Combining valuable inventions: exploring the impact of prior invention value on the performance of subsequent inventions

Innovation research widely acknowledges that most inventions are recombinations of existing ideas and technologies. Following this stream of research, this study analyses how the values of prior inventions used to develop a subsequent invention influence the value of the new invention. Building on evolutionary theory and research on technological search and technological paradigms, this article proposes a positive relationship between prior inventions’ value and subsequent invention value. The analysis of a large-scale patent data set of pharmaceutical and semiconductor firms largely confirms this notion; however, it also shows that the effect weakens when prior inventions are of “higher” value. Valuable prior inventions are also positively related to the likelihood that subsequent inventions are “breakthroughs”; however, while this effect also decreases when prior inventions hold higher values, the decreasing effect occurs only at particularly high levels of prior invention value. In contrast, combining valuable inventions limits the likelihood of generating poor invention outcomes value. In summary, while the results lend support to theories of evolutionary and cumulative technological progress, they also show that despite the recombination potential of technical knowledge, there are practical limits to the benefits of valuable inputs.