Markets for Technology
The Economics of Innovation and Corporate Strategy
350 pp., 6 x 9 in, 14 illus.
- Published: January 30, 2004
- Publisher: The MIT Press
- Published: December 7, 2001
- Publisher: The MIT Press
The past two decades have seen a gradual but noticeable change in the economic organization of innovative activity. Most firms used to integrate research and development with activities such as production, marketing, and distribution. Today firms are forming joint ventures, research and development alliances, licensing deals, and a variety of other outsourcing arrangements with universities, technology-based start-ups, and other established firms. In many industries, a division of innovative labor is emerging, with a substantial increase in the licensing of existing and prospective technologies. In short, technology and knowledge are becoming definable and tradable commodities.
Although researchers have made significant advances in understanding the determinants and consequences of innovation, until recently they have paid little attention to how innovation functions as an economic process. This book examines the nature and workings of markets for intermediate technological inputs. It looks first at how industry structure, the nature of knowledge, and intellectual property rights facilitate the development of technology markets. It then examines the impacts of these markets on firm boundaries, the division of labor within the economy, industry structure, and economic growth. Finally, it examines the implications of this framework for public policy and corporate strategy. Combining theoretical perspectives from economics and management with empirical analysis, the book also draws on historical evidence and case studies to flesh out its research results.
The fact that transactions in new technology are difficult to execute has long been recognized; but the barriers to these deals have seldom been studied. Drawing on a diverse array of disciplines, Markets for Technology takes a fascinating and thought-provoking look at this hitherto-neglected arena.
Josh Lerner, Jacob H. Schiff Professor of Investment Banking, Harvard Business School, coauthor of The Venture Capital Cycle
Markets for Technology is an important step forward in an emerging new branch of economics. The authors write with analytical rigor and historical perspective, showing that markets for technology are surprisingly robust and growing—in certain sectors under certain conditions—with real consequences for economic change.
Gavin Wright, Coe Professor of American Economic History, Stanford University
While there are a number of books on technology strategy and the economics of innovative activity, this work stakes out a distinct terrain. The authors consider the basic question of how markets for innovative outcomes operate, exploring issues such as the role of licensing, the implications of general-purpose technologies, and the nature of technical problem solving. Drawing on their own research contributions as well as those of other leading researchers, the authors provide both a powerful set of concepts with which to address these questions and a rich set of empirical findings to buttress and illustrate these arguments. The book will serve not only as a valuable text for students and academics, but as a useful touchstone for practitioners who confront these timely questions.
Dan Levinthal, Julian Aresty Professor of Economics and Management, The Wharton School of Business, University of Pennsylvania
This is a terrific book on many levels—most imoportantly theory, empirics, and strategy. The authors have done a wonderful job of bringing into focus the 'market behind the market,' the transactional setting in which information assets are traded. This book is the best evidence yet of the gains from studying these markets as a discrete phenomenon; it should serve as a catalyst for exploring new dimensions of such old issues as firm boundaries, specialization, and industry structure.
Robert Merges, Goodrich and Rosati Professor of Law and Co-Director, Berkeley Center for Law and Technology, University of California, Berkeley