Exploring the Impact of Government Regulation on Technological Transitions; a Historical Perspective on Innovation in the Dutch Network-Based Industries

Abstract

Government interventions can affect processes of technological transition through the enactment of legal and other policy instruments. In this contribution, we concentrated on legal interventions only and examined what they were, the relation between the public and private players that they affected, and the nature of the incentive they provided. We did this for four historical cases in the world of utility industries in the Netherlands in the nineteenth and twentieth centuries. The summarizing results for each case appeared in overview tables which eventually showed whether most of the administered stimuli were negative, neutral, or positive for the action alternatives of the innovating players, and thus the further development of the newly emerging technology. It is hard to escape the conclusion that the common argument and rhetoric that governments normally aim to propel industrial progress by opening a variety of options for innovating private players rings hollow when analyzed more systematically. A higher number of the incentives we found across the four cases were negative rather than positive, while some cases had only negative incentives and none had more positive than negative incentives.

Keywords

• network-based industries
• technological transitions
• legal incentives
• qualitative game theory
• behavioral tactics
• innovators