In this essay we analyze critically the idea of knowledge spillovers. We call into question much of the web of syllogism involved in both the microeconomic and aggregate versions of the theory. We certainly do not deny the reality of knowledge spillovers, or that they may be important under certain circumstances. But we do dispute the policy conclusions of the mainstream view of these matters by questioning the plausibility of the assumptions on which the conclusions are laid. Our criticisms fall into two broad categories. Our efforts, however, are not directed mainly towards intellectual (creative) destruction. We also make the affirmative case that spillovers can have a positive value for innovators and that a sensible economics of spillovers may be sought at the microeconomic level in the developing literature on strategic capabilities.
Richard N. Langlois
Richard N. LangloisUniversity of Connecticut, USAand IPEG, University of the Witwatersrand, Johannesburg, South Africa