Forgetting in R&D activities: The depreciation of knowledge stocks in biotechnology research

This research shows that innovation and production share certain common properties. Like experience in manufacturing, innovation results in the accumulation of knowledge by learning by doing. Similar to manufacturing, this knowledge depreciates over time and is forgotten. In addition to the depreciation of knowledge, the turnover of scientists results in forgetting and in lower R&D productivity. Using patent data of over 600 firms and 20,000 scientists from the U.S. and Canadian biotechnology industry from 1970 to 2007, I model scientist knowledge as a vector of skills in different technologies and determine the effect of forgetting in research and development.