Markets for Technology ─ The Economics of Innovation and Corporate Strategy

The past two decades have seen a gradual but noticeable change in the economicorganization of innovative activity. Most firms used to integrate research and development withactivities such as production, marketing, and distribution. Today firms are forming joint ventures,research and development alliances, licensing deals, and a variety of other outsourcing arrangementswith universities, technology-based start-ups, and other established firms. In many industries, adivision of innovative labor is emerging, with a substantial increase in the licensing of existingand prospective technologies. In short, technology and knowledge are becoming definable and tradablecommodities.Although researchers have made significant advances in understanding the determinantsand consequences of innovation, until recently they have paid little attention to how innovationfunctions as an economic process. This book examines the nature and workings of markets forintermediate technological inputs. It looks first at how industry structure, the nature ofknowledge, and intellectual property rights facilitate the development of technology markets. Itthen examines the impacts of these markets on firm boundaries, the division of labor within theeconomy, industry structure, and economic growth. Finally, it examines the implications of thisframework for public policy and corporate strategy. Combining theoretical perspectives fromeconomics and management with empirical analysis, the book also draws on historical evidence andcase studies to flesh out its research results.

Andrea Fosfuri is Assistant Professor of Business at the Universidad Carlos III in Madrid.