Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world

By David J. Teece. Research Policy, 2018

1,438 citations recorded by the source corpus.

The value-capture problem for innovators in the digital economy involves some different challenges from those in the industrial economy. It inevitably requires understanding the dynamics of platforms and ecosystems. These challenges are amplified for enabling technologies, which are the central focus of this article. The innovator of an enabling technology has a special business model challenge because the applicability to many downstream verticals forecloses, as a practical matter, ownership of all the relevant complements. Complementary assets (vertical and lateral) in the digital context are no longer just potential value-capture mechanisms (through asset price appreciation or through preventing exposure to monopolistic bottleneck pricing by others); they may well be needed simply for the technology to function. Technological and innovational complementors present both coordination and market design challenges to the innovator that generally lead to market failure in the form of an excess of social over private returns. The low private return leads to socially sub-optimal underinvestment in future R&D that can be addressed to some extent by better strategic decision-making by the innovator and/or by far-sighted policies from government and the judiciary.

Subfields: Accounting, Management of Technology and Innovation, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/7bcf8dd0bee6c49a8300c7d330d83dd7a9d8a362

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Citations in the corpus

The structural reshaping of globalization: Implications for strategic sectors, profiting from innovation, and the multinational enterprise (2019, background): “…the structural reshaping of the global governance system, it is clear that today’s IB environment is plagued with volatility, uncertainty, complexity, and ambiguity (VUCA) at an unprecedented scale (Bennett & Lemoine, 2014; Schoemaker, Heaton, & Teece, 2018; van Tulder, Verbeke & Jankowska, 2020).”
The age of digital entrepreneurship (2019, background): “The BM literature started to become main-stream with (i) electronic business models (eBM) since the emergence of e-commerce during the 1990s; and (ii) digital BM, in the current digital economy (Blank 2013; Osterwalder and Pigneur 2010; Ries 2011; Teece 2018).”
How entrepreneurial SMEs compete through digital platforms: The roles of digital platform capability, network capability and ambidexterity (2019, background): “Accordingly, digital platform capability allows firms to integrate critical shared knowledge that leverages internal resources while reconfiguring internal and external resources to better respond to highly changeable market needs (Helfat & Raubitschek, 2018; Teece, 2018).”
Innovation ecosystems: A conceptual review and a new definition (2020, neutral): “…central interest in management and strategy, as well as in policy-making, for example regarding disruptive innovations (Christensen, 1997) or complementary assets (Teece, 2018), platforms, and modularizations for appropriation of complementarities (Baldwin and Henkel, 2015; Jacobides et al., 2018).”