Academic journal article Innovation: Organization & Management

The Influence of the Technological Regime on the Global Light-Emitting Diode Industry: Lessons from Innovative Leaders and Latecomers

Academic journal article Innovation: Organization & Management

The Influence of the Technological Regime on the Global Light-Emitting Diode Industry: Lessons from Innovative Leaders and Latecomers

Article excerpt

(ProQuest: ... denotes formulae omitted.)

1. Introduction

East Asian successes in rapidly catching up in Information Technology, semiconductors, and the flat panel display industries have become the subject of numerous studies (see, for example, World Bank, 1993, 2008). While innovation infrastructure and institutional factors, such as high-quality manpower, state support, legislation, capital inputs and global network connections, are critical for successful growth of East Asian economies (e.g. Dosi, Pavitt, & Soete, 1990; Laursen & Meliciani, 2002), the interactions between technological and innovative capabilities have been shown to be an indispensable catalyst for rapid catch-up (Fagerberg & Godinho, 2005; Lee, 2010; Lee, Lim, & Song, 2005; Nelson & Pack, 1998; Nelson & Winter, 1982; Verspagen, 1991). In particular, the growth patterns of Korea and Taiwan, as they leapfrogged from technological catchup latecomers to innovative fast-followers, provide essential lessons in rapid catch-up for the emerging industrial giants of the twenty-first century - China, India and Brazil - which are taking advantage of globalization to enter new industries and build industrial capacity.

To reduce the impact of climate change and improve lighting energy performance, light-emitting diode (LED) sources have become the first efficiency recommendation and one of the top sustainability measures taken by businesses and the public sector. Given its importance on energy efficiency, it is essential to explore the emergence and innovative development of LED technology latecomers in Korea and Taiwan while they have shifted the oligopolistic structure appropriated by first-movers in the US, Europe, and Japan.1 This shifthas enabled the emergence of a new technological regime, creating an opportunity for technological change for latecomers (Breschi, Malerba, & Orsenigo, 2000; Malerba & Orsenigo, 1996). Technological change in these latecomers was most likely complementary to the technology frontiers, involving both cumulative and discontinuous innovations, (Lee et al., 2005; Nerkar, 2003; Perez & Soete, 1988; Teece, 1986). Although the technological regime defines and constrains the pattern of innovation activities for industrial latecomers, even when technological paths are wellestablished, the rate of catching up and innovation capability always varies because of "firm heterogeneity" derived from differences in knowledge base and industrial setting, and from technological and social uncertainties within the industry (Breschi et al., 2000; Malerba & Orsenigo, 1996).

The eco-innovation of the emerging LED industry in East Asia follows the catch-up model in semiconductors and flat panel display industries, in that the technology was developed in the US and Europe, commercially applied by the Japanese, and then transferred to East Asia latecomers for production. The technological frontiers of regime and appropriateness are set by intellectual property rights, such as those held in the US by Intel and Texas Instruments for semiconductors; in the US by Corning and in Japan by Sharp for flat panel displays; and in Japan by Nichia and in the US by Cree for the LED industry.2 All these sectors were quickly caught up and developed by Korean and Taiwanese latecomers in less than five years, so that they became international players able to innovate and compete with the technology frontiers of the global market (Hu, 2011). However, this catch-up and growth of innovative capability did not occur with all the latecomers (e.g. not with Chinese semiconductors) (Rho, Lee, & Kim, 2010). The rise of the emerging Korean and Taiwanese latecomers in the LED industry is thus evidence of the evolution of an entirely new industry, showing how technological latecomers overcame all the complex evolutionary industrial dynamics to become innovative fast-followers in the global market.

Given the critical role of technological capability in the development of high-tech industries (particularly for latecomers) and the fact that empirical analysis of firm heterogeneity is lacking in the literature, this paper sheds some empirical light on how the technological regime of the global LED industry has influenced the heterogeneity of firms at the upstream, midstream and downstream or integration levels, over the industrial value chain. …

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