Economics of Science and Technology
Jeffrey Parker, Reed College
As with most courses, this reading list only scratches the surface of the interesting and relevant literature on each of the topics we discuss. If you are interested in additional readings, please contact the instructor or search for relevant topics on EconLit. We also read only a few chapters of many books to give you a brief introduction to the subjects covered by the books. You may wish to read more chapters to get more detailed knowledge of the subject.
Many of the readings are available on the Internet. Most of these will have links directly to the reading. Note that most of these are available through online subscriptions that can be accessed only if you are connecting through the Reed network. Some of the books are available as e-books through the library Web site. For those that are only available as physical books on reserve, be sure to plan your reading carefully so that you can gain access to the limited number of copies. Not everyone will be able to read these on the morning (or even the evening) before they are discussed in class.
Starred (*) readings are not required. They are listed for those who want further detail about aspects of the topic being covered.
In some sections there is too much reading for everyone to do, so we will assign specific readings to individuals or groups, who will report on the content of these readings for the remainder of the class.
Table of Contents
- What is this class about?
- What are the requirements?
Session 2 (January 24): Knowledge
- What are the distinctive characteristics of knowledge as an economic good?
- Why are knowledge "spillovers" important? What determines their magnitude?
- What is the "knowledge dilemma," why is it an economic problem, and what mechanisms can be used to try to mitigate it?
- Foray, Dominique. 2004. The Economics of Knowledge. Cambridge, Mass.: MIT Press. [E-reserves through Moodle]
- Chapter 5: Knowledge Spillovers
- Chapter 6: Knowledge as a Public Good
Session 3 (January 26): Innovation
- What is the difference between "invention" and "innovation" and why is innovation the more important concept for economic analysis?
- What are the roles of basic research, applied research, and development in innovation?
- Does the inevitable interconnectedness of innovations that is discussed by Rosenberg render hopeless any attempt to measure the significance of a single innovation or to measure the overall rate of innovation?
- With respect to the evolution of paper clips:
- Did the innovations seem to arise more from "demand" (the need for something new and better) or "supply" (the technological ability to produce something new and better)?
- How would you, in theory and in practice, try to construct a measure of the amount of paper-clip innovation in each year?
- Freeman, Chris, and Luc Soete. 1997. The Economics of Industrial Innovation, 3rd ed. Cambridge, Mass.: MIT Press.
- Chapter 1: Introduction [E-book through library]
- Rosenberg, Nathan. 1979. Technological Interdependence in the American Economy. Technology and Culture 20 (1):25-50. Reprinted as Chapter 3 in N. Rosenberg, Inside the Black Box: Technology and Economics. Cambridge and New York: Cambridge University Press.
- Petroski, Henry. 1992. The Evolution of Useful Things, New York: Alfred Knopf. [E-reserves through Moodle]
- Chapter 4: From Pins to Paper Clips
- What do economists mean by "appropriability" of the gains from innovation? Who is appropriating what? Why is it a crucial concept?
- What are the advantages of having a high level of appropriability? What are the disadvantages?
- In a dynamic "Red Queen" equilibrium with creative destruction:
- Do producers have monopoly power?
- Do producers make economic profit in the long run?
- How is research and development funded?
- Schumpeter, Joseph A. 1950. Capitalism, Socialism, and Democracy. New York: Harper & Row. [E-reserves through Moodle]
- Chapter VII. The Process of Creative Destruction
- Parker, Jeffrey. 2016. Technological Change and Dynamic Equilibrium. Unpublished manuscript.
- *(Optional) Baumol, William J. The Microtheory of Innovative Entrepreneurship. [E-book through Reed Library] [This is the more detailed model summarized in the previous reading. Read these chapters if you want to see a more complete exposition.]
- Chapters 1 through 7 cover the basic model I've summarized in the manuscript above.
II. Technological Epochs
Session 5 (January 31): The Industrial Revolution
- What made the Industrial Revolution a "revolution"?
- What were the most central innovations and how did they change society?
- Which examples of Rosenberg's concept of "technological interdependence" seem to you to be most important during the Industrial Revolution? Why?
- Mokyr, Joel. 1990. The Lever of Riches: Technological Creativity and Economic Progress. Oxford and New York: Oxford University Press. [E-book through Reed Library]
- Chapter 5: The Years of Miracles: The Industrial Revolution, 1750-1830
- Freeman and Soete. 1997. Economics of Industrial Innovation. [E-book through Reed Library]
- Chapter 2: The Industrial Revolution.
- Mokyr, Joel. 2009. Intellectual Property Rights, the Industrial Revolution, and the Beginnings of Modern Economic Growth. American Economic Review 99 (2):349-355.
Session 6 (February 2): 1850 to 1950
- Briefly consider how each of the following key innovations enabled advances in the economy beyond the industry that produced it:
- Mass production
- Mowery and Rosenberg (p. 1) quote Alfred North Whitehead as saying, "The greatest invention of the 19th century was the invention of the method of invention." Given that the Industrial Revolution was full of great inventions that occurred before the 19th century, what does this mean?
- Mokyr. 1990. Lever of Riches. [E-book through Reed Library]
- Chapter 6: The Later Nineteenth Century: 1830-1914.
- Mowery, David C., and Nathan Rosenberg. 1998. Paths of Innovation: Technological Change in 20th-Century America, Cambridge and New York: Cambridge University Press. [E-reserves through Moodle]
- Chapter 1: Introduction
- Chapter 2: The Institutionalization of Innovation, 1900-90.
- Freeman and Soete. 1997. Economics of Industrial Innovation [E-book through Reed Library]
- Chapter 3: The Age of Electricity and Steel
- *Chapter 4: Process Innovations in Oil and Chemicals (optional)
- *Chapter 5: Synthetic Materials (optional)
- Chapter 6: Mass Production and the Automobile
This session interrupts our regular topical analysis to introduce you to the innovation simulation that will proceed over the next few weeks. There will be a "debriefing" session after the conclusion of the simulation sometime in March.
Session 8 (February 7): The Information Technology "Revolution"
- Do the currently progressing innovations in IT constitute a "revolution"? Why or why not?
- In talking about the Industrial Revolution, Mokyr asserts (p. 82 of Level of Riches) that "per-capita income is notoriously hard to measure accurately during a period in which the economy undergoes rapid changes in the may markets operate." Do you think that this applies to information technology around the turn of the millennium? Why or why not?
- Where on the "S-curve" of technological change do you think that IT currently stands? Are we still in the accelerating phase or in the later, leveling-off phase?
- Mokyr, Joel. 1997. Are We Living in the Middle of an Industrial Revolution? Federal Reserve Bank of Kansas City Economic Review 82 (2):31-43.
- Jorgenson, Dale W., and Khuong Vu. 2016. "The Impact of ICT Investment on World Economic Growth." Telecommunications Policy 40:381-382. [E-reserves through Moodle]
III. Technology and the Economy
Session 9 (February 9): Technological change and economic growth
- How do we measure economic growth?
- Are "technological progress" and "increase in productivity" the same thing?
- How do we measure the contribution of technology/productivity to growth at the aggregate level?
- How much of the growth in a country's living standards results from technology/productivity?
- How does new technology interact with investment in physical capital and human capital in the process of economic growth?
- How strong is the connection between innovation and productivity growth at the firm level?
- Mokyr, Joel. 1990. The Lever of Riches: Technological Creativity and Economic Progress, New York: Oxford University Press.
- Chapter 1: Introduction
- Maddison, Angus. 1994. Explaining the Economic Performance of Nations, 1820-1989. Chapter 2 in W.J. Baumol, R.R. Nelson, and E.N. Wolff, eds., Convergence of Productivity: Cross-National Studies and Historical Evidence, pp. 20-61. [E-reserves through Moodle]
- Hall, Bronwyn H. 2011. Innovation and Productivity. Cambridge, Mass.: National Bureau of Economic Research. NBER Working Papers, No. 17178.
- Does innovation destroy jobs or create jobs?
- Does innovation raise or lower wages, and for whom?
- Is innovation always "skill-biased"?
- What is the interaction between technological change and increases in education? How does this interaction affect wages?
- What determines whether innovation is skill-biased or the opposite?
- Which jobs are most likely to be lost to automation in the coming decades?
- What kind of education would be most valuable in avoiding job loss?
- February 12: Goldin, Claudia, and Lawrence F. Katz. 2008. The Race Between Education and Technology. Cambridge, Mass.: Belknap Press of Harvard University Press. [E-reserves through Moodle]
- Chapter 2: Inequality across the Twentieth Century
- Chapter 3: Skill-Biased Technological Change
- February 14: Acemoglu, Daron. 2002. Technical Change, Inequality, and the Labor Market. Journal of Economic Literature 40 (1):7-72.
- The Future of Jobs: The Onrushing Wave. Economist, January 18, 2014.
- Beaudry, Paul, Mark Doms, and Ethan Lewis. 2010. Should the Personal Computer Be Considered a Technological Revolution? Evidence from U.S. Metropolitan Areas. Journal of Political Economy 118 (5):988-1036.
- Frey, Carl Benedikt, and Michael Osborne. 2013. The Future of Employment: How Susceptible Are Jobs to Computerisation? University of Oxford Manuscript.
- Arntz, Melanie, Terry Gregory, and Ulrich Zierahn. 2016. The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis. OECD Social, Employment and Migration Working Papers, #189, Paris.
Session 12 (February 16): Technological change and international trade
- How do technological differences across countries affect patterns of trade?
- Does trade tend to increase or decrease innovation? Why?
- Does it matter whether the trade is with countries at a similar or different level of income?
- Krugman, Paul. 1995. Technological Change in International Trade. Chapter 9 in Paul Stoneman, ed., Handbook of the Economics of Innovation and Technological Change. (Oxford, U.K., and Cambridge, Mass., U.S.A.: Blackwell Publishing).
- Bloom, Nicholas, Mirko Draca, and John Van Reenen. 2016. Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT, and Productivity. Review of Economic Studies 83 (1):87-117.
- Diffusion of technology is difficult to measure. How do Caselli/Coleman and Comin/Hobijn measure the movement of technology among countries?
- What factors seem to determine the rate at which new technologies diffuse to other countries?
- Comin/Easterly/Gong find remarkable apparent persistence in technological sophistication among nations. Which possible explanations for this result (among those they offer or others) do you find most compelling?
- Caselli, Francesco, and John Coleman. 2001. Cross-Country Technology Diffusion: The Case of Computers. American Economic Review 91 (2):328-335.
- Comin, Diego, and Bart Hobijn. 2004. Cross-Country Technology Adoption: Making the Theories Face the Facts. Journal of Monetary Economics 51 (1):39-83.
- *(Optional) Castellacci, Fulvio, and Jose Miguel Natera. 2013. The Dynamics of National Innovation Systems: A Panel Cointegration Analysis of the Coevolution Between Innovative Capability and Absorptive Capacity. Research Policy 42 (3):579-594.
- Comin, Diego, William Easterly, and Erick Gong. 2010. Was the Wealth of Nations Determined in 1000 BC? American Economic Journal: Macroeconomics 2 (3):65-97.
Sessions 14 and 15 (February 21 and 23): Institutions, politics, and innovation
- What determines which countries are successful in raising living standards through innovation or imitation?
- Must every country innovate to be wealthy?
- In what ways are political institutions important in determining the pattern of productivity and wealth?
- (Note: These questions apply to both books we read this week, so you will be asked for responses to the same questions twice.)
- February 21: Acemoglu, Daron, and James A. Robinson. 2012. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown Business Publishing.
- Chapter 1: So Close and Yet So Different
- Chapter 2: Theories that Don't Work
- Chapter 3: The Making of Prosperity and Poverty
- February 23: Taylor, Mark Zachary. 2016. The Politics of Innovation: Why Some Countries Are Better than Others at Science & Technology. New York: Oxford University Press. [Note: You cannot get the essence of this book from only a couple of chapters. The key chapters for us are 3, 7, and 8, but you cannot really understand 7 and 8 without getting at least the main ideas of 4 through 6. Skim these chapters to get the basic idea, then read 7 and 8. You can go back to the earlier chapters as necessary (and as you have time) to augment your understanding of the later chapters.]
- Chapter 1: Introduction—The Puzzle of Cardwell's Law
- Chapter 3: Cardwell's Law in Action
- Skim Chapter 4: Does Technology Need Government? The Five Pillars of Innovation
- Skim Chapter 5: "Why Nations Fail"—Capitalism, Democracy, and Decentralization
- Skim Chapter 6: How Nations Succeed—Networks, Clusters, and Standards
- Chapter 7: Technological Losers and Political Resistance to Innovation
- Chapter 8: Creative Insecurity—Olson's Nemesis
IV. The Process of Innovation
- Why is it difficult to quantify innovation?
- What are some of the principal measures that used and, for each one, what are their advantages and disadvantages?
- If you were to define a "perfect" measure of innovation at the firm level, what would its characteristics be? Why?
- Patel, Pari, and Keith Pavitt. 1995. Patterns of Technological Activity: Their Measurement and Interpretation. Chapter 2 in P. Stoneman, ed., Handbook of the Economics of Innovation and Technological Change, Blackwell. (An overview of some of the traditional methods of measuring innovation.) [E-reserve through Moodle]
- Trajtenberg, Manuel. 2002. A Penny for Your Quotes: Patent Citations and the Value of Innovations. Chapter 2 in A.B. Jaffe and M. Trajtenberg, eds., Patents, Citations, and Innovations: A Window on the Knowledge Economy. Cambridge, Mass.: MIT Press. (A discussion of one particular method: patent citations.) [E-reserve through Moodle]
- Fischer, Timo, and Jan Leidinger. 2014. Testing Patent Value Indicators on Directly Observed Patent Value—An Empirical Analysis of Ocean Tomo Patent Auctions. Research Policy 43 (3):519-529.
Session 17 (February 28): Diffusion of innovations
- What are the processes/channels by which innovation by one firm diffuses to others?
- What determines how rapidly this diffusion occurs?
- Cohen, Wesley M., and Daniel A. Levinthal. 1989. Innovation and Learning: The Two Faces of R&D. Economic Journal 99 (397):569-596.
- Nelson, Andrew J. 2009. Measuring Knowledge Spillovers: What Patents, Licenses and Publications Reveal about Innovation Diffusion. Research Policy 38 (6):994-1005.
- Conley, Timothy G., and Christopher R. Udry. 2010. Learning about a New Technology: Pineapple in Ghana. American Economic Review 100 (1):35-69.
Session 18 (March 2): Kinds of innovation
- What is the difference between "STI" knowledge and "DUI" knowledge?
- Why might there be synergies between them? What does the evidence say?
- How can users rather than producers of technological goods contribute to innovation?
- The Rosenberg article on user innovation is old. Can you think of more recent examples or user innovation?
- Jensen, Morten Berg, Björn Johnson, Edward Lorenz, and Bengt Åke Lundvall. 2007. Forms of Knowledge and Modes of Innovation. Research Policy 36 (5):680-693.
- Rosenberg, Nathan. 1982. Inside the Black Box:Technology and Economics. Cambridge and New York: Cambridge University Press.
- Chapter 6: Learning by Using [E-reserve through Moodle]
- How did von Hippel go about determining the locus of innovation?
- What are examples of innovations performed by producers, users, and suppliers?
- What factors does von Hippel think determine the functional locus of innovation?
- von Hippel, Eric. 1988. The Sources of Innovation. Oxford and New York: Oxford University Press.
- Chapter 2: Users as Innovators
- Chapter 3: Variations in the Functional Source of Innovation
- Chapter 4: The Functional Source of Innovation as an Economic Phenomenon
- Chapter 5: Testing the Relationship Between the Functional Source of Innovation and Expected Innovation Rents
- Chapter 2: Users as Innovators
Session 20 (March 7): Firm culture and innovation
- How does Lester and Piore's evidence compare with the findings of Jensen et al. from last week's reading?
- What do Lester and Piore mean by the analogy of the "cocktail party"?
- How could the information in this book be useful to inform the organization of a startup firm?
- Lester, Richard K., and Michael J. Piore. 2004. Innovation, The Missing Dimension. Cambridge, Mass.: Harvard University Press. [E-book through Reed Library]
- Chapter 1: Integration in Cell Phones, Blue Jeans, and Medical Devices
- Chapter 2: Where Do Problems Come From?
- Chapter 3: Conversation, Interpretation, and Ambiguity
V. Science and Innovation
- How does the reward structure of academic science differ from that of corporate innovation?
- How do the incentives for choosing research projects differ between academics and corporate labs?
- Thinking of the term literally, how do incentives for "publication" differ between academic and corporate settings?
- What are the advantages and disadvantages of using grants to fund academic science?
- In planning a scientific career, what are the advantages and disadvantages of academic vs. corporate science jobs?
- Stephan, Paula E. 1996. The Economics of Science. Journal of Economic Literature 34 (3):1199-1235.
- Kealey, Terence, and Martin Ricketts. 2014. Modelling Science as a Contribution Good. Research Policy 43 (6):1014-1024.
Session 22 (March 21): Academic research and corporate innovation
- How did the Bayh-Dole Act change the economics of academic science?
- How do patents, corporate support, and other profit opportunities affect the choice of research topics for academic scientists?
- What are the advantages and disadvantages of this from a social perspective?
- Jaffe, Adam B. 1989. Real Effects of Academic Research. American Economic Review 79 (5):957-970.
- O'Shea, Rory P., Thomas J. Allen, Arnaud Chevalier, and Frank Roche. 2005. Entrepreneurial Orientation, Technology Transfer and Spinoff Performance of U.S. Universities. Research Policy 34 (7):994-1009.
- Hvide, Hans K., and Benjamin F. Jones. 2016. University Innovation and the Professor's Privilege. National Bureau of Economic Research Working Paper Series No. 22057.
VI. Intellectual Property and Innovation
Session 23 (March 23): The nature of patents
- What protection do patents afford in the United States?
- How are these protections enforced?
- Why does the effectiveness of patent protection vary across industries and inventions?
- How did the America Invents Act change the economics of patent law in the United States?
- Scotchmer, Suzanne. 2004. Innovation and Incentives. Cambridge, Mass.: MIT Press.
- Chapters 1-3 [E-reserves through Moodle]
- Hall, Bronwyn H., and Dietmar Harhoff. 2012. Recent Research on the Economics of Patents. Annual Review of Economics 4:541-565.
- Bird, Robert C. 2013. "The America Invents Act, Patent Priority, and Supplemental Examination." In The Changing Face of U.S. Patent Law and its Impact on Business Strategy, edited by Daniel R. Cahoy and Linda J. Oswald, 63-81. Cheltenham, U.K.: Edward Elgar.
- *de Saint-Georges, Matthis, and Bruno van Pottelsberghe de la Potterie. 2013. A Quality Index for Patent Systems. Research Policy 42 (3):704-719. (This paper is not required. Peruse it to see the kinds of characteristics that vary across patent systems and how some of the major countries rank.)
- What legal rights do the owners of trade secrets have to protect their secrets?
- What kinds of innovations are best protected by secrecy and what kinds are not?
- Friedman, David D., William M. Landes, and Richard A. Posner. 1991. Some Economics of Trade Secret Law. Journal of Economic Perspectives 5 (1):61-72.
- Hall, Bronwyn, Christian Helmers, Mark Rogers, and Vania Sena. 2014. The Choice between Formal and Informal Intellectual Property: A Review. Journal of Economic Literature 52 (2):375-423.
Session 25 (March 28): Patents and innovation
- How important is patent protection in providing incentives for innovation?
- Do patent barriers impede cumulative innovation?
- Moser, Petra. 2013. Patents and Innovation: Evidence from Economic History. Journal of Economic Perspectives 27 (1):23-44.
- Furman, Jeffrey L., and Scott Stern. 2011. Climbing atop the Shoulders of Giants: The Impact of Institutions on Cumulative Research. American Economic Review 101 (5):1933-1963.
Session 26 (March 30): Problems with the U.S. patent system
- What was the goal of creating the Court of Appeals for the Federal Circuit to handle patent cases? What have been the advantages and disadvantages in practice?
- Jaffe and Lerner emphasize the "Madey Decision" as a turning point in patent policy. What are the basic facts of that case and why is it important?
- What are the implications of the the following characteristics of patent law?
- Challengers to patents must file infringement cases in civil court.
- Patents are presumed to be valid unless proved invalid.
- Most patent cases are settled out of court and the Supreme Court rarely hears them.
- What does the evidence say about the effectiveness of the patent office in examining patent applications?
- Jaffe, Adam B., and Josh Lerner. 2004. Innovation and Its Discontents: How Our Broken Patent System Is Endangering Innovation and Progress, and What to Do about It. Princeton, N.J.: Princeton University Press. [E-book through Reed Library]
- Chapters 1-4, and 7.
- Chapters 1-4, and 7.
- Frakes, Michael D., and Melissa F. Wasserman. 2014. Is the Time Allocated to Review Patent Applications Inducing Examiners to Grant Invalid Patents? Evidence from Micro-Level Application Data. National Bureau of Economic Research Working Paper Series No. 20337.
- What are patent trolls and how do they make money?
- What social costs are imposed by trolls?
- What potential benefits arise from the existence of trolls?
- Reitzig, Markus, Joachim Henkel, and Christopher Heath. 2007. On Sharks, Trolls, and their Patent Prey---Unrealistic Damage Awards and Firms' Strategies of "Being Infringed." Research Policy 36 (1):134-154.
- Cohen, Lauren, Umit Gurun, and Scott Duke Kominers. 2014. Patent Trolls: Evidence from Targeted Firms. National Bureau of Economic Research Working Paper Series No. 20322.
Session 28 (April 4): Should we abolish intellectual property?
- What are the merits and potential problems with Boldrin and Levine's proposal to abolish patents?
- Do you agree with their proposal?
- If patents are not abolished altogether, what major reforms seem most beneficial?
- Boldrin, Michele, and David K. Levine. 2013. The Case Against Patents. Journal of Economic Perspectives 27 (1):3-22.
- Hall, Bronwyn H. 2009. Business and Financial Method Patents, Innovation, and Policy. Scottish Journal of Political Economy 56 (4):443-473.
- Graham, Stuart, and Saurabh Vishnubhakat. 2013. Of Smart Phone Wars and Software Patents. Journal of Economic Perspectives 27 (1):67-86.
Session 29 (April 6): The anti-commons phenomenon
- What are the key elements of the anti-commons hypothesis?
- In what ways is there a conflict between the norms of academic science and the incentives of patent law?
- Why is "Pasteur's quadrant" the locus of potential conflicts?
- What are the basic facts of the "oncomouse" case and why is it important for the anti-commons debate?
- What does the evidence say about the importance of this problem?
- Heller, Michael A., and Rebecca S. Eisenberg. 1998. Can Patents Deter Innovation? The Anticommons in Biomedical Research. Science, New Series, 280 (5364):698-701.
- Murray, Fiona, and Scott Stern. 2006. When Ideas Are Not Free: The Impact of Patents on Scientific Research. Innovation Policy and the Economy 7:33-69.
- Walsh, John P., Wesley M. Cohen, and Charlene Cho. 2007. Where Excludability Matters: Material versus Intellectual Property in Academic Biomedical Research. Research Policy 36 (8):1184-1203.
- How do open-source projects "work"?
- What are some of the problems that these projects may encounter?
- Why might programmers contribute code to open-source projects?
- What does the evidence say about which motivations are most important?
- Lerner, Josh, and Jean Tirole. 2002. Some Simple Economics of Open Source. Journal of Industrial Economics 50 (2):197-234.
- *Fershtman, Chaim, and Neil Gandal. 2011. A Brief Survey of the Economics of Open Source Software. London: Centre for Economic Policy Research. CEPR Discussion Papers, No. 8434. (This is not required, but has useful and more recent references for anyone interested in reading more.)
VII. Issues in Techological Change
Session 31 (April 11): Path dependence
- What do we mean by "path dependence"?
- Why is it important to the economics of technological progress?
- What do you make of the evidence presented for and against the QWERTY keyboard as an example of path dependence?
- What other examples of path dependence do you think are important in today's economy?
- Arthur, W. Brian. 1994. Increasing Returns and Path Dependence in the Economy, Ann Arbor, Mich.: University of Michigan Press. [E-reserves through Moodle]
- Chapter 1: Positive Feedbacks in the Economy
- Chapter 2: Competing Technologies, Increasing Returns, and Lock-In by Historical Small Events
- David, Paul A. 1985. Clio and the Economics of QWERTY. American Economic Review 75 (2):332-337.
- Liebowitz, S. J., and Stephen E. Margolis. 1990. The Fable of the Keys. Journal of Law and Economics 33 (1):1-25.
Session 32 (April 13): Networks, standards, and externalities
- What is a network effect?
- Under what conditions can a network effect lead to economic inefficiency?
- How is the idea of a network standard related to path dependence?
- Who should set standards, or should standards be allowed to evolve through the market?
- Katz, Michael L., and Carl Shapiro. 1994. Systems Competition and Network Effects. Journal of Economic Perspectives 8 (2):93-115.
- Besen, Stanley M., and Joseph Farrell. 1994. Choosing How to Compete: Strategies and Tactics in Standardization. Journal of Economic Perspectives 8 (2):117-131.
- Liebowitz, S. J., and Stephen E. Margolis. 1994. Network Externality: An Uncommon Tragedy. Journal of Economic Perspectives 8 (2):133-150.
- Basker, Emek. 2012. Raising the Barcode Scanner: Technology and Productivity in the Retail Sector. American Economic Journal: Applied Economics 2 (3):1-27.
- Why is bank lending not appropriate for risky startups?
- What does venture capital do for startups that traditional share ownership does not? Why is this important?
- How do venture capitalists choose their investments? What role do patents seem to play?
- In a world of global capital markets, why is venture capital usually quite local? What advantages and disadvantages does this pose?
- What is "staged financing" and why is it a good idea for venture capitalists?
- What happens at the "initial public offering" stage of startup growth?
- Berlin, Mitchell. 1998. That Thing Venture Capitalists Do. Federal Reserve Bank of Philadelphia Business Review January/February:15-26.
- Gompers, Paul A., and Josh Lerner. 2001. The Money of Invention: How Venture Capital Creates New Wealth. Cambridge: Mass.: Harvard Business School Press.
- Chapters 2-6.
- Haeussler, Carolin, Dietmar Harhoff, and Elisabeth Mueller. 2014. How Patenting Informs VC Investors – The Case of Biotechnology. Research Policy 43 (8):1286-1298.
- Useche, Diego. 2014. Are Patents Signals for the IPO Market? An EU–US Comparison for the Software Industry. Research Policy 43 (8):1299-1311.
- Kerr, William R., Ramana Nanda, and Matthew Rhodes-Kropf. 2014. Entrepreneurship as Experimentation. Journal of Economic Perspectives 28 (3):25-48.
- Optional Reading: *Da Rin, Marco, Thomas F. Hellmann, and Manju Puri. 2011. A Survey of Venture Capital Research. Cambridge, Mass.: National Bureau of Economic Research. NBER Working Papers, No. 17523. (This is a recent survey of the literature on venture capital. It is too long to read, but will be a useful reference for anyone who wants to learn about the current state of VC research.)
VIII. Technology Policies and National Systems of Innovation
This final section of the course will consist largely of presentations by groups who have studied the national innovation systems of various countries. The readings below provide some basic background.
- Mokyr. 1990. Lever of Riches.
- Chapter 7: Understanding Technological Progress
- Nelson, Richard R. 2008. What Enables Rapid Economic Progress: What Are the Needed Institutions?Research Policy 37 (1):1-11.
- Ács, Zoltán J., Erkko Autio, and László Szerb. 2014. National Systems of Entrepreneurship: Measurement Issues and Policy Implications. Research Policy 43 (3):476-494.
- Mowery, David C., and Nathan Rosenberg. 1993. The U.S. National Innovation System. Chapter 2 in National Innovation Systems, edited by R. R. Nelson. Oxford and New York: Oxford University Press.
- Liu, Feng-Chao, Denis Fred Simon, Yu-Tao Sun, and Cong Cao. 2011. China's Innovation Policies: Evolution, Institutional Structure, and Trajectory. Research Policy 40 (7):917-931.
- Cincera, Michele, and Reinhilde Veugelers. 2014. Differences in the Rates of Return to R&D for European and US Young Leading R&D Firms. Research Policy 43 (8):1413-1421.
- Padilla-Pérez, Ramón, and Yannick Gaudin. 2014. Science, Technology and Innovation Policies in Small and Developing Economies: The Case of Central America. Research Policy 43 (4):749-759.
- *Steil, Benn, David G. Victor, and Richard R. Nelson, eds. 2002. Technological Innovation and Economic Performance. Princeton, N.J.: Princeton University Press. (Chapters 3-8 describe the recent innovation performances of the U.S., Japan, Germany, France, the U.K., and the Nordic countries.)
- *Nelson, Richard R., ed. 1993. National Innovation Systems: A Comparative Analysis. Oxford: Oxford University Press. (Contains chapters describing the national innovation systems of many countries.)
- *There is a whole series of books (in the Reed Library) called Economic Development of XX since 1870, where XX is a country. You are encouraged to look at these for specific information on innovation policies in particular countries. See also a series of articles in the February 2002 issue of Research Policy.