Title: Scale in technology and learning-by-doing in the windmill industry

Authors: Erik Strojer Madsen, Camilla Jensen, Jorgen Drud Hansen

Addresses: Aarhus School of Business, Denmark. ' Copenhagen Business School, Denmark. ' University of Southern Denmark, Denmark

Abstract: This paper examines the remarkable development of technology and the fast learning-by-doing in the windmill industry since it emerged in the beginning of the 1980s. Based on time series of prices of windmills, a dynamic cost function for producing windmills is tested. The estimations verified that learning-by-doing in the Danish windmill industry has contributed significantly to improve the cost efficiency of the producers. The technological development has been stimulated both by process and product innovations as the capacity of the individual mills has increased. The learning effect created by early subsidies from the government has consolidated the competitive advantages of the windmill cluster in Denmark and preserved the first mover advantages at the world market. The article concludes that the industry probably will enter into a matured phase in the future with more modest technological growth.

Keywords: learning by doing; windmill industry; windmills; wind power; wind energy; costs; Denmark; cost efficiency; process innovation; product innovation; technological growth; renewable energy; scale; electricity generation.

DOI: 10.1504/JIBED.2003.007824

Journal for International Business and Entrepreneurship Development, 2003 Vol.1 No.2, pp.27 - 35

Available online: 25 Sep 2005 *

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