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Generality, Recombination, and Reuse

Generality, Recombination, and Reuse

(p.611) 13 Generality, Recombination, and Reuse
The Rate and Direction of Inventive Activity Revisited
Timothy F. Bresnahan
University of Chicago Press

This chapter focuses on the recombination and reuse of key general-purpose technologies (GPTs), which are defined as widely used discoveries capable of ongoing improvement that enable complementary innovations. A critical factor behind the creation of these key technologies is the extent to which the broad prospects for reuse can be anticipated. The chapter distinguishes between two kinds of knowledge: technical and entrepreneurial. Technical knowledge—the understanding of how a firm can transform a technology into a product—is relatively commonplace. An understanding of market demand and how an invention might be used in other sectors is a rarer and more valuable asset. Because of the scarcity of entrepreneurial knowledge, the returns from developing a GPT may be much lower than they would be otherwise. However, over time, through a process of innovations and product introductions, this scarce entrepreneurial knowledge may become much more widely known. This theory is illustrated with a number of cases from the information technology industry, where important GPTs were only developed after numerous false starts.

Keywords:   generality, recombination, reuse, general-purpose technologies, innovations, entrepreneurial knowledge

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