Innovation as Response to Emissions Legislation: Revisiting the Automotive Catalytic Converter at Johnson Matthey

Abstract

Can environmental legislation spur innovative response? This case describes the development of the automotive catalytic converter (ACC) at Johnson Matthey (JM), a precious metals company that entered the automotive industry as a component provider. The market was unfamiliar to JM and highly competitive, but in the 1970s the US Environmental Protection Agency (EPA) introduced standards for emissions control by automotive companies well ahead of current practice. Johnson Matthew responded to the prospect of market demand for a technology that could meet the regulations. The EPA policy of technology “forcing” stimulated collaboration for innovation among companies from a variety of industries. Our case evidence shows that the key innovator, JM, achieved its breakthrough as a result of proactive R&D management by the product champion together with sustained corporate support at a high level and partnership strategies.