Emerging industries depend on government support to grow, but they may be seen as threats to an incumbent industry, and they need to prove their technical feasibility and market promise. So how do emerging industries garner government support? A group of researchers led by former Erb Institute Postdoctoral Fellow Panikos Georgallis set out to demystify the conditions under which emerging industries get government support.
Established industries have economic and political power that emerging industries lack. As the researchers put it, “Nascent industries, and the firms that populate them, are vulnerable. Lacking cognitive acceptance from stakeholders, and sometimes founded in direct opposition to entrenched industries, they struggle to establish and maintain a presence. Favorable regulatory environments can help them to take root, but little is known about how such environments come into effect.” The research was published in “Shine on Me: Industry Coherence and Policy Support for Emerging Industries,” by Panayiotis (Panikos) Georgallis, Glen Dowell and Rodolphe Durand, in Administrative Science Quarterly.
They looked at the solar photovoltaics (PV) industry in Europe and found that government support is strongly dependent on three factors:
- the number of solar PV producers in each country
- how coherent the industry is, and
- how concentrated the incumbent industry is.
Their results “shed new light on the relationship between public policy and the emergence of an industry category, and they extend our understanding of how new industries can attain valuable state support while operating in seemingly hostile environments,” the researchers wrote.
Further research on this topic available: http://myumi.ch/LPpBR
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KEYWORDS: Erb Institute, university of michigan, sustainability, Panikos Georgallis, solar photovoltaics