3. Elements of an analytical framework for studying the transformation of an energy system
The process by which a new technology emerges, is improved and diffused in society can be studied from a number of perspectives. The neo-classical economic perspective focuses on how changes in relative prices influence technology choice. In contrast, seen from the perspective of the individual firm the entrepreneurial act is the central feature of innovation and diffusion. These perspectives are not irrelevant, but we will develop one which not only takes relative prices and entrepreneurial acts into account but also emphasises that: