Technology familiarity, recombinant novelty, and breakthrough invention

Sam Arts and Reinhilde Veugelers

Industrial and Corporate Change, 2015, vol. 24, issue 6, 1215-1246

Abstract: Interpreting technological invention as a recombinant search process, we study the effect of combining formerly uncombined but familiar technology components on the likelihood of creating more useful inventions. For evidence, we consider 26 years of the US patent record in biotechnology. We find that the creation of new combinations of components not only stimulates average usefulness, but also leads to a significantly higher likelihood of breakthroughs, while reducing the probability of failure. Interaction effects illustrate how reusing more familiar components continues to foster the creation of more useful and breakthrough inventions while lowering failure but only as long as the familiar components are recombined in unprecedented ways. Yet, more familiar components are less likely to be used in new combinations and as such are more likely to be associated with a familiarity trap. Our results therefore illustrate how inventive success and particularly breakthroughs require a difficult combination of the reuse of familiar components and recombinant creativity, i.e. the ability to recombine the familiar components in new ways.

Date: 2015
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