Tom Nicholas

William J. Abernathy Professor of Business Administration

Tom Nicholas is a Professor in the Entrepreneurial Management Group of Harvard Business School. He holds a doctorate in Economic History from Oxford University. Prior to joining HBS, he taught Technology Strategy at MIT's Sloan School of Management and technology and finance courses at the London School of Economics. He was also an economics consultant in San Francisco where he performed economic analysis for environmental and antitrust litigation including Sun Microsystems v. Microsoft. At HBS he has taught the first year course, The Entrepreneurial Manager, and he currently teaches in Executive Education programs on entrepreneurship and intellectual property as well as two second year elective courses: The Coming of Managerial Capitalism, which examines entrepreneurship, innovation and business development in the United States over the past 230 years; and Venture Capital in Historical Perspective (with Felda Hardymon), which focuses on the changing organizational structure of the venture capital industry and its impact on entrepreneurship and innovation over time. He has received theFaculty Teaching Award in both the Required Curriculum and the Elective Curriculum and the Charles M. Williams Award for teaching excellence.

His research focuses on the historical foundations of entrepreneurship and wealth accumulation in Europe, and on the organizational structure and incentives for innovation in late nineteenth and early twentieth century America, Britain and Japan. His work shows how the foundations of new technology formation across countries can only be understood by examining the coexistence of large corporations, formal R&D establishments and independent inventors operating outside the boundaries of firms. It also highlights that alternative mechanisms to patents—specifically prizes—can exert a powerful influence on the rate and direction of technological change. He has also constructed historical real estate price indices for Manhattan from the 1890s through to the Great Depression in order to understand the relationship between real estate and stock market cycles.​

  1. The Organization of Enterprise in Japan

    Recent research indicates that the joint stock corporation was not a superior form of business organization in many countries during the nineteenth and twentieth centuries. In Japan, by contrast, it appears to have played a more prominent role. When the Civil Code was adopted in 1896 around 5,000 registered enterprises existed but by 1939 there were over 88,000. Approximately half were joint stock firms and these outperformed limited and unlimited partnerships on a return on equity basis, while also accounting for most of the aggregate profits. When the private limited liability company was introduced in 1938 it became immediately popular, but it did not displace the joint stock form.
  2. Are Patents Creative or Destructive?

    Current debate over patent aggregation has led to renewed interest in the long standing question concerning whether patents are a creative or a destructive influence on the process of technological development. In this paper I examine the basic patent tradeoff between incentives and monopoly distortions in light of recent contributions to the literature. I outline where patents can function effectively, where they can be damaging and where additional complementary mechanisms to spur innovation may be appropriate.
  3. Technology, Innovation and Economic Growth in Britain Since 1870

    This paper examines technological change in Britain over the last 140 years. It analyzes the effects of patent laws and innovation prizes that were designed to promote technical progress. It explores the challenge associated with the changing organizational structure of innovation and the shift from independent invention to R&D activity taking place inside the boundaries of firms. And it also studies the development of British industrial science in universities and efforts to promote innovation through the formation of industry clusters. Overall, the evidence supports the traditional story of British failure in generating large payoffs from technological development. Although from the early 1970s Britain experienced a revival in the quality of innovation and improved productivity growth, structural weaknesses in the commercialization environment still remain.