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Part 1: In the Knowledge Economy, knowledge is free

Updated: Apr 9, 2018

We are told that innovation, creation are important and must be promoted in today’s world. We are told that that:


- Knowledge by itself is valuable

- In a sharing economy, IP is unnecessary.[1]


Yet we also live in a age of misunderstanding, perhaps incompete notions or outright misconceptions about knowledge, intellectual property (IP) and innovation.

That we can live in the so-called Knowledge economy where information and knowledge are valuable commodities yet IP is constantly denounced as a barrier to creativity makes little sense.  Some recent statements include:


“IP protection protection does more to inhibit creativity than to promote it… (and is) just another way of enriching the haves and impoverishing the have-nots.”[2]

- IP laws, such as those for copyright and patents, are “more like intellectual monopoly than intellectual property.. (and) do not simply give people their rightful due; on the contrary, they regularly deprive people of their rightful due.”[3]


In order to rectify this contradiction, we need to examine our assumptions about the value of knowledge and IP.


Let us consider the above notions….

Humans generally belive that increasing knowledge is a positive act.  This in turn leads to the assumption that innovation - new and improved ways of doing things, thinking, etc. is desirable. 

However, is knowledge alone valuable? By itself, no. There is a plethora of knowledge – a cursory glance through the archives of SSRN, Google, Facebook or any number of sources affirms that there is a huge amount of knoweldge available, but it is increasingly difficult to know what is real and what is fake.

The vast bulk of this knowledge is worth nothing. Most people would not part with their hard-earned cash for such knowledge, not only because the (percieved or actual) quality of free sources of information[4] but also because the knowledge has no inherent value to them.


Knowledge must be transformed

Knowledge must be transformed and/or applied in some way as to make it something someone would actually pay for, i.e. something of value.

Consider, for example, the discovery of penicillin. While Scottish bacteriologist Alexander Fleming isolated and grew the Penicillium notatum mold in a fluid medium, and found that it produced a substance capable of killing many of the common bacteria that infect humans, it took additional development (notably by Florey and Chain, researchers at the University of Oxford, who isolated and purified penicillin in the late 1930s) before an injectable (and thus valuable) form of the drug was available for therapeutic use in 1941.[5]

There are numerous other examples of discoveries, innovations, etc. that required years of further development before they could be made commercially viable such as:

· Gillette’s Safety Razor: King C. Gillette conceived the idea of a safety razor with a replaceable, disposable blade in 1895 but needed an additional eight years, along with the help of MIT professor William Nickerson, to develop the first modern, double-edged safety razor so as it could be made commercially available[6]

· The steam engine: James Watt made a breakthrough in the development of the steam engine by using a separate condenser in 1765 but it took several years of additional refinement, plus the financial backing of Matthew Boulton, before the steam engine could be commercially introduced in 1775[7]

· The flourescent lamp: Becquerel first used phosphors on the inside of a glass discharge tube in 1859[8]but it required subsequent improvements, by people such as Peter Cooper Hewitt, Jacques Risler and later,  a team at General Electric including George Inman, Richard Thayer, Willard A. Roberts, and Eugene Lemmers[9] to develop a product that was first commercially introduced in 1938.[10]


Collaboration is needed…

Thus some collaboration is often needed for knowledge to become something that is valuable enough that, someone else would actually pay for it. But the collaborators will often want some form of compensation for their efforts – Florey and Chain, for instance, did not work on Fleming’s discovery for free and individual and companies who spend millions developing products won’t do so without some subsequent commercial reward.There must be some rules governing the collaboration lest one party gain an unfair advantage over the other(s).

While one might dismiss such an apparent unwillingness to unconditionally share as selfishness or corporate greed, the fact remains that innovation and development are hard and often tedious work that may take years of effort.  Unfortunately, given the current human state, without some form of reward – whether recognition, economic gain or both – merely relying upon altruism to drive innovation is simply not sustainable and we need some rules to ensure fairness.



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[1] See, for example, Jeremy Rifkin, ‘The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism’

[2] Jake Van Der Kamp, ‘To see the fallacy of Trump’s intellectual rights charge, shall we all pay China for the use of paper?‘ http://www.scmp.com/business/global-economy/article/2131071/why-trump-accusing-china-intellectual-property-theft-doesn't

[3] Brink Lindsey. “The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality.”

[4] As far back as 2005, the quality of free sources of information on the Web had already rivaled that of paid databases. See: Luisa M. DoldiErwin Bratengeyer, (2005) "The web as a free source for scientific information: a comparison with fee‐based databases", Online Information Review, Vol. 29 Issue: 4, pp.400-411, https://doi.org/10.1108/14684520510617848

[5] https://www.britannica.com/science/penicillin

[6] Andrew Tarantola, ‘A Nick in Time: How Shaving Evolved Over 100,000 Years of HistoryGizmodo, March 18, 2014, https://gizmodo.com/a-nick-in-time-how-shaving-evolved-over-100-000-years-1545574268

[7] Cara Lira, ‘Biography of James Watt’, https://www.egr.msu.edu/~lira/supp/steam/wattbio.html

[8] http://www.edisontechcenter.org/Fluorescent.html

[9] ‘A brief history of the Fluorescent Lamp’ https://www.shineretrofits.com/knowledge-base/fluorescent-lighting-technology/a-brief-history-of-the-fluorescent-lamp.html

[10] John Enos, ‘Invention and Innovation in the Petroleum Refining Industry’

http://www.nber.org/chapters/c2124.pdf

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