Abstract
Innovative firms rely increasingly on academic science, yet they exploit only a small fraction of all academic discoveries. Which discoveries in academia do firms build upon? We posit that hubs play the role of bridges between academic science and corporate technology. Tracking citations from patents to approximately 10 million academic articles, we find that hubs facilitate the flow of academic science into corporate inventions in two ways. First, hub-based discoveries in academia are of higher quality and are more applied. Second, firms—in particular young, innovative, science-oriented ones—pay disproportionate attention to hub-based discoveries. We address concerns regarding unobserved heterogeneity by confirming the role of firms’ attention to hub-based science in a set of 147 simultaneous discoveries. Importantly, hubs not only facilitate localized knowledge flow but also extend the geographic reach of academic science, attracting the attention of distant firms. This paper was accepted by Ashish Arora, entrepreneurship and innovation.
Highlights
Fundamental scientific discoveries are essential to increasing productivity and innovation (Nelson 1982, Rosenberg and Nelson 1994, Mokyr 2002, Fleming and Sorenson 2004), resulting in “new products, new industries, new investment opportunities, and millions of jobs” (Bush 1945, p. 242)
Tracking citations from patents to approximately 10 million academic articles, we find that hubs facilitate the flow of academic science into corporate inventions in two ways
For the 36,769 firms whose patents cite any of our approximately 10 million Web of Science (WoS) papers, we examine the ratio of each firm’s citations that are to papers in hubs. (Descriptive statistics are in Table A3, online.) Because we theorize that hubs act as bridges between academic science and corporate technologies, we would expect firms that draw on hub science to be innovative and science-oriented
Summary
Fundamental scientific discoveries are essential to increasing productivity and innovation (Nelson 1982, Rosenberg and Nelson 1994, Mokyr 2002, Fleming and Sorenson 2004), resulting in “new products, new industries, new investment opportunities, and millions of jobs” (Bush 1945, p. 242). Firms are funding less basic research internally, relying instead on discoveries from academia (Arora et al 2018). Considering this division of innovative labor, firms exploit a surprisingly small fraction of the work published by academic scientists. Building on academic science is a challenging task (Bikard 2018), and less than five percent of all academic publications are cited by patents (Ahmadpoor and Jones 2017). This raises a key question regarding the interface between academic science and industrial technology: Which scientific discoveries from academia do firms choose to build upon?.
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