What drives innovation? How does it contribute to the growth of firms, industries, and economies? And do intellectual property rights help or hurt innovation and growth? Uniquely combining microeconomics, macroeconomics, and theory with empirical analysis drawn from the United States and Europe, this book introduces graduate students and advanced undergraduates to the complex process of innovation. By addressing all the major dimensions of innovation in a single text, Christine Greenhalgh and Mark Rogers are able to show how outcomes at the microlevel feed through to the macro-outcomes that in turn determine personal incomes and job opportunities.

In four sections, this textbook comprehensively addresses the nature of innovation and intellectual property, the microeconomics and macroeconomics of innovation, and economic policy at the firm and macroeconomic levels. Among the topics fully explored are the role of intellectual property in creating incentives to innovate; the social returns of innovation; the creation and destruction of jobs by innovation; whether more or fewer intellectual property rights would give firms better incentives to innovate; and the contentious issues surrounding international treaties on intellectual property.

Clearly organized and highly readable, the book is designed to be accessible to readers without advanced economics backgrounds. Most technical materials appear in boxed inserts and appendixes, and numerous graphs and tables elucidate abstract concepts.

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• Provides a comprehensive overview of the economic causes and effects of innovation
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• Covers microeconomics, macroeconomics, theoretical and empirical analysis, and policy
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• Includes up-to-date coverage of trends and policy in intellectual property and research and development
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• Features mathematics appendix and keywords and questions to assist learning and teaching
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• Outline lecture slides are available online
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This book is about understanding the complex process of innovation and how this leads to economic growth. The term “intellectual property” is also in the title since its role is central to many issues surrounding the incentives to innovate. The sustained economic growth of what are now the leading economies is the most dominant and important feature of world economic history. This sustained economic growth has changed the lives of billions of people, both those in the successful countries and those in poor countries. Economic growth allows the provision of more goods and services per capita. These can be so-called merit goods, such as housing, education, and health care, or they can be cars, air travel, and military equipment. High rates of economic growth often underpin changes in political power, as well as creating social change and allowing governments to pursue social policies. In short, economic growth matters. This means that we are acutely interested in understanding when and how innovation creates economic growth and whether intellectual property rights help or hinder the process.

Who Is This Book For?

This book is aimed at a number of potential audiences. The key audience is undergraduate or graduate students taking courses on the economics of innovation, intellectual property, or economic growth. The style of the book is “textbook,” in the sense that we strive to explain issues clearly, building from the basics upward, and each chapter has discussion questions on which to base student assignments. In some chapters we assume that readers have a basic knowledge of maths and microeconomics. Even so, there is a mathematical appendix to allow students to recap on core concepts. However, the book is different from some economics textbooks since it discusses in detail empirical analysis, historical aspects, and policy issues, as well as economic theory. This, we feel, is vital to an understanding of innovation, intellectual property, and growth. This also means that the book is useful to economists, researchers, and policy makers who want an accessible overview of economic aspects of innovation, intellectual property, and economic growth. It also means . . .