Innovation Patterns: Upgrading Sectoral Classification for the Fourth Industrial Revolution

25 Pages Posted: 7 Mar 2017 Last revised: 11 May 2018

See all articles by Dane Rook

Dane Rook

Stanford University

Adam Salvatori

Kensho Technologies

John van Moyland

Kensho Technologies

Paul Rosa

Kensho Technologies

Date Written: March 6, 2017

Abstract

At the dawn of the Fourth Industrial Revolution, we notice that conventional methods for classifying companies into economic sectors are increasingly unfit-­for-­purpose, because they fail to accommodate the key ways in which innovations are transforming existing industries, and even spawning altogether new ones. We introduce a new framework for the comparative study of Industrial Revolutions that also provides the foundation for an adaptive and comprehensive classification scheme. We show how the same five Axes of Innovation commonly characterize the first three Revolutions in modern history, and how these Axes are also capturing the key features of the Fourth Industrial Revolution that is presently underway. We demonstrate that, in any Industrial Revolution, each Axis of Innovation manifests as a unique Innovation Pattern that remains durable throughout that Revolution. Innovation Patterns are the fundamental driving forces behind Revolutions, and the interactions between them strongly shape how new technologies evolve during the Revolution in which they appear. One significant practical application of our framework is as the basis of a novel system for classifying companies into economic sectors. We discuss how this approach to classification is preferable to conventional techniques, detail how it can be used to derive a system of new-economy sectors, and provide several worked examples.

Keywords: Classification Systems, Economic Sectors, Industrial Revolutions, Innovation Dynamics

JEL Classification: G3, G23, L00, N1, O3

Suggested Citation

Rook, Dane and Salvatori, Adam and van Moyland, John and Rosa, Paul, Innovation Patterns: Upgrading Sectoral Classification for the Fourth Industrial Revolution (March 6, 2017). Available at SSRN: https://ssrn.com/abstract=2928335 or http://dx.doi.org/10.2139/ssrn.2928335

Dane Rook

Stanford University ( email )

Stanford, CA 94305
United States

Adam Salvatori (Contact Author)

Kensho Technologies ( email )

20 University Road
Cambridge, MA 02138
United States

John Van Moyland

Kensho Technologies ( email )

20 University Road
Cambridge, MA 02138
United States

Paul Rosa

Kensho Technologies ( email )

20 University Road
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
314
Abstract Views
1,547
rank
98,263
PlumX Metrics