2 Innovation, Science and Technology Flashcards
What is a technological revolution, according to Perez?
A technological revolution is a cluster of interrelated, radical breakthroughs forming a constellation of technology systems. These systems transform the entire economy and society, not just their originating industries, by introducing a new “common sense” set of practices (a techno-economic paradigm) that rejuvenates productivity, structures, and institutions across the board.
How does a techno-economic paradigm (TEP) influence innovation and organizational practices?
A TEP provides a shared logic of best practices, methods, and principles—spanning from input selection to organizational structure. As it diffuses, it becomes common sense, guiding investment decisions, production methods, consumption patterns, and institutional adjustments. It effectively channels innovation efforts toward directions aligned with the new paradigm’s core technologies.
What roles do key inputs and infrastructures play in a technological revolution?
Each technological revolution features a low-cost, widely available key input (e.g., cheap microprocessors today or cheap oil in the past) and associated infrastructures (e.g., the internet, highways) that enable widespread diffusion. Together, they lower costs, expand markets, and create fertile ground for new industries and continuous innovation.
Why do technological revolutions lead to shifts in institutional and social arrangements?
As new technologies become pervasive, their associated TEP redefines best practices in production, management, and commerce. This shift in economic “common sense” exerts pressure for institutional and societal changes—laws, regulations, education, and norms—ensuring that the full potential of the revolution’s productivity gains and opportunities can be realized.
What main trend do Arora, Belenzon, and Patacconi document regarding corporate R&D since the 1980s?
They find that large U.S. firms have substantially reduced their engagement in internal scientific research. This shift is evident in fewer publications by corporate scientists, especially in high-impact journals, and a decline in the private value attributed to their scientific capabilities.
How has the value of scientific research changed for large corporations over time, according to the study?
The “private value” that investors and acquiring firms place on a company’s scientific research has declined since the 1980s. While the value associated with technical knowledge (patents) remained stable, the value linked to scientific publications fell, suggesting a reduced willingness of firms to invest in upstream research.
Does the decline in corporate science mean that inventions are now less science-based?
No. The study finds that patented inventions are still drawing heavily on scientific knowledge, and the vintage of the cited science has not changed. This suggests that external scientific research remains critical to innovation, but large firms increasingly rely on external sources rather than producing basic research in-house.
What factors might explain the reduced incentive for large firms to conduct internal research?
- Reduced private benefits of internal research: Easier access to external inventions, intensified product-market competition, or shorter investor horizons may lower returns on in-house science.
- Stable or increasing costs: If research costs rise, firms may focus on development and acquisition rather than long-term research.
- Changes in practices: While less likely the sole cause, firms might publish fewer scientific findings due to strategic shifts in disclosure or IP management.
