Appropriating the Returns from Industrial Research and Development (original) (raw)
1987, Brookings Papers on Economic Activity
Appropriating t he Returns from Industrial Research and Development To HAVE the incentive to undertake research and development, a firm must be able to appropriate returns sufficient to make the investment worthwhile. The benefits consumers derive from an innovation, however, are increased if competitors can imitate and improve on the innovation to ensure its availability on favorable terms. Patent law seeks to resolve this tension between incentives for innovation and widespread diffusion of benefits. A patent confers, in theory, perfect appropriability (monopoly of the invention) for a limited time in return for a public We are grateful for the support of the National Science Foundation and especially to Rolf Piekarz of the NSF's Division of Policy Research and Analysis. We also wish to thank the 650 respondents to our survey and the R&D executives who helped us pretest it-especially Ralph Gomory,
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