Rethinking Innovation - (Gorman Lectures in Economics) by Jean Tirole & Josh Lerner (Hardcover)

Book Synopsis

How corporations have increasingly embraced the sharing of knowledge as a competitive strategy

Innovation is more important than ever, yet breakthroughs are becoming harder to achieve. Modern technologies, from artificial intelligence and 5G networks to biotech, are so complex that they require collaboration across companies, industries, and countries. Increasingly, firms are discovering that sharing knowledge can be more powerful, and more profitable, than guarding it. In Rethinking Innovation, distinguished economists Josh Lerner and Jean Tirole examine ways that corporations have embraced the sharing of knowledge as a competitive strategy. Open-source software, for example, has seen multibillion-dollar public offerings and shifting business strategies, producing high-profile disputes over what openness actually entails. Across high-tech industries, new forms of knowledge-sharing are transforming how companies develop and exploit new technologies.

Lerner and Tirole explore three key organizational structures that make this collaboration possible: patent pools, which bundle essential patents and make them available to firms seeking to license them; standard-setting organizations, where companies agree on common technical templates and commit to making related patents available on fair terms; and open-source communities, in which users share innovations freely with others. Drawing on decades of pioneering research, Lerner and Tirole explain how these institutions emerged, how they work in practice, and how they can both promote innovation and create new challenges for competition and policy. Combining economic insight with vivid case studies--from early efforts to coordinate aircraft patents to contemporary battles over artificial intelligence and global technology standards--Rethinking Innovation reveals how firms collaborate to develop and commercialize complex technologies. Clear and accessible throughout, this book offers a guide to the forces reshaping modern innovation for managers, policymakers, and scholars.

About the Author

Josh Lerner is the Jacob H. Schiff Professor of Investment Banking at Harvard Business School, where he is head of the Entrepreneurial Management Unit. He is the author or coauthor of, among other books, Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed--and What to Do about It; Patient Capital: The Challenges and Promises of Long-Term Investing; and Innovation and its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What to Do About It (these three Princeton). Jean Tirole, winner of the 2014 Nobel Prize in Economics, is honorary chairman of the Toulouse School of Economics and of the Institute for Advanced Study in Toulouse and a visiting professor at the Massachusetts Institute of Technology. He is the author or coauthor of Economics for the Common Good; The Theory of Corporate Finance; Financial Crises, Liquidity, and the International Monetary System (these three Princeton); The Theory of Industrial Organization; Game Theory; A Theory Of Incentives in Regulation and Procurement; and other books.