Entrepreneurial failure in the transition to electric vehicles: A case study of support for sustainability policy in Israel

Abstract

Why do entrepreneurs who gained initial remarkable government support for sustainability policy lose it rapidly and what may be learned from such failure? In May 2013, a national attempt for transition of transportation industry from internal combustion engine to electric vehicle by building country-wide infrastructure in Israel went bankrupt. Only short period before, the company, Better Place, seemed to be successful both in recruiting $850 million from investors and gaining institutional and political support via successful policy entrepreneurship from top governmental echelons to cut dependence on oil. The case study investigates what caused policy entrepreneur to lose political support and why the government did not provide a bailout plan for the company. Based on in-depth interviews over a period of several years with company employees and government officials in Israel and use of secondary data sources, the study concludes that, in the wake of national demonstrations for social justice in 2011, politicians shifted their agenda from national security concerns to welfare issues. This case fills a gap in the literature which tends to focus on successful ventures, by deriving insights from a case of entrepreneurial failure, as much can be learned from failure too. The practical lesson learned as the global movement for social justice spread is that initial success of policy entrepreneurship, which exploits a political window of opportunity, does not guarantee longterm governmental support for sustainability policy.