Question

1.What is a 'technology dead end’? Why are technology dead ends important for economic growth? Illustrate with an example. Hint: Easterly (2002) talks about all this in ch. 9.

2.In your opinion, does intellectual property (i.e. temporary ownership of ideas) incentivize the creation of more new ideas or does it lower the rate of subsequent innovation and creative expression? Explain briefly how or why. Gilbert (2011) may help you think about this.

Answer 1

1. Technological dead end, is some innovations come along with great expectations and end up being not. Dead ends are where an innovation turns out to be the basis of future competition but doesn't end well or benefit the early entrant. It will sometimes reduce the benefits or even lead to dead ends. Such innovations will lead to competition in the future but make the early entrant's product irrelevant. The studies of William Easterly showed that the dead weight of old technologies is one reason for the limited benefits for new technologies. It has been analyzed that the slowdown in growth in the US and most of the industrialized countries in the world is due to the exhaustion of existing technologies without approaching the newer technologies. When a new innovation is introduced, in some economies it may have bad luck to implement technologies that don't have much innovation potential. But it is important to learn from past failures and chose the paths that will lead to many benefits in the future.

One of the main examples of technology dead-end is the case of Blackberry. In the early 2000s, Blackberry was considered as an essential business gadget among the business community. They were prisoners in introducing the BBM messenger and fast email access. Their screens and the fully functional keyboards added to its brand label. A key reason that was considered as the failure of blackberry was its ignore to shift to newer technologies like the shift from the qwerty keypad to the touchpad. There was competition for the blackberry and on 9th 2007, steve jobs announced the iPhone and it was a revolution. Blackberry was the apple of today but due to its ignorance and lack of adaptation to further innovation met the dead-end of technology and had to exit the market.

2. Intellectual property rights, as defines by the World Intellectual Forum, is the creation of innovations, literary, artistic works, designs, symbols, names, and images used in commerce. It's divided into three categories namely patents for invention, copyrights for literary and artistic works, and trademarks for logo and brands. The underlying aim of these intellectual property rights is the ownership of the innovations of the creation and have the right to use them for monetary benefits.

According to my opinion, intellectual property rights has both a positive and negative effect on the creation of the idea. The positive side being, the IP rights helps in the sole ownership of his/her creation and can use it for monetary benefits. The hard work of the innovator is appreciated and incentivized. This gives an incentive to bring up more innovation and ideas which will lead to economic betterment. At the same time, the protection of IP is very difficult. The terms and conditions of the ownership of IP are difficult to define and hinders the creative aspirations of the innovators.