The case for governmental support

Some of the measures just described, such as support for need information sites, could benefit from governmental support. But why should government pay any attention to ameliorating a diffusion failure afflicting only the free innovation paradigm? Most fundamentally the answer is that, as will be explained in the next chapter, the diffusion and adoption of free innovation designs by those who benefit from them increases social welfare. With rare exceptions, such as the design of dangerous goods, society benefits if designs are public goods, available to anyone to use or study for free. Increased social welfare is, of course, the fundamental justification for governmental interventions in general (Machlup and Penrose 1950; Nelson 1959; Arrow 1962).

By analogy, governments today invest to cure and offset defects afflicting the producer innovation paradigm, notably by creating and supporting elaborate and very expensive intellectual property rights systems. They justify these investments and policies in terms of expected increases in social welfare. Investments in the free innovation paradigm under the same justification would only level the playing field.

< Prev   CONTENTS   Source   Next >