Innovation is among the most important topics in understanding economic sustained economic growth. Jason Potts argues that the initial stages of innovation require cooperation under uncertainty and draws from insights on the solving of commons problems to shed light on policies and conditions conducive to the creation of new firms and industries. The problems of innovation commons are overcome, Potts shows, when there are governance institutions that incentivize cooperation, thereby facilitating the pooling of distributed information, knowledge, and other inputs. The entrepreneurial discovery of an economic opportunity is thus an emergent institution resulting from the formation of a cooperative group, under conditions of extreme uncertainty, working toward the mutual purpose of opportunity discovery about a nascent technology or new idea. Among the problems commons address are those of the identity; cooperation; consent; monitoring; punishment; and independence. A commons is efficient compared to the creation of alternative economic institutions that involve extensive contracting and networks, private property rights and price signals, or public goods (i.e. firms, markets, and governments). In other words, the origin of innovation is not entrepreneurial action per se, but the creation of a common pool resource from which entrepreneurs can discover opportunities. Potts' framework draws on the evolutionary theory of cooperation and institutional theory of the commons. It also has important implications for understanding the origin of firms and industries, and for the design of innovation policy. Beginning with a discussion of problems of knowledge and coordination as well as their implications for common pool environments, the book then explores instances of innovation commons and the lifecycle of innovation, including increased institutionalization and rigidness. Potts also discusses the possible implications of the commons framework for policies to sustain innovation dynamics.

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

Reviews
The way in which he explains the emergence of new industries by integrating the topic of innovation with a theory of social cooperation structured by rules is masterful. * Erwin Dekker, Journal of Cultural Economics *
Everyone agrees that innovation drives the transformation of modern economies. But Jason Potts will ruffle feathers with his fascinating and well-researched account of the origins of innovation itself. Against the statist left he points to the limits of state-led innovation. Against the individualist right, he argues that innovation begins not by heroic individuals alone, but by institutions that govern the cooperative pooling of innovation resources and the coordination of dispersed knowledge. This is a highly innovative account of the sources of innovation, which should be read by everyone working in this field. * Geoffrey M. Hodgson, Professor in Management, Loughborough University London *
In this beautifully-written and well-argued book, Potts shows how cooperation and networking are essential to innovation and economic growth. He rightly defines technological change as a social process,and demonstrates how collective action problems involving innovation can be overcome by institutions. Relying on both economic history and theory, his book provides a convincing account based on a fusion of the new institutional economics and the economics of innovation. Highly recommended to all social scientists interested in technological change. * Joel Mokyr, Northwestern University, Author of A Culture of Growth (2016) *
Jason Potts` Innovation Commons is a trailblazing contribution to economics. The new theory presented in the lucidly written book holds that innovation begins with an institutional solution to the problem of knowledge pooling and cooperation under uncertainty, eschewing the old view of a heroic entrepreneur. Potts imagination and erudition are deeply impressive. The book not only leaves far behind the conventional wisdom of neoclassical growth theory but also clears the ground for the next generation of evolutionary economists. Shedding light on the eminently social nature of the causes of economic evolution the book leads to a new understanding of the origin of firms and industries, and of the possibilities to design innovation policy. This book will prove invaluable in advancing economic theory in the age of an increasingly more complex digital economy. * Kurt Dopfer, University of St.Gallen, Switzerland *



Book Information
ISBN 9780190937508
Author Jason Potts
Format Paperback
Page Count 280
Imprint Oxford University Press Inc
Publisher Oxford University Press Inc
Weight(grams) 386g
Dimensions(mm) 155mm * 231mm * 20mm