Why it is important to scan the horizon – The German car industry during Industry evolution

The automotive sector has undergone a significant transformation with the advent of electromobility. This revolutionary shift is reshaping the way vehicles are powered, manufactured, and utilized, with profound implications for the industry, the environment, and society as a whole.

Electromobility refers to the use of electric propulsion systems, primarily batteries or fuel cells, to power vehicles instead of traditional internal combustion engines. This transition is driven by various factors, including concerns about climate change, air pollution, and the finite nature of fossil fuels. As a result, automakers are increasingly investing in electric vehicles (EVs) and developing advanced technologies to improve their performance, range, and affordability.

Tesla has played a pivotal role in driving the adoption of electromobility and reshaping the automotive industry. However, Tesla’s success has also posed a significant challenge for traditional automakers, many of whom have struggled to catch up in the rapidly evolving electric vehicle market. Despite their substantial resources and manufacturing capabilities, legacy automakers have faced obstacles in developing competitive electric vehicles that can match Tesla’s performance, range, and brand appeal. Additionally, the transition to electromobility requires significant investment in research and development which can be daunting for established automakers.

Nevertheless, traditional car manufacturers had plenty of time and resources to search for and integrate external knowledge and identify the market changes. We investigated how the German car manufacturing sector prepared and responded to electromobility in our latest paper. What we find is that they delayed their response significantly and heavily relied on local knowledge – rather than sourcing missing knowledge early and integrating it. Using patent data, we mapped the knowledge flows for the three major players in the German car manufacturing sector and visualized the network.

Our most important finding is, that someone else in the innovation ecosystem managed to step up when the car manufacturers were not. Bosch became essential for all three car manufacturers and shows that it is essential to scan the peripheral of the industry. Otherwise you risk your position in the market and empower potential competitors to take your spot during the industry evolution.

If you want to know more, feel free to check out the full article, available here: https://doi.org/10.1111/radm.12689

Knowledge flows at the later stages of the industry evolution. Bosch managed to become a central source for knowledge, granting them the power to control knowledge in the new ecosystem.