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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. Ocde & Aen, 2009. "Travaux réglementaires internationaux," Bulletin de droit nucléaire, Éditions OCDE, vol. 2009(1), pages 147-151.
    2. Peter B. Meyer, 2003. "Episodes of Collective Invention," Working Papers 368, U.S. Bureau of Labor Statistics.
    3. 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.
    4. 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.
    5. 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.
    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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