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Wednesday, 26 July 2017

Book Review: Common Innovation

An emerging theme in economics of innovation is the recognition that our standard definition of innovation is restrictive and generally ignores innovation occurring outside the boundaries of businesses. Author G.M. Peter Swann seeks to further these arguments, by delving into common innovation, which he defines as "innovation carried out by 'the common man and woman' for their own benefit, in his book "Common Innovation: How We Create the Wealth of Nations."

Innovation is part of the foundations on which IP policy is built, and improving our understanding of innovation should help IP achieve its incentive-to-innovate goals. This is also the theme of another book I recently reviewed, the Cambridge University Press book on innovation in the informal economy. Innovation has classically been framed as the Schumpeterian "creative destruction," in which innovation (creation) disrupts (destroys) the status quo. Swann puts common innovation in perspective,
If [business innovation] can be described as Schumpeter's 'perennial gale of creative destruction,' [common innovation] is usually much more like a 'gentle and benign breeze.' ... some business innovations have substantial 'destructive' power because the innovator accounts for the beneftis to his business, but does not account for the damage done to other interests. ... [in common innovation], such destructive power is unusual. The interests of the innovator and the user are close, and the innovator is unlikely to pursue projects that are against the interests of the user.
A case study chapter examines common innovation and the socio-economic environment. It discusses a oft-overlooked idea in economics - social innovation.  One of the case studies which peaked my interest was the provision of pro-bono legal services as a social innovation. Swann notes pro bono work is done for the public good and has risen in prominence since cuts to Legal Aid.  However, Swann describes a chicken game (brinkmanship) between government and the legal profession, where the government argues Legal Aid savings are achievable with pro bono support, and the profession argues it can't - and yet the cuts proceed, leading to a socially inefficient outcome.

An uncommon cat,
Il gatto Briciola by Peter Forster
The book is structured with the first part detailing the theoretical concepts of innovation, followed by Parts II and III which provide a series of case studies on both types of innovation, and concluding with Part IV which considers the implications and future of common innovation. I found the case study chapters interesting (they also give an excellent overview of interesting economic theories such as Parkinson's Law and Veblen consumption), but they at times seem tangential to the core theme of the book.

Having recently got into a number of debates in my personal life (a professional hazard) about the impact of innovation and technology on workers and consumers, this is the kind of book which would equip me with more things to shout (an excellent debating tactic.) The back cover states that the book, "will be of great interest to scholars and students seeking a more expansive and insightful understandings of the economics of innovation and wealth." That sounds about right, although I would add that some basic understanding of economics would aid the reader.

Swann, G. M. P. Common Innovation: How We Create the Wealth of Nations. 2014, published by Edward Elgar, ISBN: 978 1 84720 050 1, is available here for £72 hardback or £20 paperback. Rupture factor: Low, a comfortable 260 pages.

3 comments:

THE US anon said...

I am not certain that I am understanding the writer's desiered point with:

"If [business innovation] can be described as Schumpeter's 'perennial gale of creative destruction,' [common innovation] is usually much more like a 'gentle and benign breeze.' ... some business innovations have substantial 'destructive' power because the innovator accounts for the beneftis [sic] to his business, but does not account for the damage done to other interests. ... [in common innovation], such destructive power is unusual. The interests of the innovator and the user are close, and the innovator is unlikely to pursue projects that are against the interests of the user."

This appears to misconstrue innovation and Schumpeter's view on innovation as somehow including the notion that the innovator is "against the interests" of the user.

Nothing could be further from the truth. Perhaps the author is confusing "user" with "established entity currently capturing the user."

One also should not be trapped into thinking that current users of the technology that may be displaced with disruptive innovation (i.e., the user who may have to change from using the old tech) is somehow having their interests "be against" with new innovation.

Unless of course, one wants to join those who wish to throw their sabots about, eh?

Claire said...

Swann appears to take a pretty meek view in this book. Less harmful types of innovation are good, but the wider more important issue would be to identify the real price of progress. Technological innovation for the pursuit of profit harms the environment and normally has a human cost. AI and robots will cause huge amounts of social disruption in the coming years as many jobs disappear.

Common innovation is a great concept (emerging from user innovation), but in reality isn't the real position of the average person a powerlessness, which the tech companies and others create to maintain their positions and interests? The existence of common innovation should not distract us from the fact that innovation has been monopolised and hijacked by innovators and governments have done very little about it.

THE US anon said...

"innovation has been monopolised and hijacked by innovators"

Huh?

I smell an ideological rant, quite divorced from any understanding of innovation and innovation theory.

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