Filthy Lucre: What Motivates the Commercialization of Innovations?

Abstract:     
It is generally assumed that individuals choose whether to commercialize novel products or innovations based on their expected economic return. However, many innovators with valuable products may be motivated by non-economic incentives that can often be antithetical to profit-seeking. Despite the importance of understanding the motivations of individuals facing commercialization decisions, academic studies of the topic are lacking, in part due to the difficulty of identifying nascent entrepreneurs and early-stage innovators. Using a unique natural experiment involving the launch of the Apple iPhone to address these empirical difficulties, I find that expected returns play little role in commercialization decisions for many highly innovative individuals, while non-economic motivations are significant, and may suppress commercialization. This suggests that which innovations become commercialized is more dependent on individual variation than the expected value of the innovation.

Number of Pages in PDF File: 36

Keywords: Commercialization, Motivation, Entrepreneurship, Free Software, Open Source, Floss, Structural, iPhone,innovation communities,open innovation

working papers series