Evolution of the Knowledge Base in Knowledge Intensive Sectors

In a knowledge based society the creation and utilisation of knowledge become the key factors determining the competitiveness of firms, regions and countries. In this perspective a considerable effort is today dedicated to characterise the knowledge base of different sectors in the economy and to detect its impact on firm performance and on industrial organization (Breschi, Lissoni, and Malerba, 2003; Krafft, 2004; Nesta and Saviotti, 2005). Although all sectors in modern economies are affected by a growing knowledge intensity, some sectors are influenced more than the average. We call these Knowledge Intensive Sectors (KISs). In this paper we map the dynamics of knowledge generation within three KISs: biotechnology, telecommunications and electronics. The first question which is addressed is how to characterize a KIS. Typically we would expect KISs to have a high R&D intensity, to produce more patents and publications than less knowledge intensive sectors and to have a greater impact of knowledge production on firm performance and on sectoral growth. A further and important aspect of KISs is the presence of discontinuity in knowledge. Not that such discontinuities are present only in KISs: other sectors are going to be affected, although often less directly, by these discontinuities. However, KISs are likely to be the first ones to start exploring new forms of knowledge and to move them towards exploitation. Thus, we can expect the dynamics of knowledge generation and utilization in KISs to be affected by both (i) the rate of knowledge creation and (ii) the presence of discontinuities in new knowledge. It follows that in order to be able to link the dynamics of knowledge creation and utilization to firm performance and to industrial organization we need to detect a number of properties of the knowledge base (KB) of KISs. Properties such as the diversity/variety of the KB, its coherence and its cognitive distance (or conversely its similarity) between different KBs have already been shown to be potential determinants of firm performance. The aim of this paper is to contribute to this new literature by characterizing the evolution of the KB in three KISs, namely biotechnology, telecommunications and electronics. We use data from the European Patent Office database (EPO database) to see whether we can find common trends in the evolution of the KB of these three KISs.