Innovation Tournaments

INTRODUCTION

Innovation can make fortunes. A robust return on equity for a large firm is 20 percent per year. Contrast this with the returns for these innovations:

Zocor, Merck’s cholesterol drug, has contributed gross profits of well over $10 billion on an investment of about $500 million.¹

Apple sold more than 100 million iPod portable music players in just the first six years after the portable music player’s 2001 introduction. The iPod and the online iTunes store have generated over $30 billion in revenue for Apple. Remarkably, Apple spends ...