Product life cycles are sector specific institutions and markets in solar cell sector

This paper builds on the concept of sectoral innovation systems, and uses it to analyse the emerging photovoltaic solar technology sector. It compares product life cycle and industry life cycle predictions with the evolution of this fledgling industry over half a century. It finds that innovation does not recede, that institutions (universities, public laboratories and policy incentives) are key to understanding the contours of the sector, including its international relocation. The sector first moved from its cradle in the United States to Japan and Western Europe, and is now emerging in North and South East Asia due to public incentives, market growth and institutional build-up in the new locations. Japan, China, Taiwan and South Korea are the most likely contenders to dominate the industry in the coming years, even if the United States remains the main locus of industrial innovation in solar cell, solar glass and solar battery technology. Already China produces more than 50% of PV solar equipment and has become the largest market for the sector. Europe remains the second most important market, but its innovation effort declines.

Objective: Understanding the international diffusion of the most probable candidate renewable technology to compete with hydrocarbons in the foreseeable future.

Data/Methods: The paper uses patents in solar technologies as its main empirical basis, but also uses production figures, exports and public supports to innovation.

Results: The paper measures the diffusion of the technology and its spectacular growth in the last five years in terms of patents and innovation.

JEL Categories: O3, L6, M2, F6