The role of market perceptions in bridging the innovation gap of bio-based markets: The example of biomass-to-liquid in Germany.

This paper discusses the role of market perceptions in the formation of new markets. A conceptual model based on the market practice framework of Kjellberg and Helgesson (2007) is developed and applied to market development activities for the Biomass-to-Liquid (BtL) innovation in Germany. The comparative longitudinal study confirms the suitability of this model in bringing different strands of theory together and helps explaining why innovations often fail to close the innovation gap. The findings show that in the development of pilot and demonstration projects common expectations through effectuation processes must be formed mostly on the exchange-practice level in order to create a market for BtL. In this context, storylines and the way they are connected to market perceptions play a key role in bridging the innovation gap of bio-based markets. • Systematic analysis of the role of market perceptions in crossing the innovation gap. • The conceptual model explores actor perceptions in the formation of new markets. • The network perspective approach reveals dynamics in the development of BtL in Germany. • Different BtL market perceptions block actors to bridge the innovation gap. • Strong market networks need to be formed during PDP development to enable effectuation processes. [ABSTRACT FROM AUTHOR]