Industrial Legacies and Germany’s Specialization in Customization
This chapter traces how entrants from legacy industries in Germany used public resources originally intended to support technological innovation in traditional sectors such as machine tools and automobile supplies. It explains why, even in new sectors such as wind and solar, German firms reproduced historical patterns of flexible specialization, customization, and small-batch production. The chapter begins with a discussion of industrial origins of Germany’s wind and solar firms, focusing in particular on machine tools, automation, and automotive sectors. It then outlines the learning process that firms navigated in pivoting from their existing industries into new industrial sectors. The second half of the chapter focuses on the two key resources that enabled these developments: collaboration with China and domestic institutional legacies.