Evidence Regarding Microsoft and Innovation

Innovation and Economic Growth and Competition Policy and Antitrust

Article Snapshot


Marco Iansiti and Josh Lerner


AEI-Brookings Joint Center for Regulatory Studies, April 2002


This paper looks at whether Microsoft harmed innovation.

Policy Relevance

Monopolists harm consumers by slowing the growth of new goods and services. Microsoft was accused of not being very innovative. The evidence shows that Microsoft was an excellent innovator.

Main Points

  • “Invention” is the creation of something new; “innovation” means bringing new products and services to market.
  • Microsoft is a leading innovator, measured by spending on research, the number of its patents referenced by others, academic publications, and product review.
  • Microsoft’s Tools and Platforms group innovated in areas such as incremental compilers and web services, letting thousands of other developers innovate as well.

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