Standards and technological substitution: the case of transportation systems

This chapter focuses on the role of standards to promote the (re)entry of technological systems in markets already dominated by a well-established incumbent technological systems. It starts from the recognition that the innovation process does not necessarily proceed neatly along a single (S-shaped) path of technological substitution. It is usually assumed that new technologies may emerge, grow and subsequently establish dominance after a period of rivalry. If they do not, the implication is that the emergence of a standard (or a dominant design) in a market does not necessarily lead to the complete substitution of an original rival but instead contributes to the dynamics of a longer-term process. The premise of this chapter is that by examining these ‘substitution dynamics’, important aspects may be revealed about the role and function of standards in the innovation process during successive generations of technology. Green technologies, specifically battery electric vehicles, are examined to explore the role of standards in technological substitution. The chapter also considers the dynamics of lock-in, the role of public policy, as well as the position of intellectual property rights disputes in such a context.