Winds of Change: A Neo-Design Approach to the Regeneration of Regions

Abstract

Among scholars, policy makers, and practitioners, there is considerable interest in the dynamics associated with regions, including their emergence, decline, and regeneration. Such interest is well justified given the role that regions play in contributing to social well-being at a variety of scales—from individuals to communities and even nation-states. In this article, we examine the processes that unfolded during the regeneration of a region in Denmark that was known for its competence in manufacturing equipment and is now known as a world leader in wind turbines. We highlight three mechanisms that led to the regeneration of this region: repurposing, experimentation, and collective learning. Based on these findings, we propose a neo-design approach to the regeneration of regions.

Keywords

regions regeneration design sustainability renewable energy

For more than a quarter century, we have been studying Denmark’s transformation into a global hub for the design, assembly, and servicing of wind turbines (Etzion, Gehman, Ferraro, & Avidan, 2017; Garud & Karnøe, 2003; Karnøe, 1990, 1999; Karnøe & Garud, 2012). In this essay, we revisit this setting to identify the mechanisms whereby Denmark’s Region Midtjylland, or the Central Region Jutland (CRJ), was able to transform itself from a region predominately specialized in manufacturing equipment into the leading global player in the wind power sector.¹ The process of transformation began in the 1970s when CRJ-based companies began redeploying resources and competencies related to manufacturing farm equipment and sailboats. Along the way, existing competencies (e.g., electronic sensors, high-precision metal components, fiberglass manufacturing) were transformed into higher value activities (e.g., wind turbine design, design and manufacturing of components such as electronics and blades). When the worldwide market for wind turbines took off in the mid-1990s, Danish firms found themselves in the enviable position of having a proven, robust technology, and operational experience in export markets.

By 2015, Denmark and especially the CRJ (by then home to more than 500 industrial manufacturing firms) were engaged in all areas of the wind industry—from research and development, design, manufacturing, and logistics to construction, cabling, servicing, and maintenance. That year, the Danish wind industry employed more than 30,000 people (40% in the CRJ) and generated more than €11.5 billion in revenue (60% from the CRJ), of which more than 60% was due to exports. Not only was the CRJ transformed so too was the Danish electricity system. For instance, by 2015, more than 42% of electricity in Denmark was produced by wind power, a world record. Not only has Denmark’s CRJ been able to regenerate itself technologically and economically, it also has fomented a transformation in the ambitions and identity of the entire country.

Below, we zoom in on selected episodes that illustrate what we believe to be some of the key processes behind this regional regeneration. By offering this narrative (described in greater detail in the studies cited), we want to draw attention to two facets of regeneration. First, we make a case for the analysis of regions comprising a variety of actors and competences who interact with one another to make regional transformation possible (Krugman, 1991; Raffaelli, 2018; Safford, 2009; Saxenian, 1996). Second, we identify three mechanisms that led to the regeneration of this region: repurposing, experimentation, and collective learning. In combination, these mechanisms represent a neo-design approach to regeneration, which we explicate in this article.

Winds of Change

We begin our account of the regeneration of the Danish CRJ region in the 1970s when Christian Riisager, a carpenter, repurposed a gearbox from an old military tank (Karnøe & Garud, 2012; Møller, 1978). In an effort to improve the blades, Riisager designed a three-bladed rotor and enlisted the help of his son, a pilot with knowledge of aerodynamics, to design a “pear-shaped” wooden blade. In one experiment with a hair dryer, Riisager discovered the now famous “lift and drag” mechanism, wherein the aerodynamic shape of the blade creates low pressure that increases the force of energy, thereby causing the blade rotation to accelerate.

Riisager’s trials were the first of many experiments on different parts of the wind turbine undertaken by entrepreneurs and other do-it-yourselfers. Another pioneer was Karl Erik Jørgensen, whose entry in 1976 corresponded with rising oil prices. He decided to build a wind turbine to offset his electricity costs. In contrast to Riisager, a carpenter, Jørgensen was a “thousand trick blacksmith” who owned a workshop where he used metal to design a multibladed turbine based on some drawings and pictures he came across (Vestergaard, 2004). In February 1978, Henrik Stiesdal, an engineering student who was experimenting with wind turbine design as part of the alternative energy movement, visited Jørgensen for help with metal drilling. After the two teamed up, Stiesdal convinced Jørgensen to develop a three-bladed fiberglass rotor with more aerodynamically shaped blades to generate more energy than Jørgensen’s original multibladed rotor design.² Jørgensen and Stiesdal initially funded their experiments through personal savings which led to many new design elements such as an “internal active yaw-system” to turn blades. In 1978, their new design qualified for a $10,000 grant offered by the regional policy office of the Danish Technical Institute to stimulate inventions in general.

Yet another experiment unfolded on the border of the CRJ, in the small town of Ulfborg. Here, the local unit of the Tvind Schools, an educational institution established to foster socialist values–based education, initiated the design and building of the world’s biggest wind turbine in 1975 (a 2 MW upwind turbine). Many engineers became interested, and experts from the Danish Technical University participated in the design of the overall turbine and blade profiles. Tvind’s blade experiments resulted in molds and skills to fold fiberglass, which were attached to the steel structure of the blade. The Tvind experiments inspired the young engineer Grove-Nielsen who, in his garage, began designing and manufacturing fiberglass blades based on the original Tvind mold for small blades.

Another critical innovation came from Riisager, when, in 1976 he connected his 15 kW wind turbine with an asynchronous generator to the electricity grid using a washing machine plug without seeking prior permission from the utilities. After 3 days of operations, during which he checked to see if his neighbors had any problems with their grid connections, Riisager met the director of the local utility to inquire about connecting his device. As regulations for connecting such devices to the grid did not exist, the utility director did not immediately respond. In the hiatus, a journalist published an article in which he erroneously reported that the utility had granted permission. Other journalists who saw this article came to see Riisager and wrote about this event. Because of this publicity, Riisager was allowed to continue using his wind turbine, despite never formally receiving permission (Vestergaard, 2004). By the summer of 1976, Riisager’s first customer asked for permission to connect to the grid. However, the Danish Electrical Utility Association was reluctant to grant approvals. Eventually, though, due to political pressure to use all domestic energy sources, the utility issued its first set of guidelines for connecting wind power to the grid.

Critical Early Users

Between 1977 and 1979, Riisager sold 72 wind turbines (Karnøe, 1991). Most users were idealistic and motivated to buy them because of environmental concerns rather than any expectation of a monetary return on their high-risk investment. However, all users were concerned about the safety and reliability of turbines. Out of this concern emerged the Danish Wind Turbine Owners’ Association. Formed in 1978, the association monitored the operations of each wind turbine and offered suggestions on the improvement of designs to manufacturers. The interactions that ensued between early wind turbine manufacturers and users created a relatively strong environment for collective learning. One outcome was the design of a double-brake system that “ensure[d] the survival of the wind turbine when something went wrong” (Gipe, 1995, p. 59).

Another initiative was a monthly publication (later called Natural Energy) detailing the performance of different brands of wind turbines, that is, the location, wind speed, operational hours, and component failures were recorded and reported (Jensen, 2003; Karnøe, 1991). As interest in the newly emerging field grew, users, producers, and do-it-yourselfers began to organize “wind meetings.” These meetings, held four to eight times a year, offered a forum for the exchange of ideas between entrepreneurs (who were motivated to improve the performance of wind turbines), users (who were attuned to safety and reliability), policy makers (who were interested in understanding how to regulate such activities), and researchers from the test station for wind power (who were interested in the overall viability of wind turbines as an alternative source of energy). Over time, the meetings helped create shared knowledge among different social groups for the new field (Karnøe, 1991). Equally important, the wind meetings created an environment where participants felt they were part of a larger community.

Overall, the activities organized by wind meetings and critical users in the Danish Wind Turbine Owners’ Association highlight the importance of collective learning in the regeneration of regions. Collective learning enabled actors to learn from one another and, in the process, scale up operations (Etzion et al., 2017). Moreover, the documentation of performance was important to establish legitimacy in the eyes of key stakeholders; specifically, these data were used to negotiate with utilities and politicians about regulations and subsidies.³

Entry of Larger Firms and Supplier Activation

The 1979 wind turbine subsidy-approval scheme was an important regulatory innovation that reset the economics of wind power and attracted small- and medium-sized CRJ companies. The new wind turbine companies included Vestas, Nordtank, and Bonus Energy (now Siemens-Gamesa Windpower). Firms producing agricultural equipment diversified into wind turbine technology by licensing and copying design elements from the wind turbines pioneered by Riisager, Stiesdal-Jørgensen, and others. The entry of these firms into a robust economy populated by manufacturers with established routines further galvanized the transformation of the region through more systematic supplier activation, for instance, in the areas of electronic controls, blades, and metal working for bearings and shafts. For example, Erik Roug (formerly Herning Container Tanks), who diversified from water and oil tanks for agricultural purposes into tubular wind turbine towers, utilized advanced high-pressure welding techniques capable of withstanding the forces of the wind.

Other components, like gears and generators, were not available in Denmark and had to be sourced from suppliers in Sweden, Finland, and Germany. Over time, during the 1980s, standard components became more specialized. Gears, however, were not standardized. For this component, the major wind turbine manufacturers collaborated with suppliers to design their own special components. In addition, “gear engineers” from wind turbine firms worked for months on location with the suppliers (Karnøe, 1991).

Problem-Solving Orientation

The intensive development work on the early Danish turbines was characterized by pragmatic, ad hoc efforts, often with serendipitous results. Due to the ambiguously defined and poorly understood technology, design and construction were driven by trial and error learning, and by simple rules of thumb. The field’s folklore abounds with stories of important improvements originating as drawings on paper napkins and “blade-throwing” competitions (specifically between Jørgensen and Stiesdal) prior to the development of the tip-brake system. Gradually, there was an accumulation of knowledge, which led to improved design rules that changed from simple, hand-calculated parameters to rules that relied on more advanced empirical analysis.

The learning-by-doing that accumulated stemmed first and foremost from an integrated, hands-on design and manufacturing process transferred from agricultural equipment to wind turbines. The first entrepreneurial efforts took place in small machine shops with a few engineers and skilled workers who possessed practical hands-on knowledge. In addition, the flat, flexible, craftlike organization of these firms facilitated the kind of communication and coordination among groups with complementary technical skills required for learning to take place (Karnøe, 1999). Much of the (often tacit) knowledge generated and disseminated was in response to specific problems that appeared. Problems would be communicated and tackled directly without too many bureaucratic formalities or hierarchical approvals, further improving the capacity for information processing and learning. This way of collaboration between engineers and skilled workers was highly institutionalized in the CRJ firms and supported by unions.

Lacking any specialized knowledge of aerodynamics, the design approach was not aerodynamic efficiency but structural dynamics and operational reliability. The firms mobilized their pragmatic skills, often tacit craft knowledge regarding the structural dynamics of materials they had acquired designing agricultural equipment that had to survive the harsh environment in the fields. On entering the new field of wind turbines, they naturally used an approach they were familiar with and good at, namely, their core competency of designing and constructing equipment that was durable and reliable enough to operate for many years with little maintenance or downtime. Learning-by-doing was an integral and familiar part of achieving that reliability. Such learning, coupled with learning-by-using among critical users, and learning-by-testing catalyzed by the introduction of the test and research center (which we describe in more detail below) constituted core elements of the virtuous collective learning process underlying the transformation of the CRJ.

Danish Wind Turbine Test Station

The Danish Wind Turbine Test Station (DWTS) was established in 1978 as part of the Danish Energy Policy research program following the 1974 energy crisis. The Danish Energy Agency provided an initial 3-year grant of about $1 million specifically to support the emerging wind turbine industry. At first, the DWTS engineers found that they did not possess enough knowledge to create robust criteria for the evaluation of wind turbines. To build up this knowledge base internally, they interacted heavily with early wind turbine manufacturers and users, continually incorporating suggestions that emerged on the test center’s research agenda (Lundsager & Jensen, 1982), while simultaneously contributing to the manufacturers’ learning-by-testing processes.

Another major challenge faced by the test center was related to developing an adequate mode of interacting with a highly independent and skeptical turbine industry. In particular, many firms did not want the center examining their products and designs, fearing that knowledge could be leaked to other firms. To address this issue, the DWTS initiated a series of wind turbine design competitions. Many participated, as there was an award for the best design in addition to the prestige of winning. This process was institutionalized when a new government subsidy scheme was enacted in 1979. This scheme offered subsides to buyers (30% of the total cost of a wind turbine) but for only those wind turbines that had been approved by the DWTS. Seizing this opportunity, the DWTS began interacting with early wind turbine users and manufacturers. Criteria were borrowed from the Danish Wind Turbine Owners’ Association’s demands for safety, which were supplemented with other structural criteria similar to building standards.

The test center’s approval responsibility quickly became the dominant factor in shaping the types of problems addressed and the types of knowledge developed by the center. Consistent with the practical problem-solving orientation and conservative attitude toward innovation (i.e., “Can the design work?” vs. “Is the design a breakthrough?”) that characterized the field, operating reliability and safety became the center’s primary evaluation criteria for wind turbines (Garud & Karnøe, 2003). The center used simple theory to calculate some minimum load factors that the industry could use as part of standardized design rules. They were conservative standards, but they were safe, with the high minimum load factors tending to support sturdy, overweight designs. The standards were used to evaluate each turbine. If a firm wanted to deviate significantly from the standards, it had to convince the test center that it would work. Although collective knowledge emerged through these interactions, the DWTS was careful not to compromise the knowledge of any one firm (Karnøe, 1991). Consequently, it became the default “bridging organization” for the various actors in the emerging field.

The extensive personal contact between turbine firm and test center personnel that occurred during numerous iterations of designing, constructing, testing, reviewing, and problem solving prior to approval of a new turbine contributed immensely to the cumulative building of a shared knowledge base and research agenda within the industry. The knowledge generated as a result of reviewing and interpreting measurement data from the test center ultimately became very important to turbine designers. Full-scale tests, measurements, and experiments on commercial wind turbines provided data for the first empirical parameter models and informed simple theories which then served as guidelines for practical design work. The interactions between the test center and industry contributed to the continuous incremental improvement of wind turbine performance. These increments added up. For example, between 1981 and 1984 the performance of 55 kW turbines improved more than 50%.

Mechanisms for Regional Regeneration

Our reading of the decades-long transformation that transpired in Denmark’s CRJ highlights three key mechanisms underlying regional regeneration (see Figure 1). The first mechanism is repurposing, defined as reusing parts for a functionality different than originally intended. As we discuss below, such repurposing includes two facets: bricolage and exaptation. Second is experimentation, defined as broadening and deepening of knowledge through trials and assessments. This includes both individual experiments and, equally important, experiments across the entire emergent ecosystem. Third is collective learning, defined as a generative memory that transforms the system even as it performs. Generative memory emerges from the interactions of three kinds of learning: learning-by-doing, learning-by-using, and learning-by-testing.

Figure 1.

A neo-design approach to the regeneration of regions.

Repurposing

The first mechanism we observed was repurposing, which has two facets. One is bricolage. Following Lévi-Strauss (1966), we define bricolage as the one time use of existing materials for a new purpose. Prior literature has highlighted the importance of bricolage for entrepreneurship and innovation (see also Baker & Nelson, 2005; Garud & Karnøe, 2003). In our case, bricolage is evident, for instance, in Riissager’s reuse of gears and shafts from lorries to create his first wind turbines, and in firms transforming materials, resources, and capabilities originally developed in the context of farming implements to provide critical parts for wind turbines.

Bricolage, while important, has limited potency on its own. In addition, the reuse of materials, resources, and capabilities at hand must be institutionalized for speciation to occur. Building on Gould (1991), we label this second facet of repurposing as exaptation, which is a feature “that did not arise as an adaptation for its present role, but was subsequently co-opted for its current function.”⁴ As with bricolage, scholars have increasingly demonstrated the role of exaptation in technological domains (Andriani & Carignani, 2014; Cattani, 2005; Garud, Gehman, & Giuliani, 2016). Although we consider both bricolage and exaptation to be critical for repurposing, the move from bricolage (which we consider to be a quick fix) to exaptation (which we consider to be institutionalization) requires considerable effort (Garud et al., 2016; Garud, Gehman, & Giuliani, 2018). And it is the repeated combination of the two that gives rise to regenerative capacities. For instance, in the case of Denmark’s CRJ, over a decade (1975-1985) actors continued repurposing skills and materials at hand to develop prototypes. These activities generated valuable data that the firms could then use to transform wind turbine designs and organizational capabilities to improve the performance of wind turbines. In other words, considerable experimentation and learning was involved in the journey from bricolage to exaptation. We discuss these two mechanisms in greater detail below.

Experimentation

The second key mechanism was experimentation. The emergence of the Danish wind power sector is replete with experimentation across a variety of scales. For instance, actors relied on scale models, such as Riisager who utilized a hair dryer to discover the now taken-for-granted design principle of “lift and drag.” In other cases, experiments were at the level of specific components, such as rotors and blades. Different prototypes made it possible for actors to demonstrate what they had designed and then to test the real-world performance of these components. For instance, the significance of Riissager’s first grid-connected wind turbine was amplified after it was publicized in the local media, thereby attracting considerable attention from the public at large. In a similar vein, the details of the working of the prototypes, showcased in wind turbine meetings and by the test center, made it possible for multiple actors to learn from the distributed experiments.

Experiments carried out at the DWTS also set in motion a series of contests. This is reminiscent of Rao’s (1994) insights on the emergence of the automobile industry in the early 1900s and the important competitive benefits enjoyed by firms that prevailed in racing contests. This result has been replicated in a recent study that revealed an additional insight—firms that participated in such races were more likely to survive (Goldfarb, Zavyalova, & Pillai, 2018). In addition to these findings, theorization has established that participation in such field configuring events enables new criteria to emerge (Garud, 2008; Kreiner, 2012). For instance, Garud (2008) has argued that trade conferences serve as venues for competitive display of designs and the enactment of different evaluation criteria; Kreiner (2012) has argued that criteria are justifications offered after the fact in the case of architectural competitions.

These different episodes also highlight an important facet of experimentation in the context of regeneration—namely, the need for institutional experimentation, such as the innovative wind turbine subsidy-approval scheme, which was highly contested in real time. Whereas regulations that have become institutionalized center on prevailing technologies in use, regeneration may require new regulations or the transformation of existing ones (e.g., Hargadon & Douglas, 2001). Recently, some have advocated “permissionless” entrepreneurial entries (e.g., the entry of Uber into the taxi industry, or the entry of Travelers Insurance into commercial banking; see Edelman, 2017; Lounsbury, Gehman, & Glynn, 2019), but permissionless entry can impose costs on other actors and on society at large (Rosenthal, 2019). Another proposal has been to experiment with policies around new technologies, the results of which can then inform implementation (e.g., Biber, Light, Ruhl, & Salzman, 2017; Light, 2018). Better understanding the interplay between institutional innovation and regional regeneration appears ripe for further research.

Collective Learning

Finally, these observations prompt the articulation of collective learning as a third mechanism driving regeneration. In particular, we discerned three modes of collective learning. The first is learning-by-doing, which was apparent in the trial and error efforts of the multiple people involved in designing and deploying prototypes. The second is learning-by-using, which led to a deeper understanding of the operational dynamics of wind turbines under different conditions and the development of important design features, such as the double break system. The third is learning-by-testing, which was readily evident in the efforts by the DWTS, an institutional actor, to record and analyze the test results of the various wind turbine installations across the region.

Collective learning drove regeneration in several different ways. First, as already mentioned, it enabled actors to learn from distributed experimentation in a coactive manner (Myers, 2017). Second, by facilitating the accumulation of data on different wind turbines, it created a generative memory, which facilitated continuous improvements. Mistakes came to be viewed as market probes that created opportunities for learning rather than providing evidence of failure. This learning formed the basis for the gradual design scale-up to larger turbines. Third, collective learning was important to the generation of a new regional identity around wind turbines. In combination, these three outcomes led to the ongoing transformation of the resources, capabilities, and identities of the actors in the field.

Toward a Neo-Design Approach

In combination, the three mechanisms we identified (repurposing, experimentation, and collective learning) constitute what we label as a neo-design approach. In the choice of this label, we were inspired by Simon (1996, p. xii) who noted: “[design is] concerned not with the necessary but with the contingent, not with how things are but with how they might be.” Realizing the fundamental uncertainties that underlie such processes, Simon offered the notion of “planning without goals,” which is made possible if one takes a “discovery” approach “guided by only the most general heuristics of ‘interestingness’ or novelty” (Simon, 1996, p. 162).

Similarly, a neo-design approach is characterized by ongoing change with intermediary outcomes serving as the basis for further transformation. These ideas can be seen in the work of contemporary scholars who offer insights on design as a process, which has variously been labeled as design thinking (Brown, 2009; Martin, 2009; Rowe, 1991) and design attitude (Boland & Collopy, 2004; Michlewski, 2008). These scholars provide insights on how phenomena emerge through repurposing, experimentation, and collective learning. In this regard, an understanding of the dynamics that unfolded in Denmark’s CRJ is a useful starting point for investigating how transformations could unfold in other regions.

Footnotes

Acknowledgements

We are grateful to the editors, Oana Branzei, Pablo Muñoz, Sally Russell, and Gail Whiteman, for their generous and helpful comments on an earlier draft of this article. Raghu Garud would also like to acknowledge Mike Farrell’s support.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Joel Gehman

Notes

Author Biographies

Raghu Garud is Farrell Chair in Innovation and Entrepreneurship, and professor of Management & Organization at the Pennsylvania State University. His research explores the emergence of novelty and its adoption. Specifically, he is interested in understanding how new ideas emerge, are valued, and become institutionalized.

Joel Gehman is Alberta School of Business Chair in Free Enterprise, and associate professor of Strategic Management & Organization at the University of Alberta. His research examines organizational responses to sustainability and values concerns, especially the role of innovation processes and cultural entrepreneurship in addressing such concerns.

Peter Karnøe is professor of Innovation and Sustainability in the Department of Planning at Aalborg University. He has intensively studied the emergence of the Danish wind turbine industry and ‘clean tech’ innovations. His current research is on climate change and the role of innovation and shifting valuations in energy system transitions.

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