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Automotive Modal Lock-in: The role of path dependence and large socio-economic regimes in market failure

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  • Max Briggs
  • Jeremy Webb
  • Clevo Wilson

Abstract

This paper addresses less recognised factors which influence the diffusion of a particular technology. While an innovationùs attributes and performance are paramount, many fail because of external factors which favour an alternative. This paper, with theoretic input from diffusion, lock-in and path-dependency, presents a qualitative study of external factors that influenced the evolution of transportation in USA. This historical account reveals how one technology and its emergent systems become dominant while other choices are overridden by socio-political, economic and technological interests which include not just the manufacturing and service industries associated with the automobile but also government and market stakeholders. Termed here as a large socio-economic regime (LSER), its power in ensuring lock-in and continued path-dependency is shown to pass through three stages, weakening eventually as awareness improves. The study extends to transport trends in China, Korea, Indonesia and Malaysia and they all show the dominant role of an LSER. As transportation policy is increasingly accountable to address both demand and environmental concerns and innovators search for solutions, this paper presents important knowledge for innovators, marketers and policy makers for commercial and societal reasons, especially when negative externalities associated with an incumbent transportation technology may lead to market failure.

Suggested Citation

  • Max Briggs & Jeremy Webb & Clevo Wilson, 2015. "Automotive Modal Lock-in: The role of path dependence and large socio-economic regimes in market failure," Economic Analysis and Policy, Elsevier, vol. 45(c), pages 58-68.
    • Handle: RePEc:eee:ecanpo:v:45:y:2015:i:c:p:58-68
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    Cited by:

    1. Deane, Felicity & Wilson, Clevo & Rowlings, David & Webb, Jeremy & Mitchell, Elaine & Hamman, Evan & Sheppard, Eva & Grace, Peter, 2018. "Sugarcane farming and the Great Barrier Reef: the role of a principled approach to change," Land Use Policy, Elsevier, vol. 78(C), pages 691-698.
    2. Francisco J. Santos-Arteaga & Debora Di Caprio & Madjid Tavana & Aidan O'Connor, 2017. "Formalising The Demand For Technological Innovations: Rational Herds, Market Frictions And Network Effects," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(02), pages 1-43, February.
    3. Gecchelin, Tommaso & Webb, Jeremy, 2019. "Modular dynamic ride-sharing transport systems," Economic Analysis and Policy, Elsevier, vol. 61(C), pages 111-117.
    4. Webb, Jeremy, 2019. "The future of transport: Literature review and overview," Economic Analysis and Policy, Elsevier, vol. 61(C), pages 1-6.
    5. Antonia Golab & Sebastian Zwickl-Bernhard & Hans Auer, 2022. "Minimum-Cost Fast-Charging Infrastructure Planning for Electric Vehicles along the Austrian High-Level Road Network," Energies, MDPI, vol. 15(6), pages 1-26, March.
    6. Sarmad Zaman Rajper & Johan Albrecht, 2020. "Prospects of Electric Vehicles in the Developing Countries: A Literature Review," Sustainability, MDPI, vol. 12(5), pages 1-19, March.
    7. Sioshansi, Fereidoon & Webb, Jeremy, 2019. "Transitioning from conventional to electric vehicles: The effect of cost and environmental drivers on peak oil demand," Economic Analysis and Policy, Elsevier, vol. 61(C), pages 7-15.
    8. Niroomand, Naghmeh & Jenkins, Glenn P., 2018. "A comparison of stated preference methods for the valuation of improvement in road safety," Economic Analysis and Policy, Elsevier, vol. 59(C), pages 138-149.
    9. Bussière, Yves D. & Madre, Jean-Loup & Tapia-Villarreal, Irving, 2019. "Will peak car observed in the North occur in the South? A demographic approach with case studies of Montreal, Lille, Juarez and Puebla," Economic Analysis and Policy, Elsevier, vol. 61(C), pages 39-54.
    10. Webb, Jeremy & Wilson, Clevo & Kularatne, Thamarasi, 2019. "Will people accept shared autonomous electric vehicles? A survey before and after receipt of the costs and benefits," Economic Analysis and Policy, Elsevier, vol. 61(C), pages 118-135.
    11. Teoh, Roger & Anciaes, Paulo & Jones, Peter, 2020. "Urban mobility transitions through GDP growth: Policy choices facing cities in developing countries," Journal of Transport Geography, Elsevier, vol. 88(C).
    12. Derbyshire, James & Giovannetti, Emanuele, 2017. "Understanding the failure to understand New Product Development failures: Mitigating the uncertainty associated with innovating new products by combining scenario planning and forecasting," Technological Forecasting and Social Change, Elsevier, vol. 125(C), pages 334-344.

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