A Template for Invention: Renewing & Recycling Knowledge Components

We explore how old technologies can be recombined to generate new inventions. We consider four ways by which old technologies can serve as templates: subtraction, reconfiguration, addition, and replacement. Subtraction and reconfiguration do not require changing a prior combination of components, whereas for the latter two, new components are introduced. We test these ideas using patent data from the US semiconductor industry. The study’s findings suggest that re-using previous combinations results in higher impact. However, not all prior technologies are equally useful; inventions that recombine components from recently developed technologies were found to have a higher impact. We also show that these inventions are more valuable when a firm is aware of, and is able to absorb, external knowledge. The implications of these findings for theories of organizational learning and innovation are discussed.