Innovation policy : concerns & rationality

This thesis is about innovation policy, its concerns and rationality; the thesis seeks to explore the concerns of innovation policy: what governments want to achieve, what means they apply, and how innovation policies can come in conflict with other government goals and objectives, and it questions the rationality of pursuing these policies. More specifically, this thesis asks: What are the concerns of innovation policy? Should governments pass innovation policies? To answer the two questions, the thesis is divided into three parts. The first part reviews some theoretical issues, the second part explores five case studies, and the last part discusses the thesis s two questions in light of conclusions drawn from two previous parts. The first part explores relevant innovation-theory from three different schools of thought neoclassical economics, evolutionary economics, and the systems of innovation -approach. Based on these theories, a model is created, that will be used to analyse the case studies in part II. The model features four main factors: gain, pressure, pull, and push. Respectively, gain designates factors such as intellectual property rights; pressure , rivalry and cooperation between competitors; pull , the size and structure of demand; and push , knowledge bases and their location, augmentation, and means of access. These factors influence the decision-making and the ability of firms to introduce innovations. By altering one or several of these factors, governments can affect the rate and direction of innovation. Most of part I will be used to develop this model theoretically, exploring how and why each of the four factors affect the firms incentives and ability to innovate. In part II, the thesis will analyse five different case studies: the pharmaceutical industry, the biotech industry, electronics in Singapore, Taiwan, and South Korea, hydrogen-powered vehicles, and the Microsoft antitrust trial. These cases will be analysed on the basis of the model introduced in part I, dividing the factors that influence an industries progressiveness into four parts. The purpose of this analysis is to explore the types of means that governments used to influence the various industries, to see what motivated the governments to intervene, and, finally, to see whether or not these policies where successful given the goals the governments had in mind. The last part of this thesis will be used, first, to summarize the most important concerns of innovation policy, and, then, to discuss the rationality of innovation policymaking. First in the summary the different types of innovation policy goals will be discussed, then, the different types of policy means, and, last, possible conflicts between innovation policy and other government goals. Second, the last part will discuss the rationality of innovation policymaking, looking at the limitations governments face in this regard. It will also see if any of the conclusions reached in the thesis have some kind of general validity. And, finally, it will discuss what the three different theoretical approaches have to say about innovation policy, and how this corresponds to the conclusions reach in this thesis