Intro to an innovation agenda for 2012
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We live in a rapidly changing economic, cultural, and societal environment. At least the following three assumptions seem safe:Embracing the full power of the Internet is essential to addressing the central economic, social, and political challenges we face today
. Looking just at our nation’s economic challenges, the data is clear: the Internet creates 2.6 jobs for every 1 it displaces and represents trillions of dollars in global GDP, with growth of 21% over the last 5 years in mature economies. Policymaking needs to be data-driven, with measurement and metrics built for the information society
: We cannot measure the information society by industrial society metrics. The above stats are only a piece of the Internet’s full impact. Looking just at GDP, Wikipedia contributes $0.00 to the economy. The Internet has been a powerful source of creativity, with more music, video, written words, and other content being produced than ever before; this cannot be measured by looking at how many CDs and DVDs are sold.To harness the full potential of the Internet, we need data-driven innovation policies.
Given the Internet’s immense contributions to the economy, culture, and society, we have to ask: how does all that good stuff come about? what makes the Internet special? and how can we accelerate that growth (while mitigating the harms)?
To us, those are among the central questions of 21st century innovation policy, and it’s the subject of this short paper. We focus on Internet innovation not because it is the only driver of innovation today, but rather because the Internet is increasingly intimately connected to virtually every facet of our economy, our society, and our lives.
What is innovation, where does it come from, and why does the Internet matter?
Peter Drucker defines innovation as "the effort to create purposeful, focused change in an enterprise's economic or social potential." The central driver for innovation is the idea: ideas allow us to take resources and make something more out of them. As economist Paul Romer puts it, the biggest advances come from better recipes for how we can use the ingredients at our disposal, rather than simply more cooking.
Good ideas alone are not enough, of course. There needs to be the right social, cultural, market, and political environment for those ideas to be turned to new, productive uses. A better idea for how to reap wheat or manufacture pins means little if there is no effective means to implement the idea and then exchange the result with others. Just as Einstein built on Newton and the entire smartphone industry has followed the trail blazed by the iPhone, ideas build on top of one another. People need the knowledge and incentives to create and implement ideas, and communities need the means to communicate and collaborate in order to improve them.
The Internet is the most powerful infrastructure for the creation, exchange, and implementation of ideas. It empowers the individual, and it empowers individuals who wish to work together. In 1989, Tim Berners-Lee used the Internet to speak to other computer scientists around the world, and then come up with and implemented the World Wide Web. Through the Internet, he could make the foundational elements of the Web available to anyone, anywhere in the world. And just 22 years later, the Web has fundamentally transformed myriad aspects of modern life. Berners-Lee didn’t have to negotiate for permission to create the Web, nor did the people who built on top of it have to negotiate with him. Instead, they could innovate without having to get permission first.
“Innovation without permission” is what makes the Internet special: the ability for anyone, anywhere to create, exchange, and implement new ideas, and make them available to people all around the world, with minimal barriers to entry. And today, innovation without permission isn’t just for the geeks. When an artist sells their works direct to fans over the Internet, that’s innovation without permission; when you blog or tweet and reach billions without the need to own a TV network, that’s innovation without permission.
The proverbial “inventor in the garage” is a misleading concept here, for innovation is actually much more decentralized than even that suggests. The online services you use today were not the product of a few inventors, but rather of a process of evolution and competition among hundreds of thousands of entrepreneurs in an open market, innovating at the edge of the network -- myriad “guys (and girls) in the garage”, who were able to reach the market with minimal resources.
Innovation remains an evolving discipline of study, but research and experience suggests that policymakers need to adapt themselves to the way innovation happens today. Many government policies intended to increase innovation are focused on big company, big science, and big budget research projects. These policies can help sometimes, but they’re very different from an agenda that truly harnesses the decentralized innovation we see today.
Innovation isn’t a solved issue, nor is it always good for everyone. Innovation can be disruptive. It can reshape markets and industries. It can transform culture. It can be scary.
But it is also at the root of economic, social, and cultural advancement, as well as individual empowerment. And thus it’s essential that we find ways to maximize the good, while mitigating the transitory harms.
This paper is not an exhaustive examination of what those policies ought to be. No one can claim to know the entire truth about how innovation works, but we believe that everyone can contribute with what they have learnt to be true about innovation.
The purpose of this innovation agenda is exactly that, to contribute our experience to the ongoing public discussion about innovation that is taking shape throughout different policy venues in the world today. Our hope is that this document can serve as a useful addition to the innovation policy dialogue globally, and that it can help frame a path forward.
The paper is structured around three key questions:
How can policymakers create the infrastructure for innovation?
How can policymakers foster the production and exchange of good ideas and useful knowledge?
How can policymakers ensure that good ideas become new businesses, organizations, and jobs?
Case study: How can Internet innovation address big challenges?