Who Profits from Innovation in Global Value Chains? A Study of the iPod and Notebook PCs

Abstract

The power of innovation to create economic value and reward pioneers with exceptional profits is a deeply-held belief of inventors, entrepreneurs, investors and the public. Innovation can enrich companies and individuals and sometimes disrupt entire industries. Yet many studies have shown that the value from innovation is often captured by someone other than the original innovator, whether by imitators, suppliers of key components, intellectual property owners, or providers of related products and services. In an era when new ideas are brought to the market by networks of specialists rather than by one company, a key question is who captures the most value from innovation in such a structure, and why?