Course Coordinator: Christoph Grimpe, Department of Strategy and Innovation (SI)

Faculty

Professor with special responsibilities Carmelo Cennamo (CC)
Department of Strategy and Innovation, CBS

Professor with special responsibilities Kristina Dahlin (KD)
Department of Strategy and Innovation, CBS

Associate Professor Mercedes Delgado (MD)
Department of Strategy and Innovation, CBS

Professor Christoph Grimpe (CG)
Department of Strategy and Innovation, CBS

Professor Karin Hoisl (KH)
Department of Strategy and Innovation, CBS

Assistant Professor Paul Hünermund (PH)
Department of Strategy and Innovation, CBS

Professor Keld Laursen (KL)
Department of Strategy and Innovation, CBS

Associate Professor Marion Pötz (MP)
Department of Strategy and Innovation, CBS

Professor Thomas Rønde (TR)
Department of Strategy and Innovation, CBS

Associate Professor Markus Simeth (MS)
Department of Strategy and Innovation, CBS

Prerequisites

Basic knowledge of theories related to economics, management, technology, innovation, and organizations. It is a requirement for receiving the course diploma that the students attend the entire course.

Duration: 10 sessions with 3 hours each

Aim of the course

The course aims to provide a set of advanced insights into the field of Management and Economics of Innovation spanning from foundational themes to the most recent developments of the field.

Course content

Both the competitiveness of firms and welfare in general depend on the ability to introduce innovative products, processes and services. Interest in management of innovation has traditionally centered on firm-internal aspects of processes such as, for instance, how collaboration and interaction among specialized professionals take place in the creation of innovation; how to deal with unavoidable uncertainty involved; and the path dependency in skills and resources. In recent years, there has been a surge in interest among scholars and practitioners in methods that allow the firm systematically to source its inputs externally. Innovation that originates from sources external to the firm has emerged as an important phenomenon and has been associated with labels such as open innovation, user innovation, crowd sourcing, and open source.

These trends have also given rise to novel and so far immature research agendas that promise to enhance our understanding of the processes and sources of innovation in the years to come. With respect to the economics of innovation, the course will cover modern economic theories related to innovation and intellectual property rights. In that regard, the course will particularly cover licensing on markets for technology as well as networks and network effects.

Learning objectives

·       To acquire an understanding and overview of topics in the management and economics of innovation

·       To be able to demonstrate knowledge of relevant theories by explaining their assumptions, causal dynamics and processes

·       To be able to demonstrate knowledge of the conceptual foundations, frameworks and methods relevant to the study of innovation management and economics

Teaching methods and assessment

Lecture Plan

Session 1: Introduction to the management of innovation (CG)

Literature

·       Anderson, P., & Tushman, M. L. 1990. Technological discontinuities and dominant designs: A cyclical model of technological change. Administrative Science Quarterly, 35 (4): 604-633.

·       Salter, A., & Alexy, O. 2013. The nature of innovation. In: Dogson, M. et al. (eds.), The Oxford Handbook of Innovation Management, Oxford University Press, Oxford: 26-50.

·       Teece, D. (1986). Profiting from technological innovation: implications for integration, collaboration, licensing, and public policy. Research Policy, 15 (6): 285-305

Session 2: Introduction to the economics of innovation (THR)

Literature

·       Scotchmer, S. 2004. Innovation and Incentives, Cambridge, Massachusetts: MIT Press, chapters 2, 4 and 6.

·       Choi, J. P. 2002. A Dynamic Analysis of Licensing: The ‘‘Boomerang'’ Effect and Grant-Back Clauses, International Economic Review, 43: 1468-2354.

·       Laursen, K., S. Moreira, T. Reichstein, and M. I. Leone. 2017. Evading the Boomerang Effect: Using the Grant-Back Clause to Further Generative Appropriability from Technology Licensing Deals. Organization Science, 28: 514-530.

Session 3: Networks, collaboration and alliances (KL)

Literature

·       Mowery, D., Oxley, J., Silverman, B. 1996. Strategic Alliances and Interfirm Knowledge Transfers. Strategic Management Journal, 17 (Winter 96 special issue): 77-91.

·       Ahuja, G. 2000. Collaboration networks, structural holes and innovation: a longitudinal study, Administrative Science Quarterly, 45 (3): 425-455.

·       Tortoriello, M. 2015. The social underpinnings of absorptive capacity: The moderating effects of structural holes on innovation generation based on external knowledge. Strategic Management Journal, 36(4): 586-597.

Background literature:

·       Cohen, W. M., & Levinthal, D. A. 1990. Absorptive capacity: A new perspective of learning and innovation. Administrative Science Quarterly, 35(1): 128-152.

Session 4: Organizational learning (KD)

Literature

·       Thompson, P. 2009. Learning by doing. In: Bronwyn Hall and Nathan Rosenberg (eds.) Handbook of Economics of Technical Change, Elsevier/North-Holland, 2009.

·       Dahlin, K., Chuang, Y. and T. Roulet. 2018. “Opportunity, motivation and ability to learn from failures and errors: Review, synthesis and ways to move forward.” Academy of Management Annals. 12(1): 252-277.

·       Thompson, P. 2001. How much did the liberty ship builders learn? New evidence for an old case study. Journal of Political Economy. 109(11): 103-137.

Background literature

·       Kim, J. and Miner, A. 2007. Vicarous learning from the failure and near-failure of others. Academy of Management Journal, Vol. 50(2), 687-714.

·       Stan, M. and Vermeulen, F. 2013. Selection at the gate: Difficult cases, spillovers, and organizational learning. Organization Science, 24(3), 796-812.

·       March, J. G. 1991. Exploration and Exploitation in Organizational Learning. Organization Science, Vol. 2(1), 71-87.

·       Levinthal, D. A. and March, J. G. 1993. The myopia of learning. Strategic Management Journal, Vol 12,95-112.

Session 5: Innovation and location (MD)

Literature

·       Stuart, T. and O. Sorenson, 2003. The Geography of Opportunity: Spatial Heterogeneity in Founding Rates and the Performance of Biotechnology Firms, Research Policy 32(2), 229-253.

·       Delgado, M., M.E. Porter, and S. Stern, 2010. Clusters and Entrepreneurship, Journal of Economic Geography 10(4), 495-518.

·       Hidalgo, César A., Pierre-Alexandre Balland, Ron Boschma, Mercedes Delgado, Maryann Feldman, Koen Frenken, Edward Glaeser, Canfei He, Dieter F. Kogler, Andrea Morrison, Frank Neffke, David Rigby, Scott Stern, Siqi Zheng, and Shengjun Zhu, 2018. “The Principle of Relatedness,” in AJ. Morales, C. Gershenson, D. Braha, AA. Minai, Y. Bar-Yam (eds.), Proceedings of the IX International Conference on Complex Systems. [Access free copy here]

Background literature

·       Alcacer, J. and M. Delgado ,2016. “Spatial Organization of Firms and Location Choices through the Value Chain,” Management Science 62 (11), 3213–3234.

·       Delgado Mercedes, Michael E. Porter, and Scott Stern, 2016. “Defining Clusters of Related Industries,” Journal of Economic Geography 16 (1), 1–38.

Session 6: Employee mobility (KH)

Literature

·       Choudhury, P. (2022). Geographic Mobility, Immobility, and Geographic Flexibility–A Review and Agenda for Research on the Changing Geography of Work. Academy of Management Annals, 16(1), 258-296.

·       Kacperczyk, A., & Balachandran, C. (2018). Vertical and horizontal wage dispersion and mobility outcomes: Evidence from the Swedish microdata. Organization Science, 29(1), 17-38.

·       Groysberg, B., Lee, L. E., & Nanda, A. (2008). Can they take it with them? The portability of star knowledge workers' performance. Management Science, 54(7), 1213-1230.

·       Stadler, C., Helfat, C. E., & Verona, G. (2022). Transferring knowledge by transferring individuals: Innovative technology use and organizational performance in multiunit firms. Organization Science, 33(1), 253-274.

·       Marx, M., Strumsky, D., Fleming, L. (2009). Mobility, skills, and the Michigan non-compete experiment. Management Science, 55(6), 875-889.

·       Mawdsley, J. K., Somaya, D. (2016). Employee mobility and organizational outcomes: An integrative conceptual framework and research agenda. Journal of Management, 42(1), 85-113.

Session 7: Platform-based innovation and innovation ecosystems (CC)

Literature

·       Rochet J-C, Tirole J. 2006. Two-sided markets: A progress report. Rand Journal of Economics 37: 645-667

·       Cennamo C., Santaló J. 2013. Platform Competition: Strategic Tradeoffs in Platform Markets, Strategic Management Journal, 34: 1331–1350

·       Adner, R., & Kapoor, R. (2010). Value creation in innovation ecosystems: How the structure of technological interdependence affects firm performance in new technology generations. Strategic Management Journal, 31(3), 306–333.

·       Jacobides M, Cennamo C, Gawer A (2018) Toward a theory of ecosystems. Strategic Management Journal. 39(8): 2255–2276.

Session 8: University-industry linkages (MS)

Literature

• Pavitt, K. 1991. What Makes Basic Research Economically Useful? Research Policy, 20: 109-119.
• Agrawal, A., Henderson, R. 2002. Putting Patents in Context: Exploring Knowledge Transfer from MIT. Management Science, 48(1), 44-60.
• Arora, A., Belenzon, S., Sheer, L. 2021. Knowledge spillovers and corporate investment in scientific research. American Economic Review 111(3), 871-898

Session 9: Innovation Project Staging and Real Options Strategies (PH)

Literature

• Dixit, A.K., Pindyck, R.S., 1994. Investment Under Uncertainty. Princeton University Press, Princeton, NJ. Chapter 2
• Bowman, E.H., Hurry, D., 1993. Strategy through the options lens: an integrated view of resource investments and the incremental-choice process. Acad. Manag. Rev. 18, 760–782.
• McGrath, R.G., Nerkar, A., 2004. Real options reasoning and a new look at the R&D investment strategies of pharmaceutical firms. Strateg. Manag. J. 25, 1–21.
• Andries, P., Hünermund, P., 2020. Firm-level effects of staged investments in innovation: The moderating role of resource availability. Research Policy, 49(7).

Session 10: Open approaches to innovation (MP)

Literature

·       Dahlander, L., Gann, D.M. 2010. How open is innovation? Research Policy, 39(6): 699-709.

·       Felin, T., Zenger, R.R. 2014. Closed or open innovation? Problem solving and the governance choice. Research Policy, 43: 914-925.

·       Gambardella, A., Raasch, C., von Hippel, E. 2016. The user innovation paradigm: impacts on markets and welfare. Management Science, 63(5): 1450-1468.

·       Laursen, K., Salter, A. J. 2006. Open for Innovation: The role of openness in explaining innovative performance among UK manufacturing firms. Strategic Management Journal, 27(2): 131-150.

Course schedule

Note: In case we receive more registrations for the course than we have seats, CBS PhD students will have first priority. Remaining seats will be filled on a first come first serve.