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Privatization of Knowledge: Did the U.S. Get It Right?

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  • Cozzi, Guido
  • Galli, Silvia

Abstract

To foster innovation and growth should basic research be publicly or privately funded? This paper studies the impact of the gradual shift in the U.S. patent system towards the patentability and commercialization of the basic R&D undertaken by universities. We see this movement as making universities becoming responsive to "market" forces. Prior to 1980, universities undertook research using an exogenous stock of researchers motivated by "curiosity." After 1980, universities patent their research and behave as private firms. This move, in a context of two-stage inventions (basic and applied research) has an a priori ambiguous effect on innovation and welfare. We build a Schumpeterian model and match it to the data to assess this important turning point.

Suggested Citation

  • Cozzi, Guido & Galli, Silvia, 2013. "Privatization of Knowledge: Did the U.S. Get It Right?," Economics Working Paper Series 1307, University of St. Gallen, School of Economics and Political Science.
    • Handle: RePEc:usg:econwp:2013:07
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    Cited by:

    1. Gersbach, Hans & Schneider, Maik T., 2015. "On the global supply of basic research," Journal of Monetary Economics, Elsevier, vol. 75(C), pages 123-137.
    2. Furukawa, Yuichi & Lai, Tat-kei & Sato, Kenji, 2019. "Love of Novelty: A Source of Innovation-Based Growth... or Underdevelopment Traps?," MPRA Paper 92915, University Library of Munich, Germany.
    3. Tetsugen Haruyama, 2009. "Competitive Innovation With Codified And Tacit Knowledge," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(4), pages 390-414, September.
    4. repec:bla:scotjp:v:56:y:2009:i:s1:p:383-389 is not listed on IDEAS
    5. repec:bla:scotjp:v:56:y:2009:i:s1:p:474-491 is not listed on IDEAS
    6. Gersbach, Hans & Schetter, Ulrich & Schmassmann, Samuel, 2023. "From local to global: A theory of public basic research in a globalized world," European Economic Review, Elsevier, vol. 160(C).
    7. Kunihiko Konishi, 2015. "Basic and Applied Research: A Welfare Analysis," Discussion Papers in Economics and Business 15-08, Osaka University, Graduate School of Economics.
    8. Gersbach, Hans & Sorger, Gerhard & Amon, Christian, 2018. "Hierarchical growth: Basic and applied research," Journal of Economic Dynamics and Control, Elsevier, vol. 90(C), pages 434-459.
    9. Guido Cozzi & Silvia Galli, 2009. "Upstream Innovation Protection: Common Law Evolution and the Dynamics of Wage Inequality," Working Papers 2009_20, Business School - Economics, University of Glasgow.
    10. Nisvan Erkal & Deborah Minehart, 2013. "Optimal Sharing Strategies in Dynamic," Department of Economics - Working Papers Series 1174, The University of Melbourne.
    11. Kunihiko Konishi, 2018. "Basic and Applied Research: A Welfare Analysis," The Japanese Economic Review, Springer, vol. 69(4), pages 414-437, December.
    12. FURUKAWA Yuichi & Tat-kei LAI & SATO Kenji, 2018. "Novelty-Seeking Traits and Innovation," Discussion papers 18073, Research Institute of Economy, Trade and Industry (RIETI).
    13. Cozzi, Guido & Galli, Silvia, 2022. "Covid-19 Vaccines, Innovation, and Intellectual Property Rights," GLO Discussion Paper Series 1095, Global Labor Organization (GLO).
    14. repec:bla:scotjp:v:56:y:2009:i:s1:p:390-414 is not listed on IDEAS
    15. Hans Gersbach & Maik Schneider & Olivier Schneller, 2013. "Basic research, openness, and convergence," Journal of Economic Growth, Springer, vol. 18(1), pages 33-68, March.
    16. Furukawa, Yuichi & Lai, Tat-kei & Sato, Kenji, 2017. "Receptivity and Innovation," MPRA Paper 81536, University Library of Munich, Germany.

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    More about this item

    Keywords

    R&D and Growth; Sequential Innovation; Basic Research; Patent Laws;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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