Systems Dynamics and Empirical Studies of Innovation in the Automotive Industry

Abstract

After a brief period of entrepreneurship and competition, the automotive industry settled into a tiered structure aligned with the assembly decomposition of the vehicle. In recent years, changes to automobiles, mobility, and energy are rapidly transforming the industry with potential to disrupt the classic roles of OEMs and Tier-1 suppliers. Several new large actors from outside the industry are now competing. This research leverages two methods to investigate how innovation diffusion impacts the position of Tier-1 suppliers. A system dynamic modeling approach and an empirical study were conducted for subsystems in this industry since 1990. The research progress and limitations from these methods separately, then in combination, are discussed with insights for further work and transdisciplinary studies in engineering.