The role of inventors’ networks and variety for breakthrough inventions

Abstract

This paper studies the role of the inventors’ networks and the diversity of the local industrial structure for regional innovation, differentiating between regions' production of normal and breakthrough innovations. Our results suggest that, on the one hand, local related variety enhances the overall innovation rate, while unrelated variety supports the rate of breakthrough innovations. On the other hand, we find evidence that inventors’ networks are determinant for regions' patenting of normal and breakthrough innovations. To do so we constructed a unique database of Italian patenting activity at the United States Patent and Trademark Office (USPTO) dating back to 1972.