The Capitalization of Knowledge

The Capitalization of Knowledge

A Triple Helix of University–Industry–Government

Edited by Riccardo Viale and Henry Etzkowitz

This ground-breaking new volume evaluates the capacity of the triple helix model to represent the recent evolution of local and national systems of innovation. It analyses both the success of the triple helix as a descriptive and empirical model within internationally competitive technology regions as well as its potential as a prescriptive hypothesis for regional or national systems that wish to expand their innovation processes and industrial development. In addition, it examines the legal, economic, administrative, political and cognitive dimensions employed to configure and study, in practical terms, the series of phenomena contained in the triple helix category.

Chapter 4: How Much Should Society Fuel the Greed of Innovators? On the Relations between Appropriability, Opportunities and Rates of Innovation

Giovanni Dosi, Luigi Marengo and Corrado Pasquali

Subjects: business and management, entrepreneurship, knowledge management, economics and finance, economics of innovation, innovation and technology, economics of innovation, knowledge management


Giovanni Dosi, Luigi Marengo and Corrado Pasquali 1. INTRODUCTION This chapter attempts a critical assessment of both theory and empirical evidence on the role and consequences of the various modes of appropriation, with particular emphasis on intellectual property rights (IPR), as incentives for technological innovation. That profit-motivated innovators are fundamental drivers of the ‘unbound Prometheus’ of modern capitalism (Landes, 1969) has been well appreciated since Smith, Marx and, later, Schumpeter. For a long time such an acknowledgment has come as an almost self-evident ‘stylized fact’. Finer concerns about the determinants of the propensity to innovate by entrepreneurs and business firms came much later with the identification of a potentially quite general trade-off underlying the economic exploitation of technological knowledge: in so far as the latter is a nonrival and hardly excludable quasi-public good, pure competitive markets are unable to generate a stream of quasi-rents sufficient to motivate profitseeking firms to invest resources in its production (Arrow, 1962). In order to provide such incentives, a general condition is to depart from pure competition (as was indeed quite naturally acknowledged by Smith, Marx and Schumpeter). Granted that, however, what is empirically the extent of such a departure? And, from a normative point of view, what is the desirable degree of appropriability able to fuel a sustained flow of innovations undertaken by business firms? And through which mechanisms? Moreover, what is the impact of different institutional and technological 121 122 The capitalization of knowledge conditions upon the profitability and competitive success of innovators...

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