Description
Innovation is among the most important topics in understanding economic sustained economic growth. Jason Potts argues that the initial stages of innovation require cooperation under uncertainty and draws from insights on the solving of commons problems to shed light on policies and conditions conducive to the creation of new firms and industries.The problems of innovation commons are overcome, Potts shows, when there are governance institutions that incentivize cooperation, thereby facilitating the pooling of distributed information, knowledge, and other inputs. The entrepreneurial discovery of an economic opportunity is thus an emergent institution resulting from the formation of a cooperative group, under conditions of extreme uncertainty, working toward the mutual purpose of opportunity discovery about a nascent technology or new idea. Among the problems commons address are those of the identity; cooperation; consent; monitoring; punishment; and independence. A commons is efficient compared to the creation of alternative economic institutions that involve extensive contracting and networks, private property rights and price signals, or public goods (i.e. firms, markets, and governments). In other words, the origin of innovation is not entrepreneurial action per se, but the creation of a common pool resource from which entrepreneurs can discover opportunities.Potts' framework draws on the evolutionary theory of cooperation and institutional theory of the commons. It also has important implications for understanding the origin of firms and industries, and for the design of innovation policy. Beginning with a discussion of problems of knowledge and coordination as well as their implications for common pool environments, the book then explores instances of innovation commons and the lifecycle of innovation, including increased institutionalization and rigidness. Potts also discusses the possible implications of the commons framework for policies to sustain innovation dynamics.
Table of Contents
Foreword - Against PrometheusAcknowledgementsChapter 1 We innovate togetherIntroduction1.1 The origin of innovation1.2 The commons in the innovation commonsWhat is a commons?An innovation commons is a knowledge commonsCommon-pooling and peer-production in an innovation commons1.3 Clunkers and Homebrew1.4 The Republic of Letters1.5 Why groups, why cooperation, why open?Overview of bookChapter 2 The innovation problemIntroduction2.1 Trade and new knowledge explain growth2.2 The innovation problem as economic problemThe Schumpeter-Nelson-Arrow version of the innovation problemThe Hayek version of the innovation problem2.3 The origin of the innovation trajectory2.4 The economic problem of innovation2.5 Innovation problem is a collective action problem2.6 Innovation happens in groupsDiscovery failureDiscovery costsConclusionChapter 3 Innovation is a knowledge problemIntroduction3.1 Innovation problem I - Social contract problem (McCloskey)3.2 Innovation problem II - Distributed knowledge problem (Hayek)3.3 Innovation problem III - Idiosyncratic risk (Williamson)3.4 Innovation problem IV - Rules for cooperation (Ostrom)ConclusionChapter 4 Four theories of the innovation commonsIntroduction4.1 Two commons4.2 Evolution of cooperation4.3 Defense against enclosure4.4 Institutional uncertaintyConclusionChapter 5 Origin of the innovation trajectoryIntroduction5.1 The zero-th phase of the innovation trajectory5.2 The fundamental transformation5.3 The Proto-Entrepreneur, the Dual-Discovery Problem, and the Two Commons SolutionThe Proto-Entrepreneur seeks Non-Price InformationThe Proto-Entrepreneur faces a Dual Discovery ProblemThe Two Commons Solution5.4 Modelling the innovation commons5.5 The innovation commons in institutional space5.6 The innovation commons as higher-order discoveryConclusionChapter 6 Rules of the Innovation commonsIntroduction6.1 Cooperation behind the veil of ignorance6.2 An emergent social order6.3 The use of society in knowledge6.4 Problems the innovation commons must solveIdentity, Cooperation, Consent, Monitoring, Punishment and conflict, Independence, Economic problems the rules must solve6.5 Origin of rules6.6 Core Design Principles6.7 Can evolution explain the innovation commons?Evolution of cooperationEvolution of cooperation in the commonsIs cooperation for innovation the institutional equivalent of war?The innovation commons as higher-order discoveryConclusion - We innovate togetherChapter 7 Lifecycle of an innovation commonsIntroduction7.1 Institutions of collective innovationInstitutional varieties of collective innovationInstitutional transformations over an innovation trajectory7.2 Origin of industry7.3 The standard model of industry associations7.4 A new model of industry associations; private governance for discovery of public goods7.5 Industry associations construct niches7.6 The demic phase of industry associationsConclusionChapter 8 Theory of Innovation PolicyIntroduction8.1 The innovation commons critique of modern innovation policyTheory of innovation policyMechanisms of innovation policyCritique of Innovation PolicyPolitical economy of innovation policyRules as policyInnovation policy as a public and private goods problemInnovation Policy and its discontents, a summary8.2 Discovery Failure8.3 Efficient Institutions of Innovation PolicyThe Comparative Institutional ApproachThe low social costs (and high private benefits) of innovation commons8.4 New innovation policyDiagnosing the innovation problemBenefits to groups, regions, nations, and the worldThis comes from civil societyThe innovation economy cannot be plannedConclusionChapter 9 Inclusive Innovation PolicyIntroduction9.1 Two types of innovation policy9.2 Innovation seen and unseen9.3 Against innovation: theory9.4 A better approach to innovation policy9.5 Inclusive innovation: A new social contractChapter 10 Conclusion10.1 The institutional origin of innovation10.2 Implications for economic theory10.3 The innovation sharing economyReferencesIndexFigures and TablesFigure 1.1 Economic goodsFigure 2.1 The innovation commons as the zero-th phase of an innovation trajectoryFigure 3.1 Market (choice) versus governance (contracting) models of innovation economicsFigure 3.2 Comparative institutions of innovation contractingFigure 7.1 Public and private ordering definitions of industryFigure 8.1 The Institutional Possibility Frontier (source Djankov et al 2003)Figure 8.2 Institutional possibilities of innovation policyFigure 9.1 Two innovation policy approachesFigure 9.2 Why friends of innovation prefer to engage governmentTable 2.1 The innovation problem as market failure vs collective actionTable 2.2 Transformation costs, transaction costs and discovery costsTable 2.3 Taxonomy of discovery costsTable 6.1 Design rulesTable 7.1 Institutional varieties of Collective InnovationTable 8.1 Innovation policy ranged between private and public instruments.
