Abstract
The Management of Innovation presents an accessible and jargon-free synthesis of the practical and strategic managerial implications of modern innovation economics, with particular focus on intellectual property. The book presents the material elegantly, with intuitive explanations and straightforward narratives of events. It is also a well-planned book. Each chapter stands on its own, and the book is beautifully written overall.
Who is the audience? The book contains a tremendous amount of digestible material suitable for undergraduate and MBA courses. Though the primary audience is students, the book could also educate an intelligent reader who is not well versed in the subject. For example, it could benefit engineers who need a rapid introduction to the basic vocabulary of intellectual property strategy and invention economics. Doctoral students could also read it to learn the basics that they have been too embarrassed to ask about.
Every chapter provides a synthesis of fundamental economic insight, relevant institutional practices, and numerous pragmatic implications for strategic priorities. Most of the insights reflect wisdom learned from economic reasoning and, one might guess, from numerous teaching sessions that helped Galasso to refine the explanations. The narratives draw from a range of examples, with pharmaceuticals and biotech receiving as much attention as software and electronic commerce do. The stories and occasional statistics effectively convey the points, and the numbers and algebra are never overwhelming.
The book is divided into two parts. The first part provides an overview of patenting, interspersed with numerous insights on how to manage intellectual property effectively. This half of the book offers an accessible entry into many topics: how a firm obtains patents, why firms use them, and how the patent system works. It also provides some practical insights into patent strategy, including when it is beneficial to defend a patent and sue another holder and when it is advantageous to abandon the effort. It also provides some details on how to use patents to construct a technology landscape, i.e., a map of the technology frontier in an industry.
The first part introduces various other facets of intellectual property strategy, including the use of copyright and trademark. It also presents an overview of practices in open source. It covers the basics in all of these topics. While none of Galasso’s analyses will become irrelevant tomorrow, the prominence of artificial intelligence in conversations about intellectual property will present challenges in the classroom. Instructors who wish to present practices relevant to AI should expect to supplement the material with new information on the areas of copyright and open source, such as Lutes (2025).
The second part of the book, labeled “Technology Creation,” provides an overview of useful implications of the economics of invention. This part discusses various ways of thinking about the drivers of inventions within and outside a profit-oriented firm. It first covers prizes and crowdsourcing. It then reviews fundamental insights about incentives and delves into the role of ecosystems, with a primary focus on why some geographic locations tend to generate more inventions. It concludes with a focus on safety during product innovation, a topic that is quite novel for books about invention.
No book can cover every topic, and in this case, instructors may need to supplement to suit their own needs and tastes. For example, the discussion of open source and crowdsourcing covers the basics of General Public Licenses but not the many inventive ways that online firms use Creative Commons to support user-generated content. The discussions about intellectual property strategy do not fully develop the implications for governing a platform or working with one, such as Amazon, Apple, Android, or Etsy. The book also skirts the use of intellectual property in product development, such as prototyping a minimal viable product around existing intellectual property.
Some personnel issues also receive limited attention, such as the pros and cons of organizational policies for researchers who want to publish in scientific journals. In prior decades, such policies accounted for the connection between scientific personnel at pharmaceutical firms and academic scientific communities, which ultimately shapes firm performance (Cockburn & Henderson, 1998). As another example from recent experience, it is well known that, with only a few exceptions, Google allows its researchers to publish articles in conferences and journals, while Apple never permits it. What are the consequences of that policy for research and development, personnel policies, and intellectual property strategies?
I absolutely recommend this book. It covers a range of essential topics and explains various strategic tools for effectively managing new technologies. These topics and tools are often neglected by entrepreneurs, corporate managers, and policymakers. The book’s graceful presentation of these subjects stands out, along with its great potential to elevate conversation on its topics.
