Capturing Value from Innovation
Summary
Lecture 1: Introduction to Value Appropriation: Formal and Informal Protection Mechanisms
• Giuri,P. Mariani, M., Brusoni, S., Crespi, G., Francoz, D. Gambardella, A., Garcia-Fontes, W.,
Geuna, A., Gonzales, R. Harhoff, D., Hoisl, K., Le Bas, C., Luzzi, A., Magazzini, L. Nesta, L.,
Nomaler, Ö., Palomeras, N., Patel, P., Romanelli, M., Verspagen, B. (2007), “Inventors and
invention processes in Europe: Results from the PatVal-EU survey,” Research Policy, 36(8),
1107-1127.
• James, S. D., Leiblein, M. J., Lu, S. (2013), “How Firms Capture Value from their Innovations,”
Journal of Management, 39(5): 1123–1155.
• Sofka, W., de Faria, P., & Shehu, E. (2018). Protecting knowledge: How legal requirements to
reveal information affect the importance of secrecy. Research Policy, 47(3), 558-572.
Lecture 2: Value Appropriation and Teece
• Ceccagnoli, M. (2009). “Appropriability, Preemption, and Firm Performance,” Strategic Manage-
ment Journal, 30(1): 81–98.
• Teece, D.J. (1986), “Profiting from Technological Innovation: Implications for Integration, Col-
laboration, Licensing and Public Policy,” Research Policy, 15(6): 285–305.
• Teece, D.J. (2010), “Business Models, Business Strategy and Innovation,” Long Range Plan-
ning, 43(2/3): 172–194.
Lecture 3: Value Appropriation in Platform Markets
• Van Alstyne MW, Parker GG, Choudary SP. 2016. Pipelines, Platforms, and the New Rules of
Strategy. Harvard Business Review, 94(4): 54-62.
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of the Literature. Journal of Management, 47(6): 1528-1563.
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through selective promotion of complements. Organization Science, 30(6), 1232-1251.
Lecture 4: Open vs. Closed Business Models
• Chesbrough, H. (2006), “Open Innovation: A New Paradigm for Understanding Industrial Inno-
vation,” in Chesbrough, H., Vanhaverbeke, W. and West, J., eds., Open Innovation: Research-
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• Laursen K. and Salter A. (2006), “Open for Innovation: The Role of Openness in Explaining
Innovation Performance among U.K. Manufacturing Firms,” Strategic Management Journal,
27(2): 131–150.
• Arora, A., Athreye, S., & Huang, C. (2016). “The paradox of openness revisited: Collaborative
innovation and patenting by UK innovators”. Research Policy, 45(7), 1352-1361.
Lecture 6: Value Appropriation in the Entertainment Industry
• Broekhuizen, T. L. J., Lampel, J. and Rietveld, J. (2013), “New Horizons or a Strategic Mirage?
Artistled-Distribution versus Alliance Strategy in the Video Game Industry,” Research Policy,
42(4): 954–964.
• Gemser, G., Leenders, M.A.A.M. and Wijnberg, N.M. (2008), “Why Some Awards are more
Effective Signals of Quality than Others: A Study of Movie Awards,” Journal of Management,
34(1): 25–54.
• Hofmann, J., Clement, M., Völckner, F., & Hennig-Thurau, T. (2017), “Empirical Generalizations
on the Impact of Stars on the Economic Success of Movies. International Journal of Research
in Marketing, 34(2), 442–461.
,Lecture 1: Introduction to Value Appropriation: Formal and Informal Protection Mechanisms
Giuri, P. et al. (2007), “Inventors and invention processes in Europe: Results from the PatVal-EU
survey,” Research Policy, 36(8), 1107-1127.
Based on a survey of the inventors of 9017 European patented inventions, this paper provides new
information about the characteristics of European inventors, the sources of their knowledge, the im-
portance of formal and informal collaborations, the motivations to invent, and the actual use and eco-
nomic value of the patents.
Introduction
Along with input data such as R&D expenditures and the human capital employed in research, patents
have become the most common measure of innovation output. A convenient feature of patents is that
they resemble invention counts. Moreover, they have been well documented, especially in recent years
thanks to the extensive on-line information that can be conveniently organized into databases. Another
advantage of patents is that they can combine different indicators.
However, patents also have shortcomings. They relate only to certain types of inventions, and there are
vast differences across firms, industries, and countries in the precision with which patents measure
innovation output. Moreover, there is still ambiguity about what exactly patent indicators measure.
This paper focuses on three areas: inventors; research collaborations and spillovers; use and economic
value of the patents. In all these areas, either the literature does not provide information on some rele-
vant topic, or there is ambiguity in the existing measures, or the existing information is potentially incom-
plete. The three central sections of this paper discuss the PatVal data that fill some of these gaps.
Who Are the European Inventors?
The PatVal survey provides a unique opportunity to explore the characteristics of individual inventors,
such as their sex, age, education, motivations to invent, and job mobility. Table 3 shows that the share
of female inventors is remarkably low.
Table 3: Sex, age, and education of inventors
Table 3 also reports that the average age of our inventors is 45, which suggests that the production of
a patent occurs when people are no longer young researchers, at least in Europe. Moreover, we find
that there is little variation across technological classes and countries. If invention is a process that
occurs when people have completed the initial stages of their careers, then women are increasingly left
out, consistent with observed academic data in which they are gradually more and more under-repre-
sented in senior positions along the career path.
The low share of women inventors seems to be consistent with two other observations: the relatively
low participation of women in engineering, and the reduced share of women along the career path. Table
3 also reports the share of inventors with tertiary education. Most European inventors (76.9%) have a
,university degree, but the share of inventors with a doctorate is only 26.0%. The shares of inventors
with a university degree or a PhD vary among technological classes.
Recent contributions have noted that there is a positive correlation between researchers’ productivity
and their mobility. They argue that inter-firm and intra-firm mobility serve as a mechanism for creating
an accurate match of employee and employer characteristics.
The furthermost right-hand column of Table 3 shows that most inventors never changed job during this
period. The EU6 share of inventors who never moved is 77.5%, with little variation across technological
classes. There are differences, however, across countries.
Table 4: Inventors’ rewards
Finally, we investigate the motivations of inventors to invent. Table 4 reports six motivations, which we
asked inventors to rate from 1 (not important) to 5 (very important). We distinguished between social
and personal motivations – i.e., effects of the patented invention on employer’s performance, personal
satisfaction, prestige, and reputation – and monetary rewards or career advances. According to the
surveyed inventors, social and personal motivations are on average more important than money or ca-
reer advances.
Both scientists and industrial inventors are creative individuals, and creative individuals have common
characteristics, motivations, and goals. We emphasize three similarities.
• First, as human capital becomes more important, the owners of this asset, whether scientist or
inventor, care about things that enhance the perception of the asset’s value. Thus, prestige and
reputation are important.
• Second, an individual benefits from the growth of the organization in which he works because
this favors his own prestige, growth, or visibility as well. This may then explain why our inventors
care about the performance of their employer.
• Third, unlike other professions, creativity, the search for knowledge, and the ability to show that
something is possible, can be personally enticing. Thus, scientists and inventors may engage
in it simply for consumption purposes, which explain the importance of personal satisfaction.
Finally, Table 4 shows the percentage of inventors that received monetary compensations for the patent
under investigation.
Collaborations, Spillovers, and Sources of Knowledge
Sources of Knowledge Spillovers
One is the creation of formal and informal networks of collaboration among researchers or institutions.
Knowledge spillovers, which are more intense when there is geographical proximity, also imply access
to external knowledge, with implied benefits. In addition, there are sectoral differences in spatial cluster-
ing. Skilled- and R&D-intensive industries benefit to a greater extent from co-location and knowledge
spillovers.
, The PatVal data allow us to consider the sources of spillovers and knowledge flows without resorting to
citation measures. This section uses different indicators from PatVal to shed some light on these issues.
It examines the importance of R&D collaborations among individuals and organizations, the role of ge-
ographical proximity to establish them, and the use of different sources of knowledge in the invention
process.
The Role of Collaborations in the Production of Inventions
Only one-third of the PatVal patents involve a single inventor. Thus, a patented invention is typically the
result of teamwork. The patent document, however, does not indicate whether the collaborations are
among inventors belonging to the same or different organizations, or give details of the type of collabo-
ration they establish.
Co-application (i.e., patents applied for by more than one organization) is the only information concern-
ing collaboration provided by the patent document. However, there may be collaborations that do not
end up in a joint application. At the same time, the information on co-applications does not provide any
details on several features of the collaboration, like which inventor belongs to which organization, or
whether they all belong to the same one, or what the type of collaboration is. Moreover, firms consider
this type of partnering sub-optimal, due to the legal complexities involved in the management of intel-
lectual properties across firm boundaries and international patent jurisdictions.
Firms tend to internalize the invention process, and to mostly coordinate internally the production of
invention and transfer of knowledge among inventors. We also found that firms, and particularly large
firms, had a lower share of co-applications. The share of patents in which the inventors declare that
there were collaborations with other institutions is even higher. Along with the higher share of collabo-
rations with external inventors, this suggests that co-applications capture a small fraction of actual col-
laborations.
Table 5: Research collaborations in the invention process
Geographical Proximity and Exchange of Knowledge Among Inventors
Fig. 1 shows the importance of the four types of interactions. Organizational proximity is the most im-
portant category. Interactions in the same organization are on average more important than interactions
with people in other organizations, especially when they are geographically close.
Surprisingly, interaction with geographically close individuals in other organizations is the least important
form of collaboration. This is puzzling given the emphasis in the literature on the importance of geo-
graphical proximity for collaboration and knowledge transfer. Geographically localized spillovers may be
more important in technological fields featuring small technology-intensive companies organized in clus-
ters.
