Innovation & Entrepreneurship

The deadline for filing amicus briefs in support of the Federal Circuit’s attempt to trim back business method patents in Bilski passed on October 2. Many briefs have been filed, and much fuss has been made in the tech community, for business method patents are linked to the problem of software patents. Many software patents, such as Amazon’s 1-click order patent, are for business methods.

If the courts ultimately trim back business method patents, will this take some of the pressure off both tech and the patent system? Not as much as many in the tech community or the patent community would hope, for reasons I examine below. Patent reform is now being driven by business constituencies, and these constituencies are not good at all at working on big picture institutional problems. There, in short, is a not-seeing-forest-for trees problem.

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Singularity Summit 09

by on October 3, 2009 · 9 comments

Is going on this weekend in New York.  Check out the program here. I can’t wait to see all the video! Also check out the suggested reading list—in particular, Why Work Toward the Singularity.  Here’s a teaser:

Why is the Singularity worth doing? The Singularity Institute for Artificial Intelligence can’t possibly speak for everyone who cares about the Singularity. We can’t even presume to speak for the volunteers and donors of the Singularity Institute. But it seems like a good guess that many supporters of the Singularity have in common a sense of being present at a critical moment in history; of having the chance to win a victory for humanity by making the right choices for the right reasons. Like a spectator at the dawn of human intelligence, trying to answer directly why superintelligence matters chokes on a dozen different simultaneous replies; what matters is the entire future growing out of that beginning.

But it is still possible to be more specific about what kinds of problems we might expect to be solved. Some of the specific answers seem almost disrespectful to the potential bound up in superintelligence; human intelligence is more than an effective way for apes to obtain bananas. Nonetheless, modern-day agriculture is very effective at producing bananas, and if you had advanced nanotechnology at your disposal, energy and matter might be plentiful enough that you could produce a million tons of bananas on a whim. In a sense that’s what nanotechnology is – good-old-fashioned material technology pushed to the limit. This only begs the question of “So what?”, but the Singularity advances on this question as well; if people can become smarter, this moves humanity forward in ways that transcend the faster and easier production of more and more bananas. For one thing, we may become smart enough to answer the question “So what?”

In one sense, asking what specific problems will be solved is like asking Benjamin Franklin in the 1700s to predict electronic circuitry, computers, Artificial Intelligence, and the Singularity on the basis of his experimentation with electricity. Setting an upper bound on the impact of superintelligence is impossible; any given upper bound could turn out to have a simple workaround that we are too young as a civilization, or insufficiently intelligent as a species, to see in advance. We can try to describe lower bounds; if we can see how to solve a problem using more or faster technological intelligence of the kind humans use, then at least that problem is probably solvable for genuinely smarter-than-human intelligence. The problem may not be solved using the particular method we were thinking of, or the problem may be solved as a special case of a more general challenge; but we can still point to the problem and say: “This is part of what’s at stake in the Singularity.”

The rest of the essay is worth reading.

Tomorrow, Friday, Oct. 2, the Information Economy Project at the George Mason University School of Law will hold a conference on Michael Heller’s new book The Gridlock Economy. Surprisingly Free will be streaming live video of the the conference kick-off debate between Heller and Richard Epstein at 8:30 a.m. (It will also be available for download later for folks allergic to early mornings.)

Called “Tragedies of the Gridlock Economy: How Mis-Configuring Property Rights Stymies Social Efficiency,” the conference will

explore a paradox that broadly affects the Information Economy. Property rights are essential to avoid a tragedy of the commons; defined properly, such institutions yield productive incentives for creation, conservation, discovery and cooperation. Applied improperly, however, such rights can produce confusion, wasteful rent-seeking, and a tragedy of the anti-commons.

This conference, building on Columbia University law professor Michael Heller’s book, The Gridlock Economy, tackles these themes through the lens of three distinct subjects: “patent thickets,” reallocation of the TV band, and the Google Books copyright litigation.

In the meantime, check out this video of Michael Heller at Google giving his elevator pitch.

Technological change confers enormous benefits, even for those of us who do not rush out to buy the latest  neat new thing.  Here’s one example.

I like to grill. I own four barbecue grills and three smokers. We got one smoker as a wedding present, but the rest were bestowed free of charge by the progressive forces of technological change.

OK, no bestowing was involved; I fished them out of neighbors’ trash.  This model on the right was considered the iPhone of barbecue grills when it was introduced in the 1950s, and not just because it was a hot wireless device.   Before then, most grills were topless — which let wind, rain, snow, etc. wreak havoc with whatever was on the barbie.  George Stephen of Mt. Prospect, IL, cut a buoy in half, and the Weber grill was born.  According to one authoritative web site, “American grillers now had a way to protect their steaks and burgers from the wind and rain, and the lid also sealed in a moist and smoky new flavor.”  I know from personal experience it also works in a snowstorm.

By the way, that was once a $400 piece of equipment.  Weber grills cost $50 when they were introduced in the 1950s — which is equivalent to $400 today when adjusted for inflation.  I’m sure by the time the previous owner bought it, improvements in manufacuring methods brought the retail price down; this basic one now costs less than $100 new.  But it became mine — surprisingly free! — when its previous owner upgraded to the next big innovation, a gas grill.

So we all have a steak in innovation — even those of us who still drive cars with manual locking doors and only use our cell phones for conversation!

This week Google unveiled Sidewiki, a tool that lets users annotate any page on the web and read other users’ notes about the page they are visiting. Professional Google watcher Jeff Jarvis quickly panned the service saying that it bifurcates the conversation at sites that already have commenting systems, and that it relieves the site owner of the ability to moderate. Others have pooh-poohed the service, too.

What strikes me about the uproar is that Sidewiki is a lot like the “electronic sidewalks” that Cass Sunstein proposed in his book Republic.com. The concept was first developed in detail in a law review article by Noah D. Zatz titled, Sidewalks in Cyberspace: Making Space for Public Forums in the Electronic Environment [PDF]. The idea is a fairness doctrine for the Internet that would require site owners to give equal time to opposing political views. Sunstein eventually abandoned the view, admitting that it was unworkable and probably unconstitutional. Now here comes Google, a corporation, not the government, and makes digital sidewalks real.

The very existence of Sidewiki, along with the fact that anyone can start a blog for free in a matter of minutes, explodes the need for a web fairness doctrine. But since we’re not talking about government forcing site owners to host opposing views, I wonder if we’re better off with such infrastructure. As some have noted, Google is not the first to try to enable web annotation, and the rest have largely failed, but Google is certainly the biggest to make the attempt. As a site owner I might be worse off with Sidewiki content next to my site that I can’t control. But as a consumer of information I can certainly see the appeal of having ready access to opposing views about what I’m reading. What costs am I overlooking? That Google owns the Sidewiki-sidewalk?

Cross-posted from Surprisingly Free. Leave a comment on the original article.

One of the projects I run is OpenRegs.com, an alternative interface to the federal government’s official Regulations.gov site. With the help of Peter Snyder, we recently developed an iPhone app that would put the Federal Register in your pocket. We duly submitted it to Apple over a week ago, and just received a message letting us know that the app has been rejected.

Action IconThe reason? Our app “uses a standard Action button for an action which is not its intended purpose.” The action button looks like the icon to the right.

According to Apple’s Human Interface Guidelines, its purpose is to “open an action sheet that allows users to take an application-specific action.” We used it to bring up a view from which a user could email a particular federal regulation. Instead, we should have used an envelope icon or something similar. Sounds like an incredibly fastidious reason to reject an application, right? It is, and I’m glad they can do so.
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Schumpeter ColumnI’m thrilled to hear that the Economist has just launched a new column about business, innovation and entrepreneurship in honor of Joseph Schumpeter (1883-1950), the brilliant Austrian economist who,

argued that innovation is at the heart of economic progress. It gives new businesses a chance to replace old ones, but it also dooms those new businesses to fail unless they can keep on innovating (or find a powerful government patron). In his most famous phrase he likened capitalism to a “perennial gale of creative destruction”.

For Schumpeter the people who kept this gale blowing were entrepreneurs. He was responsible for popularising the word itself, and for identifying the entrepreneur’s central function: of moving resources, however painfully, to areas where they can be used more productively. But he also recognised that big businesses can be as innovative as small ones, and that entrepreneurs can arise from middle management as well as college dorm-rooms.

Schumpeter’s work on the dynamism of high-tech markets (later married with Clayton Christensen‘s concept of “disruptive innovation“) is one of the most persistent themes across cyber-libertarian thinking of all stripes on a wide variety of issues. You can listen to an interview with the new column’s author on the Economist podcast here (MP3). One important point the author makes is that Schumpeter realized that celebrating capitalism did not preclude criticizing individual capitalists when justified and vice versa—something all too often forgotten today.

Google Trends for websites reveals all kinds of fascinating insights into the way technology is reshaping the world. Among them is the fact that the HuffingtonPost.com has matured from a scruffy group blog into a new media powerhouse to rival the Wall Street Journal and Washington Post:

HuffPo WSJ WashPo

Note that the convergence of these three sites has happened both because HuffPo has doubled its audience and because the audience for the WashingtonPost.com has shrunk by half.  While WSJ.com’s audience has returned to roughly its pre-election level, the decline of NYTimes.com suggests that the Internet really is splintering audiences and bringing the giants of news media like the “Gray Lady” down from their once unassailable heights:

HuffPo WSJ WashPo NyTimes

If I can amplify a bit on a post at the Cato blog earlier today, I want to clarify that I fully agree some of the ISP behaviors that net neutrality proponents have identified as demanding a regulatory response really are seriously problematic. My point of departure is that I’d rather see if there are narrower grounds for addressing the objectionable behaviors than making sweeping rules about network architecture. So in the case of Comcast’s throttling of BitTorrent, which is the big one that seems to confirm the fears of the neutralists, I think it’s significant that for a long while the company was—”lying about” assumes intent, so  I’ll charitably go with “misrepresenting”—their practices. And I don’t think you need any controversial premises about optimal network management to think that it’s impermissible for a company to charge a fee for a service, and then secretly cripple that service. So without even having to hit the more controversial “nondiscrimination” principle Julius Genachoswki proposed on Monday, you can point to this as a failure of the “transparency” principle, about which I think there’s a good deal more consensus. Now, there are bigger guns out there looking for dodgy filtering practices these days, so I’d expect the next attempt at this sort of thing to get caught more quickly, but by all means, enforce transparency about business practices too. Consumers have a right to get the service they’ve bought without having to be 1337 haxx0rz to discover how they’re being shortchanged. But before we get the feds involve in writing code for ISP routers, I’d like to see whether that proves sufficient to limit genuinely objectionable deviations from neutrality.

There’s a hoary rule of jurisprudence called the canon of constitutional avoidance. It means, very crudely, that judges don’t decide broad constitutional questions—they don’t go mucking with the basic architecture of the legal system—when they have some narrower grounds on which to rule. So if, for instance, there are two reasonable interpretations of a statute, one of which avoids a potential conflict with a constitutional rule, judges are supposed to prefer that interpretation. It’s not always possible, of course: Sometime judges have to tackle the big, broad questions. But it’s supposed to be something of a last resort. Lawyers and civil liberties advocates, of course, tend to get more animated by those broad principles, whether the First Amendment or end-to-end. But there’s often good reason to start small—to look to the specific fact patterns of problem cases and see whether there are narrower bases for resolution. It may turn out that in the kinds of cases that neutralists rightly warn could harm innovation, it’s not one big principle, but a diverse array of responses or fixes that will resolve the different issues. In a case like this one, perhaps a mix of mandated transparency, consumer demand, and user adaptation (e.g. encrypting traffic) will get you the same (or a better) result than an architectural mandate.

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Gilder explains the true meaning of the microcosm with his uniquely poetic prose:

As Peter Drucker said. “What one man can do, another can do again.” Distilling discoveries of science, a set of technologies, and a Philosophy of enterprise, the microcosm is far too big for any one country. Even its products are mostly made of ideas—waves that suffuse the mindscape of the world. (p.127)

The vital importance of ideas in all aspects of the microcosm, including hardware, is a central theme of the book:

Computer hardware thus is another form of information technology like books, films, and disks. The value resides in the ideas rather than in their material embodiment. The chip design is itself a software program. Even the design of the computer’s plastic chassis and keyboard may well have begun as a software program. Like a book, a spreadsheet financial package, even a film on a videocassette, a microchip design is conceived and developed on a computer screen and takes form in a storage device that costs between 80 cents and $2 to manufacture. The current dominance of such products in the world economy signifies the end of the industrial era and the onset of the age of the microcosm. (p. 159)

Consider debate over handset exclusivity: Those who insist that AT&T be forced to relinquish its exclusive rights to the iPhone ignore the fact that the iPhone is not so much a device as a brilliant idea—actually, a cluster of innovations made possible because AT&T was willing to partner with Apple on the risky venture of developing the expensive device and bringing it to market. Speaking of ideas made reality, I can’t wait to get my hands on a Microsoft Surface!