Economics of innovation: introduction

This course is an introduction to the economic understanding of innovation. It takes the perspective of the firm and deals with the economic incentives and economic consequences of activities aimed at developing new products and services. Every week, students work in teams to prepare a short presentation on real-life cases.These presentations are graded weekly by teachers and by peer review.When the weekly grades are more than 2 points apart (on a 1 – 10 scale), the grades will both be reconsidered and possibly adjusted.

The course introduces the view of the innovating firm as being the bridge between science and market, translating scientific and technical advances (inventions) into new products and services (innovations). Firms do not operate in isolation, but are influenced by their external environment including suppliers, users, government, universities, and even more stakeholders. The course will move from the analysis of the firm to the analysis of the sector in which it operates, and further to the national *system.*The course will tackle questions like: how do firms/sectors/countries differ in their innovation patterns?

The course will cover the following topics:

• Basics of innovation: key definitions for the economic understanding of innovation
• The role of firms and markets: issues related to competition and innovation in markets
• Intellectual Property Rights: basics of what IPR systems, their economic function and how IPRs are used to protect innovation by firms
• Recognizing innovation: recognizing different types of innovation and measuring them with quantitative indicators
• Innovation systems: basics of the concept of national innovation systems
• The economic impact of the diffusion of innovation: private vs social returns and the effect on labor markets.

After completion of the course, the student:

1. Has knowledge of and insight into the core concepts, theoretical frameworks and methodologies of economics of innovation.
2. Understands the main economic concepts that describe the innovation process
3. Is able to apply innovation theories to interpret differences in innovation patterns across firms, sectors and countries
4. Is able to identify indicators to compare in a quantitative manner the innovative performance of firms, sectors and countries

You must meet the following requirements

• Registered for a degree programme other than
• HBO-TOP Applied Physics, Pre-Master

• The Economics of Innovation: an introduction, by GMP Swann (2009)
• Additional material