Stimulating R&D of industrial energy-efficient technology; the effect of government intervention on the development of strip casting technology

Abstract

Strip casting technology in steel-making is known as an innovative energy-efficient technology. Stimulating the development (R&D) of such industrial process technologies is an appealing government intervention strategy for reducing greenhouse gas emissions. In this article, we analyse (a) the R&D trajectory of strip casting technology and (b) the effect of government intervention on the development of this particular energy-efficient technology. For this purpose we made a detailed investigation of the networks within which the technology was developed. The huge capital cost advantages of strip casting technology were already notified back in the 19th century. However, only after 1975 a robust technology network emerged. There is no single, simple determinant explaining the slow emergence of the technology network: the innovative technology had to become a more incremental improvement to the conventional production facilities before R&D was seriously pursued. Once the technology network emerged, it proved to have a strong momentum of itself. Steel firms maintained their confidence in the strategic cost advantages of the technology and persistently invested in up-scaling the technology. The effect of government intervention was minimal, because the technology network had its own strong momentum. All in all, R&D was only loosely influenced by energy-efficiency considerations or by government intervention. The major policy lesson is that information on technology networks and its momentum—in addition to classic information on energy-efficiency improvements and investments costs—is required to improve the effect of government intervention in the field of industrial energy-efficiency R&D and innovation.