I’m working through The Black Swan by Nassim Taleb. The book is about the ways in which we underestimate the improbable. More deeply, it is about how little we know about the world and how much we fool ourselves into thinking that we do know it, at the expense of actually dealing with the uncertainties of the world as it is. Take for instance, this thought:
The strategy for the discoverers and entrepreneurs is to rely less on top-down planning and focus on maximum tinkering and recognizing opportunities when they present themselves…. [T]he reason free markets work is because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or “incentives” for skill.
For innovation, this would appear to be really important stuff to consider. Unlike a lot of things that are just unknown because they are unnoticed, innovation represents something new, that hasn’t been and now is introduced and adopted. Central control ideas just don’t work for innovation. We get the same picture in Hayek, that the point of the free market is that it is able to create and respond, at the periphery, before anyone in central planning and authority is able to make a decision. We get the same picture in Diamond, where the central control of imperial China is contrasted with the competitive bickering of the messy states of Europe.
We might add the observation that central planning tends to consider options that preserve or enhance the status quo—that is, the standing of the central planners. We don’t get a chamber of commerce meeting to take an action that would make the chamber of commerce meaningless. We do not see company officials intending to put their company out of business (though they sometimes screw up and do this anyway). We do not see university patent administrators proposing policy that would eliminate university patent administrators.
For university innovation management, these ideas have profound consequences. First, a technology transfer office that reports to central administration is necessarily a part of central planning and is from the start put at a huge disadvantage. It can do useful work but it also has to appear orderly, follow all the paperwork rules of the university, and issue an annual report approved by higher ups.
Second, if university IP ownership is made compulsory, so much the worse. Then the research talent, the tinkering and exploring folks, have no role from the outset in pursuing their work. It isn’t even theirs. It’s owned by the bureauklepts. Have you ever heard of highly innovative bureauklepts? Is there any government policy that says, the road to innovation is first walked by bureauklepts? Is that the inspiration behind Bayh-Dole, that it crowned bureauklepts with the first greasy fingerprints for anything new in the world coming from (or to) university research? That’s what AUTM claims. I cannot imagine a more irrational, self-destructive, foolish approach to innovation than to combine these two attributes–embedded in central bureaucracy and compulsory ownership. And yet we have people merrily, even snarkily, espousing just this.
Witness the Stanford v. Roche debacle, with university patent administrators across the country lined up behind the proposition that university administrators should not merely require assignment, but rather university administrators should own inventions outright. It’s a failed position, wrong on the law, wrong on the purpose of the university, wrong on the effect on science, wrong on innovation. Those that might have second thoughts about compulsory ownership dare not speak their minds, for fear of retaliation from university central administrators and from patent administrators. It’s a fine world when we cannot even have a discussion about innovation because, well, patent bureaucrats have got what they want, and they are not about to let it go again.
Meanwhile, we might consider innovation as a function of the improbable. We might say, the improbable, the unexpected seeds innovation. Not all seeds grow, but that’s the starting point. The innovation that matters for university research is generally not the innovation from within, the status-preserving plans of the status quo. University research is not needed for such activity, even if there is money to be made there by getting between a company and its product revision cycle or between an industry and its common technology roadmap or even just to be the servile partner doing helpful things on the cheap with student labor. If university IP management is only about making money, then sure, there are ways to throw patent rights around for money in this space. For universities, doing so is a wrong-headed move, amounting to little more than shakedown or servitude.
Innovation that matters comes from the bottom, from the top, and the outside. Of these, the top is the least attractive for many reasons. The top is good for exploring new phenomena, but often gets so complex and at such scale that there is no way to bring resulting technology into play by means of patents and private investment. Once the investment is at the scale of governments, and continues at the scale of governments, then it is difficult to impossible for venture capital, playing at 1/10th to 1/100th of the resources, to step in. The top-based innovation is good for basic science, for building huge telescopes and cyclotrons, but not so good for innovation built on “commercializable” patents. The past thirty years of Bayh-Dole points out how utterly little the public has gotten from university patents for the trillion or so dollars of federal spending on university research.
Of most interest to university research is innovation from the bottom and from the outside. The bottom up means low cost, just good enough, make-do. It is conducive to broad adoption because it does not require specialty equipment funded at scale by governments. Anyone can adopt. In the innovation from the bottom, patents are a dead weight. They may be necessary for ballast (such as, for cross-licensing or to define a new standard) but are useless as cannon. In innovation from below, imitation means dispersion, means rapid adoption. Competition is based on brand, execution, price, and features, on clever diligence. Innovation from below breaks the operating models of the status quo, breaks the status of up-market providers of comparable goods and services.
For universities, innovation from below is the primary output of open source and open innovation strategies. It is where departmental research, as distinct from extramural research, makes its contribution. It is where instruction-based innovation has its play.
Innovation from the outside is the most important area for university innovation arising from extramural research. From the outside, the play is to obsolesce the status quo, melt its wicked ugliness completely with splash of unexpected water.
We might say, if the world is deeply improbable, so that we do not know, and only suspect how little we do know, then the world is also magical. That is, in addition to black swans, which are rare events, there are also unicorns, which are events unlike anything we expect. If we do not know the improbable, then we also do not know what has not happened even once in the history of the world. The search for such things is clearly outside the scope of business, of industry, and even of status-quo enhancing government. That’s where innovation management has its most important, and most challenging role. And that’s where central control and compulsion and planning and efficiencies and status-preserving roles for bureaucrats fade away.
The reality is, universities to be agents of innovation must institute policies that are generally anti-administration. Administration comes later, has its role, and that role may be played by any number of agents.
The imposition of university-style administration is the last thing innovation from the outside needs to have any chance of success. While it is fine—even essential–to have innovation resources available, university policies should aim to protect innovation activities from university policies. Rather of the form of grasp everything and release useless stuff after review, university policies should be of the form of take in only what is offered, and only then when it matches capabilities and purposes. Innovation should by default be the end-run, the rogue, the everything unmanaged that well meaning, job-preserving bureaucrats hate, the disorder and messiness of not knowing and not faking knowing.
For sixty years we had such disorder and messiness, and it was highly successful. For the past thirty, we have had increasing bureaucracy, and the effect has been to take universities out of the game for innovation from the outside and below, leaving a smoldering fight over university bi-polarism for innovation from within (to be servile or to troll?), and being generally ineffectual at moving high tech to mainstream.
The question now is, do university administrators complete the pattern they have started, and gain complete control over inventors’ and authors’ work, as benign to not so benign bureaucratic overlords? Or do faculty lead the charge to roll back compulsory and central policies, allowing university research once again the freedom to tinker? That is, can university administrators, on the matter of innovation, agree to be led by the imp of the improbable?