Institutional capabilities and technology upgrading: The case of the nuclear industry in Korea

Abstract

This article explores the development process of regulatory innovation during the stages of upgrading innovation based technology for late industrialized countries. Using three cases of complex products in the nuclear industry, with special reference to (South) Korea, we investigate the regulatory innovation and formation process between regulators and developers. Although exploratory, this study shows that when the technical characteristics of a product are similar to those of existing platforms, minor institutional innovation is settled easily. On the contrary, as the discontinuity of a product technology increases, it becomes more likely that the lock-in effect of existing institutional schemes will hinder innovation. This paper contributes to the technology upgrading literature by highlighting the considerable importance of institutional capabilities.