Comparison of Autonomous Vehicle Policy Among France, Japan, and Korea: An Analysis through the Lens of Sectoral Innovation System

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Abstract:

1. Purpose
Autonomous vehicles (AVs) are expected to change the landscape of the automotive industry and transform the role of vehicles in our society. Governments in many countries have been formulating public policies on AVs to embrace this new paradigm. Public policy is instrumental in socio-economic transformation especially when a new technological paradigm is emerging because public policy provides “rules of the game” that affect practices and behaviors of consumers, producers, and intermediaries in a sector. However, the literature does not pay sufficient attention to public policy on AVs as a driving factor of socio-economic transformation in the emerging AV era.

The present study aims to gain a deeper understanding of the similarities and differences of public policy on AVs in France, Japan, and Korea and why these policies are formulated in that way. Similarities can be common components of public policy on AVs while differences can indicate the path dependency of the respective countries in public policy on AVs.

2. Methodology and Design
The study employs the Sectoral Systems of Innovation (SSI) framework (Malerba 2004) to find out why each country implements its own public policies. The SSI is a lens with which to analyze the innovation process and the factors affecting innovation. The main building blocks of SSI are (a) knowledge and technologies, (b) actors (firm, government, and so on) and networks, (c) institutions (norms, practices, laws and so on), and (d) demand. In the SSI perspective, innovation process and sectoral transformation are the co-evolution of these four building blocks of the sector.

The AV is an innovation in the automobile sector, and thus, SSI is a useful tool for analyzing the role of public policy in the socio-economic transformation process by AVs. The present study seeks out the reasons behind a country’s decision to implement certain public policies in the four building blocks of the SSI framework. For example, truck platooning R&D and its tests on public roads are more active in Europe than in Japan and Korea because trucking is a much bigger industry in Europe than in Japan and Korea. This factor is related to demand, which is the fourth building block of SSI. Korean public policy on automobiles is affected by Hyundai Motor Group because the company accounts for approximately 60% of the domestic market. This factor is related to the firm, which is the second building block of SSI.

By comparing France with Japan regarding public policy on AVs, this study finds similarities based on their comparable socio-economic evolutionary level and their highly developed automobile industries. The differences can be the result of the cultural, geographical contexts of France and Japan (Europe and Asia, respectively). A comparison between Japan and Korea highlights the similarities and differences between Asian countries. Korea successfully caught up with developed countries such as Japan. As a country which was a developing country in Asia until relatively recently, Korea represents Asian developing countries, such as China and India, in some essential aspects of government policies, firm behaviors, and consumer preferences in the automobile sector.

3. Main Results
This study finds that, as a key similarity, all the three countries’ AV policies consist of four building blocks: (1) technology roadmap establishment, (2) deregulation and revision/enactment of laws, (3) R&D investment, and (4) building infrastructure. For differences, first, the Korean government regards AVs as a new economic growth engine, while Japan utilizes autonomous driving technology to solve problems of aging society and insufficient public transportation in rural areas. In the meantime, the French policy deals with the AV mainly in the realm of urban planning and environment issues. Second, while Korea’s AV policy suggests that the Korean government considers AV ‘as a product’ rather than ‘as a mobility service,’ France’s approach is more related to AV as a mobility service. Japan is in-between. Third, although Korea has been attempting to transform their innovation strategy from ‘fast-follower’ to ‘first-mover’ since 2010, Korea’s AV policy suggests that the Korean government still takes a fast-follower strategy for AV technology development.

4. Practical Implications
Given that public policy affects practices and behaviors of actors in a sector, findings of this study contribute to a better understanding of the three countries’ trajectories of socio-economic transformation in the emerging AV era. Moreover, the ingredients of AV policy identified in this study can be utilised when we attempt to understand other countries’ AV policies and resultant transformations. The Korean case is a good starting point to understand and anticipate the socio-economic transformation of Asian catching-up countries such as China and India. Multinational automakers can utilize these insights in establishing their business strategies for the huge Asian market.