Recombinant Knowledge and Growth: The Case of ICTs

The economics of recombinant knowledge is a promising field of investigation. New technological systems emerge when strong cores of complementary knowledge consolidate and feed an array of coherent applications and implementations. However, diminishing returns to recombination eventually emerge, and the rates of growth of technological systems gradually decline. Empirical evidence based on analysis of the co-occurrence of technological classes within two or more patent applications, allows the identification and measurement of the dynamics of knowledge recombination. Our analysis focus on patent applications to the European Patent Office, in the period 1981-2003, and provides empirical evidence on the emergence of the new technological system based upon information and communication technologies (ICTs) and their wide scope of applications as the result of a process of knowledge recombination. The empirical investigation confirms that the recombination process has been more effective in countries characterized by higher levels of coherence and specialization of their knowledge space. Countries better able to master the recombinant generation of new technological knowledge have experienced higher rates of increase of national multifactor productivity growth.