Linking Innovation Process to the Provisioning of Public Goods: Case of Neglected Diseases

The literature on the role of firm level innovation process mostly deals with the production of private goods as opposed to public goods. The innovation paradigms that are currently being encountered endow us with an opportunity to design a framework leading to a model of enabling firms to produce public goods. Public goods face two kinds of problems: one arising due to lack of either administrative or market oriented incentives, as the dearth of drugs for infectious diseases suggest, and the other arising due to restrictions in their use, as for example, controlling access to information over the internet. We would like to examine in particular the first set of issues arising out of a virtual neglect in the production of public goods. The production of public goods is facing an impasse due to the nature of the neo-liberal economy, where the state gradually seeks to withdraw itself from the economy without adequate replacement. We seek specifically to closely examine the role of the innovation process as a clear visible expression of the knowledge production occurring in a firm towards the production of drugs for infectious diseases. We have chosen „drugs for infectious diseases‟ as the public good for closer examination as it rises several interesting questions. Has the public goods nature of drugs for such infectious diseases reduced the innovativeness of the relevant firms? Are there any policy levers available that will incentivise production of such goods? We specifically examine how redesigning the innovation process can help firms and the state in accomplishing the production of such public goods – hitherto made rather onerous. Through this work, we seek an answer to the question “Under what kind of innovation process would an entity produce a public good?”