Enabling Technologies And The Role Of Private Firms: A Machine Learning Matching Analysis

Investments in enabling technologies-including the fifth-generation technology standard for broadband cellular networks (5G), artificial intelligence (AI), and light detection and ranging (LIDAR) technology-are important strategic decisions for firms. This paper asks how inventions that private firms developed with (versus without) public-sector partners differ in their enabling technology trajectory. Using a novel method of machine learning matching, we compare patented technologies generated from more than 30,000 public-private relationships with comparable technologies invented by private firms alone during a 21-year period. To measure the enabling potential of a technology, we introduce a new enabling technology index. The findings show that private-firm relationships with the public sector-in particular cooperative agreements and grants with mission agencies (National Aeronautics and Space Administration and Department of Defense)-are likely starting points for enabling technology trajectories. We thus put a spotlight on organizational arrangements that combine the breadth of exploration (agreements, grants) with deep exploitation in a particular domain (mission agency). A key contribution is a better understanding of the types of private-firm efforts that are associated with enabling technologies. We also challenge the common assumption that enabling technologies have their origins only in public-sector projects and show how private firms are involved. Our significant contribution is to show how private firms can change evolution of ecosystems through technology development.