1154359

Carmelo Cennamo (CC), Professor (mso)

Christoph Grimpe (CG), Professor

Karin Hoisl (KH), Professor

Paul Hünermund (PH), Assistant professor

Keld Laursen (KL), Professor

Johannes Luger (JL), Assistant Professor

Marion Pötz (MP), Associate Professor

Thomas Rønde (TR), Professor

Markus Simeth (MS), Assistant Professor

Valentina Tartari (VT), Associate Professor

Basic knowledge of theories related to economics, management, technology, innovation, and organizations. It is a requirement for receiving the course diploma that the students attend the entire course.

The course aims to provide a set of advanced insights into the field of Management and Economics of Innovation spanning from foundational themes to the most recent developments of the field.

Both the competitiveness of firms and welfare in general depend on the ability to introduce innovative products, processes and services. Interest in management of innovation has traditionally centered on firm-internal aspects of processes such as, for instance, how collaboration and interaction among specialized professionals take place in the creation of innovation; how to deal with unavoidable uncertainty involved; and the path dependency in skills and resources. In recent years, there has been a surge in interest among scholars and practitioners in methods that allow the firm systematically to source its inputs externally. Innovation that originates from sources external to the firm has emerged as an important phenomenon and has been associated with labels such as open innovation, user innovation, crowd sourcing, and open source. These trends have also given rise to novel and so far immature research agendas that promise to enhance our understanding of the processes and sources of innovation in the years to come. With respect to the economics of innovation the course will cover modern economic theories related to innovation and intellectual property rights. In that regard, the course will particularly cover licensing on markets for technology as well as networks and network effects.

Lectures, class discussion, exercises, student presentations, and a 4-hours written exam (all aids allowed)

In case of a new Covid-19 related lockdown, the teaching will take place online. Moreover, depending on who signs up for the course besides the PhD cohort at the Department of Strategy and Innovation, it is the intention to live-stream the sessions, so that remote participation will be possible.

Teaching methods and assessment: Teaching takes place during the fall semester 2021 in weeks 37 and 38 (see schedule below). Most of the sessions will be taught in a hybrid mode, i.e. in classroom with the option to participate remotely. The exam is a 4-hour written exam (open book). The exam takes place on October 4, 2021, 9:00-13:00.

Session 1: Introduction to the management of innovation (CG)

Literature

• Anderson, P., & Tushman, M. L. 1990. Technological discontinuities and dominant designs: A cyclical model of technological change. Administrative Science Quarterly, 35 (4): 604-633.
• Dosi, G. 1982. Technological Paradigms and Technological Trajectories: A Suggested Interpretation of the Determinants and Directions of Technical Change. Research Policy, 11: 147-162.
• Henderson, R., & Clark, K. B. 1990. Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms. Administrative Science Quarterly, 35 (1): 9-30.
• Pavitt, K. L. R. 1984. Sectoral patterns of technical change: towards a taxonomy and a theory. Research Policy, 13 (6): 343-373.

Session 2: Open approaches to innovation (MP)

Literature

• Dahlander, L., Gann, D.M. 2010. How open is innovation? Research Policy, 39(6): 699-709
• Felin, T., Zenger, R.R. 2014. Closed or open innovation? Problem solving and the governance choice. Research Policy, 43: 914-925.
• Gambardella, A., Raasch, C., von Hippel, E. 2016. The user innovation paradigm: impacts on markets and welfare. Management Science, 63(5): 1450-1468
• Laursen, K., Salter, A. J. 2006. Open for Innovation: The role of openness in explaining innovative performance among UK manufacturing firms. Strategic Management Journal, 27(2): 131-150.

Session 3: Organizational learning (JL)

Literature

• Brauer, M., Mammen, J., & Luger, J. (2017). Sell-offs and firm performance: A matter of experience? Journal of Management, 43(5), 1359-1387.
• Madsen, P. M., & Desai, V. (2010). Failing to learn? The effects of failure and success on organizational learning in the global orbital launch vehicle industry. Academy of Management Journal, 53(3), 451-476.
• Posen, H. E., & Levinthal, D. A. (2012). Chasing a moving target: Exploitation and exploration in dynamic environments. Management Science, 58(3), 587-601.
• Zollo, M. (2009). Superstitious learning with rare strategic decisions: Theory and evidence from corporate acquisitions. Organization Science, 20(5), 894-908.

Session 4: Employee mobility: theory and empirics (KH)

Literature

• Marx, M., Strumsky, D., Fleming, L. (2009). Mobility, skills, and the Michigan non-compete experiment. Management Science, 55(6), 875-889.
• Groysberg, B., Lee, L. E. (2009). Hiring stars and their colleagues: Exploration and exploitation in professional service firms. Organization Science, 20(4), 740-758.
• Mawdsley, J. K., Somaya, D. (2016). Employee mobility and organizational outcomes: An integrative conceptual framework and research agenda. Journal of Management, 42(1), 85-113.

Session 5: Introduction to the economics of innovation (THR)

Literature

• Scotchmer, S. 2004. Innovation and Incentives, Cambridge, Massachusetts: MIT Press, chapters 2, 4 and 6.
• Choi, J. P. 2002. A Dynamic Analysis of Licensing: The ‘‘Boomerang'’ Effect and Grant-Back Clauses, International Economic Review, 43: 1468-2354.
• Laursen, K., S. Moreira, T. Reichstein, and M. I. Leone. Evading the Boomerang Effect: Using the Grant-Back Clause to Further Generative Appropriability from Technology Licensing Deals. Organization Science, 28: 514-530.

Session 6: Networks, collaboration and alliances (KL)

Literature

• Teece, D.J. 1986. Profiting from technological innovation: Implications for integration, collaboration, licensing, and public policy. Research Policy 15: 285-305.
• Mowery, D., Oxley, J., Silverman, B. 1996. Strategic Alliances and Interfirm Knowledge Transfers. Strategic Management Journal, 17 (Winter 96 special issue): 77-91.
• Ahuja, G. 2000. Collaboration networks, structural holes and innovation: a longitudinal study, Administrative Science Quarterly, 45 (3): 425-455.
• Tortoriello, M. 2015. The social underpinnings of absorptive capacity: The moderating effects of structural holes on innovation generation based on external knowledge. Strategic Management Journal, 36(4): 586-597.

Background literature:

• Cohen, W. M., & Levinthal, D. A. 1990. Absorptive capacity: A new perspective of learning and innovation. Administrative Science Quarterly, 35(1): 128-152.

Session 7: Platform-based innovation and innovation ecosystems (CC)

Literature

• Rochet J-C, Tirole J. 2006. Two-sided markets: A progress report. Rand Journal of Economics 37: 645-667
• Cennamo C., Santaló J. 2013. Platform Competition: Strategic Tradeoffs in Platform Markets, Strategic Management Journal, 34: 1331–1350
• Adner, R., & Kapoor, R. (2010). Value creation in innovation ecosystems: How the structure of technological interdependence affects firm performance in new technology generations. Strategic Management Journal, 31(3), 306–333.
• Jacobides M, Cennamo C, Gawer A (2018) Toward a theory of ecosystems. Strategic Management Journal. 39(8): 2255–2276.

Session 8: Appropriability, markets for technology and innovation strategy (MS)

Literature

• Teece, D. 1986. Profiting from technological innovation: implications for integration, collaboration, licensing, and public policy. Research Policy, 15 (6): 285-305.
• Levin, R., Klevorick, A., Nelson, R. R., et al. 1987. Appropriating the Returns from Industrial Research and Development. Brookings Papers on Economic Activity (3): 783-820.
• Arora, A., Fosfuri, A., Gambardella, A. 2001. Markets for Technology and their Implications for Corporate Strategy. Industrial and Corporate Change, 10 (2): 419-451.
• Contigiani, A., Hsu, D., Barankay, I., 2018. Trade secrets and Innovation: Evidence from the “inevitable disclosure doctrine”. Strategic Management Journal 39 (11), 2921-2942.

Session 9: University-industry linkages (VT)

Literature

• Pavitt, K. 1991. What Makes Basic Research Economically Useful? Research Policy, 20: 109-119.
• Jaffe, A. 1989. Real Effects of Academic Research. American Economic Review, 79(5): 957-970.
• Agrawal, A., & Henderson, R. 2002. Putting Patents in Context: Exploring Knowledge Transfer from MIT. Management Science, 48(1), 44-60.
• Bercovitz, J., Feldman, M. 2008. Academic Entrepreneurs: Organizational Change at the Individual Level, Organization Science, 19(1): 69-89.

Background literature:

• Stephan, P. 1996. The Economics of Science, Journal of Economic Literature, 34(3): 1199-1235.
• Aghion, P., Dewatripont, M., Stein, J.C. 2008. Academic Freedom, Private-Sector Focus, and the Process of Innovation, The RAND Journal of Economics, 39(3): 617-635.

Session 10: Science, technology, and innovation policy evaluation (PH)

Literature

• Hünermund, P., Czarnitzki, D. (2019). Innovation Policy and Causality. ifo DICE Report 4 / 2019 (Winter): Innovation Policy, 3–6. Link: https://www.ifo.de/en/publikationen/2020/journal-complete-issue/ifo-dice-report-4-2019-winter-innovation-policy
• Czarnitzki, D., Hünermund, P., and Moshgbar, N. (2020). Public Procurement of Innovation: Evidence from a German Legislative Reform. International Journal of Industrial Organization, forthcoming. Link: https://www.sciencedirect.com/science/article/abs/pii/S0167718720300436
• Einiö, E. (2014). R&D subsidies and company performance: evidence from geographic variation in government funding based on the ERDF population-density rule. Review of Economics and Statistics, 96(4): 710–728. Link: https://www.mitpressjournals.org/doi/abs/10.1162/REST_a_00410
• Dechezleprêtre, A., Einiö, E., Martin, R. Nguyen, K., and Van Reenen, J. (2017). Do tax incentives for research increase firm innovation? An RD Design for R&D. Working Paper. Link: http://economics.mit.edu/files/12817