Dynamics of a policy-driven market: The co-evolution of technological innovation systems for solar photovoltaics in China and Germany

The rise of Chinese solar energy firms has taken many experts by surprise. German policy makers and researchers alike had suggested that the country's ambitious deployment policies would translate into a competitive advantage for the German solar photovoltaics industry. This paper argues that these expectations rested on an outdated model of the international diffusion of innovation. Building on the technological innovation system (TIS) framework and the related system functions approach, the paper thus proposes a new approach for capturing the global dynamics of innovation and industrial development in emerging technology fields. Focusing on a period of dynamic growth in the field of crystalline-based PV technologies, the paper highlights how a set of dynamic and mutual inter-dependencies between an industrialized country (i.e. Germany) and an emerging economy (i.e. China) have driven the development and diffusion of technology in the field.