The set of technological opportunities in a given industry is one of the fundamental determinants of technical advance in that line of business. We examine the concept of technological opportunity and discuss three categories of sources of those opportunities: advances in scientiﬁc understanding and technique, technological advances originating in other industries and in other private and governmental institutions, and feedbacks from an industry’s own technological advances. Data from the Yale Survey on Industrial Research and Development are used to measure the strength of various sources of technological opportunity and to discern interindustry diﬀerences in the importance of these sources. We ﬁnd that interindustry diﬀerences in the strength and sources of technological opportunities contribute importantly to explanations of cross-industry variation in R&D intensity and technological advance.
Klevorick, Alvin K.; Levin, Richard C.; Nelson, Richard R.; and Winter, Sidney G., "On the Sources and Significance of Interindustry Differences in Technological Opportunities" (1993). Cowles Foundation Discussion Papers. 1295.