Working Paper

What drives innovation? Causes of and consequences for nanotechnologies

Kiel Working Papers, 1455

Nanotechnologies are expected to be the dominant general purpose technology of the next

decades. Their market potential is immense and especially demand side arguments will have

far reaching consequences for innovations. They may occur as increased miniaturization or

via building completely new products, processes or services. Innovations in the field of

nanotechnologies do not only affect productivity in downstream sectors but these feed back to

nanotechnologies thereby inducing circles of continuing innovation. Demand for nanocomponents

mainly arises by firms while private demand is assigned to final products,

processes or services that are augmented by nanotechnologies. Due to the technology’s

controversial character, the consumer’s attitude towards risk and technology affects private

demand and this may either spur or hamper innovation. The paper aims to unravel how these

complex interdependencies and feedback mechanisms affect overall innovation that is

induced by nanotechnologies and how this on its part affects further improvements of



Christian Papilloud
Torben Zülsdorf


Publication Date
JEL Classification
O33, Z13