Re-inventing collectivism? Using innovation collectives to create and grow new technology firms

Subject Outlook for the global patent system. Significance Innovation and the diffusion of new technology contribute to GDP growth and consumer welfare. Intellectual property rights such as patents are designed to promote innovation by rewarding inventors with a right of exclusion that prevents others from making, selling or using their invention for a fixed period of time, unless they pay a licence fee. Patent registration is increasing rapidly both within advanced and emerging countries, as the latter learn about its value. However, there is a conflict between rewarding innovators with monopoly rights and promoting the diffusion of knowledge at low cost. As more products and techniques are protected by patents, there is concern that the system is inhibiting rather than promoting growth. Impacts The US patent system supports innovation, while the EU system is less clearly defined with unitary patent protection. Licensing will need to be easily obtained at reasonable prices with terms conducive to both technological and business model exploration. Governments and supranational authorities will need to ensure that patent pools can operate within sympathetic but fair antitrust regimes. Regulatory authorities will need to ensure that patent pools cannot become tools for collusive activity by leading technology firms. Firms will need to monitor constantly legislation and judgments relating to their industry in countries in which they operate.

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Introduction: The Changing Organization of Industry

The Business History Review ◽

10.1017/s000768050008140x ◽

2005 ◽

Vol 79 (3) ◽

pp. 453-466 ◽

Cited By ~ 8

Author(s):

Paul Duguid

Keyword(s):

Comparative Research ◽

New Technology ◽

Industrial Clusters ◽

Dense Networks ◽

Emerging Industries ◽

Technology Firms ◽

Japanese Firms ◽

Competitive Disadvantage ◽

Interfirm Relations ◽

Market Relations

In his seminal 1972 essay on the “organization of industry,”G. B. Richardson argued that economists had generally viewed firms as “islands of planned co-ordination in a sea of market relations.” Business historians, too, had focused predominantly on the firm (or entrepreneur) and the market. In drawing attention when he did to the “dense networks of co-operation and affiliation by which firms are inter-related,” Richardson was on the forefront of what would become a noticeable shift in the analysis of business organization. There were many reasons for this transition. In particular, the comparative success of the “Japanese model,” with its “intermarket”keiretsudisturbed standard assumptions. (Richardson himself pointed to Japanese firms as thriving examples of interfirm relations.) Furthermore, it was becoming clear that in many emerging industries networked relations of industrial clusters were increasingly important. Comparative research suggested that new-technology firms with tightly drawn boundaries were at a competitive disadvantage compared to firms that had developed cooperative links not only to suppliers but even to competitors. To explain such developments, economists, organizational theorists, and business historians alike looked beyond not only the conventional boundaries of the firm but also the conventional boundaries of their disciplines. In particular, they turned to theories of networks, the topic of this special issue.

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Do UK venture capitalists still have a bias against investment in new technology firms

Research Policy ◽

10.1016/s0048-7333(01)00174-3 ◽

2002 ◽

Vol 31 (6) ◽

pp. 1009-1030 ◽

Cited By ~ 101

Author(s):

Andy Lockett ◽

Gordon Murray ◽

Mike Wright

Keyword(s):

New Technology ◽

Venture Capitalists ◽

Technology Firms

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Monopoly and the Incentive to Innovate When Adoption Involves Switchover Disruptions

American Economic Journal Microeconomics ◽

10.1257/mic.4.3.1 ◽

2012 ◽

Vol 4 (3) ◽

pp. 1-33 ◽

Cited By ~ 14

Author(s):

Thomas J Holmes ◽

David K Levine ◽

James A Schmitz

Keyword(s):

New Technologies ◽

New Technology ◽

Fixed Cost ◽

Opportunity Costs ◽

Adoption Of Technology ◽

Technology Firms ◽

Competitive Industry

Arrow (1962) argued that since a monopoly restricts output relative to a competitive industry, it would be less willing to pay a fixed cost to adopt a new technology. We develop a new theory of why a monopolistic industry innovates less. Firms often face major problems in integrating new technologies. In some cases, upon adoption of technology, firms must temporarily reduce output. We call such problems switchover disruptions. A cost of adoption, then, is the forgone rents on the sales of lost or delayed production, and these opportunity costs are larger the higher the price on those lost units. (JEL D21, D42, L12, L14, O32, O33)

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