ABSTRACT
So far we have treated the nature of the production process as if there were no differences between conventional production and the inventive activity. To be sure, there are some obvious similarities: both involve inputs and outputs, and the choice of suitable production techniques is largely economically motivated. However, invention and innovation have a number of important distinct characteristics that make invention a qualitatively different product and R&D a fundamentally different activity. We begin by detailing some of the more important of these characteristics and broadly discussing their economic implications.
