Living Networks – Chapter 5: Distributed Innovation – Intellectual Property in a Collaborative World

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For the full Table of Contents and free chapter downloads see the Living Networks website or the Book Launch/ Preface to the Anniversary Edition.

Living Networks – Chapter 5: Distributed Innovation

Intellectual Property in a Collaborative World

OVERVIEW: Innovation and intellectual property increasingly dominate the economy. As technology advances, no firm has the resources to stand alone, and collaboration with others is becoming essential. This means that new business models are needed for developing intellectual property and sharing in its value. Open source software provides us with valuable lessons that can be applied to many other aspects of business and innovation.

This chapter on innovation and intellectual property was one of the most important in Living Networks, I thought, and is absolutely as relevant today as five years ago. Innovation is the source of the majority of value-creation in a networked world, and how we deal with intellectual property can either enable or block human progress, on every level.

The nature of the intellectual property landscape is that the structures are highly rigid, by definition being set by legislation. However attitudes are rapidly changing, and new approaches such as Creative Commons have gained enormous traction over the last years. Certainly innovation is seen more today than as something that happens across boundaries, though most organizations are still hesitant to open up. The critical next phase is in innovation in innovation models.

The chapter begins by explaining a few basic shifts:

* Innovation and intellectual property increasingly dominate the economy.

* Greater complexity means collaboration is essential.

* Changing flow is reshaping the role of intellectual property.

* We need new business models.

It goes on to explore the role of intellectual property, beginning with a telling anecdote:

In 1421 the government of Florence awarded the world’s first patent to Filippo Brunelleschi for a means of bringing goods up the usually unnavigable river Arno to the city. He demanded and was duly awarded legal protection for his invention, being given the right for three years to burn any competitor’s ship that incorporated his design.

Fast forward almost six centuries, and the global economy is dominated by intellectual property, and the flow of information and ideas. This “property” exists in the space of our minds rather than under our feet, yet it is by far the most valuable economic resource that exists today.

The key issue is the fluidity of intellectual property. One of the developments over the last years has been the growth of so-called patent trolls. The negative impact of the patent landscape on innovation is gradually being exacerbated.

The chapter then goes on to look at the open source movement, and how the principles can be adapted for other commercial ventures. I used the story of Goldcorp, the gold miner which opened out its geological information in order to get better insights on where to drill. Don Tapscott’s book Wikinomics, coming out four years later, opens with the same example.

I also discussed Creative Commons, then a new idea, as a way of increasing the fluidity of ideas. I am delighted that this has gained enormous ground since then, now being a staple of the Web 2.0 world of blogs and content sharing.

The last section of the chapter focuses on implementing distributed innovation and value creation. This is still an issue I spend much of my time on, as this is going to be one of the most important economic issues of the next decade. If we can find effective ways to create and share value from innovation across diverse and distributed groups, the global economy will be transformed. I offer five key principles, followed by the example of how Hollywood does it, as they’ve been successfully using business models for distributed innovation since the 1930s.