The Role of Innovation - Essay Example

Some experts warn that oil could become excessively costly. (EurActiv, 2004) Interest in cleaner, less polluting vehicles and fuel has grown rapidly in recent years. Emissions from petrol and diesel engines have been significantly reduced in the last decade in the US and EU driven mainly by legislation, and will continue to be reduced in the future. Thus, the barest necessity of change drives innovation in the automotive industry. New cars must satisfy strict environmental legislation and benefit from improved environmental technologies, such as electric, hydrogen and fuel cells vehicles.

As Cleveland writes, a disciplined approach to innovation can be achieved and that "process stability and capability" is just as possible in new product and process development as it is in manufacturing. He also mentions that consistent innovators in the automotive market tend to be more profitable (averaging twice the return on sales of their competitors); have higher value-added products; and achieve more rapid growth (four times that of non-innovators). An important innovation direction in automotive industry is to use alternative fuels.

A Commission Communication on alternative fuels suggests a target of 20% use of alternative fuels in road transport by 2020. The Commission concludes that only three options would have the potential to achieve individually more than 5% of total transport fuel consumption over the next 20 years: biofuels which are already available, natural gas in the medium term and hydrogen and fuel cells in the long term. (EurActiv, 2004)Core factors within the automotive industry that create resistance to innovation are high costs and lack of supplied technology.

"There are many safety-related technologies and products available that are not being used because they are either too expensive or require too many product changes," says Bernard I. Robertson, senior vice president at DaimlerChrysler AG and chairman of Convergence 2002 cited at FindArticles. (2004)For example, there is no cheap technology for storing hydrogen, so it will leak from any container, no mater how strong and no matter how well insulated. Hydrogen is also very reactive. When hydrogen gas comes into contact with metal surfaces it decomposes into hydrogen atoms, which are so very small that they can penetrate metal.

This causes structural changes that make the metal brittle.Therefore I come to the deduction that to become successful, innovation must be not only a technology system, but also a product system. Betz defines, that "The differences between a technology system and a product system are (1) in the details and fully connected steps of the core technology of the product system, and (2) in completing the product system with the necessary technologies". (2003)The market is not yet completely ready for the innovation in the automotive