The conditions for radical innovation in the automotive industry: the case of the two-strokes engine at Renault

Abstract:

What are the conditions for radical innovation in the automotive industry? In the present context of rapid changes in market regulations and structures many suggest that the best chances for radical changes lie in new players, small companies and start-ups. According to this Schumpeterian view of the innovation process, big companies and in particular the incumbent carmakers, should have neither the will nor the capacities to imagine, conceive and introduce such radical transformations.

In this paper I would like to go against this view that is at odds with the history of the automotive sector, since almost all its major innovations came from large incumbent firms, but which has been gaining momentum pushed by the examples of the TIC and pharmaceutical sectors. In order to do so, I will focus on the “biography” of a radical innovation that has been recently developed by Renault engineers and which could soon equip its forthcoming range of ultra-low cost models: it is a two-stroke engine that is bound to radically reduce the weight, size, consumption and cost of powertrains in small/compact cars.

The purpose is to show why such an innovation could have not been developed elsewhere than in a major motor company and to identify the conditions which have allowed its emergence, development and “survival” inside Renault. The focus will be on particular on the heterogeneous engineering practices and resources deployed at each stage of the innovation process. Such an approach will allow to characterize the emerging nature of the innovation process and the social, organizational and political conditions of its successful deployment and realization.

This research is based on fifteen interviews with the members of the project team, as well as with other important actors for its development (recruiters, HR managers, union representatives, external partners…).