Nature and dynamics of appropriability: strategies for appropriating returns on innovation

Abstract

The appropriability regime represents a combination of available and effective means of protecting intangibles and innovations, their profitability, and the increased rents due to research and development. It has a central role in appropriating returns on investment, but the nature of appropriability and the strategies for appropriation may not be fully known to managers, or even to researchers. The aim in this study, therefore, is to categorise the appropriability regime by extending, combining and complementing previous research. We also conducted a survey among 299 companies in order to determine the roles, availability, strength and efficiency of appropriability mechanisms. Such mechanisms offer institutional protection in the form of intellectual property rights, contracts and labour legislation, tacitness of knowledge, lead‐time, practical secrecy and human‐resource management. As a result, we suggest a conceptual clarification of the appropriability regime, and offer empirical evidence to increase understanding of the appropriation of returns on innovation.