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xxx7 Economics of Business and Innovation



Upon completion of the course, the student can: 

  • describe the theories and empirical methods for analyzing business innovation, 
  • explain the economics of different stages of innovation processes from basic research to commercialization, 
  • recognize firms’ considerations and trade-offs in innovation investment decisions, including responsible innovation issues, 
  • describe and identify the relationships between characteristics of sectors and products (e.g., firm concentration, value chain organization, product differentiation, etc.) and innovation incentives and behavior, 
  • discuss the role of innovation and policies in sustainable development, including global climate and environmental challenges and 
  • review the most important findings from research of some topics from the course. 


Upon completion of the course, the student can: 

  • analyse the innovation processes and decide whether they are risky investment projects, 
  • investigate the relationships between market structure characteristics and innovation, 
  • estimate and interpret relationships between firms’ economic performance in terms of productivity, profitability and innovation using econometric techniques on real data, 
  • formulate economic and financial advice for the management of a firm’s innovation processes and 
  • formulate advice for policy makers and the public sector in designing regulations and instruments that can influence R&D, innovation and productivity of firms, irrespective of whether they were initially intended for these very purposes or were designed primarily for other purposes. 

General competence 

Upon completion of the course, the student can: 

  • manage innovative possesses based on state-of-the-art theories and methods and 
  • use analytical tools for firms making decisions on investments in innovation or when they significantly change their business


The following topics are covered. 

  • Microeconomics of technical change 
  • Market failure (public goods, externalities, asymmetric information, etc.) 
  • Monopoly power and intellectual property rights 
  • Innovation and productivity growth 
  • Innovation and profitability 
  • Innovation and sustainability 
  • Agglomeration economies 
  • Geography of innovation 
  • The diffusion of new technology 
  • Energy and natural resource markets

Arbeids- og undervisningsformer

The following teaching methods are used. 

  • Lectures 
  • Seminars that also include student presentations and discussions. Each student will be required to give at least one seminar presentation. 
  • Self-study

Obligatoriske krav som må være godkjent før eksamen kan avlegges

  • Students must pass three out of four mandatory course requirements to be allowed to take the exam. 
  • 50% attendance in classes is required.


  • Term paper (80%). 
  • Oral defence / examination (20%).

Tillatte hjelpemidler til eksamen

  • Term paper: All resources. 
  • Oral defence / examination: None.