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
Chapter. 23550 words.
Subjects: Economic Development and Growth
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