The Economics of Innovation

It is widely believed that innovation is the key driver behind economic growth in developed economies, and even more so in Western Europe, Japan and the US. All three economic areas are short of natural resources and their most important good is human capital, e.g. well educated labor force that creates innovations which can be sold on world markets.

Economic policy sets the incentive structure for research and innovation, be it via intellectual property rights (e.g. patents and trademarks), the introduction of new technological standards, or direct public subsidies to promising innovative firms.This course discusses the economics behind these policies and offers answers to questions like:

• How can innovation be protected?
• To what extent does competition matter for innovation?
• What type of incentives does public policy create for innovation?
• How can firms use intellectual property rights as business strategy devices?

This course is aimed at graduate students of management and economics who plan to work in academia, in high technology firms, or in institutions that cooperate with or finance innovative firms.

The main text for the class is:

Scotchmer, S. 2006. Innovation and Incentives, Cambridge, MA: MIT Press.

Additional readings can be announced during the progress of the course.

* There is no tutorial the first week of the semester, i.e. the first tutorial is March 1st, 2017.

The final grade is a combination of a take-home group assignment (10%) and the final exam (90%). Further information can be found on the VVZ