The economics of collective knowledge and technological communication

Technological knowledge can be understood as a collective good when it is the outcome of the integration between internal to the firm investments in R&D and learning and the absorption of competencies and technologies provided by external organizations (such as, other firms, universities, R&D centers). Technological communication is a crucial strategy in such dynamic interaction between the firm and the system. Only under effective conditions of technological communication the private and social benefits derived from the exploitation of spillovers are higher than the private losses due to partial inappropriability. The paper presents a simple model of collective knowledge production and distribution, integrating the effects and conditions of technological communication within a simple knowledge production function. The interaction between internal investments in R&D and learning, partial inappropriability, the conditions for the access to external knowledge and the exploitation of spillovers explains increasing returns in the production of knowledge. Implications for the coordination of innovative activity of the firm follow.