NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Nurturing the Accumulation of Innovations: Lessons from the Internet

Shane Greenstein

NBER Working Paper No. 15905
Issued in April 2010
NBER Program(s):   IO   PR

The innovations that became the foundation for the Internet originate from two eras that illustrate two distinct models for accumulating innovations over the long haul. The pre-commercial era illustrates the operation of several useful non-market institutional arrangements. It also illustrates a potential drawback to government sponsorship – in this instance, truncation of exploratory activity. The commercial era illustrates a rather different set of lessons. It highlights the extraordinary power of market-oriented and widely distributed investment and adoption, which illustrates the power of market experimentation to foster innovative activity. It also illustrates a few of the conditions necessary to unleash value creation from such accumulated lessons, such as standards development and competition, and nurturing legal and regulatory policies.

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Document Object Identifier (DOI): 10.3386/w15905

Published: Shane Greenstein, 2009. "Nurturing the Accumulation of Innovations: Lessons from the Internet," NBER Chapters, in: Accelerating Innovation in Energy: Insights from Multiple Sectors National Bureau of Economic Research, Inc.

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