IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v42y2013i1p35-49.html
   My bibliography  Save this article

To protect or not to protect? Modes of appropriability in the small enterprise sector

Author

Listed:
  • Thomä, Jörg
  • Bizer, Kilian

Abstract

What appropriation strategies are chosen by innovative small firms? A cluster analysis of data from the German CIS was carried out to indentify four distinct modes of appropriability in the small enterprise sector. The results show that for many innovative small firms the key question is not whether to use intellectual property rights (IPRs) or not, but whether to protect their innovations from imitation at all. Furthermore, formal and informal innovation protection mechanisms should not be seen as mutually exclusive, since several are employed jointly. Secrecy and lead time advantages over competitors are often combined with IPRs. Yet, a number of small firms use complexity of design as a substitute to patent protection. The relevance of each appropriation mode depends on such factors as the degree of innovativeness, the type of innovator and the general market environment, which implies that the importance of IPRs is limited to specific business contexts. Furthermore, regarding firm performance as measured by innovation effects, some evidence is found that choosing both IPR- and non-IPR-oriented appropriation strategies can prove to be effective in achieving company goals. Taken all together, the study implies that the use of IPRs by innovative small firms is highly selective. The paper concludes with a discussion of the implications for policy and research.

Suggested Citation

  • Thomä, Jörg & Bizer, Kilian, 2013. "To protect or not to protect? Modes of appropriability in the small enterprise sector," Research Policy, Elsevier, vol. 42(1), pages 35-49.
  • Handle: RePEc:eee:respol:v:42:y:2013:i:1:p:35-49
    DOI: 10.1016/j.respol.2012.04.019
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S004873331200128X
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.respol.2012.04.019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Malerba, Franco, 2002. "Sectoral systems of innovation and production," Research Policy, Elsevier, vol. 31(2), pages 247-264, February.
    2. Guellec, Dominique & van Pottelsberghe de la Potterie, Bruno, 2007. "The Economics of the European Patent System: IP Policy for Innovation and Competition," OUP Catalogue, Oxford University Press, number 9780199216987.
    3. Jensen, Morten Berg & Johnson, Bjorn & Lorenz, Edward & Lundvall, Bengt Ake, 2007. "Forms of knowledge and modes of innovation," Research Policy, Elsevier, vol. 36(5), pages 680-693, June.
    4. Giovanni Dosi & Luigi Marengo & Corrado Pasquali, 2010. "How Much Should Society Fuel the Greed of Innovators? On the Relations between Appropriability, Opportunities and Rates of Innovation," Chapters, in: Riccardo Viale & Henry Etzkowitz (ed.), The Capitalization of Knowledge, chapter 4, Edward Elgar Publishing.
    5. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    6. Christine Greenhalgh & Mark Rogers, 2007. "The value of intellectual property rights to firms and society," Oxford Review of Economic Policy, Oxford University Press, vol. 23(4), pages 541-567, Winter.
    7. Rinaldo Evangelista, 2000. "Sectoral Patterns Of Technological Change In Services," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(3), pages 183-222.
    8. Petr Hanel, 2008. "The Use Of Intellectual Property Rights And Innovation By Manufacturing Firms In Canada," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(4), pages 285-309.
    9. Giovanni B. Ramello & Francesco Silva, 2006. "Appropriating signs and meaning: the elusive economics of trademark," Industrial and Corporate Change, Oxford University Press, vol. 15(6), pages 937-963, December.
    10. Harabi, Najib, 1995. "Appropriability of technical innovations an empirical analysis," Research Policy, Elsevier, vol. 24(6), pages 981-992, November.
    11. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107, Elsevier.
    12. Hollenstein, Heinz, 2003. "Innovation modes in the Swiss service sector: a cluster analysis based on firm-level data," Research Policy, Elsevier, vol. 32(5), pages 845-863, May.
    13. Baldwin, John R. & Johnson, Joanne, 1996. "Business strategies in more- and less-innovative firms in Canada," Research Policy, Elsevier, vol. 25(5), pages 785-804, August.
    14. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
    15. Levin, Richard C & Cohen, Wesley M & Mowery, David C, 1985. "R&D Appropriability, Opportunity, and Market Structure: New Evidence on Some Schumpeterian Hypotheses," American Economic Review, American Economic Association, vol. 75(2), pages 20-24, May.
    16. de Jong, Jeroen P.J. & Marsili, Orietta, 2006. "The fruit flies of innovations: A taxonomy of innovative small firms," Research Policy, Elsevier, vol. 35(2), pages 213-229, March.
    17. Malerba, Franco & Orsenigo, Luigi, 1997. "Technological Regimes and Sectoral Patterns of Innovative Activities," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 83-117.
    18. Amara, Nabil & Landry, Réjean & Traoré, Namatié, 2008. "Managing the protection of innovations in knowledge-intensive business services," Research Policy, Elsevier, vol. 37(9), pages 1530-1547, October.
    19. Christian Rammer & Dirk Czarnitzki & Alfred Spielkamp, 2009. "Innovation success of non-R&D-performers: substituting technology by management in SMEs," Small Business Economics, Springer, vol. 33(1), pages 35-58, June.
    20. Edwin Mansfield, 1986. "Patents and Innovation: An Empirical Study," Management Science, INFORMS, vol. 32(2), pages 173-181, February.
    21. Teece, David J., 2006. "Reflections on "Profiting from Innovation"," Research Policy, Elsevier, vol. 35(8), pages 1131-1146, October.
    22. Hall, Bronwyn H & Ziedonis, Rosemarie Ham, 2001. "The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 101-128, Spring.
    23. Macdonald, Stuart, 2004. "When means become ends: considering the impact of patent strategy on innovation," Information Economics and Policy, Elsevier, vol. 16(1), pages 135-158, March.
    24. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 783-832.
    25. Lanjouw, Jean O & Schankerman, Mark, 2004. "Protecting Intellectual Property Rights: Are Small Firms Handicapped?," Journal of Law and Economics, University of Chicago Press, vol. 47(1), pages 45-74, April.
    26. Paul H. Jensen & Elizabeth Webster, 2006. "Firm Size and the Use of Intellectual Property Rights," The Economic Record, The Economic Society of Australia, vol. 82(256), pages 44-55, March.
    27. Arundel, Anthony & Kabla, Isabelle, 1998. "What percentage of innovations are patented? empirical estimates for European firms," Research Policy, Elsevier, vol. 27(2), pages 127-141, June.
    28. Leiponen, Aija & Byma, Justin, 2009. "If you cannot block, you better run: Small firms, cooperative innovation, and appropriation strategies," Research Policy, Elsevier, vol. 38(9), pages 1478-1488, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thomä Jörg & Zimmermann Volker, 2013. "Knowledge Protection Practices in Innovating SMEs," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(5-6), pages 691-717, October.
    2. Chang, Yuan-Chieh & Chen, Min-Nan, 2016. "Service regime and innovation clusters: An empirical study from service firms in Taiwan," Research Policy, Elsevier, vol. 45(9), pages 1845-1857.
    3. Chen, Min-Nan & Wu, Chia-Hung, 2020. "Complementary-in use appropriability in innovative service firms: An empirical study in Taiwan," Research Policy, Elsevier, vol. 49(7).
    4. Capponi, Giovanna & Criscuolo, Paola & Martinelli, Arianna & Nuvolari, Alessandro, 2019. "Profiting from innovation: Evidence from a survey of Queen's Awards winners," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 155-169.
    5. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    6. Barros, Henrique M., 2021. "Neither at the cutting edge nor in a patent-friendly environment: Appropriating the returns from innovation in a less developed economy," Research Policy, Elsevier, vol. 50(1).
    7. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    8. Marcel Seip & Carolina Castaldi & Meindert Flikkema & Ard-Pieter de Man, 2019. "A taxonomy of firm-level IPR application practices to inform policy debates," LEM Papers Series 2019/03, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    9. Elizabeth Webster & Paul H. Jensen, 2011. "Do Patents Matter for Commercialization?," Journal of Law and Economics, University of Chicago Press, vol. 54(2), pages 431-453.
    10. Sofka, Wolfgang & Shehu, Edlira & de Faria, Pedro, 2014. "Multinational subsidiary knowledge protection—Do mandates and clusters matter?," Research Policy, Elsevier, vol. 43(8), pages 1320-1333.
    11. Yaowu Sun & Yi Zhai, 2018. "Mapping the knowledge domain and the theme evolution of appropriability research between 1986 and 2016: a scientometric review," Scientometrics, Springer;Akadémiai Kiadó, vol. 116(1), pages 203-230, July.
    12. Leiponen, Aija & Drejer, Ina, 2007. "What exactly are technological regimes?: Intra-industry heterogeneity in the organization of innovation activities," Research Policy, Elsevier, vol. 36(8), pages 1221-1238, October.
    13. Marcus M. Keupp & Angela Beckenbauer & Oliver Gassmann, 2010. "Enforcing Intellectual Property Rights in Weak Appropriability Regimes," Management International Review, Springer, vol. 50(1), pages 109-130, February.
    14. Barge-Gil, Andrés & López, Alberto, 2014. "R&D determinants: Accounting for the differences between research and development," Research Policy, Elsevier, vol. 43(9), pages 1634-1648.
    15. Miozzo, Marcela & Desyllas, Panos & Lee, Hsing-fen & Miles, Ian, 2016. "Innovation collaboration and appropriability by knowledge-intensive business services firms," Research Policy, Elsevier, vol. 45(7), pages 1337-1351.
    16. Giovanni Dosi & Richard Nelson, 2013. "The Evolution of Technologies: An Assessment of the State-of-the-Art," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 3-46, June.
    17. Mounir Amdaoud & Christian Le Bas, 2020. "Firm Patenting and Types of innovation in Least Developed Countries. An Empirical Investigation on Patenting Determinants," Working Papers hal-03059466, HAL.
    18. Leiponen, Aija & Byma, Justin, 2009. "If you cannot block, you better run: Small firms, cooperative innovation, and appropriation strategies," Research Policy, Elsevier, vol. 38(9), pages 1478-1488, November.
    19. Köhler, Christian & Sofka, Wolfgang & Grimpe, Christoph, 2009. "Selectivity in search strategies for innovation: from incremental to radical, from manufacturing to services," ZEW Discussion Papers 09-066, ZEW - Leibniz Centre for European Economic Research.
    20. Martine Gadille & Juan Ramón Gallego-Bono, 2021. "Rebuilding a Cluster While Protecting Knowledge within Low-Medium-Tech Supplier SMEs: A Spanish and French Comparison," Sustainability, MDPI, Open Access Journal, vol. 13(20), pages 1-35, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:42:y:2013:i:1:p:35-49. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/respol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/respol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.