Radical Innovation: Management and policy for electric and hybrid electric vehicle development

Doctoral thesis, 2010

Technological change can be divided into two categories: in line with the mainstream trajectory or paradigm (continuous, incremental), or breaking with it (discontinuous, radical). This thesis aims to increase understanding of the latter type: paradigmatic shifts in technology. These shifts are meandering processes lasting years or even decades and posing a serious threat as well as an opportunity to the actors involved. The empirical case of this thesis is the automotive industry and its potential shift from internal combustion engine to electric propulsion. Vehicle electrification has been on the cards for over a century but apart from a small and growing market for hybrid electric vehicles in the past dozen years, the outcome of the process is still highly uncertain. Empirical data was collected at project, firm and national levels mostly through interviews. The studies focused particularly on Volvo Cars/Sweden and Toyota/Japan. This thesis discusses and elaborates on a new theoretical concept of ‘interparadigmatic hybrids’, whilst aiming to enhance understanding of the process that constitutes a paradigmatic shift in technology. Using this new concept, it is argued that policy has targeted full electrification in one go, incorporated into vehicles with fuel cells or large batteries. Any gradual shift via various hybrid electric vehicle solutions (which appears to be the (techno)logical process) has been largely ignored. Moreover, most innovative activities have taken place within firms. Toyota’s hybrid electric vehicle development and market introduction highlights the extreme challenge involved in this first move. For various reasons, in particular the scarcity of resources, it is argued that small automakers like Volvo Cars have little chance of benefitting from a similar type of first move; indeed, a fast-follower strategy seems more suitable. Large automakers like AB Volvo (one of the largest companies in the heavy commercial vehicle segment) have a better chance of benefitting from first-mover ambitions.