Green Innovation in Natural Resource Industries: The case of Local Suppliers in the Peruvian Mining Industry

Concerns about climate change are gaining more notoriety and exerting a pressure for more stringent environmental regulations in the mining sector. Thus, demand for sustainable methods of production has increased and created opportunities for Peruvian mining suppliers that offer green innovations (GI). 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 which determined their development and integration into the mining value chain. Our study reveals that due to the novelty of the demand for GI, most local suppliers engaged in these activities are emergent ones. Moreover, they tend to follow different strategies which facilitate their entrance to the market: they establish relationships with strategic partners, specialize in niches that can hardly be covered by foreign multinational companies, and adapt their innovations to client’s requirements. However, innovations by emergent suppliers remain limited due to multinational mining companies favoring incumbent suppliers with a positive trajectory in the market, financial constraints, and lack of communication and coordination channels within the sector. Thus, successful emergent suppliers depend highly on governmental financing, and linkages with research centers at universities.