  We propose a simple model where the innovation rate of a technological domain
depends on the innovation rate of the technological domains it relies on. Using
data on US patents from 1836 to 2017, we make out-of-sample predictions and
find that the predictability of innovation rates can be boosted substantially
when network effects are taken into account. In the case where a technology$'$s
neighborhood future innovation rates are known, the average predictability gain
is 28$\%$ compared to simpler time series model which do not incorporate
network effects. Even when nothing is known about the future, we find positive
average predictability gains of 20$\%$. The results have important policy
implications, suggesting that the effective support of a given technology must
take into account the technological ecosystem surrounding the targeted
technology.
