Open innovation under authoritarianism: The case of the Soviet Union

The Soviet Union was a productive and technologically developed economy. It achieved a remarkable transformation from a feudalistic society to an advanced industrial society. How was it able to do this? This article argues that such rapid industrialisation was possible because the Soviets invested in legal institutions that created a special kind of open and highly coordinated innovation system confined to national borders. These legal institutions remain underappreciated in Western intellectual property scholarship. The article reassesses the Soviet legal institutions, by explaining their functions and effects on knowledge flows. It also conceptualises the Soviet reward system as having elements of an ‘economy of esteem’. The article is informative not only as a revisited historical account on the Soviet regulation of innovation, but also as one that teaches much about the modern models of innovation in market economies.