The Business of Innovation

Taking a cue from biology, innovation is either an evolved specie (improvisation) or an entirely new specie (identity). Improvised products or services exhibit features from a certain specie while new species represent an identity distinct from other species (read Maria Popova’s blog post Everything is a Remix). The mechanism of forces driving innovation is complex but taking another cue from Dan Ariely, innovation falls under two categories of norms or shall we say, identity?

1. market norms (driven by price/cost, business, cash, profit, copyrights, patents, IP)

2. social norms (driven by freedom, zero cost, labor of love, open source, cause, non-profit)

Of course, goods and services are driven by the economics of production, distribution and consumption. Market-driven innovations are in the business of profit-making while social-driven innovations are after the welfare of society. In the context of business, you have to play by the rules of business. Business problems require business solutions.

Innovation, originality, brilliance  or whatever term you may ascribe to it has its roots with social norms first, market norms later. The book Borrowing Brilliance has this to say:

Before the Italian Renaissance of the 14th century there was no concept of “originality”. Creativity was thought to be a collaborative effort, one artist copied another artist and was expected to make improvements on the copy by combining and adjusting the existing idea. No one signed their work, the artist wasn’t important, only the creation. However, when the free market started to put a “price” on work from certain artists this caused them to start signing and protecting their creations. Copying became a bad thing. This drove the creative process, author David Kord Murray says, into the shadows, laying a fog of misunderstanding over it. Soon, concepts like trademarks, plagiarism, copyrights, and patents arose … and with them the concept of “originality”. Therefore, originality is a concept born of economics, not creativity.

To illustrate further, Francis Ford Coppola said in an interview:

Is it important to veer away from the masters to develop one’s own style?
I once found a little excerpt from Balzac. He speaks about a young writer who stole some of his prose. The thing that almost made me weep,  he said, “I was so happy when this young person took from me.” Because that’s what we want. We want you to take from us. We want you, at first, to steal from us, because you can’t steal. You will take what we give you and you will put it in your own voice and that’s how you will find your voice.

And that’s how you begin. And then one day someone will steal from you. And Balzac said that in his book: It makes me so happy because it makes me immortal because I know that 200 years from now there will be people doing things that somehow I am part of. So the answer to your question is: Don’t worry about whether it’s appropriate to borrow or to take or do something like someone you admire because that’s only the first step and you have to take the first step.

How does an aspiring artist bridge the gap between distribution and commerce?
We have to be very clever about those things. You have to remember that it’s only a few hundred years, if that much, that artists are working with money. Artists never got money. Artists had a patron, either the leader of the state or the duke of Weimar or somewhere, or the church, the pope. Or they had another job. I have another job. I make films. No one tells me what to do. But I make the money in the wine industry. You work another job and get up at five in the morning and write your script.

This idea of Metallica or some rock n’ roll singer being rich, that’s not necessarily going to happen anymore. Because, as we enter into a new age, maybe art will be free. Maybe the students are right. They should be able to download music and movies. I’m going to be shot for saying this. But who said art has to cost money? And therefore, who says artists have to make money?

In the old days, 200 years ago, if you were a composer, the only way you could make money was to travel with the orchestra and be the conductor, because then you’d be paid as a musician. There was no recording. There were no record royalties. So I would say, “Try to disconnect the idea of cinema with the idea of making a living and money.” Because there are ways around it.

OSnews adds further:

And he’s right. This construct that artists have to somehow make more money than ‘normal’ people do is a recent idea, one first pushed by the booksellers in London during the aftermath of the enactment of the Statute of Anne. The big content providers we know today ran with this idea early last century, and have been trying to cement it in the collective consciousness ever since.

The very concept of innovation lies in building, borrowing and combining ideas, and let it evolve over time. The problem begins when others thought they need to recoup their investments in production from ideas to reality. But as Francis Ford Coppola says, there are ways around it.

Just like in open source, the money is not in software but in services, synergy and ecosystem around the software. Patents, copyrights and intellectual property are simply artificial artifacts that hold back the progress of innovation (see Why Software Patents are worse than useless). Which is why it’s not wise to mix market norms and social norms.

Chemistry knows it best: oil and water don’t mix.

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2 thoughts on “The Business of Innovation

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