Knowledge that Transforms

This exploratory article sets out to examine if and how the new digital copyright laws in the U.S. and Europe are affecting innovation on the Internet. It argues that these laws, in balance, at least to date, are having a positive effect on Internet innovation, despite the strident argument that these laws will inhibit innovation. The innovations the article discusses are peer-to-peer (P2P) file sharing technology and the new business models for music retailing that P2P has spawned. It concludes that digital copyright laws could create perverse incentives for innovation and wonders if legislators may not require a better understanding of the innovation process when crafting IP laws.

The paper attempts to develop a mathematical model of the national innovation system (NIS) of Taiwan, particularly with regard to its integrated circuit (IC) industry. The method utilised is that of system dynamics (SD). Drawing on both questionnaire/in-depth interviews and computer simulation, the paper aims to increase insights into the dynamic processes of the Taiwanese IC industry system of innovation and understand the interdependence and interaction among capital flows, human resource flows, knowledge and technology flows, and product flows in the NIS. The paper concludes with some simulations of policy alternatives confronting the IC industry and the Taiwanese government.

Can the knowledge base of an economy be measured? In this study, we combine the perspective of regional economics on the interrelationships among technology, organization, and territory with the triple-helix model, and offer the mutual information in three dimensions as an indicator of the configuration. When this probabilistic entropy is negative, the configuration reduces the uncertainty that prevails at the systems level. Data about more than a million Dutch companies are used for testing the indicator. The data contain postal codes (geography), sector codes (proxy for technology), and firm sizes in terms of number of employees (proxy for organization). The configurations are mapped at three levels: national (NUTS-1), provincial (NUTS-2), and regional (NUTS-3). The levels are cross-tabled with the knowledge-intensive sectors and services. The results suggest that medium-tech sectors contribute to the knowledge base of an economy more than high-tech ones. Knowledge-intensive services have an uncoupling effect, but less so at the high-tech end of these services.