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Exploration and Exploitation in US Technological Change

Author

Listed:
  • Carvalho, Vasco M.

    (University of Cambridge)

  • Draca, Mirko

    (University of Warwick and CAGE Research Centre)

  • Kuhlen, Nikolas

    (University of Cambridge and The Alan Turing Institute)

Abstract

How do firms and inventors move through ‘knowledge space’ as they develop their innovations? We propose a method for tracking patterns of ‘exploration and exploitation’ in patenting behaviour in the US for the period since 1920. Our exploration measure is constructed from the text of patents find involves the use of ‘Bayesian Surprise’ to measure how different current patent-based innovations are from existing portfolios. Our results indicate that there are distinct ‘life-cycle’ patterns to firm and inventor exploration. Furthermore, exploration activity is more geographically concentrated than general patenting, but this concentration is centred outside the main hubs of patenting.

Suggested Citation

  • Carvalho, Vasco M. & Draca, Mirko & Kuhlen, Nikolas, 2021. "Exploration and Exploitation in US Technological Change," The Warwick Economics Research Paper Series (TWERPS) 1366, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1366
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    References listed on IDEAS

    as
    1. Sam Arts & Bruno Cassiman & Juan Carlos Gomez, 2018. "Text matching to measure patent similarity," Strategic Management Journal, Wiley Blackwell, vol. 39(1), pages 62-84, January.
    2. Andrews, Michael J. & Whalley, Alexander, 2022. "150 years of the geography of innovation," Regional Science and Urban Economics, Elsevier, vol. 94(C).
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