This book presents a new theory of what happens at the very early stages of innovation. It describes how a new technology is transformed into an entrepreneurial opportunity and becomes the origin of economic growth. The surprising answer is cooperation. The origin of innovation begins in the commons.

Foreword - Against Prometheus Acknowledgements Chapter 1 We innovate together Introduction 1.1 The origin of innovation 1.2 The commons in the innovation commons What is a commons? An innovation commons is a knowledge commons Common-pooling and peer-production in an innovation commons 1.3 Clunkers and Homebrew 1.4 The Republic of Letters 1.5 Why groups, why cooperation, why open? Overview of book Chapter 2 The innovation problem Introduction 2.1 Trade and new knowledge explain growth 2.2 The innovation problem as economic problem The Schumpeter-Nelson-Arrow version of the innovation problem The Hayek version of the innovation problem 2.3 The origin of the innovation trajectory 2.4 The economic problem of innovation 2.5 Innovation problem is a collective action problem 2.6 Innovation happens in groups Discovery failure Discovery costs Conclusion Chapter 3 Innovation is a knowledge problem Introduction 3.1 Innovation problem I - Social contract problem (McCloskey) 3.2 Innovation problem II - Distributed knowledge problem (Hayek) 3.3 Innovation problem III - Idiosyncratic risk (Williamson) 3.4 Innovation problem IV - Rules for cooperation (Ostrom) Conclusion Chapter 4 Four theories of the innovation commons Introduction 4.1 Two commons 4.2 Evolution of cooperation 4.3 Defense against enclosure 4.4 Institutional uncertainty Conclusion Chapter 5 Origin of the innovation trajectory Introduction 5.1 The zero-th phase of the innovation trajectory 5.2 The fundamental transformation 5.3 The Proto-Entrepreneur, the Dual-Discovery Problem, and the Two Commons Solution The Proto-Entrepreneur seeks Non-Price Information The Proto-Entrepreneur faces a Dual Discovery Problem The Two Commons Solution 5.4 Modelling the innovation commons 5.5 The innovation commons in institutional space 5.6 The innovation commons as higher-order discovery Conclusion Chapter 6 Rules of the Innovation commons Introduction 6.1 Cooperation behind the veil of ignorance 6.2 An emergent social order 6.3 The use of society in knowledge 6.4 Problems the innovation commons must solve Identity, Cooperation, Consent, Monitoring, Punishment and conflict, Independence, Economic problems the rules must solve 6.5 Origin of rules 6.6 Core Design Principles 6.7 Can evolution explain the innovation commons? Evolution of cooperation Evolution of cooperation in the commons Is cooperation for innovation the institutional equivalent of war? The innovation commons as higher-order discovery Conclusion - We innovate together Chapter 7 Lifecycle of an innovation commons Introduction 7.1 Institutions of collective innovation Institutional varieties of collective innovation Institutional transformations over an innovation trajectory 7.2 Origin of industry 7.3 The standard model of industry associations 7.4 A new model of industry associations; private governance for discovery of public goods 7.5 Industry associations construct niches 7.6 The demic phase of industry associations Conclusion Chapter 8 Theory of Innovation Policy Introduction 8.1 The innovation commons critique of modern innovation policy Theory of innovation policy Mechanisms of innovation policy Critique of Innovation Policy Political economy of innovation policy Rules as policy Innovation policy as a public and private goods problem Innovation Policy and its discontents, a summary 8.2 Discovery Failure 8.3 Efficient Institutions of Innovation Policy The Comparative Institutional Approach The low social costs (and high private benefits) of innovation commons 8.4 New innovation policy Diagnosing the innovation problem Benefits to groups, regions, nations, and the world This comes from civil society The innovation economy cannot be planned Conclusion Chapter 9 Inclusive Innovation Policy Introduction 9.1 Two types of innovation policy 9.2 Innovation seen and unseen 9.3 Against innovation: theory 9.4 A better approach to innovation policy 9.5 Inclusive innovation: A new social contract Chapter 10 Conclusion 10.1 The institutional origin of innovation 10.2 Implications for economic theory 10.3 The innovation sharing economy References Index Figures and Tables Figure 1.1 Economic goods Figure 2.1 The innovation commons as the zero-th phase of an innovation trajectory Figure 3.1 Market (choice) versus governance (contracting) models of innovation economics Figure 3.2 Comparative institutions of innovation contracting Figure 7.1 Public and private ordering definitions of industry Figure 8.1 The Institutional Possibility Frontier (source Djankov et al 2003) Figure 8.2 Institutional possibilities of innovation policy Figure 9.1 Two innovation policy approaches Figure 9.2 Why friends of innovation prefer to engage government Table 2.1 The innovation problem as market failure vs collective action Table 2.2 Transformation costs, transaction costs and discovery costs Table 2.3 Taxonomy of discovery costs Table 6.1 Design rules Table 7.1 Institutional varieties of Collective Innovation Table 8.1 Innovation policy ranged between private and public instruments.

"The way in which he explains the emergence of new industries by integrating the topic of innovation with a theory of social cooperation structured by rules is masterful." -- Erwin Dekker, Journal of Cultural Economics "Everyone agrees that innovation drives the transformation of modern economies. But Jason Potts will ruffle feathers with his fascinating and well-researched account of the origins of innovation itself. Against the statist left he points to the limits of state-led innovation. Against the individualist right, he argues that innovation begins not by heroic individuals alone, but by institutions that govern the cooperative pooling of innovation resources and the coordination of dispersed knowledge. This is a highly innovative account of the sources of innovation, which should be read by everyone working in this field." -- Geoffrey M. Hodgson, Professor in Management, Loughborough University London "In this beautifully-written and well-argued book, Potts shows how cooperation and networking are essential to innovation and economic growth. He rightly defines technological change as a social process,Âand demonstrates how collective action problems involving innovation can be overcome by institutions. Relying on both economic history and theory, his book provides a convincing account based on a fusion of the new institutional economics and the economics of innovation. Highly recommended to all social scientists interested in technological change." -- Joel Mokyr, Northwestern University, Author of A Culture of Growth (2016) "Jason Potts` Innovation Commons is a trailblazing contribution to economics. The new theory presented in the lucidly written book holds that innovation begins with an institutional solution to the problem of knowledge pooling and cooperation under uncertainty, eschewing the old view of a heroic entrepreneur. Potts imagination and erudition are deeply impressive. The book not only leaves far behind the conventional wisdom of neoclassical growth theory but also clears the ground for the next generation of evolutionary economists. Shedding light on the eminently social nature of the causes of economic evolution the book leads to a new understanding of the origin of firms and industries, and of the possibilities to design innovation policy. This book will prove invaluable in advancing economic theory in the age of an increasingly more complex digital economy." -- Kurt Dopfer, University of St.Gallen, Switzerland

Selling point: Integrates new institutional economics and the analysis of entrepreneurship, innovation, and technological change Selling point: Combines economic history, evolutionary and institutional economics, and economic growth theory into a new account of the origin of innovation Selling point: Provides insights into how commons operate in entrepreneurship and innovation and the role of governance in this process

Selling point: Integrates new institutional economics and the analysis of entrepreneurship, innovation, and technological change Selling point: Combines economic history, evolutionary and institutional economics, and economic growth theory into a new account of the origin of innovation Selling point: Provides insights into how commons operate in entrepreneurship and innovation and the role of governance in this process