Working Paper: NBER ID: w20922
Authors: Mikko Packalen; Jay Bhattacharya
Abstract: A key decision in research is whether to try out new ideas or build on more established ideas. In this paper, we evaluate which type of work is more likely to spur further invention. When recent advances create superior opportunities for invention, their adoption as research inputs in the invention process promotes technological progress. The gains from pursuing such innovative research paths may, however, be very limited as new ideas are often initially raw and poorly understood. We determine idea inputs in invention based on the text of nearly every US patent granted during 1836–2010. We find that inventions that build on new ideas early are more likely to spur subsequent invention than inventions that rely on ideas of older vintage. Our results are important because they suggest a benefit from encouraging and supporting innovative research that tries out new ideas — avoiding stagnation in technological advance.
Keywords: Innovation; Invention; Patents; Research Inputs
JEL Codes: I10; O31; O32; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| use of new ideas (O35) | subsequent invention (O36) |
| new ideas early (B15) | spur subsequent invention (O31) |
| age of idea inputs (O36) | advances they spur (O00) |
| use of new ideas (O35) | higher citation counts (A14) |
| encouraging innovative research (O32) | prevent stagnation in technological advancement (O35) |