Advances in technology have enabled producers of entertainment goods to reach customers in innovative ways. However, new technologies also make it easier for users to infringe on the content. Producers argue that piracy hurts their ability to innovate, while critics argue that piracy acts as a...

This paper documents a shift in the nature of innovation in the information technology (IT) industry. Using comprehensive data on all IT patents granted by the USPTO from 1983-2004, we find strong evidence of a change in IT innovation that is systematic, substantial, and increasingly dependent...