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and what consumers de facto require (Georghiou et al. 1986). These improvements often change the
economic significance of new technologies. However, markets for new technologies tend to be
underdeveloped due to how new technologies rarely are mature at their initial introduction (Kline &
Rosenberg 1986). At the onset markets may be very small, but so called “nursing markets” or niches
can be very central to the development of a new industry (Erickson & Maitland 1989; Smith & Raven
2012). Governments can be important creators of niche markets in the shape of regulations, public
procurement, tariffs and subsidies (Mazzucato 2013).
Mobilisation of resources
As new entrants engage and experiment with emerging technologies there is a considerable need for
resources. Industry formation therefore involves the mobilization of human resources (skilled labour),
financial resources (for instance venture capital, R&D funding and capital investments) and physical
resources (such as natural resources and infrastructures) (Karltorp 2011).
2.2
Internationalisation and industry formation
Many countries are actively promoting growth of new renewable energy (RE) industries, as they
foresee massive global growth for RE technologies. The dynamics of these industries thus have an
international character, with some countries taking the lead. Germany and China have for instance
been successful in building globally leading photovoltaic industries, while Germany and Denmark have
taken the lead in the offshore wind power industry. The question is how countries that do not have
leadership positions can link up with these global developments.
Building successful RE firms and industries is not straightforward as access to markets and resources is
affected by geographical location (Coenen et al. 2012). For Norway, new RE industries have been
lacking home markets. With regards to industry formation the importance of domestic markets for
successful internationalisation in terms of market entry for manufacturing and services industries has
been underlined (Castellacci 2012; Castellacci & Fevolden 2014; Fagerberg 1992; Lundvall et al. 2002).
This literature states that
a lack of home market negatively influences the likelihood for success of
international market entry for firms
. A key question is therefore how firms can tap into international
markets by building required resources without a home market where they can demonstrate their
skills and capabilities. In the following we discuss three factors that can affect the likelihood of
compensation for insufficient home market deployment.
The first factor is firm size, which is particularly important when there is a weak domestic market as
larger firms have the resources to overcome sunk export costs and trade barriers (Castellacci 2012;