Research On Photovoltaic Sectoral Innovation Systems In China

Faced with the global increasingly serious issues of energy and environment, it is inevitable for China to develop renewable energy including photovoltaic (PV) generating. PV is currently in early stages of development, which indicates a huge potential, and its high growth rates will remain stable in 2030 and beyond (Perezagua et al.,2005). Photovoltaic generating has a broad prospect which creates huge space for the development of photovoltaic technology and industry. However, PV also faces many challenges at present. Over the past decade, the PV industry and the production capacity in China have developed rapidly. But one of the bottlenecks in China's PV sector is that the enterprises have lower innovation abilities and fewer core technologies. This leads to high product costs and market prices, restricting the enhancement of the competitiveness of the PV industry and the marketing of photovoltaic products. Therefore, technological innovation is a key issue in the development of PV industry in China.The PV industry in China is the object of this study. Based on the theory of innovation systems, the dissertation focuses on the structure analysis of the PV sectoral innovation system and the determinants of innovation performance of the PV industry, especially the sectoral innovation system. This study provides a comprehensive analysis of the factors and the structure of the PV sectoral innovation system in China, then investigates the three core issues in the development of photovoltaic industry technological progress, market development and the role of government and sheds light on the relationship between them. Based on theoretical studies, surveys and statistical validation, this study illustrates that the entrepreneurial activity, industry cooperation, government support and international technology spillovers have influence on the innovation performance of the PV industry in China. The main conclusions of this study are as follows:(1) The PV industry in China has formed a sectoral innovation system, its basic elements are actors, networks and institutions. The actors in China's PV sectoral innovation system include the enterprises in photovoltaic industry chain, research institutions and universities, governments, intermediary organizations and venture capitalists. The innovation networks include inter-firm relations, industry-university cooperation, the triple helix, and government-industry-university-research institution-financial institution-intermediary organization relationships. In China, there are many institutional factors which have influence on innovation and development of the PV industry, including development plans, relevant laws, policies, standards and so on. On this basis, the study fully depicts the PV sectoral innovation system in China, and gives a structure diagram of PV innovation system.(2) There are three core elements-technological progress, market development and policy support, which integrate to promote the innovation and development of the photovoltaic industry jointly. The power of innovation and development of PV industry is both from technology-driven and from market-pull. The technological development has its own rule and forms a technology circle and the market development also has its own rule and forms a market circle. But neither is the closed operation, interaction exists between each other. Not only that, regardless of the technology cycle or the market cycle, the two are inseparable from the policy to support and promote. This paper describes the governments'practice to promote PV development in developed countries, mainly in America, Europe, Japan, and sums up the basic experience:Firstly,from the development of photovoltaic industry, the governments focus on photovoltaic technology development and on the photovoltaic market development, and make a positive interaction between technology push and market pull to jointly promote the development of photovoltaic industry.Secondly,from the research and development of photovoltaic technology, the governments formulate the national PV research projects and allocate special R&D funding to promote the continuous advancement of photovoltaic technology with clear R&D plan and strong R&D funding.Thirdly,from the PV market development, the governments clearly state quantitative targets for PV installations and adopt a flexible and. diverse market incentives to expand the photovoltaic market with clear objectives and effective measures.(3) Innovation activities of enterprises, industry-university cooperation, government support and international technology spillovers have a significant impact on the innovation performance of PV industry in China. Through theoretical and empirical analysis, we find that:Firstly, innovation activities of enterprises affect industrial innovation performance. Both of the two innovative ways of internal R&D and external technology acquisition have impact on innovation performance of the PV industry in China, and the combination of the two ways can achieve better innovation effects.Secondly, industry-university cooperation affects industrial innovation performance. In the PV sectoral innovation system in China, there are a large number of industry-university cooperative relations, including cooperation in technology development projects, personnel exchanges and joint training, joint building laboratories, etc. This study has tested that the innovation performance of the photovoltaic industry is affected by industry-university cooperation in the Chinese context. Thirdly, government support affects industrial innovation performance. In China's PV industry, the government has taken various policy measures in support of PV development, mainly in the form of the plan, legislation, tariff policy, electricity policy, photovoltaic R&D policy, policy to support the construction of major PV projects, policy on the promotion of PV building applications, photovoltaic power generation demonstration projects, financial assistance policy, etc. In this study, based on survey data of the Chinese PV companies, it is verified that government support affects industrial innovation performance of PV industry in the Chinese context. Fourthly, international technology spillover affects industrial innovation performance. A variety of trade, investment, exchange or cooperative relationships exist between the Chinese PV companies with various overseas institutions including companies, universities, research institutions, etc. Through these different channels, the PV technology and knowledge of the overseas transfer and diffuse into the domestic photovoltaic industry. This study has tested that the innovation performance of the photovoltaic industry is affected by international technology spillover in the Chinese context.