Publications
Publications
- 2007
- HBS Working Paper Series
How to Capture Value from Innovation: Shaping Intellectual Property and Industry Architecture
By: Gary P. Pisano and David J. Teece
Abstract
In making strategic decisions about how to capture value from innovation, managers often look at two critical domains—the intellectual property environment and the architecture of the industry—as beyond their control. Yet, the intellectual property environment and the architecture of the industry can have profound influences on who wins (and who does not) from innovation. In this paper, we argue that under the right circumstances, these two domains can be shaped by managers in ways that favor one firm over another. By understanding these forces, managers will be in a better position to utilize the full tool kit of available mechanisms (and strategies) to capture value from innovation. Perhaps somewhat surprisingly, we show that more IP protection and building stronger barriers around innovation are not always the best path to capturing value. Paradoxically, innovators can sometimes benefit by weakening the intellectual property environment and opening the architecture of the industry. In this article we explain why and how. We also show how management can shape the architecture of the industry in ways that have consequences for the distribution of profits amongst firms in an industry.
Keywords
Citation
Pisano, Gary P., and David J. Teece. "How to Capture Value from Innovation: Shaping Intellectual Property and Industry Architecture." Harvard Business School Working Paper, No. 08-023, September 2007.