WORLD BANK INNOVATION POLICY COURSE SYLLABUS

April 15-17, 2014, J B1-075

This course will provide an overview of the economics of innovation policy and will aim to:

 provide a synthetic understanding of the drivers and consequences of innovation in economic

development and social progress
 explain the role of regional innovation ecosystems in shaping the nature and impact of
innovation around the world
 highlight the role of specific policy tools and initiatives, and draw out the consequences of
innovation policy choices on a range of economic and social outcomes

The course will include a mix of theoretical background, empirical evidence, and illustrative case studies.
The core of the innovation policy course is a state of the art understanding of the causes and effects of
innovation. Lecturers will illustrate the appropriate design and impact of specific innovation policies and
other initiatives aimed at encouraging its creation and diffusion. The course will emphasize the role of
innovation-based entrepreneurial ecosystems and both the promise and challenges facing innovation
policymakers as well as practitioners in developing economies.

COURSE OVERVIEW

DAY 1
9:00am: Session 1- The Changing Frontier: The Dynamics of Innovation and Innovation Policy
11:00am: Session 2- Intellectual Property in a Global Context
2:00pm: Session 3- Innovation Prizes and Demand-Side Incentives
4:00pm: Session 4- Innovation Prize Exercise

DAY 2
9:00am: Session 5- The University-Industry Interface and the New Economics of Science
11:00am: Session 6- The University-Industry Interface and the New Economics of Science:
Case Studies
2:00pm: Session 7- The Economics of Diffusion: Evidence and Exercise
4:00pm: Session 8- The Economics of Diffusion: Exercise

DAY 3
9:00am: Session 9- New Institutions for Innovation Finance: Global Angels and Crowdfunding
11:00am: Session 10- Designing a Funding Model for Caribbean Startups
12:00am: Session 11- Course Wrap Up

World Bank Innovation Policy Course Syllabus, Spring 2014, Page 1

Day 1

Lecturer: Professor Scott Stern, David Sarnoff Professor of Management of Technology,

Massachusetts Institute of Technology (MIT)

9:00am- 10:45am: SESSION 1

The Changing Frontier: The Dynamics of Innovation and Innovation Policy

This session will introduce the three central themes which will continue throughout the workshop: the
role of innovation in economic development and social progress, the requirements and infrastructure to
support innovation within a given economic and political environment, and how these institutions and
policies need to adapt over time as innovation and science evolve. Particular attention will be placed on
the challenges of nurturing innovation ecosystems in developing and emerging economies.

Required Readings

Jones, B. 2011. “As Science Evolves, How Can Science Policy?” Innovation Policy and the Economy,
11: 103-131. NBER.

Supplementary Reading

Furman, Jeffrey L., Michael E. Porter, and Scott Stern. 2002. “The Determinants of National Innovative
Capacity.” Research Policy 31, no. 6: 899-933.

10:45am- 11:00am: COFFEE BREAK

11:00am- 12:45am: SESSION 2

Intellectual Property in a Global Context

This session will provide an overview of the role of formal intellectual property in encouraging
innovation (or not) and the interplay between intellectual property rights and economic development.

Required Readings

Gallini, Nancy, and Suzanne Scotchmer. 2002. “Intellectual Property: What is the Best Incentive
System.” Innovation Policy and the Economy 2: 51-77.

Supplementary Reading

Maskus, K. 2012. Private Rights and Public Problems: The Global Economics of Intellectual Property
in the 21st Century. Peterson Institute for International Economics.

12:45pm- 2:00pm: LUNCH BREAK

World Bank Innovation Policy Course Syllabus, Spring 2014, Page 2

2:00pm- 3:45pm: SESSION 3
Innovation Prizes and Demand-Side Incentives
This session will present an interactive overview of the use of innovation prizes and competitions as a
policy lever for spurring innovation and addressing specific social and economic challenges. Particular
emphasis will be placed on understanding when and how to use innovation prizes, and also how to adapt
our emerging understanding of prizes for emerging economies. The session will also discuss other
demand-side incentives such as procurement. It will present ideas about when and how to use
procurement to promote innovation.

Required Readings
MacCormack, A., Murray, F. and Wagner, E. 2013. “Spurring Innovations through Competitions,” Sloan
Management Review.
Supplementary Reading
Kremer, Michael, and Heidi Williams. 2010. “Incentivizing Innovation: Adding to the Toolkit.”
Innovation Policy and the Economy 10, no.1: 1-17.

3:45pm- 4:00pm: COFFEE BREAK

4:00pm- 5:45pm: SESSION 4

Innovation Prize Exercise

This session will conduct an interactive exercise in which participants will work together in groups to
develop how to build or improve upon an innovation prize for a specific World Bank project. The
objective of the exercise is to identify specific opportunities for using this mechanism to advance
economic and social progress within the World Bank’s mandate.

Day 2

Lecturer: Professor Juan Rogers, Professor of Public Policy, Georgia Institute of

Technology

9:00am- 10:45am: SESSION 5

The University-Industry Interface and the New Economics of Science
This session will focus on the emerging understanding of the central role of universities and the
university-industry interface in shaping regional innovation ecosystems. Particular attention will be
placed on the challenges of technology transfer, the role of students and academic entrepreneurship as a
mechanism for regional technology transfer and diffusion, and the role of university-industry partnerships
and research collaborations in shaping regional innovative ecosystems. There will be an additional focus
on the pressures on public universities across the world to demonstrate their contribution to economic and
social well-being.
Required Readings

Bercovitz, J., and M. Feldman. 2010. “Entrepreneurial Universities and Technology Transfer: A
Conceptual Framework for Understanding Knowledge-Based Economic Development,” Journal
of Technology Transfer, 31, no. 1:175-188.

World Bank Innovation Policy Course Syllabus, Spring 2014, Page 3

Geuna A. and A. Muscio, 2009. “The Governance of University Knowledge Transfer: A Critical Review
of the Literature,” Minerva 47: 93–114.

Hausman, N. 2012. “Effects of University Innovation on Local Economic Growth and Entrepreneurship,”
Hebrew University Working Paper.

Stephan, P. 2010. “The Economics of Science Funding for Research,” International Center for Economic
Research Discussion Paper.

Supplementary Readings

Youtie, J. and P. Shapira. 2008. “Building an innovation hub: A case study of the transformation of
university roles in regional technological and economic development,” Research Policy 37:
1188–1204.

10:45am- 11:00am: COFFEE BREAK

11:00 am- 12:45pm: SESSION 6

Guest Lecturer: Dr. Kari Kankaala, Director, City of Tampere

The University-Industry Interface and the New Economics of Science: Case Studies

Course participants will learn about from the experience of Demola, an open innovation platform and
university-business collaboration model in Finland. Demola encourages student teams to create new
products and services that directly seek solutions for specific firm and government problems. The Demola
model presents opportunities for regions where the cooperation between the universities and the
companies is infrequent, and the collaboration models outdated, or not in place. The session will also
present case studies from the Latin American and Caribbean region.

12:45pm- 2:00pm: LUNCH

2:00pm- 3:45 pm: SESSION 7

The Economics of Diffusion: Evidence and Exercise

This session will provide an overview of the role of technology diffusion in shaping the overall impact of
innovation, the challenges of transferring technology from advanced to less developed economies, and
making innovation have a meaningful impact on the poor. The session will provide additional insight into
mechanisms of diffusion and the interactive nature of knowledge flow.

Required Readings

Hoekman, B., Maskus, K., and K. Saggi. 2005. “Transfer Of Technology To Developing Countries:
Unilateral And Multilateral Policy Options” Institute Of Behavioral Science, World Development,
33, no. 10: 1587–1602.

Supplementary Reading

Hall, Bronwyn H. “Innovation and Diffusion.” In Handbook on Innovation, edited by Jan Fagerberg,
David C. Mowery, and Richard R. Nelson, 459-484. New York: Oxford University Press, 2004.

World Bank Innovation Policy Course Syllabus, Spring 2014, Page 4

 3:45pm- 4:00pm: COFFEE BREAK

4:00 pm- 5:45pm: SESSION 8

The Economics of Diffusion: Exercise

The national and regional systems of innovation frameworks highlight the role of knowledge and
information flow across the economy for fundamental learning opportunities that provide the background
for innovation. No single policy can address all of the factors that affect this dynamic. Participants will
identify key issues and propose policies that might address them for a hypothetical country/region.

Day 3

9:00am- 10:45am: SESSION 9

Lecturers: Professor Christian Catalini, Assistant Professor of Technological Innovation,

Entrepreneurship, and Strategic Management, MIT, and Professor Scott Stern, MIT

New Institutions for Innovation Finance: Global Angels and Crowdfunding

This session will consider new capital markets to finance innovation, particularly in less developed
economies. The session will focus on emerging platforms for crowdfunding and global angel networks,
and analyze the impact of institutions and policies to encourage such investments.

Required Readings

Agrawal, A., Catalini, C., and A. Goldfarb. 2013. “Some Simple Economics of Crowdfunding,”
Innovation Policy and the Economy. NBER Working Paper No. 19133.

10:45am- 11:00am: COFFEE BREAK

11:00am- 12:00pm: SESSION 10

Lecturers: Qahir Dhanani, Private Sector Development Specialist, The World Bank Group, and
Aun Rahman, Financial Sector Specialist, The World Bank Group

Designing a Funding Model for Caribbean Startups

In this section, participants will discuss issues related to leveraging diaspora funds for financing projects
and startups.

12:00pm- 13:00pm: SESSION 11

Lecturer: Professor Scott Stern, MIT

Wrap Up

The closing session will summarize the main topics of the course.

World Bank Innovation Policy Course Syllabus, Spring 2014, Page 5

Online Links for Course Readings

Day 1

SESSION 1

The Changing Frontier: The Dynamics of Innovation and Innovation Policy

Required Readings

Jones, B. 2011. “As Science Evolves, How Can Science Policy?” Innovation Policy and the Economy,
11: 103-131. NBER.

Link: http://www.nber.org/chapters/c12048.pdf

Supplementary Reading

Furman, Jeffrey L., Michael E. Porter, and Scott Stern. 2002. “The Determinants of National Innovative
Capacity.” Research Policy 31, no. 6: 899-933.

Link: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.132.6720&rep=rep1&type=pdf

SESSION 2

Intellectual Property in a Global Context

Required Readings

Gallini, Nancy, and Suzanne Scotchmer. 2002. “Intellectual Property: When is it the Best Incentive
System.” Innovation Policy and the Economy 2: 51-77.

Link: http://socrates.berkeley.edu/~scotch/G_and_S.pdf

Supplementary Reading

Maskus, K. 2012. Private Rights and Public Problems: The Global Economics of Intellectual Property
in the 21st Century. Peterson Institute for International Economics.

Link: http://www.iie.com/maskus.cfm
(Selected chapters available for free, but the book is only available for purchase)

World Bank Innovation Policy Course Syllabus, Spring 2014, Page 6

SESSION 3
Innovation Prizes and Demand-Side Incentives
Required Readings
MacCormack, A., Murray, F. and Wagner, E. 2013. “Spurring Innovations through Competitions,” Sloan
Management Review.

Link: http://sloanreview.mit.edu/article/spurring-innovation-through-competitions/
Supplementary Reading
Kremer, Michael, and Heidi Williams. 2010. “Incentivizing Innovation: Adding to the Toolkit.”
Innovation Policy and the Economy 10, no.1: 1-17.

Link: http://economics.mit.edu/files/6807

SESSION 4

Innovation Prize Exercise

NO READINGS

Day 2

SESSION 5
The University-Industry Interface and the New Economics of Science
Required Readings

Bercovitz, J., and M. Feldman. 2010. “Entrepreneurial Universities and Technology Transfer: A
Conceptual Framework for Understanding Knowledge-Based Economic Development,” Journal
of Technology Transfer, 31, no. 1:175-188.

Link: http://download.springer.com/static/pdf/336/art%253A10.1007%252Fs10961-005-5029-
z.pdf?auth66=1397247258_bc957e0d687ef72c5c2967f576697753&ext=.pdf

Geuna A. and A. Muscio, 2009. “The Governance of University Knowledge Transfer: A Critical Review
of the Literature,” Minerva 47: 93–114.

Link: http://link.springer.com/article/10.1007%2Fs11024-009-9118-2#page-1

Hausman, N. 2012. “Effects of University Innovation on Local Economic Growth and Entrepreneurship,”
Hebrew University Working Paper.

Link: http://econ.biu.ac.il/files/economics/seminars/hausman_univ_innovation_12-18-2010.pdf

Stephan, P. 2010. “The Economics of Science Funding for Research,” International Center for Economic
Research Discussion Paper.

Link: http://www.icer.it/docs/wp2010/ICERwp12-10.pdf

World Bank Innovation Policy Course Syllabus, Spring 2014, Page 7

Supplementary Readings

Youtie, J. and P. Shapira. 2008. “Building an innovation hub: A case study of the transformation of
university roles in regional technological and economic development,” Research Policy 37:
1188–1204.
Link:
http://www.researchgate.net/publication/222700829_Building_an_innovation_hub_A_case_study
_of_the_transformation_of_university_roles_in_regional_technological_and_economic_develop
ment

SESSION 6

The University-Industry Interface and the New Economics of Science: Case Studies

NO READINGS

SESSION 7

The Economics of Diffusion: Evidence and Exercise

Required Readings

Hoekman, B., Maskus, K., and K. Saggi. 2005. “Transfer Of Technology To Developing Countries:
Unilateral And Multilateral Policy Options” Institute Of Behavioral Science, World Development,
33, no. 10: 1587–1602.

Link: http://www.betsaonline.com/SystemAnalysis/TransferTechnology.pdf

Supplementary Reading

Hall, Bronwyn H. “Innovation and Diffusion.” In Handbook on Innovation, edited by Jan Fagerberg,
David C. Mowery, and Richard R. Nelson, 459-484. New York: Oxford University Press, 2004.

Link: http://www.nber.org/papers/w10212.pdf?new_window=1

SESSION 8

The Economics of Diffusion: Exercise

NO READINGS

World Bank Innovation Policy Course Syllabus, Spring 2014, Page 8

Day 3

SESSION 9

New Institutions for Innovation Finance: Global Angels and Crowdfunding

Required Readings

Agrawal, A., Catalini, C., and A. Goldfarb. 2013. “Some Simple Economics of Crowdfunding,”
Innovation Policy and the Economy. NBER Working Paper No. 19133.

Link: http://www.nber.org/papers/w19133.pdf?new_window=1

SESSION 10

Designing a Funding Model for Caribbean Startups

NO READINGS

SESSION 11

Wrap Up

World Bank Innovation Policy Course Syllabus, Spring 2014, Page 9