Catch up of complex products and systems: lessons from China’s high-speed rail sectoral system

Abstract

The article uses a longitudinal case study of China’s high-speed rail from the sectoral system perspective to show how a latecomer achieves catch up in the context of complex products and systems (CoPS). Results indicate the coevolution among high-speed train CoPS, the complementary assets, and government engagement are important to the sectoral system’s catch up. To achieve catch up, a latecomer can choose a strategy in which the complementary assets take precedence over the CoPS, and the coordination of the two systems is maintained with government engagement. In addition, two elements involving the sectoral system’s knowledge base and government engagement play fundamental roles enabling the evolution of the competences of the CoPS and the leverage of complementary assets for catch up. The article contributes to the literature on catch up in the CoPS context using a sectoral system framework.

How Does Successful Catch-Up Occur in Complex Products and Systems from the Innovation Ecosystem Perspective? A Case of China’s High-Speed Railway

“…CoPS markets are often oligopolistic and bureaucratic [1]. The government plays an important role in value creation [4]. Specifically, a CoPS is coordinated by a system integrator.…”

“…Moreover, complementary assets are an important enabling factors in CoPS catchup [4], such as complementary technology, manufacturing and services [24]. System integrators in CoPS industries need to coordinate large numbers of suppliers and complementors; in cases such as the A380 super-jumbo passenger aircraft, the breakthrough of core technology alone is not equivalent to the success of the whole industry [49].…”

“…System integrators in CoPS industries need to coordinate large numbers of suppliers and complementors; in cases such as the A380 super-jumbo passenger aircraft, the breakthrough of core technology alone is not equivalent to the success of the whole industry [49]. Therefore, the level of complementary assets perform a fundamental role in the catch-up of CoPS industries [4].…”

“…First, HSR is a typical CoPS industry, and China is the world's largest emerging economy with rapid transformation innovation [4]. Through rapid development, China leapfrogged to become a technology leader in HSR and has made remarkable achievements in the global market share [65].…”

“…Studies focusing on CoPS catch-up hold controversial opinions [3]. On the one hand, the characteristics of CoPS make it a great challenge for emerging economies to master key technologies and develop systems integration capabilities [4]; much of CoPS literature is skeptical about catch-up in the CoPS industries of emerging economies [5,6]. On the other hand, an increasing number of successful catch-up cases prove that it is possible to realize CoPS catch-up in emerging economies, such as China's HSR, Brazil's aircraft, and Iran's land gas turbine industries [4,7,8].…”