ABSTRACT
The information, communication and biotechnology sectors (ICBT sectors) of the economy have undergone rapid technological change recently. These technological innovations have had a significant impact, not only on the dynamics of these sectors, but potentially on the economy as a whole. This is due to the specific characteristics of the products in these sectors. ICBT products require little or no physical resources to increase the quantity supplied, they are in that sense non-rival in consumption. They exhibit little or no transaction costs-best seen with software sales over the Internet-and they exhibit “superstar dynamics,” that is the inventor of a new product receives a (at least temporary) monopoly over the sale. Finally, it takes time and effort to invent new products in ICBT while the innovation process is uncertain, irreversible and exhibits an important role for the exchange of existing knowledge (Quah 1998).
