Measuring technological novelty with patent-based indicators
This study provides a new, more comprehensive measurement of technological novelty. Integrating insights from the existing economics and management literature, we characterize inventions ex ante along two dimensions of technological novelty: Novelty in Recombination and Novelty in Knowledge Origins. For the latter dimension we distinguish between Novel Technological and Novel Scientific Origins. For each dimension we propose an operationalization using patent classification and citation information. Results indicate that the proposed measures for the different dimensions of technological novelty are correlated, but each conveys different information. We perform a series of analyses to assess the validity of the proposed measures and compare them with other indicators used in the literature. Moreover, an analysis of the technological impact of inventions identified as novel shows that technological novelty increases the variance of technological impact and the likelihood of being among the positive outliers with respect to impact. This holds particularly for those inventions that combine Novelty in Recombination with Novelty in Technological and Scientific Origins. The results support our indicators as ex ante measures of technological novelty driving potentially radical impact.