Japanese Economic Policies and Growth: Implications for Businesses in Canada and North America

By Masao Nakamura; Iian Vertinsky | Go to book overview

4
The Role of Government Technology Policy

Introduction

Without government intervention, market failure in the sale of technologies can occur, since technologies often can be simply appropriated. This is why it is customary for governments to try to protect the property rights of the original developers of technical knowledge through patents or copyrights. The protection of property rights is considered essential in order to avoid under-investment by the private sector in research and development. Yet, in practice the full protection of an original developer's property rights is not possible. Hence it is possible that aggregate investment in R&D by private firms is less than the level that is socially desirable. Further government intervention, beyond patent and copyright protection, may be called for to overcome this type of market failure.

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