Xiao-Shan Yap, Bernhard Truffer, Deyu Li & Gaston Heimeriks
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Abstract:
Recent research in catching-up and leapfrogging literature has been at pains to explain how latecomer countries, besides a few exceptional cases, could achieve leadership positions in global industries. We propose to extend the potential development strategies by drawing on recent insights at the interface between economic geography and socio-technical transition studies. Whereas the extant catch-up literature has strongly focused on conditions of knowledge development, we claim that processes of “valuation” and in particular the formation of new markets needs to be considered more explicitly. Drawing on recent developments in the Chinese solar photovoltaics industry, we show how companies in the country moved from a knowledge based catch-up strategy, to increasingly leading the innovation frontier of the PV sector. However the most promising leapfrogging opportunity only seems to take shape in the most recent phase, where market deployment and entrepreneurial experimentation increasingly target a transition of the electricity sector towards accommodating a high share of renewables. In a nutshell, the experience of the Chinese solar photovoltaics industry progressed from manufacturing PV cells, to climbing the value chain ladder, and finally towards the construction of entirely new socio-technical systems. We argue that this approach is increasingly necessary as sustainability requirements become more urgent and that other countries may learn in order to move out of the middle- income trap.