The economics of collective knowledge and technological communication

Technological knowledge can be understood as a collective good when it is the outcome of the integration between internal to the firm investments in R&D and learning and the absorption of competencies and technologies provided by external organizations (such as, other firms, universities, R&D centers). Technological communication is a crucial strategy in such dynamic interaction between the firm and the system. Only under effective conditions of technological communication the private and social benefits derived from the exploitation of spillovers are higher than the private losses due to partial inappropriability. The article presents a simple microeconomic framework to understand knowledge production and distribution, integrating the effects and conditions of technological communication within a knowledge production function. The interaction between internal investments in R&D and learning, partial inappropriability, the conditions for the access to external knowledge and the exploitation of spillovers explains increasing returns in the production of knowledge.

Organizing knowledge spillovers when basic and applied research are interdependent: German biotechnology policy in historical perspective

The German biotechnology lag illuminates the difficulties of finding appropriate organizational forms of R&D for “embryo” innovations requiring the continued involvement of basic research scientists even after innovation has advanced to the stage of commercial product development. The analysis charts the German policy shift from largely unsuccessful “corporatist” networks (1970s and 1980s) to more promising “emergent” networks (1990s) as organizational vehicles for conducting biotechnology innovation. A constant of German R&D policy for most of the 20th century, and one underlying the initial reliance on corporatist networks in biotechnology, was the tendency to exclude universities from major R&D initiatives and rely instead on specialized research institutes. The structural inflexibilities of universities, combined with the early successes of many specialized research institutes from the 1880s on, led to path-dependent reliance on the latter for 20th-century reforms of the German national innovation system.      

The new economics of the university: a knowledge governance approach

University is becoming a cornerstone of the new emerging mode of governance of the generation and dissemination of knowledge as it reveals remarkable institutional advantages both in providing a solution to the knowledge trade-off and in reducing agency costs. The typical academic labor relationship emerges as an appropriate institutional device to handle the principal-agent problems when creative talents are required. The unique quasi-hierarchical setup of the academic system creates a supply of certified skills that are ready to operate on a professional basis. Such academic consultants can be paid on an ex-post per job basis matching only their variable costs. This supply leads to the creation of a specific market for research services where the demand is provided by the knowledge outsourcing of corporations. For this system to work effectively the non-exclusivity of intellectual property rights on the results of the research performed under contract is necessary. Non-exclusivity in academic employment relations should parallel non-exclusivity in knowledge ownership.