The role of inter-sectoral knowledge spillovers in technological innovations: The case of lithium-ion batteries

Innovation is critical for economic growth and addressing societal and environmental problems. Therefore, many policy interventions aim to accelerate and redirect technological change. Most modern technologies have value chains spanning multiple sectors, and thus are likely to require cross-sectoral knowledge spillovers. However, knowledge spillovers between sectors in a technology's value chain have hardly been analyzed. We analyze the role of the sectoral diversity and sectoral distance of knowledge for subsequent knowledge generation within one specific technology. More specifically, we investigate how the sectoral diversity and distance of prior knowledge affect the technological importance, sectoral diversity, and sectoral distance of subsequent knowledge. Our regression analyses of global patent data of lithium-ion batteries show that (1) higher sectoral diversity increases the importance of newly created knowledge, whereas higher sectoral distance does not significantly increase the importance of newly created knowledge; (2) both higher sectoral diversity and distance of prior knowledge increase the sectoral diversity of subsequent knowledge; and (3) higher sectoral distance of prior knowledge increases the sectoral distance of subsequent knowledge, whereas higher sectoral diversity of prior knowledge does not significantly increase the distance of subsequent knowledge. We discuss our findings and derive implications for research, R&D managers and policymakers.