Coherence between technology, policy and institutions: Managing innovation in the new European rail market
In a network industry like railways, major systemic innovations and new technological trajectories are tightly connected to national institutional frameworks and policies. The major transformation occurring in Europe brought by the liberalization and harmonization of railways since a decade provides a fertile ground to study the link between innovation and institutions. This article aims at providing a structured framework to look at the innovation process in the railway sector. It focuses on institutional and innovation models before and after the railway sector’s reorganization. The article is based on the case study of the European Train Management System (ERTMS), whose development spans over a period of 15 years and thus offers a very good foundation to look at the evolution of innovation models. The emergence of different innovation models underline the deep changes that occurred within the rail sector. While the study of ERTMS allows drawing some lessons on how to better manage the development and deployment of key innovative technologies in the railway sector, it also raises questions on how institutions shall adapt in order to cope with fundamental technological transformations.