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Generality, Recombination, and Reuse

Generality, Recombination, and Reuse

Chapter:
(p.611) 13 Generality, Recombination, and Reuse
Source:
The Rate and Direction of Inventive Activity Revisited
Author(s):
Timothy F. Bresnahan
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226473062.003.0019

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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