Discontinuous but not disruptive: lessons from green steel on sustainability innovation pathways for foundation industries

Salenius, VM; Cuthbertson, R; Howard-Grenville, J

Discontinuous but not disruptive: lessons from green steel on sustainability innovation pathways for foundation industries

Authors

Salenius, VM

Cuthbertson, R

Howard-Grenville, J

Publisher

Elsevier
Judge Business School
https://doi.org/10.1016/j.respol.2026.105541

Description

The foundation industries that underpin modern economies are undergoing discontinuous transformations around sustainability and decarbonisation. However, key assumptions in the existing innovation literature are based on analyses of a narrow set of industry contexts largely focused on disruptive innovation. Alternative pathways to discontinuous change remain under-researched. This paper presents the first comparative case study of two of the world’s most advanced green steel innovation ventures – Stegra and HYBRIT in northern Sweden. The two ventures were set up as, respectively, a start-up and an incumbent-driven joint venture, each with a different strategy for disrupting legacy steelmaking. However, neither followed a path predicted by the innovation literature. We find that the inherent resource constraints that are hallmarks of foundation industries led to a convergence of the two ventures’ innovation pathways. We develop theory on discontinuous innovation for foundation industries and argue that system-level drivers, including policy triggers, material resource constraints, and non-material resource enablers shape firm-level innovation pathways. Regardless of their starting point as start-ups or incumbents, ventures in such settings converge on an innovation pathway of creative accumulation rather than creative destruction.
Support from the Saïd Business School Foundation, the Templeton Education and Charitable Trust, the KAUTE Foundation, and the Marcus Wallenberg Foundation, is gratefully acknowledged.