Technological entry, exit and survival: an empirical analysis of patent data

Abstract

This paper provides new empirical evidence on the patterns of technological entry and exit across sectors and over time. We define `new' innovators—firms which innovate for the first time, and `ex'-innovators—previous innovators that do not innovate any more. We distinguish also between `real' and `lateral' entry and exit. The analysis is based on patent data (European Patent Office) for 49 technological classes in six countries (USA, Japan, Germany, UK, France and Italy) over the period 1978–1991. We find that innovative turbulence is relevant and that it is a composite phenomenon, in which real innovative entrants/exiters and lateral entrants/exiters play different roles. We then examine the patterns of survival of innovative entrants and find that most of the entrants are occasional innovators, while persistent innovators are few in number but large in terms of patents. Subsequently, we analyze differences in the patterns of technological entry and exit at the sectoral level. Finally, the role of national systems of innovation in affecting innovative entry and exit is examined.