This book presents a new theory of what happens at the very early stages of innovation. It describes how a new technology is transformed into an entrepreneurial opportunity and becomes the origin of economic growth. The surprising answer is cooperation. The origin of innovation begins in the commons.

• Foreword - Against Prometheus


• Acknowledgements


• Chapter 1 We innovate together


• Introduction


• 1.1 The origin of innovation


• 1.2 The commons in the innovation commons


• What is a commons?


• An innovation commons is a knowledge commons


• Common-pooling and peer-production in an innovation commons


• 1.3 Clunkers and Homebrew


• 1.4 The Republic of Letters


• 1.5 Why groups, why cooperation, why open?


• Overview of book


• Chapter 2 The innovation problem


• Introduction


• 2.1 Trade and new knowledge explain growth


• 2.2 The innovation problem as economic problem


• The Schumpeter-Nelson-Arrow version of the innovation problem


• The Hayek version of the innovation problem


• 2.3 The origin of the innovation trajectory


• 2.4 The economic problem of innovation


• 2.5 Innovation problem is a collective action problem


• 2.6 Innovation happens in groups


• Discovery failure


• Discovery costs


• Conclusion


• Chapter 3 Innovation is a knowledge problem


• Introduction


• 3.1 Innovation problem I - Social contract problem (McCloskey)


• 3.2 Innovation problem II - Distributed knowledge problem (Hayek)


• 3.3 Innovation problem III - Idiosyncratic risk (Williamson)


• 3.4 Innovation problem IV - Rules for cooperation (Ostrom)


• Conclusion


• Chapter 4 Four theories of the innovation commons


• Introduction


• 4.1 Two commons


• 4.2 Evolution of cooperation


• 4.3 Defense against enclosure


• 4.4 Institutional uncertainty


• Conclusion


• Chapter 5 Origin of the innovation trajectory


• Introduction


• 5.1 The zero-th phase of the innovation trajectory


• 5.2 The fundamental transformation


• 5.3 The Proto-Entrepreneur, the Dual-Discovery Problem, and the Two Commons Solution


• The Proto-Entrepreneur seeks Non-Price Information


• The Proto-Entrepreneur faces a Dual Discovery Problem


• The Two Commons Solution


• 5.4 Modelling the innovation commons


• 5.5 The innovation commons in institutional space


• 5.6 The innovation commons as higher-order discovery


• Conclusion


• Chapter 6 Rules of the Innovation commons


• Introduction


• 6.1 Cooperation behind the veil of ignorance


• 6.2 An emergent social order


• 6.3 The use of society in knowledge


• 6.4 Problems the innovation commons must solve


• Identity, Cooperation, Consent, Monitoring, Punishment and conflict, Independence, Economic problems the rules must solve


• 6.5 Origin of rules


• 6.6 Core Design Principles


• 6.7 Can evolution explain the innovation commons?


• Evolution of cooperation


• Evolution of cooperation in the commons


• Is cooperation for innovation the institutional equivalent of war?


• The innovation commons as higher-order discovery


• Conclusion - We innovate together


• Chapter 7 Lifecycle of an innovation commons


• Introduction


• 7.1 Institutions of collective innovation


• Institutional varieties of collective innovation


• Institutional transformations over an innovation trajectory


• 7.2 Origin of industry


• 7.3 The standard model of industry associations


• 7.4 A new model of industry associations; private governance for discovery of public goods


• 7.5 Industry associations construct niches


• 7.6 The demic phase of industry associations


• Conclusion


• Chapter 8 Theory of Innovation Policy


• Introduction


• 8.1 The innovation commons critique of modern innovation policy


• Theory of innovation policy


• Mechanisms of innovation policy


• Critique of Innovation Policy


• Political economy of innovation policy


• Rules as policy


• Innovation policy as a public and private goods problem


• Innovation Policy and its discontents, a summary


• 8.2 Discovery Failure


• 8.3 Efficient Institutions of Innovation Policy


• The Comparative Institutional Approach


• The low social costs (and high private benefits) of innovation commons


• 8.4 New innovation policy


• Diagnosing the innovation problem


• Benefits to groups, regions, nations, and the world


• This comes from civil society


• The innovation economy cannot be planned


• Conclusion


• Chapter 9 Inclusive Innovation Policy


• Introduction


• 9.1 Two types of innovation policy


• 9.2 Innovation seen and unseen


• 9.3 Against innovation: theory


• 9.4 A better approach to innovation policy


• 9.5 Inclusive innovation: A new social contract


• Chapter 10 Conclusion


• 10.1 The institutional origin of innovation


• 10.2 Implications for economic theory


• 10.3 The innovation sharing economy


• References


• Index


• Figures and Tables


• Figure 1.1 Economic goods


• Figure 2.1 The innovation commons as the zero-th phase of an innovation trajectory


• Figure 3.1 Market (choice) versus governance (contracting) models of innovation economics


• Figure 3.2 Comparative institutions of innovation contracting


• Figure 7.1 Public and private ordering definitions of industry


• Figure 8.1 The Institutional Possibility Frontier (source Djankov et al 2003)


• Figure 8.2 Institutional possibilities of innovation policy


• Figure 9.1 Two innovation policy approaches


• Figure 9.2 Why friends of innovation prefer to engage government


• Table 2.1 The innovation problem as market failure vs collective action


• Table 2.2 Transformation costs, transaction costs and discovery costs


• Table 2.3 Taxonomy of discovery costs


• Table 6.1 Design rules


• Table 7.1 Institutional varieties of Collective Innovation


• Table 8.1 Innovation policy ranged between private and public instruments.

Professor of Economics, School of Economics, Finance & Marketing, RMIT University, Melbourne, Australia