The ability to appropriate newly-generated technical knowledge is a key to the strategic behaviour of firms. Therefore, institutional and organisational arrangements are eventually challenged and transformed by major new (Schumpeterian) innovations. The effects of recent, revolutionary advances in information technology provide an especially striking illustration of this interplay. Although these tensions have always existed, their current dimensions are new. The seemingly inexorable development of highly-efficient, global information networks is transforming the strategic responses of firms to changing market conditions. Nowhere is this transformation more evident than in the changing role of property rights to firm-specific technical and market knowledge.