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on Technology and Industrial Dynamics |
| By: | Ashish Arora; Lee G. Branstetter; Matej Drev |
| Abstract: | This paper documents a shift in the nature of innovation in the information technology (IT) industry. Using comprehensive data on all IT patents granted by the USPTO from 1983-2004, we find strong evidence of a change in IT innovation that is systematic, substantial, and increasingly dependent on software. This change in the nature of IT innovation has had differential effects on the performance of the IT industries in the United States and Japan. Using a broad unbalanced panel of US and Japanese publicly listed IT firms in the period 1983-2004, we show that (a) Japanese IT innovation relies less on software advances than US IT innovation, (b) the innovation performance of Japanese IT firms is increasingly lagging behind that of their US counterparts, particularly in IT sectors that are more software intensive, and (c) that US IT firms are increasingly outperforming their Japanese counterparts, particularly in more software intensive sectors. The findings of this paper thus provide a fresh explanation for the relative decline of the Japanese IT industry in the 1990s. Finally, we provide suggestive evidence consistent with the hypothesis that human resource constraints played a role in preventing Japanese firms from adapting to the shift in the nature of innovation in IT. |
| Keywords: | Innovation, Technological change, IT industry, Software innovation, Japan |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd11-199&r=tid |
| By: | Russell Thomson (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia (IPRIA), The University of Melbourne); Elizabeth Webster (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia (IPRIA), The University of Melbourne) |
| Abstract: | In this paper we consider why firms sometimes choose an external development path for their own inventions, despite the costs of contracting and the risks of opportunistic behaviour and expropriation. We model the probability that firms adopt an external development strategy using survey data from over 2700 Australian inventions. Our results indicate that firms pursue external development strategies in response to perceived project-level risk about the technical feasibility of the invention, especially when suported by confidence in the patent system. Our findings also confirm that small to medium size enterprises, highly leveraged large firms and firms with few co-specialized assets are more likely to pursue an external development strategy. |
| Keywords: | Outsourcing R&D, managing technological risk, licensing innovation |
| JEL: | O32 O33 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2011n19&r=tid |