Digital technologies, technological improvement rates, and innovations “Made in Switzerland”

Abstract

Technologies evolve at different paces and their rate of improvement varies considerably. We demonstrate that the fastest technological progress currently occurs in the digital domain and empirically investigate the relationship between technologies’ improvement rates and breakthrough innovations as measured by forward citations of patents. Our empirical estimates suggest that patents from the digital sphere, as well as those related to fast-improving technologies, are associated with a higher probability to produce breakthrough innovations. We then investigate Swiss core industries’ specialization patterns toward these potential high-impact technologies and compare the state of cutting-edge innovation in Switzerland to other countries. Our findings imply that the Swiss innovation system is among the laggards regarding innovations in today’s fastest improving digital technologies.