Long-run patterns in the discovery of the adjacent possible

This study examines the network of supply and use of significant innovations across industries in Sweden, 1970-2013. It is found that 30% of innovation patterns can be predicted by network stimulus from backward and forward linkages. The network is hierarchical, characterized by hubs that connect diverse industries in closely knitted communities. To explain the network structure, a preferential weight assignment process is proposed as an adaptation of the classical preferenti...

Invention has been commonly conceptualized as a search over a space of combinatorial possibilities. Despite the existence of a rich literature, spanning a variety of disciplines, elaborating on the recombinant nature of invention, we lack a formal and quantitative characterization of the combinatorial process underpinning inventive activity. Here we utilize U.S. patent records dating from 1790 to 2010 to formally characterize the invention as a combinatorial process. To do th...

Innovation is to organizations what evolution is to organisms: it is how organisations adapt to changes in the environment and improve. Governments, institutions and firms that innovate are more likely to prosper and stand the test of time; those that fail to do so fall behind their competitors and succumb to market and environmental change. Yet despite steady advances in our understanding of evolution, what drives innovation remains elusive. On the one hand, organizations in...

One new thing often leads to another. Such correlated novelties are a familiar part of daily life. They are also thought to be fundamental to the evolution of biological systems, human society, and technology. By opening new possibilities, one novelty can pave the way for others in a process that Kauffman has called "expanding the adjacent possible". The dynamics of correlated novelties, however, have yet to be quantified empirically or modeled mathematically. Here we propose...

Novelty is not a sufficient condition for innovation. For new ideas and products to succeed, they must be integrated into the collective understanding and existing infrastructure, illustrating how the past determines the future. Here, we develop a comprehensive framework to understand how the structure of accumulated past successes curves the adjacent possible trajectory of future innovations. We observe that certain technological building blocks, upon frequent combination, c...

A long-standing discussion is to what extent patents can be used to monitor trends in innovation activity. This study quantifies the amount and quality of information about actual innovation contained in the patent system, based on 4,460 Swedish innovations (1970-2015) that have been matched to international patents. The results show that most innovations were not patented and that among those that were, 43.9% of all innovations, only a fraction can be identified with patent ...

A detailed empirical analysis of the productivity of non financial firms across several countries and years shows that productivity follows a non-Gaussian distribution with power law tails. We demonstrate that these empirical findings can be interpreted as consequence of a mechanism of exchanges in a social network where firms improve their productivity by direct innovation or/and by imitation of other firm's technological and organizational solutions. The type of network-con...

Innovation, typically spurred by reusing, recombining, and synthesizing existing concepts, is expected to result in an exponential growth of the concept space over time. However, our statistical analysis of TechNet, which is a comprehensive technology semantic network encompassing over four million concepts derived from patent texts, reveals a linear rather than exponential expansion of the overall technological concept space. Moreover, there is a notable decline in the origi...

We study the productivity implications of R&D, capital accumulation, and innovation output for entrants and incumbents in Estonia. First, in contrast to developed economies, a small percentage of firm engage in formal R&D, but a much larger percentage innovate. Second, while we find no difference in the R&D elasticity of productivity for the entrants and incumbents, the impact of innovation output - many of which are a result of 'doing, using and interacting' (DUI) mode of in...

Innovation and obsolescence describe dynamics of ever-churning and adapting social and biological systems, concepts that encompass field-specific formulations. We formalize the connection with a reduced model of the dynamics of the "space of the possible" (e.g. technologies, mutations, theories) to which agents (e.g. firms, organisms, scientists) couple as they grow, die, and replicate. We predict three regimes: the space is finite, ever growing, or a Schumpeterian dystopia i...