'Open' Disclosure of Innovations, Incentives and Follow-on Reuse: Theory on Processes of Cumulative Innovation and a Field Experiment in Computational Biology

Abstract

Most of society's innovation systems -- academic science, the patent system, open source, etc. -- are “open” in the sense that they are designed to facilitate knowledge disclosure among innovators. An essential difference across innovation systems is whether disclosure is of intermediate progress and solutions or of completed innovations. We present experimental evidence that links intermediate versus final disclosure not just with quantitative tradeoffs that shape the rate of innovation, but with transformation of the very nature of the innovation search process. We find intermediate disclosure has the advantage of efficiently steering development towards improving existing solution approaches, but also the effect of limiting experimentation and narrowing technological search. We discuss the comparative advantages of intermediate versus final disclosure policies in fostering innovation.

Keywords: open innovation, cumulative innovation, incentives, search, disclosure and access

JEL Classification: O3, J0, D02