Technological systems and development blocks

Successful technological transitions require the alignment of technologies, capabilities, infrastructure, and institutions across a wide array of industries and involving many agents. In such processes, synergies and complementarities across different fields of economic activity are crucial. When such complementarities are missing, imbalances emerge, which, in the absence of innovation, may stifle technological development, sometimes for decades. This contribution surveys our theoretical and empirical understanding of technological interdependencies across industries. Special emphasis is placed on the notion of “development blocks”, coined by Swedish economist Erik Dahmén. It discusses similarities and differences to other notions of broad technological interdependencies, like general-purpose technologies. Advances in network analysis in the last decade have furthered our empirical understanding of such interdependencies. The last section discusses the research frontier in our understanding of technological systems and possible policy implications.