2006/17 | LEM Working Paper Series | |
How much should society fuel the greed of innovators? On the relations between appropriability, opportunities and rates of innovation | ||
Giovanni Dosi, Luigi Marengo, Corrado Pasquali |
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Keywords | ||
Appropriability, Intellectual Property Right, Innovation, Technological opportunities
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Abstract | ||
The paper attempts a critical assessment of both the theory and the empirical
evidence on the role of appropriability and in particular of Intellectual Property
Right (IPR) as incentives for technological innovation. We start with a critical
discussion of the standard justification of the attribution of IPR in terms of "market
failures" in knowledge generation. Such an approach we argue misses important
features of technological knowledge and also neglects the importance of non-market
institutions in the innovation process. Next, we examine the recent changes in the
IPR regimes and their influence upon both rates of patenting and underlying rates
of innovation. The evidence broadly suggests that, first, IPRs are not the most
important device apt to "profit from innovation"; and second, they have at best no
impact, or possibly even a negative impact on the underlying rates of innovation.
Rather, we argued, technology- and industry-specific patterns of innovation are
primarily driven by the opportunities associated with each technological paradigm.
Conversely, firm-specific abilities to seize them and "profit from innovation" depend
partly on adequacy of the strategic combinations identified by the taxonomy of
Teece (1986) and partly on idiosyncratic capabilities embodied in the various firms.
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