R&D portfolios in environmentally friendly automotive propulsion: Variety, competition and policy implications

Abstract

In this article, we analyze R&D portfolios in environmentally friendly automotive propulsion including alternative fuel options. We argue that at the current stage of development, substitution of conventional car technology by a new automotive propulsion technology may lead to premature lock-in of suboptimal technology. To avoid such lock-in, one should value the variety of current R&D activity that enables organizations to learn from multiple options and to create spillovers between options. We further argue that the existence of technological variety is not a sufficient condition to avoid lock-in. Organizational variety is also required to sustain competition and avoid the dominance of few firms that possibly enforce a suboptimal technology within the sector. To assess whether recent developments in R&D have led to both technological variety and organizational competition, we analyze United States Patent and Trademark Office (USPTO) patents in low-emission vehicles (LEVs) during the period 1980-2001 using entropy statistics. Results show that both technological variety and organizational competition have increased steadily since the early nineties, suggesting that premature lock-in is unlikely to occur. From an

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