Commercial development of energy—environmentally sound technologies for the auto-industry: the case of fuel cells

The economic importance of energy and environmental issues is continuously increasing, affecting both process and product design in business. The energy crisis in California in 2001 made this basic issue universal. New technologies are expected to reduce pollution derived both from production processes and products, with costs that are still unknown and in competition with more mature technologies high. Nevertheless, until now there is still little, but growing knowledge concerning the process of technological innovation in the fields of energy and environment. In this paper we analyze the development of zinc air fuel cell (ZAFC) and its transfer from a research laboratory to potential mass production. ZAFC are a new ‘environmentally sound technology’, proven to have commercial value, that can be used for substituting internal combustion engines (ICEs) and meeting zero emission vehicles (ZEV) regulations. Although ZAFC performances are higher than traditional electric batteries ones, commercial costs are still high. Hence the pathway to mass production may come from stationary application of fuel cells for power. In contrast to the conventional ‘paradigmatic’ approach, we argue that the existing economic and organizational literature concerning technological innovation is not able to fully explain steps followed in commercializing energy—environmentally sound technologies. Existing models mainly consider adopting problems, which are due to market uncertainty, weak application, lack of a dominant design, and problems in reconfiguring existing organizational routines. Above all ‘market power’ exists in terms of control over technological innovation and its commercial application. Barriers are erected that prevent new technologies such as fuel cells from becoming adapted. Through pro-active government intervention, such as the case in California, new advanced technologies can move rapidly into the marketplace. From this discussion we draw some conclusions and issues for further research concerning policy making for sustaining the process of technological transfer and firms’ strategies in technological innovation.