Question 1

Property rights in innovation mainly include; patents, trademarks, and copyright.

Accepted Answer

Property rights in innovation refer to the legal rights granted to inventors, creators, and businesses for their innovations. The three main types of property rights in innovation are patents, trademarks, and copyright.

Question 2

Those firms who spend more on research and development are nearly always more successful at making profit from innovation.

Accepted Answer

While firms that invest in research and development (R&D) have the potential to innovate and thus gain competitive advantages, higher R&D spending does not guarantee more profit from innovation. Success depends on various factors including market demand, the effectiveness of the R&D process, and the ability to commercialize innovations.

Question 3

The main factors in determining whether the innovator can make a good profit from an innovation are luck, and good timing.

Accepted Answer

While luck and timing can certainly play a role in the success of an innovation, there are many other factors that contribute to profitability such as the quality of the innovation itself, the strength of the market demand, the level of competition, and the ability to effectively market and distribute the innovation. Therefore, while luck and timing can be important factors, they are not the only ones in determining profitability.

Question 4

One major factor to first-mover advantage is how quickly and easily an innovation can be copied.

Accepted Answer

If an innovation can be copied quickly and easily, then the first-mover advantage may be short-lived. Competitors can quickly catch up and offer similar products or services. This is why companies often try to maintain their advantage by continually innovating and improving their offerings.

Question 5

Which exploitation strategy is best for an innovation depends entirely on whether the innovator prefers to licence out the underlying patent or copyright.

Accepted Answer

The best exploitation strategy for an innovation depends on various factors such as the nature of the innovation, target market, competition, resources available, and the strategic goals of the innovator. The decision to license out a patent or copyright is just one of the many possible strategies that an innovator can adopt. Other strategies include manufacturing and selling the innovation, offering it as a service, partnering with other companies, or using the innovation to enter new markets or create new products.

Question 6

The potential to make a profit from an innovation is greatly enhanced if a rival would need 2 or 3 years to copy it.

Accepted Answer

If a rival would need 2 or 3 years to copy an innovation, it gives the original innovator a significant head start in the market and the ability to establish brand recognition, customer loyalty, and distribution channels. This can lead to a larger market share and higher profits, as competitors struggle to catch up.

Question 7

An innovation which comes to dominate the market does NOT always lead to superior profits for the innovator.

Accepted Answer

Dominating the market does not necessarily mean that the innovator will have superior profits. Competition, imitation, and other factors can affect profitability in the long run.

Question 8

An innovation is more likely to diffuse more quickly throughout an industry if it is perceived as worth imitating by competitors.

Accepted Answer

Competitors are more likely to adopt an innovation if they perceive it as valuable and having the potential to improve their business or gain a competitive advantage. This perceived value and potential for gain motivates quick diffusion throughout the industry.

Question 9

Most inventions are based on new technology.

Accepted Answer

Many inventions are improvements or new applications of existing technology rather than being based on entirely new technology.

Question 10

Only digital technology is of interest outside of the science-based industries.

Accepted Answer

Digital technology is of interest not only in science-based industries but in various other industries like marketing, entertainment, education, ecommerce, and many more.

Question 11

Regarding innovations, complementary resources are all the other things apart from the invention or idea necessary to achieve commercial success.

Accepted Answer

Complementary resources include things like funding, marketing, manufacturing capabilities, distribution channels, and intellectual property protection that are needed to turn an invention or idea into a successful product or service in the market.

Question 12

Having a patent is NOT much use if a rival is expert enough to quickly come up with an alternative way to achieve the same thing.

Accepted Answer

This is true because a patent only provides legal protection for a specific way of achieving something, and if a competitor can find a different way to achieve the same thing, they are still allowed to market their product or service without infringing on the original patent. Therefore, being able to quickly come up with an alternative method can neutralize the advantage of having a patent.

Question 13

Companies that own industry standards earn about the same returns as those companies with other competitive advantages.

Accepted Answer

Companies that own industry standards often earn higher returns than those with other competitive advantages because they can set the rules of the game in their favor, leading to increased market share, pricing power, and barriers to entry for competitors.

Question 14

Innovation must involve the attempted commercialisation of a new invention, or new idea.

Accepted Answer

Innovation involves not only the creation of new ideas or inventions but also their implementation and commercialisation to bring about economic and social value. Without attempted commercialisation, an idea or invention remains simply an invention, not an innovation.

Question 15

Close co-operation with a major potential customer during innovation development is inadvisable, in case they copy the innovation themselves.

Accepted Answer

Close co-operation with a major potential customer during innovation development can actually be beneficial as it can provide valuable insights and feedback on the product, leading to a better final product. However, it is important to have a non-disclosure agreement (NDA) in place to protect the innovation from being copied.

Question 16

A major constraint for start-up innovators is that they are unlikely to possess sufficient complementary resources for exploiting their innovation.

Accepted Answer

Start-up innovators often lack complementary resources such as funding, expertise, and networks, which can limit their ability to fully exploit their innovation.

Question 17

The "regime of appropriability" refers to the extent to which the innovator can appropriate value i.e., make a profit.

Accepted Answer

The "regime of appropriability" does refer to the extent to which the innovator can appropriate value i.e., make a profit. This concept is important in understanding the incentives for innovation and the ability of innovators to protect and profit from their ideas.

Question 18

If a firm or a person secures a patent, then commercial success is assured.

Accepted Answer

Securing a patent does not guarantee commercial success. While a patent provides legal protection and exclusive rights to the invention, commercial success also depends on factors such as market demand, pricing, competition, marketing, and distribution. Companies still need to invest time and resources into research, development, and commercialization efforts to effectively bring the invention to market and generate revenue.

Question 19

Technology is NOT very important to established, mature industries.

Accepted Answer

Technology can bring significant improvements and efficiencies to established, mature industries, allowing them to remain competitive and adapt to changing customer demands. Industries that fail to embrace technology risk falling behind their competitors and losing market share.

Question 20

The risk of failure of an innovation is a combination of technological risk and market risk.

Accepted Answer

The success of an innovation depends on both technological and market factors. Technological risk pertains to the uncertainty in the feasibility and reliability of the technology being used, while market risk refers to the uncertainty in market demand, competition, and profitability. Together, these two factors contribute to the overall risk of failure for an innovation.

Quiz 6: Technology-Based Industries and the Management of Innovation