Abstract
This study examines how technological characteristics influence the impacts of policy on innovation with respect to wind turbine and solar photovoltaic (PV) manufacturing industries in China and India. The analysis draws on patent applications and government policies in the aforementioned industries from 2000–2017. Wind power and solar PV patents in China have increased rapidly since the mid-2000s, whereas patent numbers in India have remained low. Between 2000–2017, wind turbine was a design-intensive and cost-competitive technology. Consequently, building innovation capabilities in the wind turbine industry required technology-push policies to support research and development and tacit knowledge transfer, and demand-pull policies to create a sizeable, predictable, and performance-oriented domestic market. Solar PV was considered to be a manufacturing-intensive and more expensive technology. Thus, the PV manufacturing industry benefited from technology-push policies that promoted export-oriented manufacturing. While the domestic market played a supplementary role, demand-pull policies that focused on guaranteed investment returns (feed-in tariffs) helped to improve the innovation performance in solar PV. China balanced the implementation of technology-push and demand-pull policies that met these technology-specific requirements. On the contrary, India’s inadequate technology-push policies led to a lag in innovation in wind power and solar PV. Thus, policymakers need to strike a balance between technology-push and demand-pull policies, particularly by integrating innovation policies into a policy mix, and focus on technological characteristics as they determine the nature of the technological learning required to develop innovation capabilities.
Hayashi, Daisuke