Innovation is now a key element in business strategy, especially for large groups. Indeed, in theory, it allows them to gain a significant competitive advantage in the form of a temporary monopoly on a given market. However, innovation is expensive, and firms may be reluctant to invest heavily in research and development, for uncertain results. Conversely, it may seem more tempting to simply imitate the innovative firms, and reap the benefits of innovation without bearing the financial burden. Yet, while innovation generally has a very positive connotation in all walks of life, imitation is still rather poorly received.
We chose to develop three aspects of the problem of imitation and innovation: -the barriers to imitation and their limitations: the role of patents; the adaptation and adoption of imitations emplacement; and the innovative firms and their imitators.
Firstly, the challenge of innovation and the fight against imitation is inseparable from the concept of intellectual property protection. Indeed, the existing patent system in most industrialized countries does not seem to be completely effective protection against imitation. Therefore, in the first part, we will study the role played by patents in the process of limiting innovation, but also their limitations. We will develop in particular the example of the pharmaceutical industry, which by its characteristics, is a good illustration of the challenges arising in this area.
It seemed interesting to watch how the imitation was set up specifically in business, what strategies were followed and why. This allowed us to realize that imitation, generally viewed negatively in comparison with innovation, could sometimes prove to be a key success factor more important than the latter.
Finally, when we speak of imitation, it is also important to consider which firms are imitated, and why - now it appears that the economic performance of the "imitation" is not necessarily the key element that determines the imitation.Barriers to imitation and their limitations: the role of patents
The effectiveness of patents must achieve two major objectives, namely,
• the promotion of research and development
• encourage companies to disclose their inventions so that other firms can use the results in research and rely on it
This depends on the ability of competing firms to imitate or invent around a patented innovation.
The majority of the literature on patents assume that patented products is vulnerable to imitation
• Or is excessively expensive and therefore not a threat to the innovator
• Not expensive to imitate and therefore still represents a threat to the innovator
In both cases, the decision to imitate is independent of the life of the patent and therefore an increase in patent life will encourage both research and development and implementation of innovations by firms.
The intermediate case and the most common is that imitation does not cost too much. Indeed, a study by Levin & Al show that patents raise the costs of imitation around 40% for typical and important new drugs, around 30% for major new chemical products and 20% for typical chemicals.
Introducing the concept of the imitation costs in the economic theory of patents has an effect on decisions regarding imitation by competitors to the extent that the motivation to imitate depends on the extent of protection afforded by the patent.
With intermediate cases, the most common scenario is that imitation does not cost overly much. A study by Levin & Al shows that patents increase the cost of imitation of plus or minus of 40% for typical and important new drugs, around 30% for major new chemical products and 20% for typical chemicals. Introduction of the imitation costs in the economic theory of patents has an effect on the decisions of imitation of competitors to the extent that the motivation to imitate depends on the extent of protection afforded by the patent.
A long period of legal protection will have the effect of a sustained effort to avoid innovation and patent protection period has a direct influence on the business environment of competitors.
Levin & Al stated that in most cases innovators choose to keep their innovations a secret, rather than be subject to a patent, especially in cases where the imitation is preferred.
When the costs of imitation are positive, an increase in patent life beyond a certain limit will have no effect and paradoxically will diminish the efforts of the R & D activity and motivation to patent. Increase in the scope of patent protection gives competitors a greater motivation to imitate a patented product: the longer the patent life is the longer the rivals must wait to use the technology.
If imitators enter the market until profits are zero, increase in the life of the patent will increase the number of competing products and thus reduce motivation for research and innovation. These effects have an implication on the optimal policy of patents. When the term of protection is granted by the authorities, the maximum lifetime of a patent is usually short to discourage imitation.
Tags: role of patents,link between patents and imitation, adaptation and adoption of imitations
[...] Patents, innovation and access to new pharmaceuticals, by Grabowski R&D and promotion in pharmaceuticals: A conceptual framework and empirical exploration, and by Vinod Rao II. The adaptation and adoption of imitations: Their implementation 1. The adoption of innovations through imitation This article describes the very short book by Linsu Kim on the economic development of Korea. Kim, in his book, gives advice for developing countries trying to copy the Korean model for their economic and political development. Using individual firms as an object of study, Kim looks at how companies in competitive industries can learn and make changes in response to market dynamics and changes in technology. [...]
[...] Innovation is often framed and driven by the strategic approach to HR management organizations. Strategic management of human resources is often seen as a distinct approach to management of people that seeks to achieve competitive advantage through the strategic development of the involvement of men. Strategic Management of Human Resources is a distinctive philosophy that emphasizes the commitment and motivation of human resources which are themselves characterized by high trust allowing employees to exert influence. Porter shows that human resource management is one of nine core activities in an organization and has a strategic role in all activities of the company.While human resources alone can gain competitive advantages most of the time this also leads to other activities in order to gain competitive advantages. [...]
[...] The opposite extreme is found in other articles, such as and Promotion in Pharmaceuticals: A conceptual framework and empirical exploration' (H.D. VINOD and P.M. RAO). This article follows the outline of a scientific paper, with assumptions and test models accurately described. But the abundant mathematical results are given with very little explanation, and that makes reading and understanding difficult Substantive discussion Some results seem fairly logical, such as, the fact that companies invest in both R&D and promotion of their products which are more successful than those that invest exclusively in one or the other areas (Article VINOD HD and PM Rao). [...]
[...] The majority of the literature on patents assume that imitation of patented products Is prohibitively expensive and therefore not a threat to innovation Is not expensive to imitate and therefore still represents a threat to innovation In both cases, the decision to imitate is independent of the life of the patent and thus an increase in the life of the patent will encourage both research and development and implementation of innovations by firms. With intermediate cases, the most common scenario is that imitation does not cost overly much. [...]
[...] Thus, new products are successful when they include three basic elements: The establishment of a coaching director for each new product of the research company The formation of a leader needed to create an atmosphere of stimulating innovation The development and establishment of procedures to coordinate and monitor the tasks of product development. Thus, imitation can take place within the service organizations and the only performance of these factors determine the success or otherwise of the development of new service activities. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee
