Enabling Technology, Social Returns to Innovation, and Antitrust

David Teece writes about the innovation economy, intellectual property rights, and the patent system and general purpose technologies.

Innovation is the handmaiden of competition and economic growth. Few activities have larger payoffs than investment in activities which support innovation, especially research and development (R&D). However, inventors and private firms often struggle to capture an adequate return because of spillovers which benefit other firms and consumers. Social returns are at minimum three times private returns (enabling technologies likely have greater multiples). Absent government support, significant underinvestment in R&D to support enabling technologies is likely because of the difficulties associated with finding business models that enable inventors to profit from innovation

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