Latecomer Firms, Capability Building and Sustainable Industrialization: The Case of Solar PV in Kenya and South Africa

Elder Davy*

*Corresponding author for this work

Research output: Book/ReportPh.D. thesis

39 Downloads (Pure)

Abstract

The transition towards renewable energy is accelerating globally with renewables expected to account for over ninety percent of the expansion of global power capacity from 2022 to 2027. It is well documented that this green transition is playing an important role in decoupling economic growth from rising carbon emissions, while improving access to electricity in many parts of the world. However, the relation between the green transition and technological learning and industrial development remains under-studied. This is especially the case in Africa, which has some of the world's fastest growing solar and wind energy markets, but is yet to experience the structural transformation and technological progress seen in other parts of the industrializing world. Some researchers have put forward that the renewable energy transition may represent an opportunity for late industrializing regions such as Sub-Saharan Africa (SSA) to close the gap and catch up with industry leaders. However, several authors have highlighted that establishing a renewables industry that can be sustained in the long term (sustainable industrialization), will require considerable technological learning, which has so far been limited in SSA.
Against this background, the objective of this thesis is to explore the link between the green transition and opportunities for sustainable industrialization in SSA. The thesis focuses on the solar photovoltaics (PV) industry and examines the capability building processes and firm-specific determinants that enable 'latecomer firms' with relatively low initial levels of capabilities to catch up with industry leaders on the global technological frontier. The research draws on case studies of two firms in SSA, a solar PV manufacturer in Kenya and a solar PV developer and independent power producer in South Africa. The case studies make use of analytical frameworks focused on technological capabilities and global value chains in order to explore the learning processes and firm-level determinants that enabled the two firms to improve their competitiveness and build technological capabilities.
The research reveals evidence of innovation capabilities and highlights the importance of various learning mechanisms at different points in time as well as the development of capabilities to manage and combine knowledge from corporate and locally-embedded networks. Additionally, the research points to the importance of developing capabilities specifically in high value-added services as a path to sustainable industrialization. This is in contrast with the prevailing view in the literature on industrialization and catching up, which tends to give primacy to manufacturing. Furthermore, the findings draw attention to the considerable variation in capability levels existing between similar firms in the same sector, underscoring the central role of firm-agency and strategic choices in shaping development paths in the solar PV industry in SSA. These findings suggest the need for tailored policy support for individual and groups of firms to promote sustainable industrial development in SSA.
Original languageEnglish
PublisherDTU Wind and Energy Systems
Number of pages160
DOIs
Publication statusPublished - 2023

Fingerprint

Dive into the research topics of 'Latecomer Firms, Capability Building and Sustainable Industrialization: The Case of Solar PV in Kenya and South Africa'. Together they form a unique fingerprint.

Cite this