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Nurturing the Accumulation of Innovations: Lessons from the Internet

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  • Shane Greenstein

Abstract

The innovations that became the foundation for the Internet originate from two eras that illustrate two distinct models for accumulating innovations over the long haul. The pre-commercial era illustrates the operation of several useful non-market institutional arrangements. It also illustrates a potential drawback to government sponsorship – in this instance, truncation of exploratory activity. The commercial era illustrates a rather different set of lessons. It highlights the extraordinary power of market-oriented and widely distributed investment and adoption, which illustrates the power of market experimentation to foster innovative activity. It also illustrates a few of the conditions necessary to unleash value creation from such accumulated lessons, such as standards development and competition, and nurturing legal and regulatory policies.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15905.

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Date of creation: Apr 2010
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Handle: RePEc:nbr:nberwo:15905

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  1. Joel West & Siobhan O'mahony, 2008. "The Role of Participation Architecture in Growing Sponsored Open Source Communities," Industry & Innovation, Taylor and Francis Journals, vol. 15(2), pages 145-168.
  2. Avi Goldfarb, 2004. "Concentration in advertising-supported online markets: an empirical approach," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 13(6), pages 581-594.
  3. Shane Greenstein, 2006. "Innovation and the Evolution of Market Structure for Internet Access in the United States," Discussion Papers 05-018, Stanford Institute for Economic Policy Research.
  4. Shane Greenstein, 2010. "The emergence of the Internet: collective invention and wild ducks," Industrial and Corporate Change, Oxford University Press, vol. 19(5), pages 1521-1562, October.
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Cited by:
  1. Winkler Anne E. & Glanzel Wolfang & Levin Sharon & Stephan Paula, 2011. "The Diffusion of Information Technology and the Increased Propensity of Teams to Transcend Institutional and National Borders," Dipartimento di Economia "S. Cognetti de Martiis" LEI & BRICK - Laboratorio di economia dell'innovazione "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo 201110, University of Turin.

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