Sometimes it takes traveling abroad to remind me of the many good qualities of the U.S, including a wide variety of restaurants, fixed shower heads, and ESPN. But seriously, there is one feature of the U.S. that is the envy of the world – innovativeness.
I’m here at the Economic Forum in Krynica, Poland and it’s very obvious that Europeans see red, white and blue when they think of innovation. And that’s because when it comes to innovation, the world is not flat in the Thomas Friedman sense. There are geographic spikes of innovation – and world leaders all want to erect a Silicon Valley in their nation. As Steve DelBianco and I have written about in our paper on innovation, in today’s global economy, innovation is a key component to economic growth and societal prosperity.
But how does innovation work, and why do some nations like the U.S. and Japan excel at creating innovative products and services? That was the topic of ACT’s first panel (out of four) here at the Krynica economic forum, “Localizing the Lisbon Strategy – How to Cultivate Innovation Ecosystems.” The Lisbon Strategy is the European Union’s innovation strategy to increase European jobs and economic growth.
Olaf Gersemann (Editor at Financial Times Deutschland and author of Cowboy Capitalism: European Myths, American Reality) moderated the panel. He painted a bleak portrait of European competitiveness. Purchasing power parity, unemployment, productivity growth, R&D investment are all below U.S. levels.
Waldemar Ingdahl (President of a Swedish think tank) echoed Olaf’s pessimism, and said that the EU would need an 8% growth rate over 20+ years to catch up to the U.S. He also mentioned that the EU could do a better job of educating small and medium enterprises (SMEs) about intellectual property and bemoaned the European Commission’s competition policy, which he described as focusing too much on competitor welfare at the expense of consumers.
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I’m heading to Poland this weekend to speak at the Krynica Economic Forum, the most prominent public policy conference for Central and Eastern Europe. My organization, ACT, is sponsoring a daylong session on public policy and innovation, on which I’ve organized four panels:
- Localizing the Lisbon Strategy – How to Cultivate Innovation Ecosystems
- Open, Closed or Somewhere In-Between? The Future of ICT and Software Innovation
- Copyrights and Patents – Incentives for (or Barriers to) Innovation Creation?
- Distributing Your Innovation: Avoiding Trade Barriers in a Flat World
We’re fortunate to have some top-notch speakers, including the Vice-President of the European Commission Gunter Verheugen, the Assistant Director of the World Intellectual Property Organization Francis Gurry, prominent open source advocate Larry Rosen, and Federico Etro, a professor at the University of Milan and President of Intertic (an International Think-tank on Innovation and Competition).
"Do Napisania" w Polsce (I’ll be writing from Poland)
You’ll have to listen to the latest Tech Liberation Front podcast to get the full
thought-provoking discussion on copyright law and the first sale doctrine, but
let me tease out a portion of the discussion on extending the first sale to apply
to use in addition to transfer.
The main focus of the podcast is a case Fred von Lohmann and EFF are defending concerning the "first sale" doctrine of copyright law. Fred describes first sale on the EFF website:
The idea, set out in Section 109 of the Copyright Act, is simple: once you’ve acquired a lawfully-made CD or book or DVD, you can lend, sell, or give it away without having to get permission from the copyright owner. In simpler terms, "you bought it, you own it" (and because first sale also applies to gifts,
"they gave it to you, you own it" is also true).
While Fred’s right when he says "you bought it, you own it" that doesn’t mean you can do anything you want with a copyrighted work. First sale
currently only applies to transfers of the copyrighted good. Fred said in the podcast that he would like to see the first sale doctrine expanded into the area of "use." Extending it to use means content owners
couldn’t use a copyright license to enforce certain use restrictions, such as the sharing and presentation of copyrighted material. Although this wasn’t mentioned on the podcast, I think this would have the effect of expanding "fair use."
Fred surely thinks this liberal copyright world would benefit consumers and society writ large – but it would come at some costs, too. The reality is that content creators would impose use
restrictions in other ways, especially for legitimate price and market segmentation (ie. for software, discounted OEM copies are often labeled "not for resale" to avoid competing with the normal retail channel). This would have to be done by using contract, not copyright law.
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Adam and I are heading down to North Carolina tomorrow to testify against a bill pending in the state legislature that would require anyone under 18 to have a parent’s permission to join a social networking site such as MySpace. Adam has written extensively about Internet safety. Here’s my take.
At first glance, that might seem like a sensible idea. But, as I keep pointing out to anyone who will listen, it just won’t work. How can a website be sure that someone signing up is really over 18? How can a website be sure that a person giving parental consent is really a parent? Experience and common sense suggest that education and prevention are a far better approach to Internet safety.
Indeed, a study published earlier this year in the Archives of Pediatrics and Adolescent Medicine suggests that a lot of the advice we have been giving young people about Internet safety may be off the mark anyway. The researchers found no evidence that sharing personal information online increases the chances of online victimization, like unwanted sexual solicitation and harassment. Victimization is more likely to result from other online behavior, like talking about sex with people met online and intentionally embarrassing someone else on the Internet.
These findings are in line with earlier research by the University of New Hampshire that examined 2,500 cases where juveniles were victims of sex crimes committed by people they met on the Internet. The study found that these children, almost all teenagers, were not victims of strangers who had lured them into situations where they could be abducted or assaulted. In fact, just the opposite was the case.
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We’re facing war against a technological civilization far superior to our own! Our enemy can take any shape! They could be anywhere!
– Defense Secretary Keller, played by Jon Voight in Transformers
I took a break from trying to transform bad tech regulation to see Transformers the movie. It was surprisingly cynical for a big, kid-oriented blockbuster movie. At the beginning of the ending credits, the mom and dad of the main character (Sam Witwicky, played by Shia LaBeouf) insert some skepticism about trusting the government with national security secrets to really act in the best interest of the country. And anyone notice that the evil Decepticons were military vehicles, while the good Autobots were civilian vehicles (all GM autos). A veiled message of the power of the market to do good versus government control? And what about the writing on the side of the police vehicle – “to punish and enslave” (which was the only non-military bad guy vehicle, a Saleen S281 based on the Ford Mustang)?
Every once in a while I connect with my inner geek and read through Slashdot. I often see some interesting arguments by people that understand technical issues. However, this comment, made in response to news that Apple purchased the rights to the Common Unix Printing System (CUPS), provoked me:
The real lesson here is that the idea that the developers should pool their copyrights into one person is flawed. That person can then cash out. The get all the profits for everyone else’s work. The other developers lose out on both getting a piece of the pie if they would have wanted that, and they lose out in the moral sense in that if they didn’t want their code to suddenly become part of a closed source project, they have no say in it anymore.
It seems to me that nothing wrong occurred when Apple purchased this code. CUPS, which is used for printing by many Linux distributions and in the Mac OS X, was an open source project created by Michael Sweet. Sweet presumably owned the copyright to the code, so the code was legally his to sell. Sweet should be rewarded for his labor — throw him a buck or two in the tip cup!
But wait…what about the other developers that contributed code to CUPS? Or — forget the tip cup, did Sweet profit from the entire give-a-penny, take-a-penny tray? Have no fear, as CUPS will continue to be an open-source project under a GPL2/LGPL2 license. So there’s no downside and no moral turpitude — developers that chose to contribute code will still see that code available as free software, and can take and add to it as they wish.
What seems to burn the Slashdot commenter is the fact that there’s an upside. Someone actually made money! It’s a shame that when a technology creator/owner like Sweet gets his reward, and doesn’t infringe on the rights of others to do so, he still draws fire. Oh well, in a world where people often materialistically prize money above all, there are also those who wrongly lust over other people’s money.
Tim’s latest TechKnowledge article explains why why libertarians should celebrate free software, and cautions that we shouldn’t let lefty-sounding ideals about “community” negatively cloud our perception of the GPL and free and open source software. He’s right, even if knee-jerk reactions may be otherwise – but allow me to expand the discussion. What happens when government celebrates free software, such that voluntary cooperation becomes co-opted by public policy?
Libertarians who embrace free software will (or should!) be against government programs favoring it. However, when some free software proponents adopt rhetoric calling government to their cause, it’s not enough (unfortunately) to just make the libertarian case against regulatory intervention. We must also make the deep-dive into analyzing the merits of pro-intervention platitudes.
A discussion on the merits may well require determining whether free software really does offer certain advantages, or if the new version of the dominant license governing free and open source software — the GPL — may have legal or administerability problems with its upcoming version 3.
Analyzing free software in order to debunk advocacy in favor of government preferences for free software could be seen as being against free software itself. But it’s not necessarily so, and it wasn’t meant to be the case when my colleagues at ACT and I took a deep-dive analysis into a report chock full o’ interventionist advocacy.
A European Commission report calls for a new industrial policy to ignite report advocated government programs (a la Airbus) based on free and open source software. ACT analyzed the report with a series of blog posts reviewing each section. We found that the report’s analysis favoring Free/Libre/Open Source Software (FLOSS) wasn’t adequately supported by the data. Moreover, by advocating interventionist public policies the report’s recommendations may harm, not help, Europe’s overall ICT sector. We did this not to attack FLOSS per se, but to oppose interventionist policies on behalf of FLOSS.
The report makes no attempt to disguise its purpose: convince European policymakers to favor FLOSS in their procurement decisions and other programs. Section 9 of the study—Trends, Scenarios and Public Policy Strategies—suggests a number of public policy programs to promote FLOSS, some interesting but all interventionist:
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Over at the Google Public Policy Blog, there’s an interesting post about recent efforts by Google to lobby the State Department and USTR to treat censorship as a trade barrier. Andrew McLaughlin writes:
Just as the U.S. government has, in decades past, utilized its trade negotiation powers to advance the interests of other U.S. industries, we would like to see the federal government take to heart the interests of the information industries and treat the elimination of unwarranted censorship as a central objective of our bilateral and multilateral trade agendas in the years to come.
But my hope is that the U.S. government can begin to move – incrementally, agreement-by-agreement, over the coming decade and beyond – to include in our bilateral and, eventually, multilateral trade agreements the notion that trade in information services should presumptively be free, absent some good reason to the contrary.
I can see how censorship hurts U.S. IT companies, especially if entire sites like YouTube are blocked when governments object to some user-generated content. But good luck to our trade negotiators in getting China or other repressive governments to loosen their grip over information!
How do the direct and indirect trade barriers of some nations unfairly harm the ability of foreign (particularly American) IT companies to monetize digital innovations and distribute intellectual assets globally? That’s the focus of a new paper from Rob Atkinson and Julie Hedlund at ITIF, entitled The Rise of the New Mercantilists: Unfair Trade Practices in the Innovation Economy.
Today’s innovations have much shorter life-cycles, so companies need
broader, faster market distribution in order to earn returns on
innovation–money they invest in tomorrow’s innovations. These companies seek
sales and licensing markets all across our “flat world.” The ITIF report discusses how it’s not your father’s form of protectionism anymore (such as tariffs and direct subsidies). Companies also face protectionist trade barriers in the forms of lax enforcement of intellectual property piracy and counterfeiting, disparate competition regulations, government preferences and standards manipulation.
Now here’s the crux of the question: is this a new
form of protectionism – what my colleague Steve DelBianco and I call “Protectionism 2.0”? Or are these more subtle forms of trade barriers the result of legitimate public policy goals? Probably a bit of both, but one has to ask – if Microsoft were a German company would it be facing the full wrath of competition regulators? Or if Apple were Dutch, or Norwegian, or French – would it be scrutinized by regulators in those countries eager to break the link between iTunes and iPod?
Earlier this week the NY Times reported that Google filed a complaint with the Department of Justice about Microsoft’s desktop search. At a time when Google is under scrutiny in the EU for privacy practices, censorship in China, and has potential antitrust issues of its own with the recent DoubleClick acquisition, this complaint is politically precarious.
But the complaint hits on a broader public policy point: will antitrust regulation put the heat on tech companies that innovate by integrating?
That’s the subject of my new paper along with co-author
Steve DelBianco. In Consumer Demand Drives Innovation and Integration in Desktop Computing, we examine the competition policy concerns raised by the
on-demand desktop, and the danger that overzealous regulators could constrain
the future of Web2.0.
Feature integration is an essential way to improve products
and motivate existing consumers to upgrade. Traditional desktop vendors like
Microsoft and Apple usually spend several years integrating new features into
major releases of their operating systems and applications. Even a core Linux distribution like Debian
manages only about one release each year. Consumers often prefer a bundled
product that provides more value for the money, and the software industry
typically responds by combining services in a suite of applications.
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
