A Dynamic Network Approach to Breakthrough Innovation

37 Pages Posted: 15 Dec 2012

See all articles by Russell Funk

Russell Funk

University of Minnesota

Jason Owen-Smith

University of Michigan at Ann Arbor

Date Written: December 14, 2012

Abstract

This paper outlines a framework for the study of innovation that treats discoveries as additions to evolving networks. As inventions enter they expand or limit the reach of the ideas they build on by influencing how successive discoveries use those ideas. The approach is grounded in novel measures of the extent to which an innovation amplifies or disrupts the status quo. Those measures index the effects inventions have on subsequent uses of prior discoveries. In so doing, they characterize a theoretically important but elusive feature of innovation. We validate our approach by showing it: (1) discriminates among innovations of similar impact in analyses of U.S. patents; (2) identifies discoveries that amplify and disrupt technology streams in select case studies; (3) implies disruptive patents decrease the use of their predecessors by 60% in difference-in-differences estimation; and, (4) yields novel findings in analyses of patenting at 110 U.S. universities.

Keywords: networks, innovation, methodology, patents, difference-in-differences

JEL Classification: D83, L26, L86, O31, O34

Suggested Citation

Funk, Russell and Owen-Smith, Jason, A Dynamic Network Approach to Breakthrough Innovation (December 14, 2012). Available at SSRN: https://ssrn.com/abstract=2189528 or http://dx.doi.org/10.2139/ssrn.2189528

Russell Funk (Contact Author)

University of Minnesota

MN 55455
United States

HOME PAGE: http://www.russellfunk.org

Jason Owen-Smith

University of Michigan at Ann Arbor ( email )

Ann Arbor, MI
United States

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