Related Variety, Unrelated Variety and Technological Breakthroughs: An analysis of US State-Level Patenting

TLDR

Theories of recombinant innovation suggest that related variety facilitates innovation through easier recombination, while unrelated variety can spur radical breakthroughs by linking disparate technologies. The study examines how related and unrelated variety influence regional innovation output. Analysis of US state patent and citation data from 1977–1999 confirms that both related variety boosts innovation and unrelated variety drives technological breakthroughs, providing new insights into the related variety hypothesis.

Abstract

Castaldi C., Frenken K. and Los B. Related variety, unrelated variety and technological breakthroughs: an analysis of US state-level patenting, Regional Studies. This paper investigates how variety affects the innovation output of a region. Borrowing arguments from theories of recombinant innovation, it is expected that related variety will enhance innovation as related technologies are more easily recombined into a new technology. However, it is also expected that unrelated variety enhances technological breakthroughs, since radical innovation often stems from connecting previously unrelated technologies opening up whole new functionalities and applications. Using patent data for US states in the period 1977–99 and associated citation data, evidence is found for both hypotheses. This study thus sheds a new and critical light on the related variety hypothesis in economic geography.