Monday, September 6, 2021

Uncommonly Vital Innovation Commons

My brilliant colleagues, Jason Potts (RMIT University), Dietmar Harhoff (Max Planck Institute for Innovation and Competition, Ludwig-Maximilians-Universit√§t M√ľnchen, and the Centre for Economic Policy Research ("CEPR"), and Eric von Hippel (Massachusetts Institute of Technology ("MIT") - Sloan School of Management), and I have written an article entitled "Social welfare gains from innovation commons: Theory, evidence, and policy implications" on what we refer to as the "innovation commons".  An early draft of our article is available for free download here.  Here is its abstract:

Innovation commons – which we define as repositories of freely-accessible, “open source” innovation-related information and data - are a very significant resource for innovating and innovation-adopting firms and individuals: Availability of free data and information reduces the innovation-specific private or open investment required to make the next innovative advance. Despite the clear social welfare value of innovation commons under many conditions, academic innovation research and innovation policymaking have to date focused almost entirely on enhancing private incentives to innovate by enabling innovators to keep some types of innovation-related information at least temporarily apart from the commons, via intellectual property rights.

In this paper, our focus is squarely on innovation commons theory, evidence, and policy implications. We first discuss the varying nature of and contents of innovation commons extant today. We summarize what is known about their functioning, their scale, the value they provide to innovators and to general social welfare, and the mechanisms by which this is accomplished. Perhaps somewhat counterintuitively, and with the important exception of major digital platform firms, we find that many who develop innovation-related information at private cost have private economic incentives to contribute their information to innovation commons for free access by free riders. We conclude with a discussion of the value of more general support for innovation commons, and how this could be provided by increased private and public investment in innovation commons “engineering”, and by specific forms of innovation policymaking to increase social welfare via enhancement of innovation commons.

Our general argument is that "if and as private incentives to generate valuable innovation-related information can be sustained – which we will argue is often the case – social welfare will be enhanced when innovation-related data and information are transferred from private ownership to an innovation commons."

As Stewart Brand phrased it (and might have been the first to phrase it this way), "information wants to be free".  This principle holds true for information in the form of data.

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