Innovation and the internet

My piece in today’s Fin is on innovation and the internet, developing some of the ideas I’ve discussed recently. It’s over the fold

The US-Australia Free Trade Agreement, which came into force on New Year’s Day contained numerous provisions designed to strengthen ‘intellectual property’, that is, government-created monopolies designed to reward invention and the creation of literary and other cultural works. Among other things, the term of copyright was extended from 50 to 70 years and new protections were granted to pharmaceutical companies.

A rather more obscure event a couple of weeks later was part of a trend that seems likely to render the whole ‘strong IP’ agenda both obsolete and irrelevant. At a conference at Queensland University of Technology the Australian version of the Creative Commons license was launched. The Creative Commons license is a new kind of copyright, allowing free reproduction while reserving a flexible range of rights over attribution, commercial use and derivative works.

The Internet has been the central focus of technological innovation for the past decade, and it is clear that the kind of collaboration promoted by the Creative Commons license is far more conducive to such innovation than the protection of intellectual property through tightly-held patents and copyrights.

This is clearly true in relation to the software and protocols that have given us the Internet in its modern form. The Internet was created in the university sector, with a tradition of free dissemination of research results. By virtue of its openness, it swamped or absorbed private-sector competitors such as Compuserve and AOL, which had sought to create proprietary ‘walled gardens’ open only to subscribers.

Much of the code of the Internet was written in Unix, a language created at the Bell Labs division of AT&T, and largely developed in the university sector. Because of its private-sector origins, Unix has been the subject of complex litigation over intellectual property.

The most aggressive litigator is the SCO Group, a company that claims to have acquired the rights to Unix code that has allegedly been copied into its open-source successor Linux. No actual instances of copying have been made public. It seems clear that the actual contribution of any such code is modest and could easily be replaced by non-infringing code. The point of SCOs lawsuits is not to prevent the misuse of copyrighted code but to extract rent from the users of Linux.

SCO is an extreme example, but the general point is valid. In an interconnected world where global collaboration is the natural mode of innovation, patents over trivial pieces of code and obvious ideas are an obstacle to progress, not an incentive to innovation. It is this kind of reasoning that has led IBM (SCO’s main target) to release 500 patents into the public domain, with the promise of more to come.

But the argument is equally valid in relation to the content that makes up the World Wide Web. Increasingly, value resides, not in individual Web pages, but in the links between them, and the network created by those links. If a page cannot be found using Google, it can scarcely be found at all, and the primary method used by Google to rank pages is based on the number, and quality, of linking pages.

The whole process is being taken to new levels by oddly-named innovations such as blogs and wikis. Wikis are collaborative tools that can be used to produce encyclopedias and other reference works from the contributions of hundreds, or thousands, of different writers. Blogs (or weblogs) are easily updated websites in the form of a journal or diary, covering everything from international politics to dieting. Links are the currency of blogs, to the extent that special purpose software to track such links has been created. As of today, claimed to track more than 6 million blogs and nearly a billion links, numbers that are doubling annually.

The explosion of creativity and innovation associated with these collaborative efforts stands in stark contrast to the efforts of profit-oriented entrepreneurs during the dotcom boom. Despite the dissipation of hundreds of billions of dollars, it is hard to find more than a handful of innovations that can be traced to the stockmarket darlings of the 1990s. The most commonly-cited example, Amazon’s patented ‘one-click shopping’ system, is both obvious and trivial.

The rise of creative collaboration as a major engine of technological progress poses serious challenges for traditional models of innovation, based on proprietary research and development and targeted government funding for ‘strategic’ pure research. Increasingly, innovation will come from the members of networks driven largely by creative or social, rather than economic, concerns. Governments and capital markets should either support this process or get out of the way.

6 thoughts on “Innovation and the internet

  1. Innovation will still come out of universities .Everything else and that includes blogs parasites off the university . However the Internet will restructure what a university is .Essentially the university will be delocalised. You still need a guru or set of gurus to evaluate knowledge .

  2. “The rise of creative collaboration as a major engine”?
    Maybe the resurgence. Considering every step of human progress up until the invention of copyright law was open source and collaborative.

  3. This stoush, like many in the US where the best funded lobby wins, may come down to IT&T vs media. Companies like Sony, with a leg in both camps, may find it a schizophrenic experience.

  4. There was a mistake in the AFR article. The term of copyright was not extended from 50 years to 70 years. It was extended from 100 years to 120 years. The spin doctors like the 70 year term but the fine print says that is after the death of the author. It the author is 30 when she writes the song she has 50 years to live and then another 70 years of protection of IP. A total of 120 years!

  5. Bill, I don’t see why innovations should predominantly come from the universities, much as I support the traditional role of the universities as centres of scholarship and research. So much so that I have put on line in Catallaxy the defence of traditional unis that Seamus Miller contributed to the Tony Coady collection on the universities.
    Still it is arguable that some of the most innovative thinking in public policy at present is being done in free enterprise think tanks such as The Centre for Independent Studies.
    Remember that Einstein’s best thinking was done in the patent office!
    Karl Popper spent most of his life in the academy but his seminal work was conceived while he worked as a schoolteacher on the fringe of the Vienna Circle.

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