The Palgrave Encyclopedia of Strategic Management

2018 Edition
| Editors: Mie Augier, David J. Teece

Profiting from Innovation

Reference work entry


Profiting from  innovation is a theory that accounts for marketplace outcomes between innovators and follow-on rivals. Almost all innovations require complementary investments. The weaker the  appropriability regime applicable to an innovation, and the weaker the market position of the innovator with respect to providers of complements, the harder it will be for the innovator to build a long-term advantage without pursuing corrective measures such as vertical integration. The timing of commercialization is also important because the earlier in the lifecycle of the industry an entry is made, the more financial resources will be required to survive.

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  1. 1.Berkeley Research Group, LLCEmeryvilleUSA
  2. 2.Haas School of Business, University of California, BerkeleyBerkeleyUSA