The PhD project examines the various ways in which public authorities can meaningfully contribute to the development of technologies. The first part of the project scrutinizes how and to what extent public authorities can contribute to the invention of complex technologies, whose development process is characterized by risk and uncertainty. This part builds on Mariana Mazzucato's concept of the entrepreneurial state, which, according to Mazzucato, can make risky investments. Therefore, public support might be critical to the development of complex technologies. Another pathway for public authorities to influence the development of technologies is by facilitating collaborations between (sub)regional actors. After a region defines strategic diversification objectives based on the dimensions of relatedness and complexity, actors must strategically collaborate to realize the smart specialization strategy. This second part of the project examines how successful public authorities can facilitate the necessary cooperation between various actors. Overall, the project aims to contribute to the discussion on how public resources can be used best for the development of (complex) technologies.

Current Research Question

The evolution of technological complexity: Does complexity drive government support, or does government support drive complexity?

Prior research shows that innovation processes increasingly rely on state intervention and support. A possible explanation for this trend is that innovations are more difficult to make, and greater efforts are needed for their realization. That is, total factor productivity in R&D appears to be on the decline. Consequently, public support is demanded and utilized to a greater extent. So far, it is not well understood what causes the shrinking productivity of R&D efforts. However, it matches well to the observation of growing technological complexity, which in turn is associated with a demand for greater R&D efforts. Put differently, growing technological complexity requires firms to invest more into R&D to maintain the same level of innovation, and to compensate for this they rely increasingly on public support. This leads to the question of why technological complexity is growing and what the role of the growing (public) investments into R&D is therein, which potentially allow companies to explore more risky but more rewarding technologies, which are two features of more complex technologies. The present paper seeks to disentangle the relationship between public support for R&D and technological complexity by empirically assessing the two complementary hypotheses: (1) Additional public support for R&D allows R&D actors to push technological complexity (2) Increasing levels of technological complexity induce higher requirements of public research support.

Data & Methods

The empirical study utilizes patent data of the United States Patent and Trademark Office (USPTO) between 1980 and 2016 that are matched with information on governmental support and technological complexity. In total, we collect information on 455 technologies. Panel Vector Autoregression models are used to assess the two hypotheses.

Societal interests

The role of new technology is often center stage in discussions about a more sustainable future: How can public authorities allocate their resources efficiently to support (green) technology development to cope with grand societal challenges? A cornerstone of the smart specialization framework is the bottom-up entrepreneurial discovery process, based on which the strategy is developed: How can public authorities achieve wide societal participation in this crucial process in light of declining (and selective) political participation?

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