Recently I have had two different experiences that have caused me to think really hard about patents and whether they are really a solution or a problem (or maybe a little of BOTH) in this new age of information that we are hurtling into.
The first event was a lecture by Prof Anil K.Gupta at Guelph a few nights ago. It was inspiring and uplifting to hear this great man tell how he has walked the land in India (and apparently in several other countries around the world) LEARNING the wisdom that the local peoples of those lands have to offer. Many have done this in the past but his is a completely non-exploitative approach. He looks for opportunities that might solve a problem for someone else and that can be commercialized. When and if he succeeds in taking the knowledge and commercializing it he shares the rewards back with the folks who had given him the knowledge in the first place. The network is called the Honeybee Network (an unfortunate choice since it has almost nothing to do with real beekeeping). He proudly mentioned in his talk that he has many patents for different technologies. That started the thought in my head. The cost to obtain these in all the countries his network works in (35 at last count I think), to enforce them and to license them seemed to me to be contrary to the "brand" that he was trying to establish - share the wealth of knowledge that is languishing in the traditions of indigenous peoples around the world for the betterment of everyone.
To be fair, he did mention that he gets a lot of help (from law firms amongst others) in reducing the costs of getting the patent in the first place. But that is where the problem started for me. It has been said that "It is amazing how everything looks like a nail when all you have in your toolbox is a hammer." (I did mention that there were TWO recent events. The second was a discussion with a patent-lawyer friend of mine who really unknowingly convinced me that patents were NOT always the way to go). Patents, like unions, certainly had their place in the early years of the industrial revolution. To be able to manufacture something and sell it at a profit one had to do a lot of expensive research. To recover these costs and to make the knowledge eventually available to the general public, it seemed appropriate to grant one some monopolistic rights for a limited time.
Today there is so much knowledge available to everyone and so many technologies that will aid the production of quick prototypes etc. and so much state (read your tax dollar and mine) sponsored research that one might well argue that the tremendous investments of time and costs to just find out if something has a chance to work is reduced not extended.
Surely there will be those who will point to the increasing costs of developing a drug in the pharmaceutical world and the increased time to get it approved etc. There are indeed fields where it may yet make sense to patent inventions. We are not 100% there yet. But do we see a trend where the number of such fields is increasing or decreasing? Even the pharmaceuticals industry has argued that the idea of the limited time to be able to recover their investments is insufficient. They would of course like MORE exclusivity but the fact remains that even for this industry (the bastion of patenting in a way) patenting in the old traditional sense is not working. We are entering an age of information and knowledge. The more we share it the better off we are all in terms of being able to maximally leverage it to improve our own lots and those of others.
Lest you are thinking that I may break out into a verse or two of KumBaYaa soon let me assure you that I am at heart a capitalist. I want to see free competition and a vigorous marketplace. But do we need monopolies to do that? Doesn't it sound protectionist to be granting people monopolies even for a limited time? Shouldn't we be relying on market forces to bring about the better products rather than the smug feeling that one can do whatever one wants for some time before one has to answer for it? This is what has happened in the IT world for example. The pace of improvements is so fast now that patenting is NOT considered a serious alternative. Increasingly, folks in that field rely on staying ahead of the market, on trade secrets, and on the ingenuity of their employees (whom, by the way, they have to CONSTANTLY woo to stay where they are) They have found other means like copyrights etc to protect their longer lasting inventions. And the pace of growth in this industry is second to none in my opinion. The developing world (I really hate that term. I wish someone could come up with a better descriptor) has also shown us that patenting may not be relevant there. The costs to inventors, and the rapid pace of incremental invention (to say nothing of the slow and sometimes complicated legal system in their countries) almost makes it uneconomical to patent anything. One simply has to rely on tried and true things like reputation, market acceptance, grass roots desirability etc. to succeed. Is this an altogether bad thing? I think not.
As the pace of change accelerates in all walks of life we will one day face the challenge that the time and cost to obtain a patent will be greater than the expected lifetime of the object in the marketplace before it is superseded by the next better, cheaper, faster thing. I contend that there are still ways to make money in this sort of marketplace but I question whether patenting is one of them. Those who embrace change early have a chance to ride the wave of experience.
Thursday, October 30, 2014
Monday, May 26, 2014
NECESSITY (not grant money, or passion, or culture or anything else) is the mother of innovation.
I am writing this mostly for myself. I don't expect anyone else to read it let alone voice an opinion about its contents. I have finally had enough. I am a proud Canadian of some fifty years or so. I've often wondered about the apparent gap in out ability to take great research and convert it into good market-ready innovations that move the needle of our economy. I run a company that is dedicated to making a difference in this area. I've read all the books that the pundits have written about how risk averse we are (read "blah, blah, blah") and how we need to change the culture or the mindset of the people etc. etc. etc. Here's a thought for you: If we continue to import the best people from all over the world how come THEY can't start the change for us? Bottom line: I don't think we are addressing the right issue in bemoaning our culture etc.
The simple fact is that we are living in one of the richest parts of the world no matter HOW you care to measure it. We have all the basics - food, water, shelter, clothing - by and large in GREAT abundance in this great land of ours. And we have so much more! Don't get me wrong, I don't mean we are all well off. Sure there are places that do better than others and groups that do better than others in Canada but ON AVERAGE we are a lucky lot to be just living here in Canada as compared almost to anywhere else on earth! There's an old saying that necessity is the mother of invention. I was at another of these rather common sounding talks this morning where the speaker spoke enthusiastically about how we need to do things which we have a passion for and how we need to take more risks and not be afraid to fail. I'm sure if you are ALIVE and in this country you have not escaped such talks completely. He gave example after example of great innovators and great inventions. He spoke of the "hub" of such innovation - Israel. He gave examples of his life where he has had to be inventive and he gave examples of the banking industry where the littlest bank - Tangerine - simply HAD to be nimble and inventive because they were - as it were - dancing among the feet of the BIG giants of the banking industry and would be crushed if they only stood still long enough. All of the many inspiring examples he gave had one thing in common. They had a SURVIVAL need to innovate. There was a wolf at the door, their very existence hung on their success at being innovative. And it begged the question for me: Until we have dug out the last resource from our beloved country or exhausted the last easy extraction of wealth from this land, HOW will we have this need to innovate which drives every example of success that you can think of?
So in a sense there is some relief in what I am saying for me. It says that our failures as a nation to succeed at innovation are not the function of an inbred cultural gene that blocks innovation that needs to be removed through cultural reshaping or anything else. We are humans like all the rest of our species Until we have a NEED we will not be inventive enough as a nation. Here is one case where I hope that I am wrong but even if I am right I am confident that when the challenge arises we will rise to it simply because we are... yes HUMAN.
Now I must come to the nub of what bothers me: our government has a long tradition of interfering in the harsh free market directly rather than attempting to "level the playing field" through legislation. Their most recent fashion is to support entrepreneurship - a noble concept on the surface if well executed. Their solution is to shower your tax dollars and mine on anyone who says they are helping young entrepreneurs in some way. The number of incubators and start-up competitions cropping up all over the country is simply staggering. The government can say they are doing their part by supplying the money. But I have a problem with that. There is no strategic leadership to go along with that supply of money. I understand that this is politically unwise for a government to appear to be "picking winners" as we say in Canada. So they blame the implementation on others. But I contend that they are doing the whole area of entrepreneurship a dis-service by supplying easy money and other support to start-up companies. They have removed the SURVIVAL need from most of these so-called "grantpreneurs" which would otherwise drive them to succeed. They have converted their desire to succeed to a desire to be supported. Let's face it, there is a difference in the effort that will be put into survival by someone who has mortgaged their house, maxed out their credit cards and borrowed from all of their relatives and that which will be invested by someone whose company started through a grant from the government. In the family context we call that a failure to launch. We have lowered the selection criteria for launching something that looks like a start-up but has absolutely no chance of success from the brutal market forces to a kinder-gentler one that is more painful to all of us in the long run because, if NOTHING else, it dilutes those who are REAL entrepreneurs and puts them at a disadvantage in the short term. I am not against helping those with promise. I think we have gone too far and made this into a political game that will not serve anyone well and will simply delay the inevitable.
The simple fact is that we are living in one of the richest parts of the world no matter HOW you care to measure it. We have all the basics - food, water, shelter, clothing - by and large in GREAT abundance in this great land of ours. And we have so much more! Don't get me wrong, I don't mean we are all well off. Sure there are places that do better than others and groups that do better than others in Canada but ON AVERAGE we are a lucky lot to be just living here in Canada as compared almost to anywhere else on earth! There's an old saying that necessity is the mother of invention. I was at another of these rather common sounding talks this morning where the speaker spoke enthusiastically about how we need to do things which we have a passion for and how we need to take more risks and not be afraid to fail. I'm sure if you are ALIVE and in this country you have not escaped such talks completely. He gave example after example of great innovators and great inventions. He spoke of the "hub" of such innovation - Israel. He gave examples of his life where he has had to be inventive and he gave examples of the banking industry where the littlest bank - Tangerine - simply HAD to be nimble and inventive because they were - as it were - dancing among the feet of the BIG giants of the banking industry and would be crushed if they only stood still long enough. All of the many inspiring examples he gave had one thing in common. They had a SURVIVAL need to innovate. There was a wolf at the door, their very existence hung on their success at being innovative. And it begged the question for me: Until we have dug out the last resource from our beloved country or exhausted the last easy extraction of wealth from this land, HOW will we have this need to innovate which drives every example of success that you can think of?
So in a sense there is some relief in what I am saying for me. It says that our failures as a nation to succeed at innovation are not the function of an inbred cultural gene that blocks innovation that needs to be removed through cultural reshaping or anything else. We are humans like all the rest of our species Until we have a NEED we will not be inventive enough as a nation. Here is one case where I hope that I am wrong but even if I am right I am confident that when the challenge arises we will rise to it simply because we are... yes HUMAN.
Now I must come to the nub of what bothers me: our government has a long tradition of interfering in the harsh free market directly rather than attempting to "level the playing field" through legislation. Their most recent fashion is to support entrepreneurship - a noble concept on the surface if well executed. Their solution is to shower your tax dollars and mine on anyone who says they are helping young entrepreneurs in some way. The number of incubators and start-up competitions cropping up all over the country is simply staggering. The government can say they are doing their part by supplying the money. But I have a problem with that. There is no strategic leadership to go along with that supply of money. I understand that this is politically unwise for a government to appear to be "picking winners" as we say in Canada. So they blame the implementation on others. But I contend that they are doing the whole area of entrepreneurship a dis-service by supplying easy money and other support to start-up companies. They have removed the SURVIVAL need from most of these so-called "grantpreneurs" which would otherwise drive them to succeed. They have converted their desire to succeed to a desire to be supported. Let's face it, there is a difference in the effort that will be put into survival by someone who has mortgaged their house, maxed out their credit cards and borrowed from all of their relatives and that which will be invested by someone whose company started through a grant from the government. In the family context we call that a failure to launch. We have lowered the selection criteria for launching something that looks like a start-up but has absolutely no chance of success from the brutal market forces to a kinder-gentler one that is more painful to all of us in the long run because, if NOTHING else, it dilutes those who are REAL entrepreneurs and puts them at a disadvantage in the short term. I am not against helping those with promise. I think we have gone too far and made this into a political game that will not serve anyone well and will simply delay the inevitable.
Tuesday, March 4, 2014
Does a track record in Business matter?
Yesterday, I was at a rehearsal for a start-up company competition. My job was to look at the three FINALISTS in the competition - start-ups that had "made it" to this point and who would be presenting to an illustrious group of REAL judges in a few days so that a "winner" could be announced then. I was struck by a common feature in all of these companies. They each had a world-class academic with multiple decades of scientific experience as their founder and scientific leader AND they each had a young (in some cases not even yet GRADUATED) MBA student as their 'C' level business leader. Does that strike anyone else as odd?
There are probably several explanations for this phenomenon. Probably there is some sort of government subsidy for a new employee who is taking on their first job. It is possible that there is a genuinely noble thought of giving some young person a start in life. They may have had some relationship with the scientific leader (relative or former student for example) etc. But ALL of the reasons that I could think of should also have applied to the scientific side of the company. Yet NONE of them had made this choice on the science side. Why is it possible that the same academics who would never consider giving the scientific leadership of the company that they founded to some recent graduate (even from their own groups!!) would happily give the BUSINESS leadership to a similarly inexperienced stranger from another discipline?
As I ruminated on this strange phenomenon - one which I see repeated ALL across the country - I could come up with only one explanation; one that I am sincerely VERY loathe to accept (hence this blog to recruit other explanations from my readership). The only explanation I could entertain in the end was that scientific academics have extremely low respect for the value that an experienced business person brings to the eventual success of the startup. Is it any wonder then in Canada (where the OVERWHELMING support for start-ups and innovation is based on the assumption that academics somehow are best equipped to create this country's future Sustainable Global Companies (SGCs)) that we have no real world-class global companes to show for our DECADES of adherence to this approach?
Now, I have heard many times from serious nvestors that "It is far better to invest in mediocre technology and a stellar business team than the other way around". Is it possible that there is some truth to this saying? Could it be that as Canadians we are investing in the wrong BUSINESS end of the success story? Would it be worth even taking a larger FRACTION of what we invest today in technology and investing it in our Small and Medium Enterprises (SMEs) so that those with a proven BUSINESS track record can expand their operations, try something new, increase their capacity for risk, open new markets for themselves etc. etc. etc. and maybe someday even BECOME SGCs.
I know that there are several government programs that supposedly help the SMEs. But by and large the SMEs I meet all tell me that the only interaction they have with the government is at tax time. So I ask, would we all be better off if we started to help smaller but strategically already proven companies become bigger global players? Would this approach be better than our government continuing to squander all of our collective bets on the belief that academic technologies are the answer to our future?
As usual your comments are most welcome.
There are probably several explanations for this phenomenon. Probably there is some sort of government subsidy for a new employee who is taking on their first job. It is possible that there is a genuinely noble thought of giving some young person a start in life. They may have had some relationship with the scientific leader (relative or former student for example) etc. But ALL of the reasons that I could think of should also have applied to the scientific side of the company. Yet NONE of them had made this choice on the science side. Why is it possible that the same academics who would never consider giving the scientific leadership of the company that they founded to some recent graduate (even from their own groups!!) would happily give the BUSINESS leadership to a similarly inexperienced stranger from another discipline?
As I ruminated on this strange phenomenon - one which I see repeated ALL across the country - I could come up with only one explanation; one that I am sincerely VERY loathe to accept (hence this blog to recruit other explanations from my readership). The only explanation I could entertain in the end was that scientific academics have extremely low respect for the value that an experienced business person brings to the eventual success of the startup. Is it any wonder then in Canada (where the OVERWHELMING support for start-ups and innovation is based on the assumption that academics somehow are best equipped to create this country's future Sustainable Global Companies (SGCs)) that we have no real world-class global companes to show for our DECADES of adherence to this approach?
Now, I have heard many times from serious nvestors that "It is far better to invest in mediocre technology and a stellar business team than the other way around". Is it possible that there is some truth to this saying? Could it be that as Canadians we are investing in the wrong BUSINESS end of the success story? Would it be worth even taking a larger FRACTION of what we invest today in technology and investing it in our Small and Medium Enterprises (SMEs) so that those with a proven BUSINESS track record can expand their operations, try something new, increase their capacity for risk, open new markets for themselves etc. etc. etc. and maybe someday even BECOME SGCs.
I know that there are several government programs that supposedly help the SMEs. But by and large the SMEs I meet all tell me that the only interaction they have with the government is at tax time. So I ask, would we all be better off if we started to help smaller but strategically already proven companies become bigger global players? Would this approach be better than our government continuing to squander all of our collective bets on the belief that academic technologies are the answer to our future?
As usual your comments are most welcome.
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