How a Product's Design Hierarchy Shapes the Evolution of Technological Knowledge – Evidence from Patent-Citation Networks in Wind Power

We analyze how a product's design hierarchy shapes the evolution of the underlying body of technological knowledge, building on the literature on technological evolution in complex products. This literature suggests that the design hierarchy of a product can have an ordering effect on the evolution of commercialized artifacts, in particular when product design decisions on high levels of the design hierarchy set the agenda for subsequent variation and experimentation on lower levels. We extend this literature by analyzing the design hierarchy's effect on the evolution of the industry's knowledge base, using the case of wind turbine technology over the period 1973-2009. We assess the technological focus of patents along the core trajectory of knowledge generation, identified through a patent-citation network analysis, and link it to a classification of technological problems into different levels in the design hierarchy. Our analysis suggests that the evolution of an industry's knowledge base along a technological trajectory is not a unidirectional process of gradual refinement: the focus of knowledge generation shifts over time between different sub-systems in a highly sequential pattern, whose order is strongly influenced by the design hierarchy. Each of these shifts initiates a new process of integration of industry-external knowledge into the knowledge base, thus opening windows of competitive opportunity for potential entrants with strong knowledge positions in the sub-system that has moved into the focus of innovation. We discuss implications for the debate on supply-side and demand-side influences along technological trajectories and for the understanding of the competitive advantage of specific knowledge positions of firms and nations