How long should government subsidies last for an emerging industry? The best answer is they should never start. New products go through a product development life cycle; invention, slow initial growth with iterative product improvements, market acceptance, rapid growth, maturity, and decline. New products that go through this process are robust and can withstand the challenges of the free market. Government subsidies lead to premature rapid growth and skip the tempering process of product improvement and market acceptance. Then, when the subsidies disappear, the market collapses. This is exactly what has happened in countries where high renewable energy subsidies are removed such as Spain.
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