Research objectives and content
The prevalent conception of technology policy has long been centered on the traditional market failure approach, relying on the assumptions developed within the micro-economics of information which emergence dates back to the early 1960s. According to that conception, the innovation process was conceived as yielding information which could not be appropriated fully by the innovator: the feature of innovative activity that most clearly sets it apart from other strategic investments made by firms-such as capacity expansion-was supposed to be the problem of appropriability. Indeed, information (i.e. the output of innovative activity) has long been seen as the quintessential public good, meaning that it is non-rival-its use by one agent does not preclude its use by another-and non-excludable-the producer of new knowledge cannot prevent non-payers from using it. As a consequence, within that framework, the returns which innovators realize from their efforts can often bear little relation to the commercial success of the new products or processes which they introduce, and this can severely undermine incentives to do R&D. The objective of policy makers was then to overcome those failures of the competitive system by subsidizing firms or even by substituting for private actors in the course of innovative activity.