Growing Technological Relatedness to the ICT Industry and Its Impacts

Abstract

We create an inter-sectoral citation network using 1.3 million patents granted between 1981 and 2010 across all industries in the U.S. In this network space, we find a significant increase over time in the proximity of non-ICT industries to the ICT industry. Such "ICT-Closeness" of an industry relates to a significant increase in the proportion of ICT technologies in the industry's patent portfolio and complementarity between ICT and non-ICT patents in its portfolio. We hypothesize and find that ICT-Closeness has a significant positive impact on innovation outcomes of the citing industry, including innovative efficiency, recombinant capabilities, and creation of new products, services and business methods. ICT-Closeness also engenders hypercompetition in the citing industries, as reflected in greater winner-take-all dynamics and turbulence. Our results point to a paradigm shift in knowledge production and in turn, sources of competitive value across diverse industries.

Keywords: Research and Development, Innovation, Information Systems, It Diffusion and Adoption, Organizational Studies, Effectiveness-Performance, Networks-Graphs