Green innovation in natural resource industries: The case of local suppliers in the Peruvian mining industry

Abstract

Concerns about climate change are gaining notoriety and are exerting pressure for tougher environmental regulations for the mining sector. Demand for sustainable methods of production has increased and has created opportunities for Peruvian mining suppliers that offer green innovations. In this paper, we follow the technological trajectories of a set of local firms who successfully undertook green innovations in order to analyze the main factors that determined their development and integration into the mining value chain. In particular, our findings show that these suppliers share internal factors such as highly specialized human capital and considerable technological effort that led to their innovations. Likewise, there are some external factors that drive innovation in local suppliers such as the market structure and value chains as well as linkages with stakeholders within the mining sector and research centers and access to external funding provided by the government. However, the examples of successful innovative firms are still scarce and limited by the captive structure of the value chain in the industry. In this structure, multinational mining companies favor incumbent suppliers with a positive trajectory in the market. The structure also generates financial constraints and a lack of communication and coordination channels among the stakeholders.