The Illusive Slump of Disruptive Patents

Jeffrey Macher (), Christian Rutzer () and Rolf Weder ()
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Jeffrey Macher: University of Basel
Christian Rutzer: University of Basel
Rolf Weder: University of Basel

Working papers from Faculty of Business and Economics - University of Basel

Abstract: Despite tremendous growth in the volume of new scientific and technological knowledge, the popular press has recently raised concerns that disruptive innovative activity is slowing. These dire prognoses were mainly driven by Park et al. (2023), a Nature publication that uses decades of data and millions of observations coupled with a novel quantitative metric (the CD index) that characterizes innovation in science and technology as either consolidating or disruptive. We challenge the Park et al. (2023) methodology and findings, principally around concerns of truncation bias and exclusion bias. We show that 88 percent of the decrease in disruptive patents over 1980-2010 reported by the authors can be explained by their truncation of all backward citations before 1976. We also show that this truncation bias varies by technology class. We update the analysis to 2016 and account for a change in U.S. patent law that allows for citations to patent applications in addition to patent grants, which is ignored by the authors in their analysis. We show that the number of highly disruptive patents has increased since 1980---particularly in IT technologies. Our results suggest caution in using the Park et al. (2023) methodology as a basis for research and decision making in public policy, industry restructuring or firm reorganization aimed at altering the current innovation landscape.

Keywords: Disruptive Innovation; Truncation Bias; Exclusion Bias; U.S. Patent Law Change (search for similar items in EconPapers)
JEL-codes: O30 O32 O33 (search for similar items in EconPapers)
Date: 2023-06-19
New Economics Papers: this item is included in nep-cse, nep-his, nep-ino, nep-ipr, nep-sbm and nep-tid
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