Essays on the Direction of Technical Change

Abstract

The rate and direction of inventive activity are central to firms’ competitiveness as well as economic growth. A fundamental question arises from the fact that innovation increasingly relies on public scientific findings, many of which are freely published and accessible. How can firms capture private value from publicly available knowledge? Chapter 2 investigates the concept of first-mover advantage in utilizing public science. It finds that being first to apply cutting-edge public science enables broader patents, but requires active internal R&D to recognize opportunities early. Chapter 3 surveys the extensive literature employing quasi-experimental techniques to quantify forces shaping the direction of innovation. It contributes software tailored for innovation data to assist future research. Chapter 4 leverages FDA data to empirically analyze post-acquisition innovation trajectories in medical devices, revealing the slowed evolution of acquired technologies.Overall, this dissertation elucidates how firms derive competitive advantage from public science, surveys techniques for quantifying innovation’s direction, and empirically examines merger impacts on medical technology advancement. The studies contribute novel data, methods, and insights to support firms, policymakers, and other stakeholders with an interest in the evolution of technical change.