The technological system of production and innovation

DOI: https://doi.org/10.1016/j.respol.2018.10.003
Download the full article for free through this direct link (valid until April 04, 2019)

The technological system of production and innovation: The case of photovoltaic technology in China

From less than 1% in 2003 to a market share of 60% since 2011! How China has become the world’s leader in solar photovoltaics? What was the effectiveness of western punitive policies throughout the ‘solar wars’? This recent research paper tells the interesting story of production, innovation, policy and environment.

Research article published in the scientific journal: Research Policy Vol. 48(4) 2019, pp. 993-1015. Authored by: Dr. Mahmood H. Shubbak

Highlights

Studying production and innovation system of Photovoltaics in China over 1995–2017.
Utilizing three analytical levels: institutions, market dynamics, and innovation.
Illustrating the interactions between these levels and their impact on environment.
Recognizing 4 stages of development influenced by market dynamics and public policy.
Domestic deployment in latest stage had positive environmental and innovative effects.

Abstract

This research paper studies the Chinese technological system of production and innovation in the field of photovoltaics (PV). It contributes to a better understanding of the emergence and development of the system by utilizing three levels of analysis: the institutional framework of the system, the market dynamics of production and deployment, and the composition of innovation-related activities. The analysis demonstrates the interrelated roles of transnational factors, local government policies, and research and development (R&D) activities undertaken by the main actors in shaping the system dynamics. Tracking the relative position of China in the global PV manufacturing, installation and technological development, the analysis shows a gap between the growth of China’s market share and its modest share of transnational patent applications. This suggests a puzzle, which the paper attempts to answer by inspecting the individual companies in the system against four aspects. First, the dynamic development of their size and performance. Second, the nature of their international involvement through foreign direct investment and mergers and acquisition deals. Third, their technological specialization within the PV value chain over time. Fourth, the spatial scope of their patenting protection endeavours. The analysis recognises four periods of system development driven jointly by market dynamics and government plans. Behind the continuous growth of the system, there were different driving and moderating factors in each period.

Graphical Abstract*

* Note: The relevant subsections are given in square brackets. The arrows show direction of influence.

JEL Classification

L11, O31, O38, Q42, Q48, Q55

Expert Reviewers’ Comments

“It is an insightful and useful paper that gets at some of the right questions, indeed centrally important questions”

“There is a great significance to the paper’s contribution, as it will be a more definitive take than most, and an original angle, and it is also written more clearly… than most papers on this subject. Its contextual sections and literature reviews are robust.”

“This paper provides a comprehensive appraisal of the evolution of the Chinese technological system of production and innovation in the field of PV technologies. This appraisal is based on a very thorough research and the authors are able to present also several interesting trends of evolution using also quantitative data, on installations, patents, market performance of major firms”