Technological novelty and key enabling technologies: evidence from European regions

This paper deals with the determinants of technological novelty at the local level and, in particular, with the impact of the local endowment of key enabling technologies (KETs). Looking at local innovations as recombinations of pre-existing knowledge, we argue that the local endowment of KETs facilitates regions introducing inventions with novel technological origins, either in absolute or in relative terms. We test for this argument by focusing on a sample of 1,255 EU (NUTS3) regions over the 2000-2014 period and propose an original instrumental variable strategy that allows us to maintain the local endowment of KETs as exogenous. The results confirm our main hypotheses. In particular, a 1% increase in KETs increases by similar to 1.8% the number of novel patents generated at the local level. KETs therefore appear to be 'enabling' of technological innovations that are unique in recombination across the board. However, KETs promote 'new-to-the-region' innovations more than 'new-to-the-world' innovations, representing a policy leverage to which regions could resort in targeting the local replication of technological advancements already present at the global frontier for some time.