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Communicating Technical Knowledge

Author

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  • James Bessen

    (Research on Innovation, Boston University School of Law)

Abstract

Firms reduce the marginal cost of communicating technical knowledge by “formalizing” it in standards, dominant designs or other ways. But this only pays when new technology is sufficiently developed. In a simple model with endogenous communication costs, two equilibria emerge. With formalized knowledge, new technologies replace old and patents increase innovation. But without formalization, new technologies coexist with old, patents decrease innovation, and inventors might freely exchange knowledge. This affects policy and can explain why some innovation is highly localized despite global production and why some nations that innovate with mature technologies have difficulty moving to the innovation frontier.

Suggested Citation

  • James Bessen, 2010. "Communicating Technical Knowledge," Working Papers 1001, Research on Innovation.
    • Handle: RePEc:roi:wpaper:1001
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    Keywords

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    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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