The value of an individual innovation: When ownership of complementary inventions is fragmented

Abstract

An innovation's social value depends on various factors that are independent of how the particular innovation is used with other technologies. Examples of such factors are the size of the market the innovation will serve and the manner in which the innovation is managed. However, an innovation must often be implemented with complementary inventions whenever it is exercised and its benefits are realized. In such cases, an innovation's value depends, in part, on the ownership structure of the related inventions. This paper makes its contribution by examining how an innovation's social value is affected when it must be applied in concert with other essential inventions. In this paper, I propose a measure that helps predict an innovation's social value. I also suggest a practical procedure to implement this measure and I evaluate a key feature of this procedure.

Citation

Rosell, C. (2009), "The value of an individual innovation: When ownership of complementary inventions is fragmented", Libecap, G.D. (Ed.) Measuring the Social Value of Innovation: A Link in the University Technology Transfer and Entrepreneurship Equation (Advances in the Study of Entrepreneurship, Innovation and Economic Growth, Vol. 19), Emerald Group Publishing Limited, Leeds, pp. 189-212. https://doi.org/10.1108/S1048-4736(2009)0000019008