Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259536 
Year of Publication: 
2021
Series/Report no.: 
LEM Working Paper Series No. 2021/41
Publisher: 
Scuola Superiore Sant'Anna, Laboratory of Economics and Management (LEM), Pisa
Abstract: 
Government funding of innovation can have a significant impact not only on the rate of technical change, but also on its direction. In this paper, we examine the role that government grants and government departments played in the development of artificial intelligence (AI), an emergent general purpose technology with the potential to revolutionize many aspects of the economy and society. We analyze all AI patents filed at the US Patent and Trademark Office and develop network measures that capture each patent's influence on all possible sequences of follow-on innovation. By identifying the effect of patents on technological trajectories, we are able to account for the long-term cumulative impact of new knowledge that is not captured by standard patent citation measures. We show that patents funded by government grants, but above all patents filed by federal agencies and state departments, profoundly influenced the development of AI. These long-term effects were especially significant in early phases, and weakened over time as private incentives took over. These results are robust to alternative specifications and controlling for endogeneity.
Subjects: 
R&D
Technical change
Government subsidies
Technology policy
General purpose technology
JEL: 
O31
O33
O38
D85
Document Type: 
Working Paper

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