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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.

Suggested Citation

  • Shane Greenstein, 2010. "Nurturing the Accumulation of Innovations: Lessons from the Internet," NBER Working Papers 15905, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:15905
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    References listed on IDEAS

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    1. Peter B. Meyer, 2003. "Episodes of Collective Invention," Working Papers 368, U.S. Bureau of Labor Statistics.
    2. Avi Goldfarb, 2004. "Concentration in advertising-supported online markets: an empirical approach," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(6), pages 581-594.
    3. Joel West & Siobhan O'mahony, 2008. "The Role of Participation Architecture in Growing Sponsored Open Source Communities," Industry and Innovation, Taylor & Francis Journals, vol. 15(2), pages 145-168.
    4. Ocde & Aen, 2009. "Travaux réglementaires internationaux," Bulletin de droit nucléaire, Éditions OCDE, vol. 2009(1), pages 147-151.
    5. Shane Greenstein & Ryan C. McDevitt, 2009. "The Broadband Bonus: Accounting for Broadband Internet's Impact on U.S. GDP," NBER Working Papers 14758, National Bureau of Economic Research, Inc.
    6. 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.
    7. Shane Greenstein, 2010. "The emergence of the Internet: collective invention and wild ducks," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(5), pages 1521-1562, October.
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    Cited by:

    1. Kevin J. Boudreau, 2012. "Let a Thousand Flowers Bloom? An Early Look at Large Numbers of Software App Developers and Patterns of Innovation," Organization Science, INFORMS, vol. 23(5), pages 1409-1427, October.
    2. Greenstein, Shane & Nagle, Frank, 2014. "Digital dark matter and the economic contribution of Apache," Research Policy, Elsevier, vol. 43(4), pages 623-631.
    3. Winkler, Anne E. & Glänzel, Wolfgang & Levin, Sharon & Stephan, Paula, 2011. "The Diffusion of Information Technology and the Increased Propensity of Teams to Transcend Institutional and National Borders," IZA Discussion Papers 5857, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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