much larger product portfolio – ship propulsion alternatives,
transmissions, autonomy solutions, fleet optimization solutions, port management
solutions, engine power plants, and battery storage systems. Furthermore, to offer
entire lifecycle solutions, the firm offers service providing maintenance, upgrades, spare
parts, and training for example.
In November 2021, the firm held a yearly update for investors where it laid out the
new strategic roadmap for the business. It acknowledged that SystCo can play a key
role in the sustainability transition in the marine and energy industry. The firm therefore
positions itself as the enabler of the energy transition by developing sustainability
solutions such as carbon neutral fuels, logistic optimization technologies, and energy
saving technologies (Agnevall, 2021). The exact steps to take are, however, disputed
among employees.

Set1_1A_4 General Manager, translated from Dutch: “So, SystCo

recognized at an early stage that we need to do something with

43
 sustainability. But there are still arguments going on – and I’m stating
that carefully – on the upper layers about what the right strategy is,
how we are going to do that. […].”

Regarding the external context, the shipping industry SystCo operates in is a

worldwide operating business-to-business industry. Vessels sail intercontinental,
mooring at ports in different countries and thus subject to different regulatory bodies.
The United Nation’s agency IMO (International Maritime Organization) organizes
international safety, security, and atmospheric pollution prevention of international
shipping by setting standards.
Typically, the industry is regarded as conservative and slow changing. Two
industry characteristics are considered to be the cause of that. Firstly, the industry is
capital intensive with vessels each costing tens to hundreds of millions of euros and
operating with low margins. Secondly, vessels operate in the open ocean, far away from
shore and emergency response teams. Safety is therefore a prerequisite for each vessel.
Because of the capital intensity and safety emphasis, the industry is risk-averse and
therefore often on the conservative side of technological change.

Set1_1C_6 Chief Technologist: “Shipping is very conservative

because of high safety: if you are alone with the vessel on the ocean it
should work. And therefore, we are not too revolutionary usually.”

Adding to the complexity of SystCo’s innovative work is the fact that every vessel
is unique and developed in separate projects, no standard seagoing vessel exists.
SystCo is involved in those projects as a system solution developer and provider hence
the firm works closely with customers. The firm is therefore for its majority of operations
a typical project-based organisation supplying to a CoPS.

Set1_1C_1 Senior System Engineer: “So, every ship is unique, and

you have traits, different blueprints, and different applications where
you are working. So, you can’t compare it with cars or planes.”

44
 In recent years, energy sustainability has become the main topic between SystCo
and vessel owners. Therefore, while being part of the strategy since 2019, the firm has
put decarbonization at the centre of the updated strategy by striving to become the
enabler of decarbonization in the energy and marine industry (Agnevall, 2021). The
customers expect SystCo to develop these new innovations as the brand is regarded as
credible and powerful. Such characteristics are appreciated when insecurity is high in a
capital-intensive industry.

Set1_1B_3 Vice President Division Strategy: “The focus in the

past years and particularly 2021 has been setting the company on the
right path for decarbonization. I put decarbonization already in our
strategy in 2019 right after IMO in 2018 published the decarbonization
goals.”

To become the enabler of decarbonization, the firm must replace or adapt its
product portfolio to sustainable alternatives. That is a significant challenge for a firm
originally built on fossil-fuel based technology that still forms the biggest business unit
of the organization. Balancing the revenue of the old, polluting technologies with
investment in technology that is to replace that very technology is a struggle for upper
management, especially because SystCo is a listed company.

Set1_1A_8 President of Business Unit, translated from Dutch:

“As a listed company, we always need to balance investing in R&D to
have a future, but we also need to generate money for our
shareholders today. […] That balance is difficult, especially in
developing radical innovations with insecure business cases.”

Finally, SystCo consists of four business units that are in turn divided in subdivision
that largely operate as independent businesses with their own R&D, sales, engineering,
projects etcetera. This organization is the result of a series of reorganizations aimed at
better division and representation of technologies in the firm. New product development
R&D happens in or in-between divisions depending on the nature of the technology.

45
4.2 Position of ecosystem projects in new product development
To set the stage for discontinuous innovation, I will draw upon the new product
development roadmap elaborated in interview Set1_A1_10 with the vice-president of the
respective division. The technology is considered by the president of the business unit
as a radical innovation. This is a good example of a clearly thought-out development
roadmap as the division has experience with the development challenge. To ensure
secrecy of this prominent innovation, the following codes will be used in this section:
Technology A The current technology that the division sells
Product A The product that technology A is used with
Innovation B Innovation that is to replace technology A

Set1_1A_10 Vice-President of Division: “[Innovation B] has many

commonalities with the journey that we have done for [technology A].
Nobody had marinized that technology, we were pioneering that, and
we intend to do the same with this new technology.”

In this case, the innovation is to replace the current technology in the future and is
developed entirely in the same business division. The new technology is needed to give
the business unit a future. The development is therefore not subject to severe internal
resistance.

Set1_1A_10 Vice President of Division: “I think in general

employees are very excited about this because strategically what we
do is that we show that there is a future for us beyond the old
technology as well. […] and from that sense it has been easy to have
buy-in for this, not a problem at all.”

This same notion is expressed in the board of management by stating the current
technology is being phased out in the business unit in which the innovation takes place.
The development of a new product was based on determining how the knowledge of
the old technology could be exploited in the future.

46
 Set1_1A_8 President of Business Unit, translated from Dutch:
“[Technology A], yes, essentially that is a dying business because in
year X – I don’t know when year X is […] – but then nobody uses
[product A] anymore so who needs [technology A]? […] We looked at
our knowledge of [technology A] and saw that this new technology is
something important and similar. […] What we do is develop that for a
ship.”

In the next paragraph the typical development roadmap as applied in SystCo is

introduced along with the process of implementing this in the business division. This
will shed light on the project-based product development in SystCo and conclude with a
link to pilot projects where customers are included. Elaborating the role external actors
in the internal development roadmap.

4.2.1 Project-based development in SystCo: Innovation B

The development of innovation B starts with the existing knowledge base in the
firm that is selling technology A. An idea was formed to develop a new technology that
exploits the existing knowledge base, responds to the projected developments in the
industry, and is in-line with SystCo’s strategy.

Set1_1A_10 Vice President of Division: “When you look at all the

projections […] it will take a long time for shipping to fundamentally
change the energy mix compared to what it is today. And hence this
means that a technology like [innovation B] is something we think you
can apply in order to still achieve a significant reduction in CO2
emissions while burning the old, dirty fuels. […] It fits perfectly – in my
mind at least – in the decarbonization strategy of Systco as a group
and complements the other technologies we intend to offer.”

With this idea, the division started with basic R&D in 2019 to narrow down to one
specific technology that was thought to be best applicable and mature enough to be

47
developed for the marine industry. A technology was selected that has many similarities
to technology A. Then, in 2021, the board of management agreed with the division’s view
and bought in on this idea with a multi-million-euro investment into the technology. The
status of the project in 2022 is as follows.

Set1_1A_10 Vice President of Division: “We now have built up

this technology in our own test centre in Norway […]. It is a small-scale
plant, it is 1MW. We will be testing there continuously. […] And in
addition to this we will also start to do full scale vessel pilots. We’ve
signed the first agreement related to that with the customer and we
are in discussion with some other customers as well. We will
gradually scale up this technology, […] start with 1MW, the pilot is
7MW, and then we gradually move up in terms of sizes.”

Two requirements motivate the inclusion of customers in a pilot project. First, the
scale of the industry requires the pilot to be performed on a real vessel. The laboratory
is too small to test the real-life scale that is up to 80MW in size. Second, the inclusion of
customers was also a conscious choice by the board of management:

Set1_1A_8 President of Business Unit, translated from Dutch:

“With this innovation – and I believe this is the first time we did this in
SystCo – we went public with our intention of developing this
technology very early in the process […] because we want this open
dialogue with customers. First, to see if there is demand for it, […]
secondly, to see what the customer actually wants, and thirdly, we can
put something on-board […] but if you cannot get rid of the waste
anywhere in the harbour you have a problem. So, that whole
ecosystem needs to be built together.”

So, involvement of customers enables a dialogue between technology developer

and the customer that aims to align the product offering with customer requirements.
Next to this, the division is also engaged in another project aimed at developing the

48
whole ecosystem as introduced in above quote and acknowledged by the divisions Vice
President.

Set1_1A_10 Vice President of Division: “What we have done in

addition is that we have entered in a Norwegian government funded
consortium where we are looking at this technology from an
ecosystem point of view. We have one role there focussing on
[innovation B] on board the vessel, then other players […] are also
consortium partners in this development project. They look into other
parts of the ecosystem.”

The ecosystem project described here by the Vice President is similar to

SystProject A and B. It includes a number of actors from the ecosystem beyond the
customer and addresses the ecosystem-related problems in a demonstration project.
This shows that in a typical NPD process, distinct ecosystem demonstration projects
address ecosystem bottlenecks, in this case lacking infrastructure.
To conclude, in this NPD process three project types can be distinguished. First,
the internal project development stages of R&D and laboratory projects. Second and in
parallel to the laboratory stage are pilot projects where a customer is involved as an
external actor. Last and also in parallel to the R&D and pilot project, there is an
ecosystem project in which several external actors will demonstrate the ecosystem
aspect of the innovation crucial for the innovation to materialize. The laboratory, pilot,
and demonstration project happen in parallel, and each fulfil a distinct role in the NPD
process. These three project groups can be distinguished by the degree of external
actors included in them and are subsequently covered in the next three sections. First,
the internal development process contributing to the internal context of innovation is
elaborated. Second, the inclusion of customers is motivated by uncovering the role of
pilot projects in SystCo. Then, the distinct value of the demonstration project is
uncovered in relation to laboratory and pilot projects.

49
4.2.2 The challenges of discontinuous innovation in SystCo
Each project is based on a prior knowledge base and an aspired goal, the
processes inside a project create new knowledge until that goal is achieved. Then, the
project is concluded and there exists a new set of knowledge that is distributed to
subsequent projects. In internal R&D and laboratory projects, the knowledge creating
objectives in a typical project are technical where outputs are technical specifications,
system operation descriptions, and standards of developed systems.

Set1_1C_3 Project Engineer: “We need to also produce

documentation and concepts for further use in SystCo. […] We are
talking about technical specifications and also system operation
descriptions and that kind of thing. […] And to as high grade as
possible the standardization […] to have something we can produce
that will fit in maybe 90% of the vessels.”

Creating this knowledge is the technological objective of a project but, especially

in innovative projects, the goal is also to get the organization to own the new technology
and sell it. This process of getting business units to commit to an innovation is,
according to an experienced, innovative engineer, a major hurdle:

Set1_1B_1 General Manager Ecosystem Innovation, translated

from Dutch: “That is the hardest process in innovation. It is very easy
to say, ‘here I have a new sandwich’, and then it gets moved to a new
department. If you let go too quick, it falls on the ground; ‘not invented
here’. […] So, there is practically only one method to make those
transitions smooth and that is to involve them at an early stage to
show them the value and those kinds of things.”

Being developed entirely in one business division, the example of Technology B in

chapter 4.2.1 gives an example of how such early involvement of employees in
innovative work is applied in practice. Moreover, the adoption of the technology and

50
learning of required competences in the entire division is realized in a project-based
manner.

Set1_1A_10 Vice President of Division: “Initially, it is a very small

team, but we need to expand this knowledge across all our
operations. […] what we are doing is that we are gradually involving
people across the organization into these pilot projects […], we are
involving people from our design integration team and also
engineering teams with a project manager from our normal project
team. […] Then, when we get so far that we are about to install this
equipment on a vessel, then our service engineers who normally do
the hands-on work on-site will also be involved. They are now also
building up the system in the laboratories, so they are starting to get
some knowledge and competence around this.”

Complications arise, however, when the development does not take place inside a
business division. This is the case with more discontinuous technologies that do not
build as much on the existing knowledge base and hence an innovation moves between
divisions and is potentially dropped.

Set1_1B_1 General Manager Ecosystem Innovation, translated

from Dutch: “If you start with a project idea, it is not clear upfront in
what business unit or division that lands. For instance, for [innovation]
it took more than 2.5 years before a business owner stood up and
said ‘hey, that is mine’. That was even after we already had a delivery
project.”

In such cases, there is a need for internal persuasion of business divisions. This
act of getting someone aligned with your vision is internally referred to as ‘socializing’.
The vision may be an idea, or it may be participation in a demonstration project, as long
as it is about the further development of an innovation.

51
 Set1_1B_1 General Manager Ecosystem Innovation, translated
from Dutch: “I need to sell my project again, and with [innovation] I
have done that thirty times, literally, […] by drinking coffee and starting
about the main goals of the firm […] and to translate that on his level
and say ‘hey, if you do this you have a chance that your stake in the
firm grows’.”

Furthermore, to continue development of the technology on each development

stage, support of upper management is needed. Support for an idea or next step is
gained by aligning it with the firm’s strategy and the industry’s projected change, as
stated by a Vice President. Below observation is an example of an investment request
in a new laboratory environment which was ultimately granted.

Set1_1C_1 Senior Systems Engineer: “Last year, my boss had the

idea and pitched it towards the CEO of our division: in order to be able
to deliver as expected regarding our roadmap or vision, we need to
have a platform to trial and error and develop [….]. It was a back-and-
forth and it felt like it was too costly.”

So, there are four internal processes that are at play in the technology development
process: (1) the creation of technical knowledge as development objective of a
laboratory or R&D project, (2) socializing innovations with business divisions for them
to take ownership, (3) distribution of knowledge in division by involving more disciplines
in each stage, and (4) socializing ideas and plans with upper management to get
approval and support. The NPD project owner is an individual in the SystCo organization
who takes the lead in these processes.
The later knowledge base that concludes an NPD project is what forms the prior
knowledge base for the subsequent stage. As such, this is a repeating process in which
with each step the number of employees involved is increased until the project is
deemed to be finished.

52
 If the NPD process develops discontinuous innovation, the difficulty of getting
internal support from leaders and colleagues rises. This is caused by the greater
distance between the prior knowledge base and the later knowledge base hence
envisioning that later knowledge base is harder. Not only from a technology perspective
where a radical idea seems unfeasible, but also from a commercial perspective where
the business case of such ideas cannot be made easily. Convincing employees and
people of the value of this technology requires more extensive communication to
overcome the knowledge gap.

Set1_A5_Senior Director Rapid Innovation: “To socialize an idea

with radical, discontinuous innovation, you basically have fewer
options to socialize an idea that you get acceptance for it so that you
get funding for implementation and so on. […] You have to stand
behind your innovation and whenever it gets challenged you have to
put your communication energy and maybe investing resources into
proving the nay-sayers are wrong.

4.3 Inclusion of customers in projects

Internal NPD projects and their dynamics are important. Technological
development progress in R&D and laboratory projects is used to develop the technology
and communicate to colleagues and superiors. This chapter will extend the
understanding of NPD project stages by addressing what the role of customers is in
pilot projects.
Customers are an important source of information to verify whether there is
demand for an idea or innovation hence the decision of upper management to involve
them in early phases. There is even a ‘rapid innovation’ division with the task of
communicating ideas with customers to test whether that idea is worth pursuing. Pilot
projects are, however, in a stage where the idea has been socialized already and the
objective is more in proving technical performance. Inclusion of customers in pilot

53
projects is therefore very much about the vessel they own and being able to develop a
solution for that real-life environment. The learning goals of a pilot project are clearly
listed by a Vice President:

Set1_1A_10 Vice President of Division: “When we scale up, we

would like to make sure that the same performance rates are still valid
[…]. We would also like to make sure with the pilots that this is a
technology that is fit for purpose. Meaning that a ship is a way
different environment compared to a test laboratory on land.”

Two technology development objectives can be identified based on this: (1)

making the technology scalable and (2) making the technology applicable in an actual
vessel. The first objective is confirmed by several engineers who emphasize that there
is a clear task of developing the technological solution along with a degree of
standardization. The real-life environment of a pilot-project gives engineers an insight in
what is actually demanded of the technology, what environment it is subjected to, and
where standardization is possible and required.
The complexity of the vessel is related to the second technology objective: making
the technology applicable in an actual vessel. This is the step from laboratory to
installing the technology in real life. This concerns the technology interfacing with other
systems onboard but also the effects of the innovation on ordinary operations as one
engineer involved with autonomous system development mentions:

Set1_1C_1 Senior System Engineer: “Because if you have

onboard crew, if something breaks or if something is misfunctioning
on board, you have the crew who can take action. So, the human
element is for sure not only creating human errors, but also creating
human solutions.”

This is a clear example of how the introduction of an innovation can have a

significant impact on the operations of the vessel. This impact increases as the
innovation becomes more discontinuous, both in technical as in operational integration.

54
Solving this problem is a key aspect of engineers that work on such discontinuous
innovations and one of the main reasons why real-life pilots need to be undertaken.

Set1_1C_2 Head of technology group: “Well, I don’t think it is that

easy because things will interact in probably very surprising ways
once we start wiring them together. Completely new problems will
emerge. We don’t know what we don’t know to quite some extent.”

Developing a system on-board an actual vessel enables engineers to discover and

resolve issues in a real-life environment. The outputs of these type of projects focus on
the technology development similar to laboratory projects but address a higher degree
of complexity and greater emphasis on standardization. This has to do with the real-life
implementation and the uniqueness of every vessel.
As the technology becomes more innovative, the complexity increases further, and
situations emerge where the unknowns are unknown. This is caused by unpredictable
interactions with neighbouring systems in the CoPS and operational demands that can
only be discovered in real-life projects. As the innovation discontinuousness rises, the
technology development project’s dependence on the external environment increases
as well. Information from external sources is needed to understand what the actual
problem is and how the innovation and real-life environment respond to each other.
Therefore, inclusion of the real-life environment with customers is necessary for the
development of an appropriate solution.

4.4 The distinct value of SystProject A and B

So, inclusion of customers as external actors in a project offers engineers an
environment where scale and real-world complexity can be addressed along with
verification through customer dialogue. In this chapter, the distinct value of
demonstration projects is uncovered by determining what distinct value SystProject A
and B offer SystCo compared to previously elaborated R&D, laboratory, or pilot projects.

55
 There are two characteristics that distinguish demonstration projects SystProject
A and SystProject B from a pilot project, namely: (1) a wide variety of actors participates,
and (2) the demo takes place in a light-rule environment. These two characteristics offer
distinct opportunities to firms and come in addition to the subsidy involved.
Subsidies are namely not a distinct value of either SystProject. It affects the risk-
level of an innovative project regardless of whether it is a pilot or a laboratory project.
The cost of failure is namely reduced by the subsidy involved. This allows a firm in an
innovative project to work on a more discontinuous idea while being subject to the same
risk when developing a more continuous idea in a pilot project. This need for subsidy
grows with the discontinuousness of the idea since SystCo, as a supplier to CoPS, is
inherently linked to customers for any real-life experiment to take place. Subsidy is thus
not a distinct value of a demonstration project but is an important factor in the analysed
case.

Set1_1A_8 President of Business Unit, translated from Dutch:

“Don’t forget that the customer must provide its vessel and can’t sail
for maybe a week because it needs to be installed. So, I think that
subsidies are not only good for us [SystCo] to get a push in the right
direction, but also that […] the customer is compensated for the risk
that he takes. For [Innovation] it was difficult to find a pilot, until we
got subsidy.”

Subsidy thus influence the degree of risk the firm is exposed to in pursuing
discontinuous ideas. But with increased discontinuousness comes increased external
dependence. So, what becomes apparent is that carrying the financial risk is one thing
but being able to overcome the technological challenge is another. Adding subsidy to a
demonstration project may get customers to allow more discontinuous innovation on
their vessel, it does not decrease SystCo’s dependence on external knowledge. For this,
the partnership in the project is required.

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 Set1_1B_8 Senior Project Manager: “You could then argue that
‘Hey, SystCo, if you have so much money you just develop it yourself!’,
but […] that is not the problem. You need to have a common
understanding and to understand when which technology is going to
be brought to the market.

This Senior Project Manager introduces what appears to be the biggest innovation
challenge for SystCo. The problem is not the technology development, the firm is able
to do so. It is the fact that the success of the technology depends on the right steps
taken by all the required actors at the right time. This refers to ecosystem innovation
view by Adner (2006), stating that the success of a firm holding an innovation depends
on the supporting efforts for innovation implementation by others. The same manager
continues:

Set1_1B_8 Senior Project Manager: “Part of this ecosystem

understanding in the value chain is of course uncertainty; which will
be the solution or solutions if we are to get rid of fossil fuels by 2050?
[…] We need to get our head – the ecosystem head – around which
parts are we to bet on first. We need alignment here throughout the
value chain. All the way from energy sources, logistics, storage,
bunkering, operating, etcetera.”

Getting the ecosystem head around what steps to take is a reoccurring goal.
SystCo can produce ideas for innovations that can enable zero-carbon shipping, but it
is the working interface with the value chain and other ecosystem members that
enables success. The actors seemed to look for what steps to take and when.

Set1_1C_1 Senior Systems Engineer: “The thing is that there are

many unknowns and probably as many unknown unknowns out there
that need to be addressed. This is easier if you have a bunch of
people working from different parts of in this case Europe and
different backgrounds like academy, industry, operators, and have

57
 different tasks within the project so that you need to interface with
them and you need to explain your work to them for them to
understand and have a working interface.”

So, the collaboration in the demonstration project is the distinct property that
creates new knowledge valuable for the development of discontinuous innovations. It
manifests itself as alignment between interfacing systems and actors. By developing a
solution together with the actors with which you interface, you develop new ecosystem
configurations addressing a mutual goal.
The second distinct feature of a Horizon project facilitates development of
discontinuous innovations furthermore. The demonstration is namely developed in an
environment where governments and classification will exempt the demonstration from
certain, existing rules. The demonstrator actors still need to ask for permission but,
because the demonstration will not be used for commercial purposes, Horizon project
coordinators expect to get permission.

Set2_2B_5 Project Lead: “We just need permission of the

ministry; we can’t get around that. Until now we have a green light in
the sense that there are possibilities for permission. […] We will see
what actually happens, but we expect that, because we are not sailing
commercially, that we will succeed.”

So, in summary, the demonstration project is an environment where actors receive

subsidy that allows them to explore more discontinuous innovations by working
together with actors affected by the innovation. However, this applies to any type of
project. Collaboration and exemption of existing rules are, however, distinctive
characteristics. The collaborative work focusses on aligning ecosystem innovation
actors that will ensure that the technological innovation is supported in ecosystem
efforts. Such ecosystem restructuring and the discontinuous innovation itself often
clashes with existing rules. For this reason, innovations demonstrated in SystProject A
and B have to adhere to rules less strictly and can get permission from governments

58
more easily. Demonstration projects are a collaborative, experimental environment
comparable to an exploratory project.

4.5 Knowledge creation in Horizon projects

Demonstration projects have some unique traits and they can be considered
exploratory projects. The question that follows is what knowledge creation processes
take place in such projects. in the demonstration project, the demos are in the lead as
those are the primary objective. Knowledge generated in demos is reported to the
project coordinator which uses the findings to reach the overarching Horizon project’s
goal of writing a green ports master plan. This creates an environment where demos
work independently towards their own goals with their own project leader, milestones,
and challenges. The Horizon project coordinator is just a regular project partner in the
hierarchy of the project organization.

Set2_2B_1 Project Manager, translated from Dutch: “All parties

are equal partners in the project, there is no hierarchical top-down
structure. And to make that manageable, demos are leading. […] We
[project coordinator] are not ultimately responsible, only for ensuring
that the deliverable [Master Plan] is made, which is organised in
[Horizon Project] as a work package.”

Each of the demonstration projects is thus an independently ran project within the
Horizon project. The demonstration projects do not report to the Horizon project
coordinators, but they do have deliverables that are to be met. This is for instance to
deliver reports to the project coordinator as input for the masterplan, as well as a half-
time and full-time reporting of the standings.

Set2_2B_1 Project Manager, translated from Dutch: “Within

workpackages and demos, deliverables are defined. These are a few
reports, not too many, that run through the project and eventually

59
 there is a half-time report of the standings and at the end of the
project as well.”

So, as demonstration projects operate independently, the knowledge creating

process in the Horizon project takes place inside the demonstration project themselves.
The actors in them focus on their own goals. In this research, two such demos had
SystCo as a partner. The demos had, in accordance with the Horizon project
organization, independent goals. One was developing a new technology for green
propulsion, the other developed an autonomous sailing solution. Both followed the
same knowledge creating approach: learning by doing or as Horizon project
coordinators call it, ‘a living lab’.

Set2_2B_3 Innovation Consultant, translated from Dutch: “That is

why a project like Horizon project is so good because others do the
work and the [Coordinators] facilitate it. That is the living lab. Let the
port be the lab where all these things are tested by [firms].”

The living lab is thus the playground where demos are tested. Partners will do so
in a 2-step approach of firstly developing the technology and then running the
demonstration. For this reason, the Horizon project included technologies that were
sufficiently mature to be demonstrated within the timeframe of the project.
The first step of the project is realizing the demonstration. The magnitude of this
effort depends on the maturity of the technology. This development is, in both
demonstration projects, performed by SystCo who can be considered the holder of the
innovation. But, between the two analysed demonstration projects, SystProject B was
relatively immature which created insecurity about the demonstration event taking
place.

Set2_2A_3 Project Partner, translated from Dutch: “But, I thought

we could do research with technologies that already existed, call it
applied research, looking at how the building blocks fit together.
Building blocks of which we thought that they would be more mature.

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 This has to do with standards. […] Now it is more about if we can get
the technology ready in time.”

But supposing that the technology is developed in time and runs in the port
environment, then the second step of real-life testing can be done. This real-life
application serves two learning goals of SystCo. Namely, to uncover whether the
technology works technically and financially as well as how it impacts the ecosystem.

Set1_1C_Head of Division: “Firstly, the demo is to prove that it

actually works […]. Electrifying the thing and getting the people of it,
that is the hypothesis. Let’s see if that actually works technically and
financially. The next thing is, how does it impact it’s – it is a trigger
word – ecosystem? […] Because it is not an isolated product, it is a link
in a chain.”

Firstly, there is the technological and financial verification of the technology. In

case of SystProject B, these learning objectives were predominantly technical. The
primary objective was to test whether the technology works, works together with other
technologies, and whether there is a new business case in it.

Set2_2A_3 Project Partner, translated from Dutch: “We thus have

the goal to prove no-regret – or disprove it, that is also possible. […]
And secondly there is [a potential new business model]. And three, you
could say is the connection with other [innovations]”

So, in terms of technology there are clear objectives. The technology needs to be
developed and once developed the demo will show if performance is as expected. The
more complicated learning goal is to test what the impact is on the ecosystem. This
ecosystem testing can be divided into two target groups, namely the directly and
indirectly affected actors.
The directly affected actors are those that are affected by the innovation in their
daily work. Either as an adopter or because of an interface with the adopting actor. For

61
instance, the port terminal that loads cargo on an autonomous inland waterway vessel.
This can be considered as the supply chain in which the innovation is adopted. The
challenge is namely to find a configuration of technologies and operations in which the
innovation is good business. For this, the whole supply chain needs to share the added
value.

Set1_1B_8 Senior Project Manager: “We have to identify where it

is good business and in the entire value chain, we are not alone here.
And also how we share this added value in the entire value chain, I
think that is a very important aspect. That all parties in the specific
value chain make this to be good business.”

This concept of innovation being made cooperatively into good business

mentioned by the Senior Project Manager echoes the notion of Van de Ven (1986)
stating that the materialization of an innovation requires multiple actors to adapt
operations for the innovation to be valuable. In SystProject A, this rearranged supply
chain organization is defined as a use case. A configuration of technologies and
operations in the supply chain wherein the innovation makes sense and is profitable.

Set2_2B_5 Project Lead, translated from Dutch: “How can that

[harbour logistics] change with the deployment of an autonomous
vessel? […] Because the stake of the terminal to receive such vessels
and the possibilities that it offers, those are the use-cases that are
directly affected by the business drivers and thus the operational and
financial result. […] With our demo, we want to work with use cases
and make claims about that. So, based on research […] defining when
it is interesting for a big deep-sea terminal to receive these ships.”

A use case can be considered a product of the Horizon project. They give grip on
the scenarios, as above cited project lead states. In SystProject A, the actors plan on
engaging with the directly affected actors in workshops.

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 Set2_2B_5 Project Lead, translated from Dutch: “We have
workshops with them [actors in use case], for instance with terminals.
We invite demo partners […] and then we get together as a group and
have a workshop with deep dives. Really drawing on a board, writing,
somebody presents his ideas and is challenged. Then we make
choices like ‘what makes the most sense?’.”

This is the first of two ecosystem alignment mechanisms that focusses on directly
affected actors. The second focusses on the indirectly affected actors. These are actors
that are not directly in contact with the innovation but limit the ecosystem in
materialization of an innovation, conflicting regulation or lack of classification approval
for example. SystProject A and B are used to signal to these organizations, either just by
showing or by actively involving actors in the periodical demonstration project meetings.

Set1_1C_3 Project Engineer: “You will have the demonstration

and then you got some exception from the rules. But if you want to
build a series of this, then you need to have the class approval. […]
Now we are involving the authorities, presenting the solutions to them
[…] the technology also has to mature for them.”

Ideally, the result of involving indirectly affected actors is the removal of external
barriers. These are, as mentioned in the context description of SystCo, regulations,
classification, and to a certain degree infrastructure. The Horizon project has a distinct
workpackage for the communication, stakeholder engagement, and dissemination of
findings. An example of such engagement is participation of policy advisors in
demonstration project meetings.

Set2_2B_3 Innovation Consultant, translated from Dutch: “I have

had projects where a policy advisor joined a meeting to learn and see
what we were doing and what impact that can have on policy. […] And
when you can really show that regulation on certain aspects is

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 necessary […], then they are always willing. It only takes 5 to 10 years
before it is done.”

So, the knowledge creating process in a Horizon project takes place in the
demonstration projects that are ran as independent projects. In a two-step process,
SystProject actors will first develop the technology and then the demonstration will run
in a living lab environment. From this demonstration, two main learning goals are
defined: (1) technology and financial verification and (2) ecosystem innovation.
Technology and financial verification is similar to the technology verification in a
pilot project but is more experimental. Primarily because a pilot project takes place on a
commercially operating vessel while the researched demonstration takes place on a
vessel without direct commercial goals. Second, the innovation developed in the
demonstration project concerns more discontinuous innovation hence the learning is
more closely related to understanding the situation, the challenge, and the value
proposition than about performance improvement and standardization.
The second goal, ecosystem innovation, exists out of two elements. First, the
directly involved actors that engage with the innovation are to be included. The goal with
this group is to identify how the innovation can be made into good business in the entire
supply chain. This is explicitly tested by testing different use case configurations
determining how operation configurations can be adapted to exploit the innovation. This
is subject to the discontinuous innovation paradox by Lynn et al. (1996) as the outcome
depends on the shape of the technology and vice versa. This ecosystem impact is
achieved in worksessions with a set of the directly affected actors.
Secondly, indirectly involved actors are ecosystem actors that are not affected by
the innovation but impact its materialization. Especially regulation and classification are
considered innovation barriers hence actors who impact these rules are to be involved
in the project. A separate workpackage in the Horizon project engages in this effort and
an example of the ecosystem impact method is inclusion of policy advisors in
demonstration project meetings.

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4.6 Demonstration project value for business case development in SystCo
SystProject A and B offer an environment where discontinuous innovations are
developed in collaboration with demo partners and demonstrated in a real-life
environment. In this type of demonstration project, the actors indicate that technological
and financial verification and ecosystem innovation are two goals. This distinguishes
the demonstration project from both a laboratory and pilot projects as a type of
exploratory project.
The absorption of that knowledge in SystCo is also separated into two goals:
technology understanding and ecosystem alignment. The first step is namely to develop
the technology for the demonstration and to verify whether the design is performing as
expected, meeting customer demands, and creating significant financial benefits. This
is a feedback loop on the assumptions made, technology design, and dimensioning.

Set1_1C_8 Project Engineer: “One part of it is that we are

interested in how the equipment behaves but we are also very
interested in the actual profile of the vessel: how is the vessel used?
[…] We assume that the vessel will sail for this period within a few nots
[…] and those kinds of things. But to actually see the loading of the
engines and how it is actually used is also very valuable information.
[…] So, the demonstration period is feedback on the design and
dimensioning.”

So, technological feedback is about inquiring real-life data. This data is codified in
technology reports like system descriptions and technological system specifications.
There was, however, no distinct reporting about the real-life performance in demo
projects mentioned by the interviewees. The SystProject plans did, however, mention a
field experience review as an action. Technology verification is therefore considered to
be similar to technology verification in pilot projects yet with greater emphasis on
creating a better understanding of the challenge and verification assumptions made in
the R&D and laboratory phases of NPD.

65
 Financial verification is codified in the development of business cases and value
propositions with which commitment to a follow-up development stage can be
motivated. This relates to developing a greater internal understanding of the innovation
and the implementation in a real vessel, which is considered by innovative engineers to
be a significant challenge.

Set1_1C_2 Head of Division: “But even to a bigger extent

internally for the learning [as opposed to external communication of
performance]. […] So, there is great value in internally showing like ‘oh,
ships still exist in their majority of parts made out of steel and there
are still quite some things that rust away, which are getting dirty,
which leak, which make noise, and spill things. And you also have to
get that under control.”

A demonstration project therefore not only shows the real-life complexity of

implementing the innovation, but it also sheds light on the problem. Discontinuous
innovation is namely an insecure undertaking and, as previously addressed, a large
internal knowledge gap is present. Addressing that knowledge gap is about identifying
unknown unknowns so that technology and business model development can take
them into account.

Set2_2B_1 Project Manager, translated from Dutch: “We are

doing this with maybe all innovations we are doing now, we report
very clearly what we know and don’t know. Because I think that those
gaps in knowledge, by identifying those, which is done by the
demonstrations, […] that is part of the whole learning we establish.”

With this greater understanding of the problem, a greater understanding of the

needs of the innovation and the appropriate value proposition is established. Developing
that value proposition is what enables actors in SystCo to develop new business
models.

66
 Set1_1B_General Manager, translated from Dutch: “As you are
getting a better understanding of how you can develop better
solutions, your ultimate value proposition is sharpened.”

So, in the internal NPD process of SystCo, the demonstration project contributes
to development of better business models by creating a better understanding of the
challenge.
The second learning dynamic is in ecosystem alignment. The collaborative nature
of SystProject A and B creates dialogue between ecosystem actors that enables
ecosystem solutions. This type of solution is one in which the benefit of the innovation
is shared throughout the supply chain, which is considered a prerequisite for success.
If one link in the chain does not support the innovation, that actor is not willing to adapt
its operations to it and the innovation is not able to materialize.

Set1_1C_2 Head of Division: “This concept is going to have

effects outside its own system. So, if the environment outside the
system is not to a minimum extent supportive of it, it’s not just not
going to work, it is going to die before it starts living.”

Codification of this alignment is, again, in the development of the right business
case. The key is to identify the solution with mutual gain instead of optimizing for the
sub-problem that SystCo addresses. Data of the demonstration project is gathered and
used as motivation of an improved business case. This in turn can be used internally to
mandate further commitment to next phases of the NPD process of that innovation.
The same counts for the alignment of indirectly affected actors. A major
bottleneck for discontinuous innovation is namely conflicting rules or the lack thereof.
Demonstrations by its experimental nature are environments where the innovation also
matures for regulatory bodies. Because regulation and classification are in place to
ensure safety, innovation maturation mainly relies on proving the safety of the solution.

Set1_1C_8 Project Engineer: “It is not only a technical

development, there will also be some rules and regulations. Since this

67
 is new, perhaps the rules are not complete, or they don’t exist. So, it is
a lot of work on risk-based approach […] we have to evaluate the risk
and the mitigation and stuff.”

A very clear output example is the development of a new standard or law. In

SystProject B’s prior NPD stages, the safety concept philosophy was included by a
government organization into new regulation after demonstrating the innovation. So, by
engaging in a demonstration project and showcasing innovative efforts, SystCo can
have an impact in the development of new regulation and new classification.

Set1_1B_1 General Manager, translated from Dutch: “We did that

[safety study] for the [innovation]. […] We described 110 events. The
nice thing is that the Dutch government has made documents […]
following the same logic. They made 20 scenarios of things that can
go wrong and attached 84 risk-mitigation measures to those.”

The last absorption mechanism related to ecosystem alignment is the signalling

value of the demonstration for brand image. By engaging in a high-profile Horizon
project, the supply chain and other actors in the ecosystem learn about the
developments that SystCo is working on. SystCo uses the engagement in Horizon and
similar projects as marketing material to positively impact the perception of the brand
in the industry.

Set1_1C_8 Project Engineer: “We just had this exhibition in

Norway […] with many ship owners, suppliers, and shipyards,
internationally. So, these [demonstration] projects were presented
there.

So, in summary, there are two internal learning dynamics. First, there is technology
verification through logging data of the demonstration period and feeding this into
technical reports. This verification does not only focus on the technology, but it also
focusses on clarifying what the actual challenge is. Second, is alignment of supply chain

68
actors about what solution is supported throughout the chain which improves the
understanding of the challenge from an ecosystem perspective. This is codified in
developing better value propositions and business cases that have a greater chance of
success.
There are three learning dynamics towards the ecosystem that does not directly
codify in an internal product but contributes to business case development of SystCo.
First, the internal refinement of the value proposition is a product of supply chain actors
understanding how reconfiguration of operations can exploit the innovation. Ecosystem
actors learn from the demonstration project so, there is a clear user exemplification
dynamic that is achieved in demonstration projects.
Second, through demonstration projects, discontinuous innovation barriers can be
addressed. For example, regulation change that can be mandated by proving a solution
is safe in a demonstration project.
Last, the demonstration project improves the brand image of SystCo with
ecosystem actors. This includes branding with ecosystem actors that SystCo did not
previously collaborate with. It is thus a form of network building. Showing to the industry
what the firm is doing impacts the valuation of the brand. Successful demonstrations
can be expected to improve the value of SystCo.

4.7 Demonstration project performance factors

To conclude the research findings chapter, this paragraph will address the
identified factors that impact demonstration project performance. These are based on
comments made by Horizon and SystProject coordinators, SystCo employees, and
SystProject partners. In general, these factors impact commitment and collaboration
performance.
Four positive factors were identified in this research. First, having a mutual goal
and stake in the project is a prerequisite for fruitful collaboration. If actors in a
demonstration project or in the entire Horizon project acknowledge what the greater
vision is and want to book success in that mission, very constructive partnerships are

69
established. The mutually acknowledged higher goal facilitates an environment where
actors strive for mutual success. This relates to the ecosystem innovation goal of
finding a solution that meets the higher goal and benefits all actors.

Set2_2B_4 Program Manager, translated from Dutch: “We work

together very well, and the demo partners know what the overall goal
is, and we want that to be achieved. Partners are doing their best to
regard it as ‘how are we going to achieve this together’.”

Second, to improve the knowledge creation process, demonstration projects

should attract a set of actors with different backgrounds. This brings together very
different knowledge bases that recombine into creative ideas. Having actors with the
same background in one project will limit the degree of creativity. This is considered
important as the development of discontinuous ideas demands creative solutions
across the entire ecosystem.

Set2_2B_3 Innovation Consultant, translated from Dutch: “I’ve

been in many of these projects and sometimes you are in one with
people from the same sector. That is less innovative than when you
have projects with many different sectors because they are curious to
see how the other does things.”

So, having multiple sectors in one demonstration project creates diversity of

knowledge and thereby a more fruitful environment for innovation. The third success
factor urges the actors to be open to that knowledge and for coordinators to facilitate
collaboration. One important aspect in this regard is creating an environment where
actors are not anxious to share information with the risk of losing intellectual property
rights. In a Horizon project and often in other publicly funded projects as well, this is very
clearly addressed in the project agreement to make sure that actors can freely share
information without losing the ownership of the information.

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 Set1_1B_7 Director: “These EU funded projects have quite
general terms and nearly always it is that each of the connected firms
owns the IP they created. […] In addition, there is the NDA clause as
part of the agreement. So, what is disclosed under the agreement is
not considered public material. And if you do that, it is completely ok
to co-innovate and each of the companies can have their own part of
the value chain.”

It must be noted, however, that what is disclosed under the agreement is not public
material but performing the demonstration is. So, patent filing should be done before a
demonstration is ran with the public as is the case with any internal development
undertaking.
Lastly, it is recommended to remain flexible. Discontinuous innovation is about
defining your roadmap as you make progress. Finding out that a direction that you
previously deemed rich in potential may turn out to be sub-optimal during the project.
So, the goal that was defined in the project proposal may become less valuable and the
project coordinators should be flexible to change it. This will ensure that the project
outputs are of greater value. In the case of SystProject A and B, this does require
European approval, but the European Commission is always willing to adjust if
motivated clearly.

Set2_2B_3 Innovation Consultant: “The most important ‘don’t’ is

to not stick relentlessly with what we wrote down two years ago, what
we would like to do. Innovation and research means that you have to
adjust your work, and you can. You need the European Commission
but you can. […] Small adjustments are always accepted if you
motivate them clearly.”

Three performance limiting factors of demonstration projects were also identified.

These factors impact the commitment or collaboration performance in the project and
were extracted from compliments or complaints about the project made by participants.

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 First, conflicting interests between actors in SystProject A and SystProject B may
hamper each demonstration project’s output. This may be due to two actors being
(partial) competitors or a conflict of interests due to ownership stakes in participating
start-ups. In both cases, there is a pollution of the collaborative efforts as partners are
weary of sharing information or assets. Either because that information contributes to
a competitor’s performance or because there is no mutual trust.

Set2_2A_1 Project Developer, translated from Dutch: “I don’t feel

like we can’t share certain things because we are competitors, but we
do have opposing interests. […] A partner says ‘we want to test real-
time with the system, we want to run it’, and we’ll say ‘forget it’. We
have a contract with a customer that we need to comply with. Plus,
we have our own revenue model behind it and that needs to continue,
it is our business.”

This can be overcome through open dialogue with partners to address possible
conflicting matters. A lot of trouble is expected to be due to a misunderstanding of the
project goals and the partners role in achieving that. Being open to each other supports
a better dialogue and prevents a conflict to emerge at the start of the project.

Set2_2A_1 Project Developer, translated from Dutch: “People

from all partners should have been in the negotiations prior to the
project. Many decisions were made in the rounding up of the grant
agreement while we weren’t sitting at the table. […] I think that good
stakeholder management […] is a prerequisite to starting a project in a
good manner.”

Second, there is the commercial goal of partners. While every actor engaging in a
demonstration project has an aspired commercial gain, that commercial aspect can
pollute the research efforts in the project. If, for instance, the demands for the
technology demonstration are defined by a commercial gain one actor has, that may

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limit the explorative value of the project. There needs to be a balance between the
commercial goals and the exploratory efforts.

Set2_2B_1 Project Manager, translated from Dutch: “I strongly

notice that partners think in solutions. So, not from an innovation,
research, or ‘let’s make something experimental’. No, organisations
are, especially on the commercial side, very focussed on results and
solutions. And what I see is that this is quite challenging because you
run into certain things, also into limitations.”

So, the project should ensure an environment where actors with different
backgrounds can freely collaborate with a common goal in mind while also being flexible
regarding that goal. Participating actors should be free to pursue commercial goals but
can contribute to better project performance by approaching it as a research project.
Lastly, good stakeholder management prior to starting the project can prevent conflicts
in the project at an early stage.

4.8 Summary: the characteristics of SystProjects in SystCo

Table 5 provides an overview of the three types of NPD projects that were identified
in SystCo with the appropriate characteristics that define them. It attempts to put
SystProject A and B as demonstration projects in a comparison with alternative projects
and as such determines what the distinct value is that the demonstration project offers.
These characteristics encompass firstly the two distinct properties of demonstration
projects namely (1) the involvement of a diverse set of actors and (2) the light-rule
environment. Furthermore, the operational environment is included to highlight that the
real-life nature of the demonstration project similar to a pilot project.
The commercial nature is like a laboratory experiment as the demonstration itself
is not purposed for commercial operation. The nuance here is that the analysed
demonstrations that showcase autonomous and electric shipping are to take place on

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 a real vessel. So, while the demonstration itself is not to operate commercially,
there is still a customer involved that will provide a vessel and as such an indirect degree
of commercial focus.
The goals and expectations of a demonstration project are, again, a mix of
laboratory experiment and pilot project goals. The real-world environment enables

Table 5. Characteristics of laboratory experiment, pilot project, and demonstration project in NPD process.

Laboratory Pilot project Demonstration project

experiment

Environment Confined, controlled Real-world environment Real-world environment

environment

Commercial Not commercial Commercial Demonstration itself is

focus not commercial

Relation to Not directly subject Subject to all regulation Possible exception from
regulation to regulation or and classification (some) regulation and
classification classification

Directly SystCo and suppliers SystCo, suppliers, and SystCo, suppliers,

involved customer customers, various
actors innovation ecosystem
actors, and (research)
institutes

Goals/ Mature technology Uncover real-life and Technology & financial

expectations for real-life scale effects, develop viability verification,
application, both standards, inquire define ecosystem, create
experimental as customer feedback ecosystem alignment
commercial and solve bottlenecks,
signal to indirectly
affected actors

Outputs Technology Technology Improved value

specifications, specifications, system proposition, supply chain
performance descriptions, standards, alignment, field
metrics, internal value proposition experience review,
technology verification improved brand image,
understanding influence regulation
change

Role of public
Decrease risk exposure for involved actors
funding

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SystCo to determine the technological and financial verification of the technology.
Focus is, however, not on uncovering scale-effects or standards like in a pilot project but
on defining the challenge and situation itself. It is a form of experimental technology
development on an ecosystem level by determining the appropriate value proposition
and market segment and thus to uncover what the ecosystem of the innovation is. This
will aid defining and overcoming ecosystem bottleneck problems.
Verification of the defined value proposition is performed by establishing a shared
benefit in the relevant supply chain. Further alignment is created in the ecosystem by
collaborative activities and an agreement of the shared value proposition that is offered.
Both forms of alignment contribute to defining an improved business model for the
discontinuous innovation. That business case is prior to the demonstration project
insecure, ill-defined, and based on entrepreneurial and technical ideas. The ecosystem
work in the demonstration project provides the environment where that complex
business case can be verified and adapted.
Internally, the improved and verified business case is used to motivate further
commitment the development of that technology (or motivate not to do so). First, further
commitment requires support from upper management who need to provide budget for
the follow-up NPD stage. Second, it shows to fellow employees that the discontinuous
innovation has potential and that it offers a future beyond the old technology. As such,
these employees are aligned with the internal innovation champion’s vision who can
include them in the next stage. This is an important dynamic by which an innovation
grows into an organization and is, according to innovative engineers in SystCo, possibly
the hardest part of innovation. Moreover, a demonstration project also shows to actors
inside the organization what the actual product is and as such gets away from insecure,
unverified visions of the future or as employees internally regard it, ‘colourful PowerPoint
talk’.
To improve the performance of a demonstration project, the coordinators and
participants should share a mutual goal, have diverse backgrounds, and an experimental
mindset. These are characteristics that aid experimental knowledge creation. To

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furthermore aid the collaboration between the actors, the demonstration project needs
to ensure that information can be shared freely by ensuring that intellectual property
remains with the actor that shares. This collaborative environment is furthermore
improved by avoiding inclusion of actors with conflicting interests, competitors for
instance. Furthermore, the actors that engage should avoid emphasizing commercial
interests in a demonstration project as this conflicts with the experimental goal of the
project. Finally, the role of public funding is universal among project types as this
reduces the risk exposure of involved actors which can motivate the development of
more discontinuous innovations.

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5 Discussion

5.1 Demonstration projects for discontinuous innovation

Discontinuous innovation is a risky undertaking due to high uncertainty, an ill-
defined market, underdeveloped infrastructure, questions about timing, and
dependence on exogeneous factors like regulation (Lynn, Morone, & Paulson, 1996).
However, motivated by the current energy transition, SystCo engages in discontinuous
innovation. The firm sets out to develop technological solutions that are to enable
autonomous shipping powered by a new green-energy powertrain solution. Both these
solutions are to be implemented in existing products – water going vessels – that are
characterized as high-cost, engineering-intensive products developed by many firms
that deliver parts of the final, interrelated system. As such, the discontinuous innovation
that SystCo develops is to be implemented in CoPS (Hobday, 1998). All the engaged
actors that deliver to the CoPS strive to perform a specific task which is in this case to
sail with goods between point A and B. The solution therefore has to complement the
set of technologies in the CoPS to improve the performance of the whole system.
This is where discontinuous innovation in a CoPS becomes complicated. First, the
ecosystem aspect of innovation demands significant alignment efforts to enable the
materialization of an innovation (Adner, 2006). In system solutions, the challenge is to
identify the value proposition of the innovation that concerns each member in the
system while also inducing innovative action by each member to enable the innovation
to offer that value proposition. This relates to the adoption and co-innovation risk as
proposed by Adner (2012). As an actor in CoPS development, the size and number of
actors in the ecosystem of SystCo innovations is relatively high which requires
significant alignment efforts.
Second is the extension of co-innovation risk into a broader setting similar to the
work by Walrave et al. (2018) who include the sociotechnical perspective to ecosystem
innovation. The discontinuous nature of the innovations namely conflicts with factors
outside the control of the directly affected actors (e.g., CoPS suppliers and users).
Regulation, infrastructure, and standards are the two most prominently mentioned

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ones. These factors enable the industry to operate and to operate safely but have severe
implications for innovation freedom and viability. Standards, for example, are the
adherence of a technology developer to a prescribed set of conditions that a standard
or normalisation institute acknowledges as safe. This is not only a prerequisite for the
shipowner to ensure that the route across the deep sea is safe, but also a property of
the ship that tells insurance firms that there is low risk which allows lower insurance
cost. Compliance to rules and regulation is therefore a dynamic in the worldwide marine
industry that ensures safety but restricts alternatives to be developed.
As the marine industry is large scale, very capital intensive and the innovation takes
place in a CoPS that interacts with a lot of neighbouring systems, experimentation is
hard to achieve. SystCo can only test innovations in their own laboratories where their
existing product line is tested if an innovation is more continuous in nature. In such a
case, the innovation is matured and developed in a laboratory project making it fit for
purpose in a vessel. Then, the somewhat mature innovation is installed in a real-life,
commercially sailing vessel in a pilot project to verify the technology, develop standards
to aid scalability, and inquire customer feedback. Potential problems in the exogeneous
environment are addressed in an ‘ecosystem project’ where actors that need to co-
innovate the required infrastructure are included.
This example that is internally regarded as a radical innovation shows more signs
of continuous innovation as it continuous on the existing product line that SystCo
manufactures. It is a case of large-scale innovation that has a significant dependence
on exogeneous actors and is therefore a good example of how a laboratory, pilot, and
ecosystem project can contribute to the development of an innovation. The ecosystem
project that is described in this example is similar to SystProject A and B, but has a less
experimental nature due to the more continuous nature of the innovation.
When the innovation becomes more discontinuous, a demonstration project is
used by Systco as a combination of a laboratory and pilot experiment. Engineers are
aware of the unknown unknowns in the CoPS complexity as well as the integration in
the daily operations in the industry. So, the goal of autonomous, emission-free shipping

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is clear but the exact product offering and how the adopting actors should adjust for it
is not. This regards the insecurity of discontinuous innovation on an ecosystem level.
SystProject A and B are demonstration projects in which a technology is
developed in a collaborative partnership with many actors and demonstrated in a real-
life environment that is exempted of regulation and has no direct commercial goal. This
demonstration project complies with the five characteristics of an exploratory project
as defined by Lenfle (2008) and according to SystCo it addresses nearly all implications
of discontinuous innovation on all levels.
In the first stage of the demonstration project, the partners will develop the
technology that is to be demonstrated. In the demonstration project, there are three
learning dynamics. First, there is the showcasing and testing of the innovation to verify
the technological and financial viability with the aspired customer segment. Second,
there is the alignment of directly affected actors in the development of use cases that
exploit the innovation and improve the overall ecosystem value proposition. Third, the
demonstration signals to indirectly affected actors that the innovation is safe and
motivates regulation, standards, and infrastructure changes.
Both the technological, financial, and ecosystem verification of the technology
feed back into the demonstration partners and especially SystCo as the main
technology developer. This aids the development of business cases by (a) identifying
the appropriate value proposition of the technology that can be materialized in the
ecosystem, (b) ecosystem alignment feedback. Ecosystem alignment encompasses
the alignment with directly affected actors that need to co-innovate to enable
materialization of the innovation as well as indirectly affected actors that address
exogeneous barriers to the innovation. These dynamics of discontinuous innovation
development in a demonstration project are depicted in Figure 3.
SystProject A and B show dynamics similar to the technology verification and
customer exemplification dynamics proposed by Gasparro et al. (2022). However, since
the demonstration project addresses a CoPS in a wider innovation ecosystem, these

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 Figure 3. Depiction of discontinuous innovation development dynamics in a demonstration

project.

two dynamics take place between the demonstration partners and the ecosystem. It is
thus considered a project that allows a group of actors to develop ecosystem innovation
alongside the product innovation itself.
The innovation paradox between these two goals is similar to the known
technology verification-exemplification dynamic between a customer and the
technology developer (Gasparro, Zerjav, Konstantinou, & Casady, 2022). However, the
customer is in this case a set of actors developing the demonstration i.e., co-innovators,
and the customer is replaced with the ecosystem. Note that demonstration developing
actors can also be part of the ecosystem hence this project is a learning environment
for incumbent firms like SystCo as well.
Ideally, based on the solutions proposed to the discontinuous innovation
challenges in technology, ecosystem, and exogeneous factors (Adner, 2017; Lynn,
Morone, & Paulson, 1996; Walrave, et al., 2018), combined with the expressed value of
experimentation projects (Lenfle, 2008), a firm should engage in demonstration projects
to develop and validate the technology as well as develop and validate the ecosystem
strategy. Based on the demonstration project characteristics and objectives, this
theoretical proposition is confirmed in this case study.
Now, suspicion arises about whether this ‘can-do-it-all’ demonstration project is
not overestimated in this case study. The distinguishing value of the project is namely

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the collaboration with partners and the possible exemption of rules making it an
experimental environment i.e., a living lab as the coordinators name it. But
experimentation happens prior to the development of an innovation. So, the
demonstration requires a degree of maturity of the innovation for it to be showcased
which requires experimentation, but a higher degree of maturity reduces the need for
experimentation.
The negative effect of this paradox is believed to be part of SystProject A and B
due to the commercial goals of actors in the demonstration project. Each firm namely
pursues a commercial goal in the project. This can be finding new customers or selling
assets to the project. Such commercial goals were stated to be the result of the to-be
demonstrated technology not being that innovative anymore. The demonstration
project then turns into a technology delivery project aiding technology development or
commercial goals while the discontinuous experimentation in an ecosystem falls into
the background.
Pursuing commercial goals is not inherently bad, the project coordinators state
that this is normal and should be accepted. But the experimental nature of the
demonstration project should be central. So, while the demonstration project appears
to do it all for a discontinuous innovation, the performance of the project is believed to
be limited by this exact ambition. In the example of the in-house developed, large-scale
technology, the role of the ecosystem project had a clear purpose: overcome co-
innovation problems. This concerned the need for new infrastructure technology.
The more discontinuous innovations in SystProject A and B had no clear goals
apart from realizing the demonstration and learning from it. While this lack of goals is
the purpose of experimentation, the commercial goals of the actors in it limited the
performance of the project. Moreover, the experiments are very costly and time
intensive. Even though the duration of the project is 5 years, actors have expressed
worries if the demonstration can even be realized in this timeframe. In that case, the
living-lab approach of the Horizon project may not get off the ground at all.

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 The lack of an experimental nature is more apparent when observing the Horizon
project overarching the demonstration projects. Demonstration projects contribute to
the development of a masterplan for green ports. The technologies that are to be
demonstrated were selected based on the maturity of them and their contribution to
enabling greening all modes of transport in the port. So, while the demonstrations are
experimental, the technologies serve a very straight-forward goal.

5.2 Limitations and future research

This research was performed on two demonstration projects A and B in one
Horizon project. The research provides the detailed perspective of only one incumbent
firm. While effort was taken to include the perspectives of partnering firms in the
demonstration project, it must be acknowledged that the findings of this research are
not verified across multiple projects nor across multiple incumbent firms. However, by
deploying a qualitative, exploratory case study approach, a lot of anecdotal information
about similar projects and experiences of actors in several firms was acquired. So, the
findings of this research should be regarded as grounded, exploratory results that
motivates further research in specific aspects.
The research shows how the ecosystem perspective on innovation is prominent
in modern innovative firms. Especially sustainable innovations of which firms struggle
to define the business case emphasize that the technology is not considered to be the
problem. These firms are actively looking for ways to influence the environment around
the innovation, including the adopting actors. regulators and other innovating firms. The
demonstration project analysed herein addresses this challenge by providing a
collaborative, experimental environment. Further research is proposed to improve the
understanding of discontinuous and complex innovation in the ecosystem perspective.
First, research is proposed to address complex innovation in ecosystems. To aid
the structured approach and better understanding of complex innovation in an
ecosystem perspective, a better structuring of ecosystem actors is believed to be
valuable. Even though the innovation ecosystem is clearly defined by Adner (2017), the

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real-life use of the definition by innovators typically addresses everything that is in any
way related to the innovation. For example, in this research the firm delivers products to
a CoPS, so there is interfacing with other systems in that product. But the CoPS itself
performs a distinct task as well, in this case shipping products from A to B. In that
operation it is part of a transport network of ports and terminals who in turn offer a
mutual value proposition as well. This creates layers of value propositions that affect
what the ecosystem is and what it demands. For example, a vessel needs to be able to
interface with the port and terminal. So, any innovation in the vessel that impacts the
operations e.g., an autonomous ship with a green-energy drivetrain requires changes all
around: charging infrastructure, adapted terminal operations, new regulation, different
size vessels, other types of propulsion components, a new bridge lay-out, new operator
training, and so forth.
Second, further research is proposed at identifying and evaluating the
characteristics of different types of exploratory projects. In this research, the project
was dubbed a ‘demonstration project’ but, while the goal of the project was to
demonstrate, the definition does not give enough credit to the characteristics of
SystProject A and B. A valuable research direction is proposed to be to research different
exploratory projects and determine what the characteristics are and what this enables.
In this research, the commercial focus, environment, relation to regulation, and involved
actors are identified as characteristics. Future research can verify these characteristics
and determine what an optimal configuration is for certain exploratory goals.
Third, the exploratory projects analysed provide an environment for ecosystem
experimentation of discontinuous innovation and relates to Strategic Niche
Management (SNM) in doing so (Raven, Bosch, & Weterings, 2010). Further research is
recommended to further uncover the characteristics of SystProjects and similar
projects that enable sociotechnical experimentation as a policy tool. In this case it is the
exemption of regulation and financial support of public institutions. Especially since the
signalling value of SystProject A and B were identified as an important aspect,

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demonstration projects may be valuable learning environments for governments as
well.
Fourth, a significant bottleneck that is not clearly addressed in ecosystem
innovation literature yet is self-inflicted bottlenecks and barriers. A firm that develops
solutions to replace its own product portfolio, as in the case of SystCo, encounters a
situation where discontinuous innovation bottlenecks and barriers in the ecosystem are
in place to facilitate ‘old’ technologies to materialize. So, not only the current
technologies generate revenue to enable innovation, also the current ecosystem
configuration does so. Research into this subject can look into identifying, managing,
and overcoming these contingencies in a firm’s innovative efforts and as such enable
incumbent firms to challenge their own product portfolio. This research already
highlights the importance of internal alignment with employees and upper management
for innovation support, but it has not covered how strategic management can include
these self-inflicted bottlenecks in an appropriate ecosystem innovation strategy.
Fifth, in a discussion with the director of Intellectual Property in SystCo, the topic
of network relations as a strategic asset for a firm was brought up. Even though the
case study findings did not emphasize this learning dynamic due to the lack of network
building efforts mentioned by interviewees, it is hypothesized by the researcher as a
potential strategic learning dynamic. Especially in CoPS development, communication
with actors developing interfacing systems can allow improved innovative performance.
A potent research direction may be the network building value of collaborative,
experimental projects and the strategic edge such activities grant a firm.
Last, as will become apparent in the managerial implications, adopting the
ecosystem perspective on innovation is considered valuable for a firm, especially in an
incumbent firm dominated by processes and commercially focussed decision making.
The ecosystem perspective enables identification of ecosystem risks and shed light on
what are considered the unknown unknowns of innovation. Identifying these
uncertainties enables the firm to direct efforts and motivate innovations that were
previously deemed too risky. However, what is not yet addressed is that the developing

84
firm can be a bottleneck in the ecosystem as well. Especially large, incumbent firms built
on the ‘old’ technology can get in this situation where they tend to keep the status quo
in place. How should firms and their employees manage the phenomenon where they
develop a new technology that cannibalizes the market share of one of their other
projects? How can an innovator in a firm get support with a manager for an innovation
that replaces the technology that generates her salary? In this case study an important
method was to highlight that one’s salary is at risk but the innovation offers a way out.
This method is relevant as it offers ways of discontinuous innovators to gain support
for exploratory projects like a demonstration project.

5.3 Managerial implications

SystProject A and B have very clear and noble goals that address the complexity
that is apparent in discontinuous innovation and the sustainability transition. Especially
in the challenging, large scale, conservative shipping industry this kind of collaborative,
daring projects are respectable. The actors in the project come together and attempt to
enable change in the industry, which is a great challenge compared to turning an oil
tanker around. The very oil tanker that SystCo delivers systems to. To conclude this
research, tentative advise is given to improve the ability of a firm to develop
discontinuous innovations and turn the value of a demonstration project into value for
the firm.
Firms engaging in demonstration project are advised to develop an ecosystem
perspective on innovation. By doing so, an appropriate ecosystem strategy for an
innovation can be defined. This gives the ecosystem aspect of a demonstration project
a clear purpose for the firm beyond the regular technological and financial aspects. The
crucial part herein is that while this case study aimed to identify how a demonstration
project can aid development of business cases for discontinuous innovations, the
distinct value of a demonstration project is not included in current business model
development.

85
 So, to benefit from a demonstration project as researched in this report, the firm
needs to include the ecosystem perspective in the business case development. This
new, wide perspective on innovation will be of significant benefit as it addresses many
development struggles. With this strategy, the co-innovation and adoption risks that are
experienced by engineers and managers, but not understood, are made tacit. Such tacit
understanding of the innovation in an ecosystem perspective allows for better decision
making and greater understanding of the bottleneck problems. It can enable an
incumbent firm to address those and pursue innovations that are previously considered
commercially unviable.
Lastly, the development of a discontinuous innovation or any innovation for that
matter does not happen in one project. Especially experimentation projects should be
treated more as experiments, not as a delivery projects. The technological development
that plays a very central role in the demonstration project should be made as low-cost
and flexible as possible, while serving the learning goals of the project. The first product
is rarely the optimal configuration and by engaging in a demonstration project with a
prototype, the cost-benefit and contribution to innovation are all expected to increase.

86
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Appendix 1: Interview outlines Set 1

Interview set 1: Outline Date: 21-03-2022

Set framework Context, content, and process of change

scope:

Set subjects: Actors in SystCo actively involved in the firm’s adaptation process or
projects.

Subject classes: 1A: Top management; Aware of context and content of entire firm or
business units within the firm.
1B: Firm adaptation managers (business owners); Manage the change
process, are decision makers in demonstration projects.
1C: Demo-project executers; Participate in the demonstration project and
may be intermediaries in it.

Process: 1. Reach out by email and ask for participation in research. Attach
brief introduction of the thesis research, the general subject of the
interview, and why the interviewee is a valuable source of data.
2. Fill in ‘Facesheet’ in separate Excel document as far as known
upfront. Ask for general info at the start of the interview.
3. If interviewee is interested, schedule an online or offline meeting of
an hour.
4. During interview, follow the interview guide relevant to the
respective interviewee (1A, 1B, or 1C).
5. Ask interviewees at end of the session whether he or she knows any
colleagues that should be interviewed as well.

Interview guide Primary topics to discuss: internal & external context of SystCo.
1A:

Background and definitions [5 min]

- A brief introduction of the research and the topics to discuss:
- For my master thesis I am researching the change of firms in the
sustainability transition focusing on firms that engage in discontinuous
innovative work to enable it.
- Are you familiar with the concept ‘discontinuous innovation’ as
opposed to continuous innovation?

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 - During this interview I would like to discuss the situation of SystCo as a
firm and the industry it is active in. My goal is to hear from you if
SystCo must change, why, and what needs to change exactly.
- How would you describe your role in moving SystCo to the future?

Questions about the external context of SystCo [25 min]

- Let’s start with the external context of SystCo: this is the environment in
which SystCo operates and validates the strategic decisions it makes.
- Can you briefly describe the competitive environment SystCo
operates in? [Probes: Strengths, Weaknesses, Opportunities, Threats
(SWOT); New Entrants, Buyers, Suppliers, Substitutes, Competitive
Rivalry (Porter’s 5 Forces)]
- What is the economic situation of SystCo? [Probes: market size,
product or service demand, competition, availability and quality of
suppliers, reliability of distribution chain (micro);
employment/unemployment, interest rates, consumer confidence
levels, recessions (macro)]
- How would you describe the social and political context of Wärsilä?
[Probes: taxation policies and subsidies, political stability, foreign
trade regulations, employment laws (politics); meaning and
interpretation of firm’s operation (social)]

Questions about the internal context of SystCo [25 min]

- Having covered the external context of SystCo, we move to the internal
context. This concerns the structures through which ideas have to
proceed in the firm. Simply put: how does SystCo as a firm allow for
novel ideas of change to be brought up and realized in the organization.
- Could you elaborate how the organization in SystCo facilitates you
in doing things different? [Probes: division of work, co-ordination,
common objectives, co-operative relationship, authority-
responsibility relationships]
- How would you describe the corporate culture in the firm? Do you
feel like you have meaningful responsibilities and receive support
and respect for the changes you make or propose? [Probes: people
interactions, response to change (two dimensions); caring, purpose,
learning, enjoyment, results, authority, safety, order (culture styles)]
- Are there internal political dynamics that support or hamper the
progress of the firm? Do you trust your superiors and the board of
management in ensuring a prosperous future? [Probes: distance
from decisions, political behavior, accountability]

92
 Questions about the content of change in SystCo [58 min]
- So, we have covered the external environment of the firm as well as the
internal one. Now we will discuss what the way forward is of the firm,
motivated by the context we have discussed. I want to know from you
what needs to change in the firm and why.
- Does SystCo need to change? This may be a result of imperfect
internal context aspects or a mismatch between the firm and the
external context. [Probes: trust in leaders, customer feedback,
political developments (motivation)]
- What needs to change? [Probes: economic driven transformation,
changes to support organizational capabilities (two dimensions of
change)]

Interview guide Primary topics to discuss: content & process

1B:

Background and definitions [10 min]

- A brief introduction of the research and the topics to discuss:
- For my master thesis I am researching the change of firms in the
sustainability transition focusing on firms that engage in discontinuous
innovative work to enable it.
- Are you familiar with the concept ‘discontinuous innovation’ as
opposed to continuous innovation?
- During this interview I would like to discuss how SystCo moves to the
future as technology developer and how the change process is
managed, in particular we are going to focus on the value of HORIZON
PROJECT herein.
- How would you describe your role in moving SystCo to the future?

Questions about the content of change in SystCo [20 min]

- First and foremost, let’s cover to what extent change is a relevant
subject for you in SystCo.
- Does SystCo need to change? This may be a result of imperfect
internal context or a mismatch between the firm and the external
context. [Probes: trust in leaders, customer feedback, political
developments (motivation)]
- What needs to change? [Probes: economic driven transformation,
changes to support organizational capabilities (two dimensions of
change)]

93
 Questions about the process of change in SystCo [30 min]
- SystCo is connected to the HORIZON PROJECT in demo 6
(autonomous barge) and demo 7 (green energy container). In this
project, radically new technologies are developed and demonstrated in
the port area. I would like to discuss what purpose participation in this
project serves for you and for the change that is aspired.
- Could you elaborate your role in moving SystCo toward the future in
more detail? How do you plan on doing this? Is there information or
support you miss in doing this? (Probe: restructuring, reengineering,
corporate structure change, new technology, total quality
management (type of change); economic driven or changes to
support organizational capabilities (dimensions of change); change
targets)
- What is the goal you set on your group’s participation in HORIZON
PROJECT? What do you want to achieve? Are there formal success
metrics? [Probe: milestones, success factors, ROI, alignment with
strategic business goals, technology performance metrics, CSI]
- What do you expect to gain by participating in HORIZON PROJECT?
Does that contribute to your change-related work? [Probe:
technology verification, market justification, cross-fertilization,
learning]
- What new possibilities does the HORIZON PROJECT give you to
achieve your goals and aid your internal work processes? How do
you exploit those possibilities? [Probe: external sources of
knowledge, coordination, practical experience, testing, alignment]
- Does the organization and coordination in HORIZON PROJECT help
you in exploiting the possibilities the project offers? [Probe:
mismatch in project organization capabilities and firm ambitions]
- How do you aim to implement the achievements or progress made
in the HORIZON PROJECT into the technological development and
marketing of discontinuous innovations? [Probe: no project is an
island]

Interview guide Primary topics to discuss: process

1C:

Background and definitions [10 min]

- A brief introduction of the research and the topics to discuss:
- For my master thesis I am researching the change of firms in the
sustainability transition focusing on firms that engage in discontinuous
innovative work to enable it.

94
- Are you familiar with the concept ‘discontinuous innovation’ as
opposed to continuous innovation?
- During this interview I would like to discuss how SystCo moves to the
future as technology developer and how the change process is
managed, in particular we are going to focus on the value of HORIZON
PROJECT herein.
- How would you describe your role in moving SystCo to the future?
(Touch upon content, don’t focus on it)

Questions about the process of change in SystCo [50 min]

- SystCo is connected to the HORIZON PROJECT in demo 6
(autonomous barge) and demo 7 (green energy container). In this
project, radically new technologies are developed and demonstrated in
the port area. I would like to discuss what purpose participation in this
project serves for you and for the change that is aspired.
- Could you elaborate your role in moving SystCo toward the future in
more detail? How do you plan on doing this? Is there information or
support you miss in doing this? (Probe: restructuring, reengineering,
corporate structure change, new technology, total quality
management (type of change); economic driven or changes to
support organizational capabilities (dimensions of change); change
targets)
- What is the goal you set on your participation in HORIZON
PROJECT? What do you want to achieve? Are there formal success
metrics? [Probe: milestones, success factors, ROI, alignment with
strategic business goals, technology performance metrics, CSI]
- What do you expect to gain by participating in HORIZON PROJECT?
Does that contribute to your change-related work? [Probe:
technology verification, market justification, cross-fertilization,
learning]
- What new possibilities does the HORIZON PROJECT give you to
achieve your goals and aid your internal work processes? How do
you exploit those possibilities? [Probe: network, external sources of
knowledge, coordination, practical experience, testing, alignment]
- Does the organization and coordination in HORIZON PROJECT help
you achieving your goals faster? [Probe: internal goals overlap
project goals, firm goals, resolving external problems]
- How do you aim to implement the achievements or progress made
in the HORIZON PROJECT into the technological development and
marketing of discontinuous innovations? [Probe: marketing
technologies, guide innovation work, revisit firm strategy, identify
non-technical barriers]

95
Appendix 2: Interview outlines Set 2

Interview set 2: Outline Date: 21-03-2022

Set framework Process of change

scope:

Set subjects: Actors active in the same parts of the technology demonstration project
as SystCo, or actors managing the project.

Subject classes: 2A: Participating actors; employees operating as intermediaries in a firm

participating in the same demonstration projects as SystCo.
2B: Coordinating actors; employees of the coordinating firm that
coordinate either one of the demo-projects or the Horizon project.

Process: 1. Reach out by email and ask for participation in research. Attach
brief introduction of the thesis research, the general subject of the
interview, and why the interviewee is a valuable source of data.
2. If interviewee is interested, schedule an online or offline meeting of
an hour.
3. Fill in ‘Facesheet’ in separate Excel document as far as known
upfront. Ask for general info at the start of the interview.
4. During interview, follow the interview guide relevant to the
respective interviewee (2A, 2B).
5. Ask interviewees at end of the session whether he knows any
colleagues that should be interviewed as well.

Interview Guide Background and definitions [10 min]

2A. - A brief introduction of the research and the topics to discuss
- For my master thesis I am researching how projects like HORIZON
PROJECT can contribute to change in a firm, so how HORIZON
PROJECT can be of value to the future of a firm. This focusses on
discontinuous innovation in the sustainability transition, characterized
by novel technologies and immature markets.
- Are you familiar with the concept ‘discontinuous innovation’ as
opposed to continuous innovation?
- In this interview I would like to discuss how HORIZON PROJECT is of
value to you and how you aim to extract that value from the project.
Afterall, the project also serves a function in the future of the firm you
work for.

96
 - How would you describe your role in moving the firm you work for,
forward?

Questions about the process of change in firm [50 min]

- The firm you work for is active in HORIZON PROJECT to develop and
demonstrate technologies for the future in demo X. I would like to
discuss what purpose participation in this project has for you, your firm,
and the change that the firm strives for. Change herein refers to a
change in an industry (adoption of a new technology for instance) but
also change in your firm (development of new business model).
- What future does the firm you work for envision? [Probe: start-up or
incumbent, change in industry]
- To what extent does your work contribute to the future of the firm?
[Probe: project-based targets, strategy input, significance]
- Could you elaborate your activities regarding the firm’s participation
in HORIZON PROJECT? [networking, coordinating, managing,
engineering, marketing, intermediary]
- What is the goal you set on your participation in HORIZON
PROJECT? What do you want to achieve? Are there formal success
metrics? [Probe: milestones, success factors, ROI, alignment with
strategic business goals, technology performance metrics, CSI]
- What new possibilities does the HORIZON PROJECT give you to
achieve your goals and aid your internal work processes? How do
you exploit those possibilities? [Probe: network, external sources of
knowledge, coordination, practical experience, testing, alignment]
- What do you and your firm expect to gain by participating in
HORIZON PROJECT? Does that contribute to the future of the firm?
[Probe: technology development, user exemplification, business-
related targets]
- Does the organization and coordination in HORIZON PROJECT help
you achieving your goals faster? [Probe: networking efficiency,
target setting, actor alignment, access to novel knowledge]
- How do you aim to implement the achievements or progress made
in the HORIZON PROJECT into the technological development and
marketing of discontinuous innovations? [Probe: feedback to sales
or marketing, feedback to technology developers, market
identification, technology verification]

Interview Guide Background and definitions [10 min]

2B:
- A brief introduction to the research and the topics to discuss.

97
- For my master thesis I am researching how projects like HORIZON
PROJECT can contribute to change in a firm, so how HORIZON
PROJECT can be of value to the future of a firm. This focusses on
discontinuous innovation in the sustainability transition, characterized
by novel technologies and immature markets
- Are you familiar with the concept ‘discontinuous innovation’ as
opposed to continuous innovation?
- In this interview I would like to discuss the mission of HORIZON
PROJECT and the method it deploys to achieve that. The focus will be
on the demonstration projects in HORIZON PROJECT and how the
project facilitates learning processes that move the sustainability
transition forward both technically as socially. But let’s first start with
understanding your position in the project.
- How would you describe the your role in HORIZON PROJECT in
ensuring a positive outcome in the end?

Questions about technology projects as a landmark project [50min]

- You are active in the coordination of the HORIZON PROJECT which
covers a variety of workpackages and demonstration projects. I would
like to discuss how the project is organized to enable actors, engaged
in different work-packages and demos, to align efforts towards a
mutual goal. I would like to know how you regard the value of HORIZON
PROJECT for actors that are connected to it.
- What is the ultimate goal set for HORIZON PROJECT? And what
other secondary goals does it strive for? [Probe: self-interest goals
(ports), enabling goals (technology), awareness goals (market)]
- What is the vision of the organization of HORIZON PROJECT? Why
was this project brought to life to reach the specific goals? What
does this project construction offer? [Probe: market failure, lack of
technology, no vision]
- How does the project facilitate the connected actors in realizing the
goals of the project? [Probe: networking, sprints, alignment]
- Are there success metrics that the progress and results of the
project are measured with? When is the project successful, when
does it fail?
- How are project outputs turned into lasting achievements that
contribute to the future of the stakeholders?

98
Appendix 3: Overview of themes and codes

Group: Theme: Codes:

1. External 1.1 The shipping industry is slow and Conservative and slow industry
context of conservative as a result of capital
SystCo intensity, low margins, long equipment Safety emphasis in industry
lifetime, and safety emphasis.
Low margins in shipping industry

1.2 The shipping industry is risk averse. High-risk investments are avoided
in the industry

1.3 The shipping industry regards the Decarbonization is a central topic

energy-transition as a primary challenge with customers
today.

1.4 Traditional drivers of innovation in Drivers of innovation: OPEX

the shipping industry are (1) cost and (2)
regulation. Drivers of innovation: regulation

1.5 New drivers of innovation are (1) the Drivers of innovation: green finance
role of cargo owners and (2) green
financing. Drivers of innovation: cargo owners

1.6 The SystCo brand is regarded by the SystCo has muscle power to
industry as credible and powerful and transform the industry
expect them to take the lead in
decarbonization, this image is also SystCo is regarded as a credible
needed for SystCo to attract new talent. firm.

SystCo is regarded as a frontrunner

in technology development

A frontrunner image is needed to

attract new talent

1.7 The shipping industry operates Worldwide operating industry

worldwide and therefore subject to a
variety of regulatory bodies.

1.8 Each vessel in the shipping industry There are only unique vessels
is a unique product.

1.9 Regulation and classification is not Rules are not complete or do not
ready for radically new innovations exist

Existing rules obstruct innovations

99
 Rule-making bodies are actively
looking for rule solutions

2. Internal 2.1 Processes dominate the way of The majority of work is captured in
context of working in SystCo which causes friction processes
SystCo with innovative employees.
The higher up in SystCo, the more
processes and facts dominate

Conflict minding management does

not solve problems

Middle management are most

process driven and risk averse

2.2 Virtually all projects – R&D, pilots, Demonstrations happen on actual

demos, ordinary sales – occur with the vessels of a ship owner
customer as vital partner to offer its
vessel. If we want to test, we need a vessel

Proof-of-concept require a
customer to be involved

For pilot-projects you need a

customer to share your vision

The customers make projects

happen

All my work is project-based

2.3 SystCo exists out of a number of Number of independent business

independently operating business units
divisions that focus on themselves and
their stakes. Pride of own products blinds for
alternatives

Not too intensive benchmarking

with competing innovations to limit
venturing out

Internal debate on future

technology is still ongoing

2.4 The larger business division in Biggest division dominates smaller

SystCo tends to dominate the other ones
ones.

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2.5 In general, top-level regards the SystCo is led by commercial people
bottom-level as too technology focused on all levels
while the bottom-level thinks of
managers as emphasizing Commercial focus of leadership
commercialization too much. limits technologic input in decision
making

New board shows technology

expertise

SystCo leadership does not know

the true needs of customers

Technicians focus too much on

technology

SystCo leadership tries to keep

innovation close to the firm

2.6 A high perceived distance between Impossible to reach all 19.000

actors in SystCo, both from top to employees
bottom as from side to side, limits
knowledge distribution efficiency. Top-to-bottom communication
passes a lot of layers

Layers don’t take the right action

based on top-to-bottom
communication

Business divisions in SystCo don't

know what the other ones are doing

Decision making process is unclear

or not understood by engineers

Interaction between business

divisions happens on interfaces

2.7 SystCo has continuously changed SystCo has always been changing
and reorganized over the last couple of
years with the ambition to turn to a Strategy is directed at more
more efficient, customer-centric, customer centricity
service-oriented firm.

2.8 Internal entrepreneurship is not Keep on doing what you did keeps
facilitated in the process-based you your job
organization and has been reorganized
out of the firm. Entrepreneurship happens in-
between business divisions

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 Too little celebration of
innovativeness and
entrepreneurship

2.9 ‘Old technology’ makes research into Old technologies earn money for
new technologies possible. R&D of new technologies

80% of products enable the top 20%

of innovations to exist

2.10 Employees are very busy and have I am not happy with the amount of
too little time to put enough attention to time I can spend on tasks
their work.
Because I am busy I am not able to
do all my work

2.11 The decarbonization strategy is a Decarbonization has been part of

continuation of the path that SystCo is the strategy since 2019
on for years and is considered a live
strategy that needs to be in place for a Strategy is a live document
long time.
SystCo cannot change all of the
sudden

3. Content 3.1 Regulation and classification rules New rules need to create
of change need to be developed to enable appreciation of new technologies
innovation roll-out.
Rules need to be developed to
enable commercialization

3.2 Standards are required in the Standards are needed to improve

technology development to enable ease of implementation
market uptake and scale-up.
Standards are needed to enable
scale-up in size and output

3.3 The current operational demands The fundamental task will remain
are still the main requirements for new shipping between A and B
technologies.
An innovation is ready when it
fulfills the tech-spec requirements

Innovation performance is based on

old-tech metrics

3.4 The industry needs to change to Seeing is believing

learn to appreciate new technologies
and for this we need to show, not tell. Customers will demand what they
know

102
 If customers don’t support it, it will
not succeed

Customers do not know the

sustainability metrics

Customers need to learn to

appreciate new solutions

3.5 Instead of one technology, the future Many different technologies for
energy technology will comprise a set of different segments of the industry
solutions for a variety of applications.

Insecurity about what technology

for what segment

Flexibility as main trait of new

technologies

3.6 Because the problem is so complex, Common sense instead of process-

we need creativity and common sense driven decision making
to develop the right solutions for the
right problem. Should prevent developing a sub-
optimal solution

There are many unknown

unknowns

The integration is more

complicated than the technology

Technology solutions are not

always the answer

The challenge is too complex for

linear metrics

The future is unknown so you need

to take incremental steps

3.7 We develop the technology but Technology is our product, but

depend on the infrastructure that infrastructure is required
supports its roll-out, we do not develop
that infrastructure.

4. Process 4.1 The general elements of project- Clear example of carbon capture
of change based development are (1) idea, (2) technology development

103
R&D, (3) laboratory, (4) pilot projects, (5)
sales projects.

4.2 Because of a lack of rules, engineers New goal-based standards in

deploy risk-based engineering to development
emphasize safety in the development
process. Risk-based engineering deployed in
innovative projects

4.3 By gradually involving people from Clear example of carbon capture

the organization into each development technology adoption
stage, the knowledge is expanded
across the organization. Knowledge is transferred with
people between projects

4.4 With each development stage, Extensive socializing of idea needed

socialization of the next stage needs to even after final stage
be done to get support from
management and business units. Socializing is needed to get
financial support

Business unit needs to adopt

technology

Innovation is carried by people

4.5 For commercial and practical Customers are approached to test

reasons, customers are involved in each support for ideas
development stage for idea socialization
and to be a pilot-project partner. Before R&D phase, a customer
needs to be willing to be the pilot

An idea without a business case is

nothing

4.6 Over the course of development of a Incremental development along

radical innovation several less-radical radical development stages
products are developed and marketed.

4.7 In any technology development Technology specification and

project, the outputs are technology system description as project
specifications and system descriptions output
as well as standards in the case of pilots
and Horizon projects which all becomes Matured information is distributed
SystCo information after the project. and becomes SystCo information

Standards are a tacit output of

pilots and demos

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 Standards are an objective in the
future, not now

4.8 Internally, knowledge is shared Periodic meeting between

between similar, simultaneous projects overlapping projects
through meetings and relationships.
Individuals in projects discuss with
each other

4.9 SystCo is not focused on patents Being the frontrunner is key as our
due to ease of inventing around, the firm systems are not patentable
rather protects its knowledge by (1)
being the frontrunner, (2) complexity, (3) Our protection is the complexity of
network of suppliers, and (4) secrecy. the systems

For important projects an IP plan

with patents is made

Secrecy is an important part of IP

protection in SystCo development

4.10 Regarding the innovative work as Employees see the innovation as

enabling you to have a future in the firm their future work
increases the willingness among
employees to adopt new ways of
working.

5. Internal 5.1 One goal of a pilot or demonstration A demo offers new, real-life,
position of is to learn about the real-life complexity practical knowledge
Horizon and practical implementation of the
project innovation. In a demo we learn about scalability
and implementation

We need to take the real-world

uncertainties into account

5.2 Working together in a Horizon In a Horizon project we align our

project with partners with different activities with a mutual goal
backgrounds gives new insights in the
actual problem and the appropriate The problem is too complex to
solution which motivates further attempt to solve on your own
development investment and
commitment. Working together with partners
allows us to align our solutions

Together we are able to overcome

the challenge

105
 Find solution together where whole
supply chain benefits

Collaboration creates socialization

of idea between actors

Through interfacing the actors

recombine knowledge

Network of actors is the benefit of a

Horizon project

We identify and solve unknowns

together

5.3 Rule makers are involved to show Technology also has to mature for
the technology so they can develop authorities
substantiated, safe regulation based on
the demonstrated technologies. Regulators are or are to be involved
in Horizon project

Influence regulation through demo

project

Classification needs to be involved

in the Horizon project

5.4 Participating in a Horizon project Pilots and demos are needed for
introduces the customer which is not co-development with customer
involved in a laboratory experiment.
Demos take place on a commercial
vessel

5.5 Participation in a Horizon project is Horizon project participation in

used to shape the brand image with the media
public.
Invite prominent guests to project
sites

Present Horizon project

achievements at events

Horizon projects come with the

publicity

Actors should be given room to

gain brand publicity

106
5.6 The demo in Horizon project is very Signaling to customers is not part
technology-centric and about making of the Horizon project demo
the solution work in the real-life
environment, signaling to the industry is Developing the technology is the
not the goal – at least not a main goal. focus of the Horizon project demo

Participation in Horizon project

ensures wide signaling and impact

Signaling goes both to and from

technology developers

5.7 Commercial goals are pursued in The technology demo is the goal
Horizon projects but are inferior to the
goal of realizing the technology Commercial gains are an additional
demonstration. benefit

Technology development is the

main goal

Commercial goals are actively

pursued

5.8 The available subsidy in a Horizon Getting compensated for

project allows for more risky technology development is a benefit
development, especially for ship owners.
Subsidy is the main reason to
participate in Horizon project

The subsidy allows for larger scale

projects

With subsidy you can persuade

shipowners

5.9 Conflicting commercial interests No competitors in the same

between Horizon or demo partners can Horizon project
hamper the collaborative efforts and
limit the project’s innovative output. Knowledge sharing between
competitors sometimes required

We don’t allow competitors to work

with our assets

The coordinator is a stakeholder in

one of the partners

Conflicting interest between demos

hampers project

107
 New shareholder distribution or
CEO’s change course of firm

From the beginning it is hard to

make the concrete steps

Partnership with other demo is

merely alignment of activities

5.10 Intellectual property ownership is Knowledge sharing in Horizon

accounted for in the agreement, only the project is not public information
public demonstration counts as public
information. Patent should be filed before
demonstration

5.11 Participating in practical Horizon Developing in committees takes a

projects give you a way of increasing the long time and is tedious
development speed of a technology in a
direction you advocate, and you can Participating in a Horizon project
benefit. gives you a say and impact

5.12 Realizing the demo is the main Realizing the demo is the main goal
objective of the Horizon project, demos
are therefore also in the lead. Demos are in the lead

Project coordinators bring findings

together and report to EU

Demos report data and findings to

the coordinators

The coordinator is just a partner

among the others

Demos are secondary goals for the

coordinator

6. Horizon 6.1 All partners in the Horizon project Motivation to participate was to
project have a commercial goal motivating invest in assets
insights participation in the project.
We are looking for new business
models in the Horizon project

We are looking for new customers

in the Horizon project

6.2 One partner was not in the Horizon The innovation aspect was not an
project to innovate but for commercial incentive as we already do this

108
reasons only, making them displeased
Sometimes the Horizon project
with the project.
seems just a show-off project

I feel like a facilitator, not a

participant

6.3 Without a clear gain, effort into the Because there is not much in it for
Horizon project is limited to a minimum. us, we limit our effort

Wonder why we participated as

there is no gain for us

We want to be of service but only

with minimal effort

6.4 Several practical project Some process and stakeholder

organization aspects are hampering the aspects are poorly managed
efficiency of the partnered development.
Good stakeholder management is a
prerequisite for a good start

The challenge is to keep the project

running smoothly

The practical side of project

organization is unpredictable

6.5 In terms of technology, the Horizon With the demo we show that the
project with the demo is used to prove technology works and is flexible
that the technology works and is
applicable, but a lot of development also Technology readiness level is a bit
has to be done still. too low

The EU call asks for demo-ready

technologies

6.6 Both demos focus on developing In the Horizon project we reevaluate

business cases together with the port the whole business case
operators and other supply chain actors.
We want to learn about the viable
business cases

The demo is not the main goal

The product of the demo is

developing use cases

6.7 The Horizon project is only Horizon demo is inferior to the

complementary or sometimes even scaleup objective of the firm

109
independent of the firm’s strategic
Horizon project runs in parallel to
progress.
the firm

6.8 Indirect partners can participate in External actors can get indirect
the Horizon project and get paid with the funding from Horizon actors
subsidy budget that direct partners
have. Any interested actor can be
included in a demo

6.9 The higher goal of the project and The higher goal of the project
mutual goal of making the project a strengthens partnerships
success is what creates constructive
partnerships. The goal of making an impact is
very clear

6.10 The Horizon project is a research The Horizon project is a research

project, but commercial actors seem to project
approach it as a regular delivery project.
Partners treat Horizon as a regular
project

6.11 The ‘Do’s’ of an EU project are: (1) Do’s according to experienced EU

be open, (2) stimulate cooperation project coordinator
between different sectors, and (3)
prevent same-sector cooperation.

6.12 The most important ‘Don’t’ of an EU Don’ts according to experienced EU

project is sticking relentlessly with the project coordinator
original plan, try to be flexible.
The EU is flexible about adapting
project objectives

Horizon project coordinator should

not be scared of EU

6.13 Knowledge distribution outward is We are going to give workshops for

actively done by the coordinators as well people that are affected
as in demos, also to receive feedback.

110