Environmental Engineering Reference
In-Depth Information
1.4.2 The Need for Speed
here is strategic value in policies that encourage expedience in regard to a
transition to domestically cultivated alternative energy supplies. First and
foremost, as just discussed, some alternative energy technologies will rep-
resent the prudent economic choice in decades to come. herefore, indus-
trialized nations that outperform others in nurturing alternative electricity
generation technology lay the foundation for preserving a competitive edge
in this important factor endowment. his is because policies that most
efectively anticipate and support superior technology expedite competitive
shakeout, whereby the most eicient competitors leverage market expan-
sion opportunities to attain competitive advantage through economies of
scale. Eventually the market consolidates to a pool of highly proicient mar-
ket leaders,
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providing consumers with economically optimized products—
in this context, cleaner and cheaper energy.
Firms that establish advanced competencies in critical stages of the
renewable supply chain can use this competitive edge to establish unas-
sailable market positions in foreign energy markets. he mechanisms that
link domestic market conditions to international competitiveness are
fairly straightforward. In order to achieve a dominant position in a given
market, a irm must develop the core competencies that allow it to pro-
duce and deliver goods and services that meet market requirements in a
competitively superior manner.
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Many of these core competencies can
only be honed through experience. In short, market pioneers can gain a
competitive advantage over slow market entrants by learning from experi-
ences in highly competitive markets and adopting better practices.
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Firms
that succeed in highly competitive domestic markets often ind that les-
sons learned domestically are often transferable to competitive forays into
foreign alternative energy markets. Moreover, irst-movers can establish
defensive beachheads in markets to more efectively deter market entry
attempts by competing irms.
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hey can establish early brand recognition,
early market share leads, and economies of scale that make it diicult for
competitors to usurp.
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he Dutch irm Vestas, which is the world's largest
wind turbine manufacturer, is a testament to the efectiveness of domestic
energy policy in nurturing irms that are capable of competing successfully
in global markets.
As all this unfolds, governments that have helped nurture the devel-
opment of alternative energy industry leaders begin to beneit through
enhanced tax revenues and job creation as the irms grow irst domesti-
cally and then internationally. Employment is a particularly salient issue
in regard to alternative energy development because studies suggest that
