Monday 6 April 2009
Open Innovation or Open Slather?
In the past twelve months, perhaps encouraged by a couple of recommendations in the National Review of Australia’s innovation system, there have been growing calls from some quarters to open up to the public all research or intellectual property (IP) developed using public funds. The theory goes that it is lack of access to information and new knowledge, and particularly valuable IP, that prevents many of society’s problems from being solved. After all, if Australian taxpayer money has been used to fund research, the public should have free access to the results of this research, right?
Not always! Apart from the quite erroneous assumption that public value will always be maximised by providing free and easy access to this research, it also assumes that the “public” in other countries will not use that information for their own commercial gain and end up charging back the Australian public to appreciate the benefits.
Where does the idea of so-called “open access” to IP come from in the first place? The debate tends to be fierce in education circles, particularly in the sharing of curricula and course content. Proponents also frequently cite the open source software movement, now embraced by IBM and even more recently by Apple in its new iPhone, to illustrate the advantages of widespread community collaboration in the development of new standards and software, and that such “free” software can still result in widespread commercial application. User-led innovation and community collaboration, as demonstrated in the multiplicity of iPhone applications, certainly has its place, provided mechanisms exist for contributors to receive their fair share of the benefits or rewards. However, it is quite wrong to suggest that this is the best, indeed only, form of collaboration that brings triple bottom line benefits to the public.
There are many other forms of collaboration in innovating, and many require constraints on access to IP and ensuing developmental outputs in order to fund ongoing development. “Open innovation” is a broad term that is used to describe the collaborative exchange of IP along the value chain in order to develop new products or services that will deliver value to customers. Proctor and Gamble is the most frequently cited exemplar of the open innovation process, with over 50% of their products the result of deep collaborations with multiple partner organisations that undertake research, development, and cross licensing of IP.
Open innovation, by also involving the consumer in the collaboration, can create not just new products or services, but indeed new markets where none existed before. Value arises not just from the inputs alone, but also from the involvement of end users themselves. By casting a broad net to collect and evaluate ideas, the risks of development can be shared, and breakthrough innovation can be the result. However, the exchange of IP does not have to involve the entire public, nor need it be at zero cost.
Too many people who should know better confuse open innovation with open access. Why does it matter? Because almost everyone agrees that open innovation, involving deep and trusted collaboration, is essential for companies to grow and economies to thrive. Open access is another matter entirely. Proctor and Gamble are fine practitioners of open innovation but certainly do not provide open access to their IP. Is open innovation being used as a Trojan horse so open access becomes the norm?
Commercialisation of publicly funded research involves many complex issues and needs careful unpacking, rather than solutions that promise a silver bullet. Most publicly funded research already exists in the public domain by virtue of the fact that most scientists both want to and need to publish. That is the right thing to do, so the frontiers of knowledge continue to advance.
But let us not throw the baby out with the bathwater. There is also much IP that should be directly commercialised to bring benefits to society, and that frequently requires IP to be kept confidential. The commercialisation of Gardasil would never have proceeded in an open access regime, because no company could have afforded the clinical trials and development pathway required to bring the drug to the masses without exclusive rights.
Optimising public value from publicly funded research will require multiple pathways to usage. The fact that the direct commercialisation of university research will yield perhaps no more than 3-5% of total university income does not invalidate it as one such pathway. Would 0% be more optimal, as the proponents of open access would have it? In fact, the correct currency that demonstrates value may not necessarily be economic at all, but could be an environmental or societal measure instead. Direct commercialisation of university IP can often achieve all three, even if a Proctor and Gamble or a Merck commercially benefit in the process. Thousands of women who would otherwise suffer from cervical cancer will doubtless support the AIC on this one.
To go back to the AIC E-Newsletter please click here.
