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A hybrid model of innovation that stays the course

European governments want business to spend more on research and development. But even if, through tax breaks and other inducements, the amount of investment in R&D is stepped up, it will not necessarily lead to more innovation. What matters is how well companies manage the innovation process, how they organise and motivate their scientists, how they decide which ideas to pursue and which to discard.

On these issues, and on innovation policy generally, there is much to be learnt from the US. In a new book, Harvard professor Josh Lerner provides an authoritative analysis of the strengths and weaknesses of the American system.

As Lerner, explains, the organisation of research in large companies has changed markedly in recent decades. The days of big central laboratories are over – Bell Laboratories is the classic example – as companies break up their scientific staff into smaller units and make more use of external providers.

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