The Architecture of Innovation: The Economics of Creative Organizations

The developed world is struggling with unsustainable promises and unappealing choices, and sustained economic growth represents one of the few ways out. And over the centuries, growth in advanced economies has been strongly linked to innovation. Despite the vast amounts written about innovation over the years, understanding of its drivers remains surprisingly limited. This book, by top Harvard Business School professor Josh Lerner, seeks to remedy this shortfall. It highlights that while organizational economists have made strides in understanding what combinations of incentives and organization structure can encourage innovative breakthroughs, many of these insights have not yet received the attention they deserve in the real world, or been developed in ways that can easily be applied in real situations. The author focuses on two models for encouraging innovation, the corporate research laboratory and the start-up. Each model, while proven and successful, also faces significant challenges and ambiguities. A central argument is that there remains considerable potential for hybrids between these two approaches. This book draws on important research in economics and reviews different approaches to innovation, combining this with a series of case examples to explore the challenges that face start up firms, large firms, and nations. It is essential reading for anybody faced with the challenge of innovation.