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Academic freedom, private‐sector focus, and the process of innovation
Author(s) -
Aghion Philippe,
Dewatripont Mathias,
Stein Jeremy C.
Publication year - 2008
Publication title -
the rand journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.687
H-Index - 108
eISSN - 1756-2171
pISSN - 0741-6261
DOI - 10.1111/j.1756-2171.2008.00031.x
Subject(s) - precommitment , private sector , process (computing) , control (management) , focus (optics) , industrial organization , law and economics , business , economics , public relations , political science , management , computer science , microeconomics , economic growth , physics , optics , operating system
We develop a model that clarifies the respective advantages and disadvantages of academic and private‐sector research. Rather than relying on lack of appropriability or spillovers to generate a rationale for academic research, we emphasize control‐rights considerations, and argue that the fundamental tradeoff between academia and the private sector is one of creative control versus focus. By serving as a precommitment mechanism that allows scientists to freely pursue their own interests, academia can be indispensable for early‐stage research. At the same time, the private sector's ability to direct scientists toward higher‐payoff activities makes it more attractive for later‐stage research.