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Towards An Institutions-Theoretic Framework Comparing Solar Photovoltaic Diffusion Patterns In Japan And The United States

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  • KWOK L. SHUM

    (Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong)

  • CHIHIRO WATANABE

    (Tokyo Institute of Technology, Department of Industrial Engineering and Management, Meguro-ku, Ookayama, Tokyo, Japan)

Abstract

This paper studies and compares the actual historic solar photovoltaic (PV) installation data in Japan and the United States and proposes two deployment models to account for the differences. Deployment, along with research, development and demonstration, constitutes what is known as the RD3(PCAST — President's Council of Advances in Science and Technology, United States) innovative chain of a new technology. Japan deploys PV focusing on the niche of utility grid-tied small-scale system (90 per cent of which is standardised roof-top residential PV system) using highly integrated value chain; this seems to draw upon her strong manufacturing culture and associated social technology and institutions for suppliers-dominated innovations.The United States deploys PV as abroadly defined innovationemphasising user-oriented customisation in both on and off grid, residential and industrial applications using small independent and intermediary system integrators. Empirical analysis of the diffusion patterns in the grid-tied small system category in respective contexts suggests that Japan's institutions seem to match her mass deployment strategy while the United States' combination of fragmented industry structure and diversity deployment gives rise to a complex diffusion pattern calling for continual institutional innovation or co-evolution. Our research, therefore, highlights that commercialisation of new technology or technical change, in general, is not an autonomous process and has strong institutionalunderpinnings. We formalise and generalise this "match" (Perez, 1983) argument in accordance with Nelson and Sampat's (2001) framework of physical technology vs social technology and their interactions. Some potential future extensions regarding utilities for this model are then highlighted.

Suggested Citation

  • Kwok L. Shum & Chihiro Watanabe, 2007. "Towards An Institutions-Theoretic Framework Comparing Solar Photovoltaic Diffusion Patterns In Japan And The United States," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 11(04), pages 565-592.
    • Handle: RePEc:wsi:ijimxx:v:11:y:2007:i:04:n:s1363919607001874
    DOI: 10.1142/S1363919607001874
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    References listed on IDEAS

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    1. Geroski, Paul, 2003. "The Evolution of New Markets," OUP Catalogue, Oxford University Press, number 9780199248896.
    2. Richard R. Nelson, 2003. "Physical and Social Technologies, and Their Evolution," LEM Papers Series 2003/09, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Davies, Stephen W., 1979. "Inter-firm diffusion of process innovations," European Economic Review, Elsevier, vol. 12(4), pages 299-317, October.
    4. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, April.
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    Cited by:

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    2. Neij, Lena & Heiskanen, Eva & Strupeit, Lars, 2017. "The deployment of new energy technologies and the need for local learning," Energy Policy, Elsevier, vol. 101(C), pages 274-283.

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