In order to switch to renewable energy technologies, major technological transformation processes
have to take place in different industrial sectors. Such transformations have been referred as
technological transitions. Theoretical frameworks have been developed that describe elements of
technological transitions such as the emergence and growth of new technologies, physical and social
constraints and the competition and co-evolution of different technological options. Such frameworks
may be used to inform governments, firms and other actors of how to understand and influence change
processes.
However, to this point no attempt has been made to develop a formal modeling tool based on these
qualitative frameworks of technical change. In a formal model some generic patterns can be
reproduced and visualized. Secondly, having a model, the effect of different inputs can be tested, such
as different policy regimes and management strategies. Thirdly, playing with a model, patterns of
change can be discovered that can be fed back into the design of more empirical and quantitative
studies. Finally, the strictness of a formal model could sharpen the concepts used to describe real
world processes.
This thesis presents two formal models of technological diffusion and substitution. Several researchers
have used the Lotka-Volterra equations to model competition among technologies. Lotka-Volterra
models assume that while a technology grows, it diffuses into a larger market in which it might
compete with other technologies and different variables included in the equations represent this
feature. Lotka-Volterra equations show that there are different modes of interaction between
technologies: symbiosis, predatory prey, and pure competition. The model presented in this study
demonstrates the failure of an emerging technology in pure competition with a mature and wellestablished
technology, but also how a third technology called “bridging technology” could change the
dynamics in favor of the emerging one.
Compared to the Lotka-Volterra model, the second and more detailed model of technology diffusion
presented in this study provides us with a better understanding of the dynamics and feedback
mechanisms governing the technology diffusion process. Different mechanisms such as technological
learning, price reduction, increment in firm’s income enhancing the technology’s performance, and
increment in technology’s attractiveness among users, have been added to the model of diffusion. The
diffusion model is used to show how on one hand the strategies and...
