Industry dynamics, technological regimes and the role of demand

In this paper, we propose an industrial dynamics model to analyze the interactions between the price-performance sensitivity of demand, the sources of innovation in a sector, and certain features of the corresponding pattern of industrial transformation. More precisely, we study market concentration in different technological regimes and demand conditions. The computational analysis of our model shows that market demand plays a key role in industrial dynamics. Thus, although for intermediate values of the price-performance sensitivity, our results show the well-known relationships in the literature between technological regimes and industry transformation, we find surprising outcomes when demand is strongly biased either towards price or performance. Hence, for different technological regimes, a high performance sensitivity of demand tends to concentrate the market. On the other hand, under conditions of high price sensitivity, the industry generally tends to atomize. That is to say, for extreme values of the price-performance sensitivity of demand, we find concentrated or atomized market structures no matter the technological regime we are in. These results highlight the importance of considering the role of demand in the analysis of industrial dynamics

Mapping Inventors’ Networks to Trace Knowledge Flows Among EU Regions

Recent literature on technological changes has highlighted the role of knowledge recombination in innovation. Evidence suggests that the production of scientific and technological knowledge is becoming an increasingly collective phenomenon. Thus, in rapidly developing industries, it is almost inevitable to develop inter-organizational collaborations to identify new opportunities for new technologies. The aim of this chapter was to explore the innovative activities and networks in European regions (EU 27 plus Norway and Switzerland) from 1980 to 2010. Specifically, we analysed the most innovative sectors: environmental (green), biotechnology (biotech), laser and optic technology and nanotechnology (nanotech). This longitudinal study relies on European Patent Office (EPO) patents and inventors’ data by year and region, as provided by OECD-Regpat database. Our main findings emphasize the rise of co-inventions in intra-regional and inter-regional inventive networks, the concentration of innovations in central regions and peripheral regions’ reliance on external knowledge flows to compensate for their technological weaknesses

Explicitly searching for useful inventions: dynamic relatedness and the costs of connecting versus synthesizing

Inventions combine technological features. When features are barely related, burdensomely broad knowledge is required to identify the situations that they share. When features are overly related, burdensomely broad knowledge is required to identify the situations that distinguish them. Thus, according to my first hypothesis, when features are moderately related, the costs of connecting and costs of synthesizing are cumulatively minimized, and the most useful inventions emerge. I also hypothesize that continued experimentation with a specific set of features is likely to lead to the discovery of decreasingly useful inventions; the earlier-identified connections reflect the more common consumer situations. Covering data from all industries, the empirical analysis provides broad support for the first hypothesis. Regressions to test the second hypothesis are inconclusive when examining industry types individually. Yet, this study represents an exploratory investigation, and future research should test refined hypotheses with more sophisticated data, such as that found in literature-based discovery research