Professor Gallagher Explores "Innovation and Technology Transfer Across Global Value Chains: Evidence from China's PV Industry"

Climate & Development Knowledge Network

Innovation and Technology Transfer

China’s success as a rapid innovation follower in the infant PV industry has surprised many observers. This paper explores how China inserted itself into global clean energy innovation systems by examining the case of the solar PV industry. It decomposes global PV industry value chains, and further determines the main factors shaping PV technology diffusion. Chinese firms first entered PV module manufacturing through technology acquisition, and then gradually succeeded building their competitiveness and technological capabilities by utilizing a vertical integration strategy, as well as local interactive learning networks. The main drivers for PV technology development and diffusion in the global innovation system are global market formation policy, a global mobilization of talent, optimal manufacturing capacity, and vertical integration of value chains in China. The development trajectory of the PV industry in China indicates that innovation in cleaner energy technologies is a combination of global and national innovation processes, and that effective global coordination of PV innovation systems along the global PV value chain is significant for global clean energy development.