The Economics of Innovation (L&E)

Course Outline

It is widely believed that innovation is the key driver behind economic growth in developed economies, and even more so in Western Europe, Japan and the US. All three economic areas are short of natural resources and their most important good is human capital, e.g. well educated labor force that creates innovations which can be sold on world markets.

Economic policy sets the incentive structure for research and innovation, be it via intellectual property rights (e.g. patents and trademarks), the introduction of new technological standards, or direct public subsidies to promising innovative firms.This course discusses the economics behind these policies and offers answers to questions like:

  • How can innovation be protected?
  • To what extent does competition matter for innovation?
  • What type of incentives does public policy create for innovation?
  • How can firms use intellectual property rights as business strategy devices?

Target Group

This course is aimed at graduate students of management and economics who plan to work in academia, in high technology firms, or in institutions that cooperate with or finance innovative firms.

Course Readings

The main text for the class is:

Scotchmer, S. 2006. Innovation and Incentives, Cambridge, MA: MIT Press.

Additional readings can be announced during the progress of the course.

Course Format

  Time Room
Lecture (Tuesdays) 10:15 - 12:00 KOL-G-204
Tutorials (Wednesdays) 10:15 - 12:00 KO2-F-174



This semester there will be no take-home exercises; only a written exam. The written exam is on June, 19, 2018, 10:15 h.