Project ideas and results help extend the state of the art on licensing, innovation and policy under uncertainty by properly accounting for the role of uncertainty, intangibles and flexibility in innovation activity. They underscore that value in innovation as well as business strategy and policy derives from tackling uncertainty in a forward-looking contingent manner and viewing it as an opportunity rather than a threat. Our novel framework allows researchers, firms and policy planners related to innovation to properly account for the role of uncertainty and the range of possible outcomes and staged decisions contingent on future economic scenarios and developments. The project synthesizes and extends ideas from the literature to new domains in innovation activity and economic/public policy.
The areas of intangibles appraisal, innovation management and policy decision making have been at a crossroads. Much has been done, but a lot of gaps remain. This project contributes by (1) using option-based analysis to properly account for the role of uncertainty and the value of flexibility on investment, economic outcomes and innovation activity, and (2) by testing the empirical implications of option-based predictions (e.g. of the role of uncertainty and flexibility) both at the level of the macro-economy (e.g. in terms of investment, productivity, employment and overall economic output), as well as at the firm level using a rich data set on biotech/pharma licensing deals to push the innovation licensing terms design and policy frontier forward.
The experiences, interactions and relationships developed at MIT and LUISS have helped advance the fellow’s career and publication output and opened possibilities for collaboration. In terms of broader impact and implications, the work has the potential to enhance the innovation capability of an organization or the nation and might lead to new market opportunities concerning licensing deals design, as well as strengthen the competitiveness and growth of companies via licensing-in agreements to enhance and complement internally-generated organic growth. As such it may help address industrial and societal needs for a more holistic and collaborative growth and innovation activity. Although the work has the potential to result in exploitable innovation activities, the aim was to provide a conceptual economic framework for understanding and improving innovative activities, rather than to develop prototypes, processes or methods ready to be launched.
The work helps contribute towards European policy objectives and strategies regarding the knowledge economy and Europe’s 2020 Strategy and may have a favourable impact on improving EU economic and innovation policy making, and in particular improving licensing activity and deal term design under conditions of uncertainty. The developed framework might be of value to European enterprises, IP managers, VCs and other funding providers, and EU policy makers as they strive to understand, evaluate and exploit innovation investments, growth and policy options. The results on value sharing and design of licencing deal terms in the biomedical sciences should be of interest to pharmaceuticals (potential licensees) and innovating biotech firms (licensors).
The results were disseminated to the King's and London communities through a public Workshop on Innovation and Public Policy organized at King's on 26 June 2019 with presentation of the project results on licensing and innovation by the researcher and another 16 presentations by international speakers on topics related to innovation and public policy as well as a panel discussion on Innovation and Public Policy the following day.
