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On the Economics of Innovation Projects Product Experimentation in the Music Industry


  • Mark Lorenzen
  • Lars Frederiksen


The paper is conceptual, combining project and economic organization literatures in order to explain the organization and management of market-based projects. It dedicates particular focus to projects set up in order to facilitate product innovation through experimentation. It investigates the internal vs. market economies of scale and scope related to projects, as well as the issues of governance, planning and coordination related to reaping such economies. Incorporating transaction cost perspectives as well as considerations of labour markets, the paper explains the management of market-organized innovation projects by virtue of localized project ecologies and local labour markets of leaders and boundary spanners. It illustrates its arguments with a case study of the Recorded Music industry.

Suggested Citation

  • Mark Lorenzen & Lars Frederiksen, 2005. "On the Economics of Innovation Projects Product Experimentation in the Music Industry," DRUID Working Papers 05-23, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:05-23

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    References listed on IDEAS

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    More about this item


    Project management; product innovation;

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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