In the simplest model of innovation, the same firm does the initial R&D investment and pushes the technology right through to the product market. However, in a world in which transactions are increasingly taking place across national borders, the innovation supply chain has become more fragmented.
This event examines the effect of the relational context in which transactions for immature technology occur on the chance that negotiations to transact immature technology succeed. Relational context (the way parties to a transaction met: whether they were former colleagues, met through a friend, or some sort of professional network or association) tells us something about the trust (and other social institutions) that underpin the transaction. It has been found that the prior depth of the relationship and circumstantial knowledge about each other matters a lot. The chance that parties who know each other from previous business will conclude a transaction is 60 percentage points higher than for those who met through a cold call.
Elizabeth Webster is the Director of the Intellectual Property Research Institute of Australia (IPRIA) and Professorial Fellow, Melbourne Institute of Applied Economics and Social Research at the University of Melbourne. She has a PhD (economics) from the University of Cambridge and economics degrees from Monash University.
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