Yes, monopolies do have the resources to invest in R&D. The problem is that they often lack the incentive because they have control of a market. Government reg

Yes, monopolies do have the resources to invest in R&D. The problem is that they often lack the incentive because they have control of a market. Government regulations that mandate some return (think telecommunications services for those in rural areas, pollution standards, etc.) can provide an incentive for monopolists/oligopolists to perform better according to some criteria. The problem is those mandates are not what we would always consider "innovative". By definition, they are often designed to incrementally improve on the status quo. The game of politics has an important role. When there are oligopolies in many industries it is not unusual to see regulators getting jobs at the very companies they regulate. Think of the ties between the SEC and finance, CRTC in Canada and the communications sector, etc. Monopolists have a way of cementing their position in the economy and reducing the mandates that governments place on them.