Green industrial policy and latecomer catch-up: A missed green window of opportunity for domestic solar PV module manufacturers in Indonesia

The notion of green industrial policy (GIP) has gained attention recently in order to conceptualize the relationship between the transition to green technologies and the development of domestic manufacturers of such technologies. In this paper, we contribute to advancing the literature on GIP by presenting a conceptual framework on GIP in the context of latecomer catch-up of domestic firms in developing countries. The framework combines insights from the development studies literature on industrial policies, policy mixes in sustainability transition studies and the literature on firm-level catch-up. We apply the framework to study how industrial policies and energy policies have interacted and influenced the initial entry and early-stage catch-up of domestic solar PV module manufacturers in Indonesia in the period 2008–2023. Empirically, we draw on semi-structured interviews with representatives of domestic solar PV module manufacturers, industry informants and relevant government agencies. Based on the conceptual framework, we identify the inhibiting and encouraging factors influencing firm-level catch-up trajectories within three distinctive phases. We find that, while the catch-up trajectory of domestic solar PV module manufacturers resembled a path toward coexistence during the first and second phases, the third phase involved an aborted catch-up trajectory. However, a new catch-up trajectory toward coexistence may be emerging in relation to the recent establishment of export-oriented solar PV module production. Conceptually, the paper contributes to advancing the literature on GIPs by adopting a firm-oriented perspective and by seeking closer integration with research in development studies on the catching-up of latecomer firms.