Breakthrough technologies – Semiconductor, innovation and intellectual property

Semiconductor technology is at the origin of today’s digital economy. Its contribution to innovation, productivity and economic growth in the past four decades has been extensive. This paper analyzes how this breakthrough technology came about, how it diffused, and what role intellectual property (IP) played historically. The paper finds that the semiconductor innovation ecosystem evolved considerably over time, reflecting in particular the move from early - stage invention and first commercialization to mass production and diffusion. All phases relied heavily on contributions in fundamental science, linkages to public research and individual entrepreneurship. Government policy, in the form of demand-side and industrial policies were key. In terms of I P, patents were used intensively. However, they were often used as an effective means of sharing technology, rather than merely as a tool to block competitors. Antitrust policy helped spur key patent holders to set up liberal licensing policies. In contrast, and potentially as a cautionary tale for the future, the creation of new IP form s – the sui generis system to protect mask design - did not produce the desired outcome. Finally, copyright has gained in importance more recently.