Commercial development of environmental technologies for the automotive industry towards a new model of technological innovation

Economic importance of environmental issues is increasing, and new technologies are expected to reduce pollution derived both from productive processes and products, with costs that are still unknown. Until now, there is still little knowledge concerning the process of technological innovation in this field. What does exist is outdated due to rapid change in technology. In this paper, we analyse the development of Zinc Air Fuel Cells (ZAFC) and their transfer from research laboratories to large mass production. ZAFC are a new "environmental technology", proved to have a commercial value, that can be used for building Zero Emission Vehicles (ZEV). Although ZAFC performances are higher than traditional lead-acid batteries ones, difficulties in funding ZAFC engineering and "moving" them from laboratories to production caused some years delay in their diffusion. On the basis of this "paradigmatic" case, we argue that existing economic and organisational literature concerning technological innovation is not able to fully explain steps followed in developing environmental technologies. Existing models mainly consider adoption problems as due to market uncertainty, weak appropriability regime, lack of a dominant design, and difficulties in reconfiguring organisational routines. Additionally, the following aspects play a fundamental role in developing environmental technologies, pointing out how technological trajectories depend both on exogenous market conditions and endogenous firm competencies: 1. regulations concerning introduction of ZEV "create" market demand and business development for new technologies; they impose constraints that can be met only by segmenting transportation market at each stage of technology development; 2. each stage of technology development requires alternative forms of division and coordination of innovative labour; upstream and downstream industries are involved in new forms of inter-firm relationships, causing a reconfiguration of product architecture and reducing effects of path dependency; 3. product differentiation increases firm capabilities to plan at the same time technology introduction and customer selection, while meeting requirements concerning "network externalities"; 4. it is necessary to find and/or create alternative funding sources for each research, development and design stage of the new technologies. From this discussion, we will draw some conclusions and issues for further researches concerning government policy and firms' strategies for sustaining the process of technological innovation and transfer.