SBE-RCUK Lead Agency: Co-location of manufacturing and innovation: drivers & impacts of technological innovation along wind energy global value chain

The proposed research will address the following questions: (i) How have different parts of the wind manufacturing value chain changed in terms of location? What factors explain these changes and differences across firms? (ii) How does the nature and direction of innovation (measured by the focus of patents) differ depending on the location of OEMs (including their R&D and subsidiaries) and suppliers? (iii) How does internationalization of manufacturing and R&D of OEMs and suppliers affect innovation in the wind GVC? The investigators will use mixed-method techniques to conduct this research, using a unique database of 12 major OEMs and their relationships with 470 suppliers (2006 to 2014). The preliminary database developed by the investigators includes firm-level information on the type of component, the locations of firms, etc. The investigators will significantly develop this database by adding new information on firms, public policies, and technology, and by conducting interviews to understand outcomes of internationalization. The analysis will employ a new methodology to characterize patents, social networks to depict the GVC, econometric techniques to determine the relationship between manufacturing shifts and patenting practices, and comparative case studies.

Intellectual merit:
The study of the impacts of manufacturing shifts on technology innovation will test emerging theories in a new sector (wind energy) that is strongly shaped by public policy interventions, while adding an important focus on components and supplier firms. The empirical and theoretical analysis, including the development of a methodology for studying drivers of manufacturing and R&D location decisions and their impacts, will be designed to apply to other industries. Comparative case studies and discussions on OEMs and on countries will further contribute to the understanding of the relationship between trade, energy policy, technology innovation, and local industry development in globally distributed manufacturing industries.

Broader impacts:
This research can have substantial impacts on public policy and on society. For policymakers in high-income economies (e.g., US or UK) interested in domestic manufacturing and employment generation in modern industries, this research will inform on the design of policies that spur local manufacturing and economic competitiveness with a granular understanding of the linkages along GVC. For policymakers in emerging economies interested in new industries, this research can provide insights on leveraging GVCs for local technology and capacity development in an industry greatly relevant for balancing economic growth with environment and climate targets. For society, this research can elucidate the ways in which manufacturing shifts affect the ability of technological innovation to meet climate and environmental challenges, thus supporting design of policies to meet societal goals.

Our research has substantial impacts on public policy, industry, and society. For policymakers in countries like the US and UK who are interested in domestic manufacturing in modern industries to ensure economic competitiveness, this research can inform the design of policies that spur local manufacturing in small and medium firms (such as specialized component suppliers) with a more granular understanding of competitive advantage along the value chain (e.g. in offshore wind). Our research can inform the design of policies that meet both economic and environmental goals by providing insights into firms' strategic priorities and activities related to manufacturing and innovation in a growing clean energy industry. For policymakers in countries like China, India, the research can similarly provide insight into manufacturing, innovation, and job growth in the context of meeting demand of large domestic markets while generating export opportunities. For emerging economies interested in participating in the wind GVC, or in developing local technology and new industries, this research can provide insights on how small and medium enterprises can be leveraged for local innovation. For firms and industry in growing sectors (such as clean energy) that are heavily shaped by public policy, this research can inform on the choices to engage in overseas manufacturing (or to source components from local suppliers) and how these choices can influence their technology development strategies. For society, this research can elucidate the ways in which manufacturing shifts may hamper or enhance the ability of technological innovation to meet climate and environmental challenges thereby supporting the design of policies to meet societal goals.

The research project itself will have broader, positive impacts in three ways. First, the project led by women PIs with interdisciplinary academic training will emphasize on greater involvement of other women (from PIs home universities) in interdisciplinary research that combines expertise in physical sciences and engineering, energy, public policy, economics, and management. The investigators seek to infuse this project with opportunities for bringing in and mentoring new women in this field and also to allow others already in the field to connect (especially given the relatively few women scientists and engineers who work on energy technologies and in particular on wind technology). Second, the research will involve multiple GAs who will gain experience in the complex interactions between different disciplines as well as the multiple dimensions of public policy-including energy, innovation, and trade-in a growing industry, thus contributing to developing a more informed and competitive workforce. Third, the international collaboration will strengthen cross-country academic linkages and ease wider international dissemination of results, which is particularly needed in a global industry (wind) and a global problem (climate change).