Business Innovation and the Law
Show Less

Business Innovation and the Law

Perspectives from Intellectual Property, Labour, Competition and Corporate Law

Edited by Marilyn Pittard, Ann L. Monotti and John Duns

Business Innovation and the Law analyses the topical issue of protecting and promoting business research and development. It does so by examining business innovation through the lens of different legal disciplines – intellectual property, labour and employment laws, competition and corporate laws.
Buy Book in Print
Show Summary Details

Chapter 14: Innovation through the lens of competition law

John Duns

Extract

Innovation is at the heart of competition policy because of the strong link between innovation and efficiency. Efficiency is the main, some would say the sole, criterion by which competition policy judges and assesses conduct. In the blunt words of economist Philip Williams, ‘We should regulate for competition where that regulation enhances the efficiency with which resources are allocated. We should not regulate for com- petition if that regulation lessens the efficiency with which resources are allocated.’ Firms that innovate are efficient in that they develop products to meet the changing demands of their customers. Likewise, firms that fail to innovate are inefficient in this sense, as the resources they employ are not being directed to where they are most demanded. The social benefits of dynamic efficiency are well established. The efficiency that is generated by innovation (referred to as ‘dynamic’ efficiency because of its forward-focused, changing nature) is one of the key justifications universally offered for competition law. Dynamic efficiency and innovation are commonly described as being a prized outcome of a competitive market. One review of competition law, for example, described dynamic efficiency as being: the need for industries to make timely changes to technology and products in response to changes in consumer tastes and in productive opportunities. Competition in markets for goods and services provides incentives to under- take research and development, effect innovation in product design, reform management structures and strategies and create new products and production processes. In light of this established link between competition policy on the one hand,

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.


Further information

or login to access all content.