Public Initiative to Seed, Grow, and Diffuse a Mobility Innovation: Industrial Policy versus Transportations Policy

Type de publication:

Conference Paper


Gerpisa colloquium, Brussels (2024)


Carfree city, Infrastructure, Mobility Innovation, Public Subsidy, Public Transportation Policy


The CASE issues of cars are frequently discussed in an industrial policy point of view, such as a public subsidy for consumers, OEMs, and suppliers to encourage purchasing, R&D, and production. But at the same time, transportation policy, including urban design policy has substantial influence on the automotive industry.
In recent years, trends of Car free city and car inhibit policy, especially in metropolitan area becomes growing. These initiatives can be obstacles of existing OEMs through discourage consumers to purchase a new vehicle, including BEVs.
Such car-inhibit policy attempts not only to shift the powertrain of vehicles, but also shift the transportation modes from cars to more sustainable ones, such as Tram, bicycle, and walking. In Our paper, authors attempt to describe how public transport policy can accelerate mobility innovations through the case of Light Rail Tram (LRT), autonomous vehicles, and public transports in Europe and Japan.

[Research Methodology]
According to the theory of disruptive innovation (Christensen, 1997), existing company is rather better at the continuous innovation, since it is profitable and predictable. On the other hand, disruptive innovation is unprofitable and unpredictable at its infant phase. Therefore, existing companies are reluctant to facilitate disruptive innovation because of the rack of motivation and incentive.
From this point of view, the main hypothesis is that the public transport policy and urban development policy are more effective and efficient than industrial policy to fostering the mobility innovations that is in infant phase.
To verify this hypothesis, the authors gathered the data of the speed of mobility innovations, in terms of performance evolution and diffusion, and the data of the public financial expenditure and interventions such as approval, deregulation, and lawmaking through case studies.

[Findings from case studies]
Existing automotive OEMs faces obstacles to shift their products and strategies into CASE oriented one. Especially the champions of ICE vehicles are reluctant to introduce BEVs and FCVs, by contrast the new entrants are eager to bet BEVs.
Government of countries, states and municipalities attempts to accelerate the diffusion and technological evolution of BEVs for carbon-neutral and enhancement of the urban amenity through numbers of subsidies to reduce the cost of innovation from customers and company point of view. Nevertheless, the velocity of the replacement of ICE vehicles and HVs by BEVs are slow in many developed countries with existing automotive industries despite these attempts.
On the other hand, the innovation of public transportation, including LRT, autonomous bus, autonomous taxies, and ridesharing are rapidly evolving during this decades with public support of regulations and financing into infrastructure investments in Europe and US.
The situation in Japan is characteristic. Public support to public transportation is very weak in Japan and public transportation operators requires to be financially independent. This forces public transportation operators to decelerate the investments into innovation and infrastructure.

From these case studies, authors emphasize the significance of public intervention, both of policy making and finance into public transportation for fostering mobility innovation, such as introducing LRT, autonomous and shared transportation. Moreover, public intervention can accelerate discouraging the automotive purchase by consumers.
Both researchers and practitioners should realize the potential of public intervention and take advantage of it. At the same time, bureaucrats can learn from the attempts in the other country to support the mobility innovations in their country.

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