ABSTRACT
Market shake-up. As the transition is radical and systemic, new technologies and business models are sometimes developed by completely new industry players. For example, tyre manufacturer Michelin has developed an electric vehicle on the basis of two wheel hub motors, one for traction and braking and the other for electric active suspension control (Evans, 2008). If this concept became the dominant design, it would devalue many assets held by incumbent producers of combustion engines, gearboxes, cardan shafts and the like, and it would establish a tyre manufacturer as a competitor of traditional car makers. Likewise, the Chinese company BYD started expanding as a battery producer around 1996 and entered automobile production in 2003. Such examples indicate a major potential for market shake-ups and newcomers leapfrogging into the new technologies. Governments need to be aware of the effects of their policies on national competitiveness. When they establish new industry standards for batteries or plugs, for example, some big industry players who have developed other standards may have to write off multi-million investments. Encouraging innovation and avoiding technological lock-in without sacrificing existing competitive advantages is a challenging task.
