Dancing with the Stars: Innovation Through Interactions

Abstract

An inventor's own knowledge is a key input in the innovation process. This knowledge can be built by interacting with and learning from others. This paper uses a new large-scale panel dataset on European inventors matched to their employers and patents. We document key empirical facts on inventors' productivity over the life cycle, inventors' research teams, and interactions with other inventors. Among others, most patents are the result of collaborative work. Interactions with better inventors are very strongly correlated with higher subsequent productivity. These facts motivate the main ingredients of our new innovation-led endogenous growth model, in which innovations are produced by heterogeneous research teams of inventors using inventor knowledge. The evolution of an inventor's knowledge is explained through the lens of a diffusion model in which inventors can learn in two ways: By interacting with others at an endogenously chosen rate; and from an external, age-dependent source that captures alternative learning channels, such as learning-by-doing. Thus, our knowledge diffusion model nests inside the innovation-based endogenous growth model. We estimate the model, which fits the data very closely, and use it to perform several policy exercises, such as quantifying the large importance of interactions for growth, studying the effects of reducing interaction costs (e.g., through IT or infrastructure), and comparing the learning and innovation processes of different countries.

Taxation and Innovation in the 20th Century

“…One can imagine that these agglomeration forces -which are technology field-specific -capture amenities which matter to inventors. They may also be valued per se if there are complementarities with other researchers, thanks to interactions or learning (Akcigit et al, 2018). 33 Furthermore, agglomeration 33 The agglomeration measure can also capture congestion effects, which we would expect to play a negative role.…”

Note on Idea Diffusion Models with Cohort Structures

“…Alternatively, the model can be simulated to back out the growth rate and the invariant distributions as in Akcigit et al . ().…”

“…Although in the Poisson arrival case there is no general analytical solution for the invariant distributions, the functional system of equations (11) can be numerically solved using an iterative procedure. Alternatively, the model can be simulated to back out the growth rate and the invariant distributions as in Akcigit et al (2018).…”

Free Movement of Inventors: Open-Border Policy and Innovation in Switzerland

“…We disambiguated inventors using the algorithm proposed by and already used by Breschi et al (2017), Kogler et al (2017), Akcigit et al (2018) and Ferrucci and Lissoni (2019). As for the disambiguation of applicants, we employed the unique identifiers produced by Du Plessis et al (2009).…”