Abstract
Technologies are defined as general purpose (GPTs) when they can be applied, with low adaptation costs, to different products or industries. This implies that the benefit of an innovation, when general purpose, propagates across markets and industries. GPTs are more likely to be developed by diversified firms, or when downstream markets are composed of many specialized users rather than a few large customers. In cases such as these, when downstream markets are fragmented, GPTs are more likely to be licensed. They enable upstream technology-specialist companies to increase their rents by extending the number of licensee, rather than relying on their limited bargaining power.
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Gambardella, A., Giarratana, M. (2016). General-Purpose Technology. In: Augier, M., Teece, D. (eds) The Palgrave Encyclopedia of Strategic Management. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-94848-2_345-1
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DOI: https://doi.org/10.1057/978-1-349-94848-2_345-1
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