Teece (1986) "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy
22 important questions on Teece (1986) "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy
What does this paper attempt to explain?
Where does a regime of appropriability refer to?
When are trade secrets a viable alternative to patents?
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What affects the ease of imitation?
Where can a dichotomy be drawn regarding property rights enviornment?
What about weak appropriability regime?
What is the preparadigmatic stage?
What is the paradigmatic stage?
What does the emergence of a dominant paradigm signal?
What happens once a dominant design emerges?
- Scale and learning become much more important
- Specialized capital gets deployed as incumbent's seek to lower unit costs through exploiting economies of scale and learning.
- Reduced uncertainty over product design provides an opportunity to amortize specialized long-lived investments.
Which three kinds of complementary assets are there?
- Generic assets
- Specialized assets
- Co-specialized assets
What are generic assets?
What are cospecialized assets?
Which three concepts can be related in a way which will shed light on the imitation process, and the distribution of profits between innovator and follower?
- Tight appropriability regimes
- Weak appropriablility regimes
- Preparadigmatic phase
- Paradigmatic phase
What should an innovator do in the preparadigmatic phase?
What becomes crucial in the paradigmatic phase?
What are the advantages of contractual modes?
- The innovator will not have to make upfront capital expenditures needed to build or buy the asset in question. This reduces the risks as well as cash requirements.
- Contracting rather than integrating is likely to be the optimal strategy in a tight appropriability regime and where complementary assets are available in competitive supply.
- In a partnership knowledge transfer is quick
- Arm’s length contracting embodies more than a simple buy-sell agreement is becoming so common, and is so multifaceted, that the term strategic partnering has been devised to describe it.
What are the disadvantages of contractual modes?
- It may be difficult to induce partner to make costly irreversible commitments which depend on the success on the innovation and treat of opportunistic abuse.
- The innovator must persuade its prospective partner that the risk is a good one. The situation is one open to opportunistic abuse on both sides. The innovator has incentives to overstate the value of the innovation, while the supplier has incentives to “run with the technology” should the innovation be a success.
What is the criticism about contractual modes?
- There is the risk that the partner won't perform according to the innovator's perception of what the contract requires;
- There is the added danger that the partner may imitate the innovator's technology and attempt to compete with the innovator.
What are the advantages of integration modes?
- Possible spillovers, higher synergies
- Advantage of possibly having already some complementary assets in-house (able to buy/build)
- Even after the innovation is announced, the innovator might still be able to build or buy complementary capacities at competitive prices if the innovation has iron clad legal protection.
What are the disadvantages of integration modes?
- Time and cash constraints (fig.9)
- Distribution and specialized manufacturing competences often become bottlenecks.
What is the criticism about integration modes?
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