One of the world’s greatest experiments in open innovation is mobile wireless. Technology enterprises have invested billions of R&D dollars to develop 2G, 3G, 4G, now 5G, and hopefully 6G soon. Technology developers make investments and look to the patent system and associated regulators to reward them for risky investments, should their patented technologies become included in the standards. In recent years there has been an uptick in the number of technology implementers. But because patents are not self-enforcing, unlicensed use occurs, which is corrosive of the open innovation system that allows non-vertically integrated firms to compete at the device level. This chapter reviews antitrust theories that some implementers have used to avoid paying royalties to patent owners. This is examined in the context of the FRAND licensing regime established by ETSI, a standards development organization. “Hold up” and “hold out” theories are examined. Hold up theories lack empirical support and are misused by some implementers—particularly those in China—who would prefer to free ride on the R&D investments of others. Restoring and revitalizing technology markets for mobile wireless likely requires limits to be placed on the availability of FRAND licenses with respect to recalcitrant technology implementers. Otherwise, the innovation ecosystem will be harmed, and open innovation (that is, licensing) business models will collapse.

Introduction

The previous chapter focused on using the resource-based view (RBV) of strategy to think about talent. One of the key critiques that it made of the talent management perspective was that it overplays the importance of general management and underplays the value of expert knowledge and is antithetical to the RBV that has come to dominate the field of strategy. The RBV is one of the foundational pillars of dynamic capabilities. This chapter builds on the previous arguments, and discusses the management of talent in terms of the dynamic capabilities framework.

In recent decades, expert talent has become more important than ever for the creation and management of technology in the global economy (Albert and Bradley, 1997; Reich, 2002). Many job categories are becoming so complex and interdependent that managing them in a traditional structured hierarchical format is no longer a realistic option. Some decomposition of processes into specialized functional tasks is still necessary, but deep hierarchies are too cumbersome and inflexible.

This chapter asks how competition policy should be shaped if it were to favor Schumpeterian competition over neoclassical static competition. Schumpeterian competition is the kind of competition that is engendered by product and process innovation. Such competition not only brings price competition – it tends to overturn the existing order. A framework that favors dynamic over static competition would put less weight on market share and concentration, and more weight on assessing potential competition and enterprise-level capabilities. Developments in evolutionary economics and the behavioral theory of the firm in recent decades indicate how the machinery of a new framework can be engineered and applied to antitrust.

Introduction

In 1988, in anticipation of the centennial of the Sherman Act, my Berkeley colleagues and I held a conference on campus that led to the 1992 volume titled Antitrust, Innovation, and Competitiveness, with contributions from many of the leading scholars in antitrust law and economics. The conference was designed to alert the law and economics communities to a set of emerging issues on antitrust and innovation. With hindsight, we believe it was a watershed event, and a slow and reluctant awakening to antitrust and innovation issues is now underway.

Introduction

Schumpeter's evolutionary theory of innovation suggests that the “gales of creative destruction” brought about by radical innovation will allow some organizations to gain competitive advantage and result in “… old concerns and established industries … perish[ing] that nevertheless would be able to live on vigorously and usefully if they could weather a particular storm [of this creative destruction]” (Schumpeter, 1942, 90). Although Schumpeter's argument does not specifically identify the organizational locus of the innovation, it does note that “new concerns or industries that introduce new commodities or processes” are likely to displace older industries (Schumpeter, 89).

Radical innovation and its organizational foundations became an important area of study in subsequent academic inquiry on innovation. Many commentators have highlighted the advantage small and de novo firms have over incumbent firms in generating and incubating radical innovations (Foster, 1986; Jewkes et al, 1958; Tilton, 1971; Abernathy & Utterback, 1978; Mitchell, 1989; Henderson & Clark, 1990). This suggests two key research questions.