Econ 483_Lecture 16_Cumulative innovation

The 1st innovation accelerates development of the 2nd

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Unformatted text preview: nnovation accelerates development of the 2nd The social value includes the value of getting the 2nd sooner. Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing - Are earlier innovators compensated for their entire contributions? - Could we reward Einstein for his contributions? Albert Einstein Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Case: the laser The laser was invented by C. Townes & his colleagues in 50s. The inventors were inspired by a theory put forward by Einstein 40 years earlier the radar research during WWII In 1977, another laser patent was …led by G. Gould. The Gould patent earned vast sums. The Townes patents earned modest sums. Einstein, the founder, earned nothing at all. Nowadays, new laser-related patents are issued; new uses in surgery, computer hardware & software; for cutting & welding etc Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Inventors’compensation - Is it easy to compensate the developers of basic technologies? - Could we reward Einstein for his contributions? Note that: The founders earn some pro…t from licensing the technologies to later developers. Commercial value generally resides in products that are developed later. Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing How is the dominance in these three software markets shifted? Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Shifting dominance ) "leapfrogging" The …rst text editor was WordStar. WordStar was supplanted by Corel’ Word Perfect, which was s supplanted by Microsoft Word. Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights...
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This note was uploaded on 03/16/2014 for the course ECON 483 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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