Different Approaches to Governing the Economy: Regulatory Policy Styles and the Promotion of Emerging Technologies

Improvements in cost and performance of battery technology have made it a viable solution to decarbonise the economy, particularly the electricity and transport sectors – a crucial step towards mitigating climate change. These improvements also foreshadow an emerging mega-industry: global battery demand is predicted to increase fourteen fold from 2018 to 2030, indicating future business opportunity of around $300bn in 2030. Based on a previous systematic analysis of global battery industry dynamics, we know that China caught up with previous front-runners Japan and Korea in both manufacturing capacities (revealed in battery plant sizes) as well as capabilities for innovation (expressed in its patenting activities). Importantly, “the West”, i.e. the US and Europe, are falling behind Asian competitors. Western governments and regulatory agencies are therefore in a situation where they have to devise regulatory policy approaches to catch-up with the Asian frontrunners. While we know from innovation studies that market intervention through regulatory governance is necessary to foster innovation in complex technologies (such as Lithium-ion batteries), this insight sits uncomfortably with persistent notions about how to “best” govern the economy: the US is generally described as having a hands-off approach towards governing the economy and by a reluctance towards “industry policy” in particular, while the EU is seen as representing the mirror image. Whether and how such perceived styles of regulatory governance actually are expressed in concrete policy mixes targeting an emerging and potentially highly disruptive industry sector, however, remains understudied. To address this gap, in this paper we aim to answer two questions: (1) How do regulatory policy mixes targeting the battery industry and their design characteristics evolve over time?; (2) Who are the actors driving policy design choices, policymakers or regulatory agencies? To answer these questions, we analyse a set of 220 regulatory policies from China, the Chinese province Guangdong, the United States, California, Europe, and the United Kingdom that were enacted between 2001-2019. To systematically assess design characteristics of the policy mixes, our newly-created dataset includes information on policies’ general design characteristics (e.g., instrument types, goals, objectives etc.), policies’ design characteristics that are specifically related to fostering innovation in complex technologies, as well as policies’ origin, i.e. whether they originate from elected policymakers or from regulatory agencies. We are particularly interested in whether specific policy design features, such as targeting specific battery technologies and/or applications, are pushed by independent regulators when elected policymakers have not yet decided on policy design yet or when they have previously opted for different policy design features.