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Privatization of knowledge: Did the U.S. get it right?

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  • Cozzi, Guido
  • Galli, Silvia

Abstract

Should knowledge creation be publicly or privately funded? This paper studies the shift in the U.S. innovation system towards the patentability and commercialization of the basic-research happened during the early 1980s. We interpret this change as rendering scientists and researchers responsive to “market” forces. Before 1980, universities researched by employing scientists motivated by “curiosity.” After 1980, scientists could patent their research and universities could behave as private firms. In a context of two-stage inventions (basic and applied research), this reform has a priori ambiguous effects on innovation and welfare. We build a Schumpeterian growth model and match it to the data to assess this critical turning point from the innovation and welfare perspectives.

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  • Cozzi, Guido & Galli, Silvia, 2021. "Privatization of knowledge: Did the U.S. get it right?," Economic Modelling, Elsevier, vol. 98(C), pages 179-191.
    • Handle: RePEc:eee:ecmode:v:98:y:2021:i:c:p:179-191
    DOI: 10.1016/j.econmod.2021.01.011
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    Cited by:

    1. Tetsugen Haruyama, 2009. "Competitive Innovation With Codified And Tacit Knowledge," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(4), pages 390-414, September.
    2. Guido Cozzi, 2009. "Intellectual Property, Innovation, And Growth: Introduction To The Special Issue," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(s1), pages 383-389, September.
    3. Kunihiko Konishi, 2018. "Basic and Applied Research: A Welfare Analysis," The Japanese Economic Review, Springer, vol. 69(4), pages 414-437, December.
    4. Gersbach, Hans & Sorger, Gerhard & Amon, Christian, 2018. "Hierarchical growth: Basic and applied research," Journal of Economic Dynamics and Control, Elsevier, vol. 90(C), pages 434-459.
    5. FURUKAWA Yuichi & Tat-kei LAI & SATO Kenji, 2018. "Novelty-Seeking Traits and Innovation," Discussion papers 18073, Research Institute of Economy, Trade and Industry (RIETI).
    6. Furukawa, Yuichi & Lai, Tat-kei & Sato, Kenji, 2017. "Receptivity and Innovation," MPRA Paper 81536, University Library of Munich, Germany.
    7. Hans Gersbach & Maik Schneider & Olivier Schneller, 2013. "Basic research, openness, and convergence," Journal of Economic Growth, Springer, vol. 18(1), pages 33-68, March.
    8. Gersbach, Hans & Schneider, Maik T., 2015. "On the global supply of basic research," Journal of Monetary Economics, Elsevier, vol. 75(C), pages 123-137.
    9. Guido Cozzi & Silvia Galli, 2009. "Science-Based R&D In Schumpeterian Growth," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(s1), pages 474-491, September.
    10. Kunihiko Konishi, 2015. "Basic and Applied Research: A Welfare Analysis," Discussion Papers in Economics and Business 15-08, Osaka University, Graduate School of Economics.
    11. Guido Cozzi & Silvia Galli, 2009. "Upstream Innovation Protection: Common Law Evolution and the Dynamics of Wage Inequality," Working Papers 2009_20, Business School - Economics, University of Glasgow.
    12. Nisvan Erkal & Deborah Minehart, 2013. "Optimal Sharing Strategies in Dynamic," Department of Economics - Working Papers Series 1174, The University of Melbourne.
    13. Cozzi, Guido & Galli, Silvia, 2022. "Covid-19 Vaccines, Innovation, and Intellectual Property Rights," GLO Discussion Paper Series 1095, Global Labor Organization (GLO).
    14. Tetsugen Haruyama, 2009. "Competitive Innovation With Codified And Tacit Knowledge," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(s1), pages 390-414, September.
    15. Furukawa, Yuichi & Lai, Tat-kei & Sato, Kenji, 2019. "Love of Novelty: A Source of Innovation-Based Growth... or Underdevelopment Traps?," MPRA Paper 92915, University Library of Munich, Germany.

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    More about this item

    Keywords

    Innovation policy; Institutions; Public basic research; Quality ladder; Private basic research;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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