From Infant Industry to Global Champion: The Importance of China's Innovation System for the Domestic Electric Vehicle Battery Industry

Abstract

This is a qualitative case study on the Chinese electric vehicle battery (EVB) industry. We have researched the relationship between the Chinese innovation system and the EVB industry. The research design is of exploratory and explanatory nature and tries to grasp how the Chinese innovation system is related and affects the emerging EVB industry. This was done in light of innovation theory, narrowed down to National Innovation System (NIS) and Regional Innovation System (RIS), to gather a comprehensive frame and solid foundation for understanding the details in this relation. Through semistructured interviews followed by comprehensive coding processes, we integrated out empirics with our chosen academic literature to elaborate the relation between the Chinese innovation system and the EVB industry. We discovered that three actors stood central within both theories and findings: academia, businesses, and government. From a national perspective, it became apparent that the central government with their utilized measures in the form of plans, initiatives and policies guides the nation in a strategic desired direction. We also discovered the promotion of interregional coordination, with a focus on clustering different industries within specific regions, overall framed as the “urban planning policy”. Upstream-downstream connections, firms interacting with it’s environment and interactive learning process are found to be a guiding motive for the move towards clusters, and are seen to apparent for players of the EVB industry. Furthermore, Nelson’s (1993) indicators for effective innovative performance are also seen to be fulfilled to a high degree. We, therefore, conclude for the governmental measures being responsible for interactive movement and forming of the EVB industry. From a regional perspective, further evidence was made on clustering and interactions, structurally formed as a regionalized national innovation system. This was in coherence with the national perspective built between academia and businesses with the government orchestrating the innovation process. We, therefore, conclude from a regional perspective that the Chinese innovation system is related to the emerging EVB industry. This is seen through the encouragement of indigenous innovation via governmental measures, creating systems surrounding businesses, academia and government, which further helps strengthen the development of the regional EVB industry. All in all, we conclude that the analyzed Chinese innovation systems, built up and structured around governmental measures act like an enhancing infrastructure and environment for the EVB industry development.