Working Paper
What drives innovation? Causes of and consequences for nanotechnologies
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
nanotechnologies.
Key Words
- controversial technologies
- Determinants of innovation
- general purpose technologies