Sources of innovation in the upstream oil and gas industry: Demand pull and technology push

Jeff Thurston

ABSTRACT

An annual count of the number of technical diffusions in the exploration and development industry from 1947 to 1990 shows a pattern that ebbs and flows, notably with peaks centered around 1962, 1974, and 1984. I present an analysis to determine, in the aggregate, if these periods of prolific innovative activity were driven by the typical engines of technological development: at least one of demand-pull or technology push. This analysis suggests: in 1962 innovation responded to demand pull, the 1972 innovation boom is attributable to technology push, and the 1984 cycle was driven by both. Current conditions favor an increased rate of diffusions due to both technology push and demand pull.

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