Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy

Posted: 17 Nov 2009

See all articles by David Teece

David Teece

Institute for Business Innovation

Date Written: 1986

Abstract

Establishes a framework within which to analyze the profit distribution of innovations and determines the reasons why imitators may outperform innovators. First, the three fundamental building blocks necessary to explain the distribution of innovations are discussed: the appropriability regime, complementary assets, and the dominant design paradigm. Next, the imitation process and the distribution of profits between innovator and follower are examined by relating these three concepts. Then, an appropriate control structure is proposed which the innovator ought to establish over critical, complementary assets. Finally, implications for R&D strategy, industry structure and trade policies are discussed. Analysis suggests that firm boundaries are an important strategic variable for firms that innovate. Also, innovator ownership of complementary assets can be the deciding factor in whether innovators or imitators outperform one another in garnering the most economic return from innovation. (SFL)

Keywords: Appropriability, Imitators, Complementary assets, Technology innovation, Firm strategies, Intellectual property, Commercialization, Competitive advantages, R&D, Licensing, First-mover advantage, Interfirm alliances

Suggested Citation

Teece, David J., Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy (1986). Research Policy, Vol. 15, Issue 6, p. 285-305 1986. Available at SSRN: https://ssrn.com/abstract=1504495

David J. Teece (Contact Author)

Institute for Business Innovation ( email )

F402 Haas School of Business, #1930
Berkeley, CA 94720-1930
United States
(510) 642-4041 (Phone)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
2,544
PlumX Metrics