Diversity in technology competition: The link between platforms and sociotechnical transitions

Abstract

There is an urgent need for a fast transition to a low-carbon economy, which will involve behavioural change and new technologies. This paper focuses on the technological dimension of the transition. Low-carbon technologies usually have a modular architecture that utilize standards to enable interfacing of components. These standards contribute to transition inertia. An important question addressed in this article is whether maintaining technological diversity can help overcome inertia. This requires keeping options open and foregoing returns to scale. It is a trade-off which has technological as well as spatial dimensions which are important because different geographical areas may provide institutional or other advantages to the emergence of distinct technologies. In order to explore this, the platform competition and transitions literature are reviewed, links between them are established, and a system dynamics model is developed where multiple new technologies compete with an incumbent. It is used to answer two questions: Will a larger portfolio accelerate or delay a transition to a new technology, and under which conditions will such an acceleration occur? does spatial differentiation matter to the outcome? The model results show that technological diversity and spatial differentiation matter for the speed of transitions. The challenge is to create a level competitive field for all technologies accounting for the distinct institutional advantages their spatial differentiation may provide. This opens a range of future research directions. Highlights:-I develop a model of technology evolution-It describes competition of incumbent and new technologies-It represents technological diversity and spatial differentiation-It studies time to realize a full transition to new technologies-Transition time increases with the number of technologies, and spatial dispersion

System dynamics modelling and simulation for sociotechnical transitions research

“…Platforms in innovation ecosystems can be products, services, or technologies that provide a basis on which groups of suppliers can develop their own complementary products, technologies, or services, organized as an innovative business ecosystem (Gawer and Cusumano, 2014). The implication is that platforms bind a sociotechnical system together and they matter for contemporary transition research (Papachristos, 2017). For example, in transport, automotive and electricity industry actors, along with dedicated standardization bodies and developers of charging equipment, coalesce around DC and AC charging solutions for electric vehicles (Bakker et al, 2015).…”

“…Casey and Toyli (2012) develop an SD model to study the strategic management of two-sided platforms in the diffusion of public wireless local area services which could be relevant for transition research on urban smart cities. Papachristos (2017) discusses the conceptual link between technological platforms and sociotechnical transitions and uses an SD model to show how technology diversity and incentives can slow or accelerate a technology transition. This work could be used to develop conceptually the MLP in terms of niche-regime interactions.…”

An agent-based model of climate-energy policies to promote wind propulsion technology in shipping

“…Agent interactions produce emergent behavior and system properties that are not prescribed in agent behavior (Epstein and Axtell, 1996;Epstein, 2007). Agent-based and system dynamics modelling are some of the methods often used in sociotechnical transitions research (Safarzyńska and van den Bergh, 2010;Safarzynska et al, 2012;Holtz et al, 2015;Köhler et al, 2018;Papachristos, 2011;Papachristos, 2017;Papachristos, 2018b). ABMs have certain advantages when it comes to exploring the behavior of complex adaptive systems as they: (i) provide explicit and systematic representations that allow experimentation, and (ii) generate complex system behavior from underlying mechanisms and processes and thus they facilitate the inference of insights about system behaviour.…”

Policy and state in complexity economics

“…However, this may not always be feasible under returns to scale and network externalities. So there are critical conditions for new institutional solutions and standards to be learned and for openness and transition policies to become feasible, and they may exist in critical time windows only (Heinrich 2013;Houser et al 2014;Papachristos 2017).…”