Innovation within a networked economy – China’s electric cars

One week after I told my class that I thought that either China or India would build infrastructure for hydrogen fuel cell cars before any of the western countries did, the New York Times reports that China is trying to become the world leader in electric cars. So I was close! My reasoning was that hydrogen cars require a fair bit of supporting technology –  especially a system of refueling stations – and that it would be much easier to build this infrastructure in an economy where the petrol car system wasn’t so deeply embedded.  At the same time, you need a reasonably big market to make the whole thing work, which means China or India (or maybe Brazil).

John and I were discussing this issue of economic embeddedness this afternoon with regard to our research on project-based firms, who face a relatively unique set of innovation challenges due to the high level of interdependencies within their work.  The same applies a the level of countries – in order to accommodate a new innovation, in many cases ties to previous systems have to be broken first.  In the case of cars, there are a whole lot of ties that need to be broken before an entirely new system like electric or hydrogen can be put in place.  Consequently, I think there is a very high chance that these technologies will spread widely first in a place with fewer existing ties to break.

I can’t take credit for making a correct prediction yet, but if China goes electric, I guess that still leaves India with a great chance to build a hydrogen fuel cell industry! And I’ll even take credit for the prediction of Brazil manages it first…

(I first found this story through – a very good website and blog that is well worth checking out)

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.