Cumulative Innovation Research Articles

Knowledge Sharing and Cumulative Innovation in Business Networks

How can we explain the success of cooperative networks of firms which share innovations, such as Silicon Valley or the Open Source community? This paper shows that if innovations are cumulative, making an invention publicly available to a network of firms may be valuable if the firm expects to benefit from future improvements made by other firms. A cooperative equilibrium where all innovations are made public is shown to exist under certain conditions. Furthermore, such an equilibrium does not rest on punishment strategies being followed after a deviation: it is optimal not to deviate regardless of another firm’s actions following a deviation. A cooperative equilibrium is more likely to arise the greater the number of firms in the network. When R&D effort is endogenous, cooperative equilibria are associated with strategic complementarities between firms’ research effort, which may lead to multiple equilibria.

When mRNA technology meets patent law: innovation, barriers and public health

Abstract The success of messenger ribonucleic acid (mRNA) technology during the Coronavirus disease (COVID-19) pandemic has ushered in a new era of vaccine and therapeutic development. In this rapidly evolving field, top biotech and biopharma companies are constantly searching for new opportunities to create innovative treatments and vaccines. However, the landscape of mRNA patents is getting complicated and dense, with an accumulation of partially overlapping patent rights that require multiple rights holders’ permission for use and commercialization. Additionally, there are several pending patent lawsuits related to key components of mRNA platform technologies, with strong implications for follow-on innovation and technology diffusion within the field. The case of mRNA technology—as often happens with emerging technologies—is therefore emblematic of the policy dilemma faced by patent law of how to balance economic incentives in a setting of cumulative innovation. This article maps out relevant legal factors that, under different conditions, might aggravate or mitigate the potential negative effects of patents in the field. Further, it sets a framework for more targeted examination of the identified issues.

Patent regime and the geography of cumulative innovation

The localization effect of cumulative innovation was strengthening in the past few decades, a puzzling trend given the decreasing cost of knowledge transmission. To unravel this puzzle, we attend to patent regime and propose a legal perspective. We illustrate with a stylized model that a pro-patent regime re-distributes profits from later innovators to initial patent owners, which discourages distant followers with higher learning and licensing costs and therefore leads to stronger localization of cumulative innovation. We test the model predictions by exploiting an unexpected pro-patent regime change—the creation of the Court of Appeals for the Federal Circuit. We find that follow-on innovations became more localized after patents were strengthened in litigation, especially in regions that experienced a greater increase in patent enforceability. A series of robustness tests and cross-sectional analyses strongly support this finding. Interestingly, we find that scientific knowledge diffusion, which was unaffected by patent regime, became less localized during the same period. Our paper shows that patent regime can shape the geography of cumulative innovation, which has profound implications for firm strategies and policymaking.

Women in top management teams and their impact on innovation

In this study, we integrate insights from the literature on top management team (TMT) composition, gender diversity, and cumulative innovation, and examine how TMT gender diversity (or women in TMTs) impacts firm innovation. We analyze a panel of U.S. firms over the period 2005–2019, exploiting U.S. state-level variation in support policies protecting the rights of female workers. We find that greater TMT gender diversity increases the number of innovations but decreases their impact. Furthermore, greater TMT gender diversity narrows the breadth of search (search becomes more local). We illuminate the multifaceted innovation outcomes of gender-diverse TMTs and highlight the risk-reducing effects of female TMT members in innovation contexts. Our study provides opportune innovation insights that are much needed in the current era, with the increasing presence of female executives in TMTs.

Litigation versus Spillovers

This paper studies how patent litigation affects innovation and technology spillovers across firms. Using a unique data set on patent litigation from the United States, this paper shows that litigants are active innovators and share complementary knowledge assets with each other, creating spillovers. However, as a result of litigation, firms reduce follow-on innovation, thus impeding the effects of spillovers. Moreover, litigants fall behind the frontier, resulting in a divergence of productivity growth, which suggests a reduction of their role as intermediaries of knowledge diffusion. These findings imply that litigation, in contrast with the original objective of the intellectual property rights (IPRs) enforcement systems, can obstruct technological diffusion, which not only decreases cumulative innovation and spillovers, but also slows down productivity growth.

Spread The Seed to Win a Long Harvest

In an emerging technology sector, the generative value of inventions—its potential to spawn subsequent iterations and cumulative inventions—is crucial yet challenging to realize. This paper examines firm research publications as a novel mechanism for generative value creation in emerging technology sectors. Research publications, by broadcasting the firm’s research and attracting a diverse set of external follow-up inventions, exposes the focal inventing firm to a pool of distant, unfamiliar knowledge. In the meantime, the theoretical knowledge contained in these publications guides the focal firm to learn from and build on the distant knowledge contained in external follow-up inventions efficiently. To test these arguments, I collected data on U.S. publicly-traded, AI-active firms from 1995 to 2015. I tracked the cumulative innovation activities around these firms’ AI-related patents and the research publications associated with these patents. Analyses based on within-firm models show that, for a focal AI patent, same-firm publications not only increase the knowledge distance between the firm’s original knowledge pool and the incoming external follow-up inventions, but also enhance the volume and private value of the firm’s related, subsequent inventive efforts. This paper contributes to the literature on generative value of inventions, emerging technologies, and corporate publications.

Regional innovation ability and its inequality: Measurements and dynamic decomposition

To bridge the research gap regarding the inequality of innovation ability, this paper proposes a more reasonable proxy indicator of research and development capital, applying the concentration index to quantify the inequality of regional innovation ability based on the regional economic levels in China and to dynamically decompose changes of regional innovation ability inequality. The study reveals that China's innovation ability has gradually improved, accompanied by significant regional agglomeration effects and widening regional gaps. The findings indicate that inequality of regional innovation ability in China remains high, and the correlation between the regional innovation ability and economic development level has increased. Improvement in the degree of synergy between regional economic development is conducive to alleviating the inequality of regional innovation ability, and cumulative innovation ability effects, particularly the scale factor, exacerbate the inequality of regional innovation ability. This research has important practical significance for policymakers and researchers seeking approaches to investigate and promote effective the coordinated development of regional innovation and improve the overall quality and efficiency of innovation ability.

Innovative Strategies for Talent Cultivation in New Ventures Under Higher Education.

This study aims to help enterprises enhance their innovation capabilities in the environment of knowledge economy globalization and stand out in the fierce industry competition. Firstly, data on existing higher education theories and innovation theories are analyzed. Secondly, two companies in the sample data are selected for detailed analysis. Finally, research conclusion and corresponding talent management strategies are presented. The results show that the cumulative contribution value of employees is 87.496%. The cumulative contribution value of human capital is 70.322%. The contribution value of cumulative innovation performance is 61.658%. The cumulative contribution value of R&D investment is 45.306%. The coefficient for the overall sample size is 0.509. The employee quality coefficient is 0.452. The correlation coefficient for educational attainment is 0.598. The high-tech service industry has the highest correlation coefficient at 0.504. The auto industry has the highest coefficient at 0.669. The experimental research has drawn the following conclusion: (1) Talents positively affect enterprise innovation performance; (2) Research and Development (R&D) investment has a positive correlation with enterprise innovation performance; (3) R&D investment has a positive correlation with talents. Through experimental research, the education level of employees is measured by academic qualifications, but the essence of academic qualification measurement is the level of knowledge and skills that employees have. In summary, the study can extend the strategic analysis of the cultivation of innovative talents and play a valuable auxiliary role in cultivating innovative talents.

Detecting Slowly Accumulating Faults Using a Bank of Cumulative Innovations Monitors in Kalman Filters

<h3>Summary</h3> Extended Kalman filters (EKFs) that monitor innovations over time have been demonstrated to be effective at detecting slowly accumulating measurement faults (Quartararo &amp; Langel, 2020; Tanil et al., 2018). This paper first demonstrates that a single cumulative monitor becomes increasingly sensitive to measurement error model uncertainty as the accumulation interval increases, leading to false alarm and detection rates that can differ significantly from predefined design parameters. In response, a bank of finite-length cumulative innovations monitors is explored for fault detection in multisensor navigation systems. A novel extension to traditional covariance analysis (<i>Covariance Analysis Including Expected Values</i> or CAIEV) is developed to accommodate measurement faults and is used in addition to Monte Carlo simulations to present detection results for a variety of GPS fault profiles and inertial measurement unit (IMU) grades. Data for time-to-detect is presented alongside the position-domain bias induced by the fault at the time of detection. We show that the monitor bank can reliably detect the presence of faulty measurements after the position-domain bias has reached only tens of meters using tactical and aviation-grade IMUs for the cases considered, an improvement over other innovations-based techniques.

An Autocatalytic Network Model of Conceptual Change

In reflexively autocatalytic foodset (RAF)-generated networks, nodes are not only passive transmitters of activation, but they also actively galvanize, or "catalyze" the synthesis of novel ("foodset-derived") nodes from existing ones (the "foodset"). Thus, RAFs are uniquely suited to modeling how new structure grows out of currently available structure, and analyzing phase transitions in potentially very large networks. RAFs have been used to model the origins of evolutionary processes, both biological (the origin of life) and cultural (the origin of cumulative innovation), and may potentially provide an overarching framework that integrates evolutionary and developmental approaches to cognition. Applied to cognition, the foodset consists of information obtained through social learning or individual learning of pre-existing information, and foodset-derived items arise through mental operations resulting in new information. Thus, mental representations are not only propagators of spreading activation, but they also trigger the derivation of new mental representations. To illustrate the application of RAF networks in cognitive science, we develop a step-by-step process model of conceptual change (i.e., the process by which a child becomes an active participant in cultural evolution), focusing on childrens' mental models of the shape of the Earth. Using results from (Vosniadou & Brewer, 1992), we model different trajectories from the flat Earth model to the spherical Earth model, as well as the impact of other factors, such as pretend play, on cognitive development. As RAFs increase in size and number, they begin to merge, bridging previously compartmentalized knowledge, and get subsumed by a giant RAF (the maxRAF) that constrains and enables the scaffolding of new conceptual structure. At this point, the cognitive network becomes self-sustaining and self-organizing. The child can reliably frame new knowledge and experiences in terms of previous ones, and engage in recursive representational redescription and abstract thought. We suggest that individual differences in the reactivity of mental representations, that is, their proclivity to trigger conceptual change, culminate in different cognitive networks and concomitant learning trajectories.

Modeling patent clarity

This study uses machine learning techniques to model patent claim clarity and analyze how clarity relates to important patent policy objectives. Specifically, machine learning models are trained on a dataset of over 600,000 U.S. patent applications that were (or were not) rejected for indefiniteness, a proxy for claim clarity, using features based on the linguistic attributes of each application. The model is then applied to over 2 million issued patents and their corresponding applications, deriving estimates of the clarity of each patent's claim set at application and issuance.First, the properties of claim clarity and its relationship with the patent examination process are studied. Wordiness and repetitiveness corresponds to reduced clarity, whereas more descriptiveness whereas clearer claims tend to be more descriptive. Clarity also changes during patent examination, indicating that patent office policies may affect claim clarity.Next, the relationship between claim clarity and cumulative innovation is studied. Clear patents are found to receive more citations by applicants of unrelated future patents, a key indicator of cumulative innovation. However, unclear patents tend to receive more examiner citations, particularly in later years, and the technological relevance of examiner citations also tends to decline over time. This raises important questions about the role of late-stage examiner citations in the patent examination process, which are framed for future research.Finally, this study evaluates the impact of the U.S. Supreme Court's Nautilus v. Biosig decision, which sought to improve patent claim clarity. A difference-in-difference analysis of applications examined under the old versus new standard is conducted to evaluate the causal effect of Nautilus on the claims of patents filed under the old standard but examined under the new standard. This reveals a significant improvement in patent claim clarity post-Nautilus.

Disclosure and Subsequent Innovation: Evidence from the Patent Depository Library Program

How important is access to patent documents for subsequent innovation? We examine the expansion of the USPTO Patent Library system after 1975. Patent libraries provided access to patents before the Internet. We find that after patent library opening, local patenting increases by 8–20 percent relative to similar regions. Additional analyses suggest that disclosure of technical information drives this effect: inventors increasingly take up ideas from outside their region, and the effect is strongest in technologies where patents are more informative. We thus provide evidence that disclosure plays an important role in cumulative innovation. (JEL D83, K11, O31, O34, R11)

Making Cognitive Niches Explicit: On the Importance of External Cognitive Representations in Accounting for Cumulative Culture

Cumulative transmission and innovation are the hallmark properties of the cultural achievements of human beings. Cognitive scientists have traditionally explained these properties in terms of social learning and creativity. The non-social cognitive dimension of cumulative culture, the so-called technical reasoning, has also been accounted for recently. These explanatory perspectives are methodologically individualistic since they frame cumulative and innovative culture in terms of the processing of inner cognitive representations. Here we show that going beyond methodological individualism could facilitate an understanding of why some inventions are disseminated in a stable form and constitute the basis for further modifications. Drawing on three cases of cognitive history of prominent achievements of Antiquity, i.e., Homerian epics, Euclidean geometry, and Roman law, we investigate which properties of cognitive artifacts shaped cognitive niches for modifying original cognitive tasks or developing new ones. These niches both constrained and enabled the cognitive skills of humans to promote cumulative culture and further innovations. At the same time, we claim that “wide cognition,” incorporating both intracranial resources and external cognitive representations, constitutes a platform for building explanations of cognitive phenomena developing over a historical time scale.

Patent Enforcement and Innovation

This paper investigates the effect of patent protection on cumulative innovation. While one of the main functions of the patent system is to foster innovation, patents might block sequential innovation. Consequently, the actual impact of patent rights on innovation is still under debate. To investigate this relationship, I analyze the impact of patent infringement litigation on cumulative innovation. The results for a sample of U.S. patents imply that patent citations increase after a case is filed in a court. While citations increase during the litigation period, the relative effect size decreases in the years following the closure of the case. Further results imply that this effect is particularly driven by patents subject to litigation with a high degree of novelty and patents with a narrow breadth. Analyzing the impact of non-practicing entities shows that the change in citations is lower for patents owned by this type of patent holders. Moreover, citations of litigated patents stem particularly from patents that are close in terms of technological proximity and general similarity.

New Walls in a Flat World? A Legal Perspective toward the Border Puzzle in Cumulative Innovation

New Walls in a Flat World? A Legal Perspective toward the Border Puzzle in Cumulative Innovation

Can antitrust law enforcement spur innovation? Antitrust regulation of patent consolidation and its impact on follow-on innovations

This study examines the effect of antitrust regulation of patent consolidation on the development of follow-on innovations. Our reconciliation of the various strains of literature hypothesizes that in sectors where cumulative innovation is crucial to firms’ market operations, a firm that consolidates patents for substituting technologies for its already-possessed technologies discourages market competitions and follow-on innovation by competitors. In this case, antitrust regulation of patent consolidation is anticipated to positively affect competitors’ follow-on innovation. We empirically test this hypothesis with the case of the US Department of Justice's regulation of Novell's software patent transfers to four large proprietary software companies (i.e., Microsoft, Oracle, EMC, and Apple) in 2011. Our analyses using US patent, trademark, and copyright data have found evidence corroborating our hypothesis. Our research provides policy and scholarly implications regarding how antitrust law can be a complementary institution to the patent law for promoting innovation.

The Optimal Patent Portfolio of The Technology Standards Alliances in Innovation Competition

ABSTRACT Unlike the dominant theories based on the rigid assumption that “technology standards must contain only essential patents”, this paper discusses the standard alliances that are engaged in their cumulative innovation. Its focus is particularly on a more realistic setting that a standard alliance should contain both the essential and the non-essential patents. We use the essential-patent’s ratio, which denotes the percentage of the essential patents in the total patents in a standard, as the cumulative innovation model’s core variable. The mathematical analysis illustrates that the essential-patent’s ratio performs an important role in the arguments’ standards. There is an optimal portfolio that maximizes the alliances’ efficiency in an innovation competition. It implies that the social welfare effects depend on the dynamic trade-off between the long-term technical gap caused by the technological upgrades’ missing opportunities and the short-term welfare losses that consumers may suffer. The patents’ and antitrust laws should tolerate a certain number of non-essential patents being contained by the technology standards.

Human biases limit cumulative innovation.

Is technological advancement constrained by biases in human cognition? People in all societies build on discoveries inherited from previous generations, leading to cumulative innovation. However, biases in human learning and memory may influence the process of knowledge transmission, potentially limiting this process. Here, we show that cumulative innovation in a continuous optimization problem is systematically constrained by human biases. In a large (n = 1250) behavioural study using a transmission chain design, participants searched for virtual technologies in one of four environments after inheriting a solution from previous generations. Participants converged on worse solutions in environments misaligned with their biases. These results substantiate a mathematical model of cumulative innovation in Bayesian agents, highlighting formal relationships between cultural evolution and distributed stochastic optimization. Our findings provide experimental evidence that human biases can limit the advancement of knowledge in a controlled laboratory setting, reinforcing concerns about bias in creative, scientific and educational contexts.

Increasing the Level of Abstraction as a Strategy for Accelerating the Adoption of Complex Technologies

Many new technologies are complex and embody high levels of technical sophistication, and applying them should require significant knowledge and experience. Yet, the rapid adoption and incorporation of these technologies into other innovations seems inconsistent with the expertise needed to make them work. In this paper, we propose increasing levels of abstraction as a strategy for speeding the adoption of new technologies. Higher-level abstractions package complexity in ways that makes them easier to understand and recombine, and they decrease the resources needed by firms to deploy sophisticated technical know-how. Increasing the level of abstraction is a way to push forward the innovative frontier by making such difficult-to-use technologies readily accessible to other innovators. Although this framing has been used in engineering and software development to describe modular encapsulation and cumulative innovation, we propose its use in the management literature to describe more broadly the uptake of new technologies and their facile recombination. This framing casts a different light on cumulative innovation and exposes new managerial questions to explore

What Stimulated Rapid, Cumulative Innovation After 100,000 Years Ago?

Imagination and innovation are likely stimulated through the intersection of brain power, motor skill and social need. Through time, escalating creativity may have influenced cognition and social interactions, creating a feedback situation that also implicated demography. Such reciprocal interactions between technology, cognition and society may have motivated the accumulation of innovations that are particularly visible in the archaeological record after 100,000 years ago (not as a revolution, but incrementally). Raw materials also played a role because they are not passive; intense interaction with objects reflexively stimulates human imagination and creativity. Archaeological evidence for material culture items that appear to embody imagination is present before the appearance of Homo sapiens. The implication is that imagination is not the sole preserve of people like us; nonetheless, H. sapiens took imaginative expressions to new heights after about 100,000 years ago. Perforated and ochre-covered marine shells were found in early modern human burials and living sites and thereafter more material culture items convey imagination. Shell beads were strung to form a variety of patterns, and engraved ostrich eggshells, engraved ochre, worked bone and hundreds of pieces of utilised ochre have been widely found. Innovation, imagination and complex cognition are also conveyed in the manufacture of everyday objects used for subsistence activities.