Innovation snowballing is empirically correct

//DH

Innovation snowballing is more than just a theory. Recent quantitative work suggests it is an empirical reality. Economist David Popp, for instance, finds that the propensity to innovate in a given energy-efficient technology increases with the number of prior patents filed for each technology, indicating that energy innovators do, in fact, stand on the shoulders of past entrepreneurs, leading to innovation snowballing.70 Other research shows that oil shocks increase innovation in energy-saving technology like air conditioners and that the switch toward more innovation in energy-saving technology persists after the end of the oil shock.71 Path dependency also characterizes the trajectory of clean automobile innovations. In particular, a team of researchers led by Harvard economist Philippe Aghion shows that, when fuel prices increase, innovation rates in cleantech (e.g., hybrid and electric vehicles) increase and that these increased rates are self-perpetuating, while innovation rates in dirtytech (the internal combustion engine) decrease.72 Firms with a history in clean auto innovation are much more likely to channel their future research efforts towards clean technologies.73 The same is true for firms with histories in dirty car technologies. A firm’s future research agenda depends not only on its own innovation history, but also on those of its neighbors: a company’s propensity to innovate in clean (dirty) technologies increases if they are situated in countries where other firms focus more on clean (dirty) automobile innovation. Put differently, firms that are exposed to clean (dirty) innovation spillovers are more likely to engage in clean (dirty) innovation in the future.74