Integrating innovation system and management concepts: The development of electric and hybrid electric vehicles in Japan

Policymakers as well as corporate managers want to know how to gain the lead and benefit from a paradigmatic shift in technology. This paper develops and uses a combined policy and firm-level theoretical framework to derive policy implications from a case study of the development of battery, hybrid and fuel cell electric vehicles (BEVs, HEVs and FCVs) in Japan. Among the implications of the study, it is argued that Japanese national policy has so far had a limited direct role in the electrification of vehicles; this has been very largely decided and carried out in-house at the automakers. Policymakers need to consider this as well as the inherently international nature of the automotive industry. One key factor behind Toyota's and Honda's early and sustained lead in the electrification trajectory is the intense and in some aspects quite specific type of competition on the domestic market, which has nurtured firms with a strong product development capability. Finally, it is argued that the proposed theoretical framework contributes to a more balanced view of the role of policy in this potential paradigmatic shift in technology in a mature industry, compared to traditional policy or firm-level approaches.