Innovation Fail: autocracy + bureaucracy

I have yet to see a reasoned argument supporting what many university technology transfer officers appear to favor: that the best innovation policy is

autocracy + bureaucracy

That’s what 70 of ’em argued in their amicus brief in Stanford v. Roche.


Vesting statute, compulsory ownership, tech transfer as we know it will fail without it. I call this “thumb pie.” No good idea can be developed without a bureaucrat having a thumb in it to make sure it is done to the satisfaction of the bureaucrat. Everything that is to be baked must be baked for the bureaucracy, which is the only power that knows when everything has been done properly. Bureaukleptic cookery.  At least, that’s the argument. 

So c’mon all you patent heads out there, why not put some thought into it and come out with a reasoned argument–not just bluster–why this approach is so much better.  Show how the move to this approach has developed over time from how things were pre-Bayh-Dole, how universities have come to realize that requiring ownership is much more effective than requesting ownership, or accepting ownership at times when asked to.  How this move to requiring ownership represents progress, and how it will benefit research, science, innovation, universities, and community in the long run.   C’mon.  If you believe it, then it’s worth the time to work it out in a reasoned discussion.  Show how Steven Johnson has it all wrong about networked non-market innovation.  How Henry Chesbrough has entirely missed the mark with open innovation.  How the open source movement has no merit.  Why Jared Diamond is all confused over the rise of Europe with its competing states while China lost its edge with imperial controls that stifled innovation.  Dig into Bayh-Dole and show how it was secretly a law authorizing university monopolies of invention–and more–under the guise of restricting federal agency claims on inventions to enable a diversity of private opportunities.  Should be a piece of cake.  C’mon, how about it?

I propose they can’t do it because it can’t be done.  If they don’t bother to try, they won’t have to persuade themselves that there’s a problem with trying to institutionalize ownership of inventions.  This is so like a bozonet. Get a degree of power and then blustercluck to keep it.

In its place, I propose a different formula:

freedom +  diversity

Innovation, before it is a command and control thing for orderly execution according to a plan properly budgeted and staffed with capable leaders and docile but diligent underlings, is a matter of exploration, poking of the unknown, mastering without a master, and working against the consensus, outside the status quo, pushing against existing investments, doing things before they are trendy.

Freedom allows folks to explore. Autocracy requires them to be trained to follow a proper process.  Freedom creates opportunities from the unknown.  Autocracy requires compliance to make the process “successful”.  Freedom is idiographic, working from circumstances.  Autocracy is nomothetic, working from rules.  Freedom assumes that individuals are in the best position to take initiatives based on their own needs and interests. Autocracy assumes that a proper system can do things better than individuals, even ones that have invented new things that the world has never seen before.

Imagine that we could do a capability sort to be done on individuals who invent as well as those who are first to understand the invention–members of a research team, for instance. Put these all in a list and magically sort it from most capable to least to develop the invention. Now put the “process” in the list.  It might sort rather high in the list. Let’s say the “process” is better than 80% of the individuals’ personal capabilities.   That still leaves 20% who are more capable than the “process.”

Let’s also add to this list, now, the level of capability that’s needed to develop any particular invention attached to anyone on this list.   This is harder to do.  There’s nothing to indicate that the “process” capability is sufficient to help more than a very few of the inventions.  In a major research university getting 250+ invention reports a year, the “process” might be capable of handling perhaps 10 a year, maybe less. Historically, it appears that one can expect a decent deal, on average, once every five to ten years per institution using the “process.” Even then it is not clear that the deal happens because of the “process” or in spite of it. In other words, while the “process” might be more capable than most individuals, it appears to lack the capability to produce with regard to most reported inventions. Blame things as one may–“early stage” or “lack of funds” or “poorly trained faculty” or “uncooperative inventors”–it’s a problem created by the “process.”

There are other side effects of the “process.” One is that by taking away personal opportunity, the “process” also takes away personal responsibility and interest. In a way, that the “process” sorts high is an indication of its adverse effect on individual actions.  Imposing autocracy on creative talent means that it is now limited to being in the service of the autocracy. The more effective the assertion of authority, the “training,” the enforcement, the more the “process” removes the diversity of opportunities that one might otherwise contemplate.

Another side effect of the “process” is that it greatly reduces the range of opportunities available to a practice community.  While the process imagines an end-to-end outcome, from removing an invention gently but firmly from the presumably naive hands of its inventor and research team to making a lot of money on a big-hit commercial license that covers product sold in a lucrative market, a lot of inventions do not, and cannot, follow that model. The “process” imposes this model, however, on everything, and sets expectations and resource needs accordingly. This is where we get the university version of the “funding gap” or “valley of death.” It is largely an artifact of imposing the marketing model required by the “process.” The funding gap is a measure of the misapplication of the “process” to the circumstances surrounding the invention.

Take a silly example.  A squirrel tractor. It is only a matter of more research and marketing to create a vast market for squirrels driving small tractors to microcultivate fields of corn and soybeans, eliminating the need for chemicals and heavy equipment and making the world a better place. The funding gap is the difference between reality and aspirations. If the aspirations are off, then the funding gap will be huge.

For most university reported inventions, the “process” almost always requires steps that result in a huge funding gap–patent work, more research, an early startup with seed funding, more patent work, a sophisticated license agreement, more seed funding, an incubator….   In practice, however, the natural history of university inventions may be that the next step is to collaborate with someone who can benefit from the invention–maybe at another university, maybe in industry, maybe just someone who works in the area. Maybe filing a patent is the wrong thing.  Maybe it is possible to be too early–trying to be a midwife at conception rather than birth. In other words, it may be that the best thing a university inventor can do is to partner with folks outside the university, working out the arrangements informally–or at least outside the “process.” Or it may be that the best thing is to make ten variations on the theme, and characterize each, and perhaps an opportunity for, say, variation 7 will come along, and then it will be easier to move on that opportunity, with partners in hand. (Here, some readers may recognize the story of Warfarin, told small).

It is of course of value to help individuals be prepared to take on innovation activities. That sort of mentoring and instruction is important. It is also important, however, to understand how that instruction happens effectively. One is aiming to improve judgment not shut it off. Some interesting neuro-economic research suggests that when folks are under the influence of authority, they shut off whole systems of their brains and follow the rules, but when they are faced with making their own choices, they fire a whole different set of neurons, exploring, judging, comparing, working it out. The “process” shuts off judgment. Freedom does not do this. It prepares the mind for chance rather than order.

It is worth knowing the linear model. Sometimes it happens and it is good to recognize it and follow it. But the linear model outcome is a very rare event. It has been made yet rarer as universities have moved to provincial, compulsory models on top of the linear model. It is one thing for a research inventor to recognize an application, seek out assistance, and develop a vision into a new product or company. Neat. It happens. Good.  It is very much another thing altogether to *require* each inventor to participate in that model until it is shown that it isn’t working. Then it takes a degree of gall (or naïveté) to blame the bad outcome on the technology (“it lacked commercial potential”) or on the community (“a funding gap” or “a lack of innovation capacity”).

In one respect, tech transfer officers are correct in arguing that it is also not a matter of “inept, bungling, poorly skilled technology transfer officers” or “bureaucratic red-tape”.  The linear model + compulsory participation simply *cannot be made to work any better*.   There still may be inept technology transfer officers and a lot of red tape, too, but technically, these are not the problem with the “process”.  The process is the problem with the “process”.   It can be fixed only as in cat, not car.  That is, the “process” can be neutered so that it does not propagate beyond the range of its best activity, which is in the form of a voluntary acceptance of select inventions that are clearly ready for a bout of linear model effort.  That’s how it was pre-Bayh-Dole.  That’s what Bayh-Dole was written to anticipate.  And that’s what has been foreclosed by university administrators moving to a compulsory system to try to make the linear model work even better.  And what they have done is make it work worse, and they have suppressed the development of personal skills and responsibilities, have suppressed personal initiatives and collaborations, and have interfered in the robust ways in which research activity contributes to community quite apart from an overarching fixation with making money by taking ownership positions on everything that could be owned.

Freedom.  If you want innovation, start here.  It will be disorderly, unknown, challenging anyone’s skill set.  It won’t run down a paved road, it won’t suck up to the powers that be.  It won’t be proper within a policy approved by a committee seven years ago.  It may follow a path that no one will follow again.  It doesn’t have to screw over supporters.  It doesn’t have to be illegal.  It doesn’t have to cause harm.  But it can carry big risks, big uncertainties, big stress.   Freedom starts it.   Any innovation policy that doesn’t start with freedom already has a dominant position and the purpose is to keep it with incremental improvements, with efficiency gains, with proper roadmaps for orderly transition from one thing to the next, preserving one’s status.   Freedom says, you can have status, but because we choose to give it to you.

Diversity.   Occam’s opponent in the debates was Chatton.  Chatton’s principle was “the diversity of things should not be unnecessarily reduced”.   It is possible to create patch reasoning–rationalizations that plug gaps in one’s understanding, which then come to be taken not as provisional heuristics pending a better explanation, but truths in their own right–compelling even in their simplicity.   Einstein’s quip hits home:  “Make things as simple as possible, but not simpler”.  The “process” in demanding compulsory participation fails this rule.   Innovation thrives on diversity, constantly poking at things, checking for change, opportunity.  There are thousands of pathways by which a next step can lead toward a breakthrough network and surface an innovation as a social or economic force.  The invention one started with may be long gone.  The start may not even involve an invention.  There may never be an invention.  Inventions may happen later, like mushrooms in the grass.  The “process” could never accept that.  It has no clue what to do with critical mass or network externalities or congestion in a network or networked innovation.  It grinds on with a command and control system that sets up to negotiate a patent license, prepared to litigate to defend its premise, and determined to hold out until someone pays.  No university releases patent rights generally.  Most universities don’t even give up paying maintenance fees but will hold a failed marketing effort to the very end as a barrier to practice, just to make it clear how serious the “process” is about getting paid.

I don’t see how autocracy + bureaucracy is a working approach to innovation.  Not generally, and especially not in university work.  Even in companies, folks have reason to question whether the folks in power have any idea what to do with the talent at the periphery of an organization.    A firm orderliness no doubt appeals to the administrator who does not want to be bothered with the unknown, or with having to know something in its details, and in its variations, and in its uncertainties.  A firm orderliness is easy to implement.  There are easy metrics.  There is a ready pool of “successes”.    The “process” is like administrative candy.   Making it compulsory is like saying that not only is it a sweet rationalization of a complicated challenge, but it’s also loaded with nutrition.  It’s good for you.   Freedom and diversity have none of this sweetness for administrators.  It’s like watching your kids move out into the wild world and not helicopter them.  It’s like recognizing that events drive this more than all your planning.  It’s about recognizing a new pattern, not the same one over and over, for efficiency.   Innovation is no factory.  It is the Grendel that raids the factory, the hall, and tears arms and policy decrees off hapless administrators.  It thrives on events, not boring sameness.   It is outside. High Plains Drifter. Bring it in, but it doesn’t necessarily work for you.

Administrative folks want innovation to make money for the university.  Enough of stewardship, rush the food bowl, own the food bowl. They want technology transfer offices to be little factories that produce lucrative products. There have been a few such deals.  Just enough to inspire a build-out. The mistake folks make is thinking that these deals happened because there was this little, under-resourced, under-respected factory thing with proper procedures that produced it. Yes, there was a technology transfer officer–and probably a whole team of them–and yes there was a deal–but it’s no factory, and the next deal might not look anything like the first. Google looked nothing like Cohen-Boyer–other than that there was an invention, university involvement, patenting, and licensing. Plant a seed, move on. One can build any number of narratives out of these elements, and none of them, for innovation, depend on a compulsory program of university ownership or dedication to a single method of taking the next step, whatever it might be, toward adding to the fun stuff of community.  I know, I’m supposed to write in the high economics register, about the “economic vitality” and “national competitiveness” or at least the abstract “quality of life.” But deep down, I think there’s more to it to say “fun stuff”. That’s where the serious stuff happens–when talented, expert, insightful folks start having fun making new things. No university patent policy refers to “fun.” Administrators do not think this way. Autocracy + bureaucracy is about power, properness, and process. Freedom + diversity. That’s about fun. That’s the groundtruth of innovation. As Feynman would have it, the pleasure of finding things out.

Enough, then, of the “process.” If folks can’t come up in 30 years with a cogent development of why we should, in a free society at universities dedicated to openness, desire autocracy + bureaucracy, then the “process” as presently practiced is a failed thing. Remove the compulsory part, and we are back to the huge build out of a remarkably narrow thing–the linear model. But at least, then, there’s the chance to also build out the rest of a mature environment for innovation–encouraging exploration, creativity, and developing the opportunities one has rather than incessantly aspiring to a huge payday for the university as the crowning achievement of each bit of discovery, insight, idea, invention, or tool that’s made.

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