Jim Bessen gave last week\u2019s \u201cWeb Exceptionalism\u201d presentation at the Berkman Fellows Hour.\u00a0 Jim asked, \u201cIs technological innovation on the Web different?\u201d<\/p>\n
What follows here is an attempt at recapping a lively, high-level Fellows Hour discussion.\u00a0 To paraphrase [a no-doubt cringing] Wordsworth, liveblogging \u2014 as I\u2019ve just come to learn\u00a0\u2014 might best be described as a spontaneous overflow of note-taking recollected in tranquility, and the practice supplies ample opportunity for missing nuance and eliding worthy discussion points, both in the note-taking and in the tranquil recollection.\u00a0 That\u2019s my long way around to an apology for the summation failing to live up to the event. \u00a0(And sorry, too, for the time lag in getting this posted.) \u00a0Here goes:<\/em><\/p>\n At the outset, Jim makes clear that when talks of \u201cinnovation,\u201d he means \u201ctechnological innovation\u201d and not cultural or production innovation.\u00a0 Web-related innovation is of course a part of that, but his principal focus is on how the Web facilitates innovation more broadly\u00a0\u2014 and whether that facilitation is, per the Fellows Hour theme, \u201cexceptional.\u201d<\/p>\n To be sure, Jim says, the Web enables a whole new level of collaboration (take, for example, open-source software).\u00a0 Digital media and the Internet reduce the cost of communication, with the result that you can cheaply and easily \u201cpool knowledge\u201d all across the globe.\u00a0 The conventional wisdom is that Internet collaboration has triggered a \u201crevolution of innovation.\u201d<\/p>\n Jim isn\u2019t convinced, and he urges us not to buy into the hype, which is in large part predicated on mythologies of pre-digital innovation (i.e.<\/em>, an inventor has a moment of inspiration, followed by several moments of perspiration, obtains a patent, and starts a company).\u00a0 In point of fact, the past was not so different.\u00a0 Pre-digital innovation was fraught with collaboration.\u00a0 Blast furnaces, steel minimills, U.S steamboats, the early PC\u00a0\u2014 all of these significant technological advances were the products of extensive collaboration.\u00a0 And indeed, biological innovation was until very recently an extremely collaborative effort.\u00a0 Jim pauses for a moment over to wonder aloud why this history of pre-digital collaboration is \u201ca hidden history.\u201d\u00a0 \u201cPropaganda,\u201d in support of the cult of the inventor, may have something to do with it.<\/p>\n So the phenomenon of collaboration does not, in Jim\u2019s view, make the Internet exceptional on its own.\u00a0 Another possibility is scalability.\u00a0 Larry Lessig has written of the Internet that entry costs to the technology are very low, such that scalability might be the Net\u2019s exceptionality trait.\u00a0 Jim is not sure this is any different from conditions in the 19th<\/sup> century.<\/p>\n But collaboration nowadays, with Internet technology, is for the first time truly global, isn\u2019t it?\u00a0 Jim counters that researchers have recently unearthed records of substantial communications between French aviation innovators and the Wright brothers.\u00a0 Sure, overseas collaboration can happen more quickly online, but Jim is not sure the rate of exchange is enough to be truly consequential.<\/p>\n Does the Net\u2019s ability to pull in vast numbers of collaborators make it an exceptional engine of innovation?\u00a0 Jim argues that the size of an innovation network is not critical.\u00a0 Technological innovations generally \u2014\u00a0before and now \u2014\u00a0emerge from a core network of a handful of collaborators.<\/p>\n Jim suggests a recurring pattern for technological innovation.\u00a0\u00a0 We see early-stage collaboration, innovators exchanging knowledge until the point of a major breakthrough\u00a0\u2014 the Kitty Hawk<\/em>, Bessemer steel, the Apple II\u00a0\u2014 triggers a shutdown of collaboration, while a single agent consolidates its gains into market dominance.\u00a0 There are, of course, exceptions \u2014\u00a0Jim mentions Cornish mining and steam engines.<\/p>\n Jim considers that the Internet may indeed be exceptional in that online collaborative innovations tend to resist market domination\/ collaboration failure.\u00a0 Linux is by all accounts a mature OS.\u00a0 The breakthrough moment has come and gone, and large firms are generating the majority of code.\u00a0 Here, however, the firms participate in and benefit from the incremental innovation that large firms are good at, but there\u2019s no domination.\u00a0 Consider as well smartphone OS: Jim observes that contrary to many projections, we are seeing a space created for innovation (in this case, apps) that large companies do not dominate.<\/p>\n Finally, innovation accomplished on the Web \u2014 at least in cases where collaboration survives the \u201cmajor breakthrough\u201d stage\u00a0\u2014 may be distinctive in the level of customization it offers.\u00a0 Open-source software is accessible, and therefore customizable, and Jim posits that Web innovation is more open in the long-term to customization.<\/p>\n To sum up: Web-facilitated innovation is exceptional for its resistance to single-player domination and, relatedly, for its susceptibility to customization.<\/p>\n *** Discussion follows ***<\/p>\n Q: Let\u2019s not forget that the Bessemer steel case differs from Linux on the ground that open-source licenses leveraged IP in the latter case to prevent the innovation from being captured.<\/p>\n Jim: It\u2019s important to note that the Bessemer innovators licensed the process, mastered the technology as others had not, and then they built U.S. Steel.\u00a0 But generally, yes, folks seeking to dominate a market will deploy patents to that end, as they can.\u00a0 And it\u2019s not just IP rights that would-be dominators will leverage into supremacy: often they leverage other assets, as Microsoft hoped to do with Windows and Internet Explorer.<\/p>\n Q: Can we point to instances in which we had significant post-\u201cforking\u201d innovation?\u00a0 Maybe the OS X-Windows case?<\/p>\n Jim: This is one important mechanism for preventing dominance.\u00a0 There\u2019s the more formal mechanism of licensing, too.\u00a0 Apache is a license that could be taken private, but there is so much community innovation around Apache, it resists any single-player dominance.<\/p>\n Q: Isn\u2019t it the case that large-scale participants tended to exert a disproportionate influence on early-stage innovative collaboration?<\/p>\n Jim: In my historical examples, there weren\u2019t big companies involved.<\/p>\n Q (follow-up): But collaboration on the Web\u00a0\u2014 even early-stage collaboration\u00a0\u2014 tends to find itself \u201cdominated\u201d by consistent\/insistent participants.<\/p>\n Jim: There was a significant social network phenomenon in the pre-digital era.\u00a0 The International Fraternity of Mechanicians would share technologies within the community but enforce a patent against out-group infringers.\u00a0 Let\u2019s take care to distinguish between what I\u2019m talking about \u2014\u00a0market dominance \u2014 and contribution dominance.\u00a0 How is it that in the open source context, hobbyist contributions have given way to large-firm professional contributions, but there is still no one exerting market dominance?\u00a0 That\u2019s the point of interest for me.<\/p>\n Q: Might we be understating the historical significance of the rise of the corporation, or the rationalization of scientific practices?\u00a0 These are radical changes.<\/p>\n Jim: It\u2019s been shown that involvement of an original scientist in a biotech corporation is directly related to its success.<\/p>\n Q (follow-up): . . . but you can\u2019t innovate now without having a Ph.D. or corporate affiliation.<\/p>\n Jim: Mark Zuckerberg?<\/p>\n Q (follow-up): Point taken.<\/p>\n Jim: Several of the collaboration examples I described predate the modern corporation.<\/p>\n Q (follow-up): Nonetheless, it\u2019s important to remember that the macroeconomy changes right alongside the technology\u00a0\u2014\u00a0and it\u2019s not easy to control for that.<\/p>\n Q: And let\u2019s not forget [Clayton] Christensen\u2019s \u201cInnovator\u2019s Dilemma\u201d: the market dominator is unlikely to see the innovations that will disrupt its domination.<\/p>\n Jim: Yes.\u00a0 And large companies are less able to leverage success with one technology into another area.<\/p>\n Q: Sarnoff was able to leverage radio into TV, but Microsoft couldn\u2019t leverage OS supremacy into browser supremacy.<\/p>\n Jim: And indeed, Microsoft\u2019s ability to leverage anything today is much less than in the case of the OS\/IE failure fifteen years ago.\u00a0 Windows is just now coming up with a phone OS.\u00a0 The horse has left the barn.<\/p>\n Q: How do the phenomena you describe square with the patent push phenomenon?<\/p>\n Jim: In the past you\u2019d see the heavy waves of patenting late in the life cycle.\u00a0 Firms would only take out patents after they had staked out ground they wanted to dominate.\u00a0 Now the patents are coming first\u00a0\u2014 and in many cases inventors have no intention of marketing the technology.<\/p>\n Q (follow-up): Might aggressive patenting be a rearguard corporate action to use IP to take back some of the ground they\u2019re losing elsewhere?<\/p>\n Jim: A lot of this is orthogonal and has to do with problems in the legal system.<\/p>\n Q: We\u2019re seeing less de facto<\/em> standardization from big firms.\u00a0 What role will public standards organizations play in web-era innovation?<\/p>\n Jim: I\u2019m not sure I agree with the premise: consider Apple\u2019s iPhone apps standard.\u00a0 But I do agree that public standard bodies have become more influential. \u00a0This may have to do with the greater modularity that comes from collaboration.<\/p>\n Q: Does the ability to interact quickly and electronically beat down the need to hash out standards?<\/p>\n Jim: The standards bodies still exist and flourish.<\/p>\n Q: HTML won in industry after industry, precisely because it\u2019s a crappy, anything-goes standard.<\/p>\n Q: The Web may require more from us \u2014 whenever you want to work at a level where you have to have a common substrate (as you increasingly need to do on the Net)\u00a0\u2014 standards are required.<\/p>\n Q: Maybe one way to see standards is that you dampen innovation in one space to enhance innovation above it.<\/p>\n Q: What happens if the courts retrench on patentability and reject software and business model patents?<\/p>\n Jim: We\u2019ve concluded through research that these patents function as a 10% to 20% tax on innovation.\u00a0 The big payers are the large companies, but every startup that makes any progress has to worry about patents and has had a patent asserted against them.\u00a0 If thrown out, restricted reasonably, you\u2019re alleviating the tax and improving incentives to innovate.<\/p>\n Q: Are we headed in that direction?<\/p>\n Jim: The Supreme Court made a step in the right direction with Bilski<\/em>.\u00a0 The Federal Circuit has made moves to restrict the availability of the doctrine of equivalents in proving infringement.\u00a0 There\u2019s an awareness now that things are screwed up.\u00a0 The train may be turning around.\u00a0 A number of patent law doctrines and Patent and Trademark Office practices affect the issuance of software patents.\u00a0 They\u2019ve all changed over time.\u00a0 Five years ago, pretty much any software was patentable, but now it\u2019s getting more difficult.\u00a0 Patent litigation has tripled from the early 1990s.\u00a0 It\u2019s finally leveling off, but the litigation rate for software patents continues to increase.\u00a0 Common problems include overlooked prior art, vaguely-stated claims subject to broad interpretation in patentee-friendly fora like the Eastern District of Texas.\u00a0 Although courts may take baby steps in the right directions, the situation likely will continue to deteriorate until a crisis hits the large IT firms and they become politically active.<\/p>\n Q: What role does copyright play in locking down software?<\/p>\n Jim: This is not an issue with software innovations.<\/p>\n Q: It is possible to infringe a copyrighted header file if you use it, but typically you can rewrite the header file in a manner that does not, strictly speaking, infringe the copyright (although it will infringe a patent).\u00a0 And of course, some expression is not copyrightable.\u00a0 If there\u2019s only one way to write code to accomplish a result, then you run the risk of infringing copyright, but in that case copyright\u2019s \u201cmerger doctrine\u201d would likely preclude infringement liability.<\/p>\n Q: Trafficking in technologies of subversion \u2014 hacking DSS, jailbreaking iPhones \u2014 is easily accomplished online.\u00a0 That\u2019s a consequential aspect of Web exceptionalism.<\/p>\n Q: But of course, that same quick-and-easy distribution has empowered the big-firm objects of subversion in the first place.<\/p>\n Q: The sort of online subversion we see tends to be directed at attacking models of rent extraction.<\/p>\n Jim: to sum up, I see the following aspects of the Web as \u201cexceptional\u201d promoters of innovation: (1) faster diffusion of information, (2) lower cost of entry (possibly), (3) a culture of civil disobedience, (4) the relative inability to leverage dominance from one area into another, (5) greater customizability, and (6) the ability of communities to create their own defensive perimeter to allow collaboration without subjecting a technology to control (i.e.<\/em>, through GPL).\u00a0 That last bit might be \u201clegal exceptionalism.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Jim Bessen gave last week\u2019s \u201cWeb Exceptionalism\u201d presentation at the Berkman Fellows Hour.\u00a0 Jim asked, \u201cIs technological innovation on the Web different?\u201d What follows here is an attempt at recapping a lively, high-level Fellows Hour discussion.\u00a0 To paraphrase [a no-doubt cringing] Wordsworth, liveblogging \u2014 as I\u2019ve just come to learn\u00a0\u2014 might best be described as 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