Innovation in disruptive regulatory environments

Abstract

Purpose The purpose of this paper is to explore the development of the electric vehicle, technological capabilities of incumbents and would‐be new entrants in the auto industry. These are discussed with reference to US regulatory moves towards zero emission standards to provide a new framework for identifying the potential success of various types of regulation and the technological capabilities they demand. Design/methodology/approach Methodologically, a two pronged approach is adopted whereby US patents are analysed to quantitatively confirm the presented case‐based evidence on responses to emission regulation. The paper also discusses the use of patents as a means of examining technological development. Findings The paper shows the significant need for market protection for disruptive innovation and that a limiting factor of success in regulation occurs when radical technology is demanded. Originality/value A new framework is presented for identifying the potential success of various types of regulation by linking to the technological capabilities they demand and identifies the significant need for market protection for disruptive innovation. This implies that a limiting factor of success in regulation occurs when radical technology is demanded.

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