Abstract: Contracting Invention: The Firm as Entrepreneurial Community
The markets for technology that formed within the framework of the first national patent system in Germany reveal a complex dynamic between individual inventors seeking returns on their ideas and firms with resources to commercialize the technology. The high costs associated with patent rights in the German system gave an advantage to large firms that organized entrepreneurial activity around in-house R&D programs. Firms in the chemical industry adopted employment practices that replaced apprentices with university-trained chemists to consciously "routinize" innovation. My analysis of employment contracts reveals the strategies developed by the firm to encourage inventive activity and to promote management styles among its employee-chemists. The firm demanded exclusive rights to develop, or not, new technology. The successes and failures of these strategies reveal a complex relationship between the firm management and the research chemists. Individual chemist's attitudes toward the proprietary nature of their work and the autonomy to set R&D goals worked against the policies of the firm.