Unrelated diversification in latecomer contexts: Emergence of the Chinese solar photovoltaics industry

Abstract

New industries emerge in increasingly complex spatial patterns that challenge existing explanations of industrial path creation. In particular, the case of latecomer regions building up industries in fields that are unrelated to their previous industrial capabilities is not well understood in the literature. This paper aims to address this gap by expanding on an analytical framework that draws on innovation studies and catching-up literature to characterize unrelated diversification processes in latecomer contexts. A case study in the Chinese solar photovoltaics (PV) sector reveals an industry formation process that differs from traditional models of industry formation. The PV industry emerged from a highly internationalized entrepreneurial project in which Chinese latecomer firms directly mobilized knowledge, markets, investment and technology legitimacy developing outside China and combined them with the country's generic capabilities in mass-manufacturing. In some industries, globalization thus enables a new model of industrial path creation that heavily draws on extraregional system resources.

Geographies of transition—From topical concerns to theoretical engagement: A comment on the transitions research agenda

“…EEG provides robust evidence that regions and countries are most likely to move into new industries that are related to the pre-existing knowledge bases and capability portfolios (Hidalgo et al, 2018). In this context, in particular exploring the determinants of 'long jumps' into technologically and institutionally unrelated, more sustainable, development paths is a frontier that is of key relevance for both transitions and geography scholars (Binz and Diaz Anadon, 2018;Boschma, 2017;Grillitsch et al, 2018).…”

The short-term costs of local content requirements in the Indian solar auctions

“…In order to analyse the possible benefits of the LCR policy, we select a small set of indicators commonly used in the innovation systems and catching-up literature to determine whether a country is 'narrowing' the gap between the innovation leader and itself. While there are no perfect sets of metrics, we employ three different metrics commonly used in the innovation and economics literature: (1) domestic and international patent filings in the technology of interest 40 , (2) domestic production versus international imports 5 and (3) exports to other countries from the country of interest 4 .…”

“…This market is projected to grow to US$6.4 trillion by 2023, with solar technologies expected to constitute the largest share of value of the clean energy technologies market 3 . The idea that localizing clean technology industries (that is, manufacturing clean technologies locally) might be possible for developing and emerging countries, at least in some contexts, is partly inspired by China's success in building competitive domestic wind and solar power manufacturing industries 4,5 and by the decades-long academic literatures on national and technology innovation systems, 6 catching up 7 and related diversification 8 , among others [9][10][11] . Recently, there has also been a renewed interest in industrial policy, particularly in the case of green technologies [12][13][14] .…”

China’s role in the next phase of the energy transition: Contributions to global niche formation in the Concentrated Solar Power sector

“…This article will highlight the divergence from traditional catch-up development in the Chinese CSP sector by analysing the relative importance of domestic and foreign elements in its early stage CSP industry formation. Similar to recent analyses on transnational innovation dynamics in emergent cleantech sectors (Andersson et al, 2018;Binz and Anadon, 2018), we will trace the origin of four industrial path formation resources (knowledge, market demand, investment, and legitimacy). This is done through a review of Chinese government policy and industry reports, the creation of a database of actors involved in pilot and demonstration projects, and a series of interviews with Chinese CSP experts in academia, industry, and government.…”

“…Much scholarly attention has been focused on the conditions that enabled this shift of manufacturing industries towards China and other emerging economies such as India, South Korea, Brazil, etc. (Binz and Anadon, 2018;de la Tour et al, 2011;Fu and Zhang, 2011;Gosens and Lu, 2013;Lema and Lema, 2012;Lewis, 2007;Quitzow, 2015). These studies have in large part re-iterated conclusions from literatures on National Innovation Systems or on catchingup.…”