Academic Freedom, Private-Sector Focus and the Process of Innovation

Mathias Dewatripont, Jeremy Stein and Philippe Aghion

No 6234, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop a model that clarifies the respective advantages and disadvantages of academic and private-sector research. Rather than relying on lack of appropriability or spillovers to generate a rationale for academic research, we emphasize control-rights considerations, and argue that the fundamental tradeoff between academia and the private sector is one of creative control versus focus. By serving as a precommitment mechanism that allows scientists to freely pursue their own interests, academia can be indispensable for early-stage research. At the same time, the private sector's ability to direct scientists towards higher-payoff activities makes it more attractive for later-stage research.

Date: 2007-04
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Related works:
Working Paper: Academic Freedom, Private-Sector Focus, and the Process of Innovation (2008)
Working Paper: Academic Freedom, Private-Sector Focus, and the Process of Innovation (2005)
Working Paper: Academic Freedom, Private-Sector Focus, and the Process of Innovation (2005)
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