The Source of Innovation: The Open Commons Alternative

A Public Library; important venture but not a lucrative venture

Last week’s best read on the web from the contrary-to-my-personal/popular-beliefs section was, in my opinion, this.

The author has some interesting insights into the sources of America’s innovation, how said innovation comes mostly from government funding and, most importantly, how the private sector tends to NOT produce innovation, or even downright discourages it.

If you’ve been to a fair number of entrepreneurship and startup events, you’ll probably have heard the oft spoken claim that the private sector is the source of innovation. However, the guardian article I argues to the contrary; government is the source of all major innovations that exist today, and it is most certainly true. Nothing can outcompete government spending on risky ventures, especially private capital.

Unlike private capital, the spenders of public funds usually tend to invest in long term projects that are either too expensive to manage with private capital, will take too long to build with little in terms of direct monetary returns, are not prone to scarcity (despite being desirable) and therefore not profitable (for example national infrastructure for utilities such as water and sewerage). These kinds of ventures are extremely risky but important nonetheless. Just not important enough in the context of capitalism.

Having a system that can easily handle this kind of spending without being held accountable by the principles of capitalism (though obviously this does not mean such a system is exempt from the principles of sustainability and accountability) is what leads to the concept of public spending on public goods (this also includes military spending for the public good that is national defence, a necessary evil unfortunately).

However, having said all this, I’d also add that, although this kind of system of spending is important in the creation of public goods, it would be perhaps myopic to accept the that the MODERN STATE ARCHITECTURE is the only way logical to guarantee and execute public goods creation. There are other ways of deriving the same via different means that are, arguably, more open and accountable than classic states (or supranational entities for that matter).

Wikipedia comes to mind here: it is neither a government nor a private entity. It is a commons: a resource that is owned by the community. It’s resource is knowledge, freely created, curated and edited by ordinary people for anyone who can access it. Its funding is derived from generous donations (like taxes, but without the legal coercion). And, most importantly, it works without being directly dependent on government, or private capital. It is the middle ground of innovative possibilities that we all want.

Why do I fuss over this? Simple, I want my innovation to be guilt-free, clean, without any stain that taints government-sourced innovation (military R&D for war, sometimes without accountability) and private capital (questionable intents, inaccessibility through artificial scarcity and over pricing). 

Innovation that is purely and directly owned by the community is there in the wild. In fact, due to the fact that all innovations can ultimately be traced to the individual minds of ordinary but brilliant folks, we can at least agree to accept that the need for a different approach that doesn’t involve introducing potentially perverse incentives (government or private in nature) to these people is in order.

A collective (commons-based) investment scheme for open innovation might be the third alternative that we desperately need. The public spending versus private capital discourse should not blind us to this if we really want the march of innovation to continue to thrive and sustain itself. There is also space to talk about expanding this approach to create a directly ruled, commons-based system of government, but that’s probably a topic for best suited for another day.