Rebalancing Competition Policy to Stimulate Innovation and Sustain Growth

Chan Jonathan and Fung Herbert ()
Additional contact information
Chan Jonathan: Competition Commission of Singapore – Business and Economics, 45 Maxwell Road, #09-01 The URA Centre Singapore, 069118, Singapore
Fung Herbert: Competition Commission of Singapore – Business and Economics, 45 Maxwell Road, #09-01 The URA Centre Singapore, 069118, Singapore

Asian Journal of Law and Economics, 2017, vol. 8, issue 1, 29

Abstract: Innovation is fundamental to sustainable economic development because input resources are finite. When an economy faces constraints such as land and labour, innovation fuels continued growth through new technologies that utilises the limited resources more productively. Competition contributes to this process by providing a platform for new technologies to replace old ones, but excessive competition may also dampen the incentives to innovate. Unlike economics literature which typically examines how market structure affects innovation, this paper explores how innovation affects the market structure. We observe that, as innovative businesses are scalable, markets are becoming more concentrated from a static point of view. However, as disruptive innovation takes place in the broader ecosystem of separate but related markets, product life cycles shorten, and these concentrated markets become more competitive from a dynamic point of view. We also find that innovative products often do not conform to existing regulations. In order to unleash the full potential of innovation as a driving force for sustained economic growth, we recommend a rebalancing of competition law and policy towards stronger enforcement against lateral anti-competitive activities versus horizontal and vertical ones. We also recommend more emphasis on dynamic competition analysis versus static ones in regulatory decision-making.

Keywords: antitrust; competition policy; economic development; innovation; sustainable growth (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/ajle-2015-0029 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:ajlecn:v:8:y:2017:i:1:p:29:n:2

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/ajle/html

DOI: 10.1515/ajle-2015-0029

Access Statistics for this article

Asian Journal of Law and Economics is currently edited by Noriyuki Yanagawa

More articles in Asian Journal of Law and Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().