marine fisheries?

13.1 Investments in Innovation

LEARNING OBJECTIVES

By the end of this section, you will be able to:

•

Identify the positive externalities of new technology.

• Explain the difference between private benefits and social benefits and give examples of each.

• Calculate and analyze rates of return

Market competition can provide an incentive for discovering new technology because a firm can earn higher

Access for free at openstax.org
13.1 • Investments in Innovation 309

profits by finding a way to produce products more cheaply or to create products with characteristics

consumers want. As Gregory Lee, CEO of Samsung said, “Relentless pursuit of new innovation is the key

principle of our business and enables consumers to discover a world of possibilities with technology.” An

innovative firm knows that it will usually have a temporary edge over its competitors and thus an ability to

earn above-normal profits before competitors can catch up.
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