The Economist on patents and patent trolls

In an article of the Economist, the use of patents is discussed, particularly in business methods or software. Besides a good analysis of the current (US) situation regarding the practice of patent trolls and the legal issues related to broad patents claims, the article also discusses the role of patents as a metric of innovation:

"...patent issuance is a poor measure of innovation. Patenting is strictly a metric of invention. Innovation is such a vastly different endeavour—in terms of investment, time and the human resources required—as to be virtually unrelated to invention."

I whish more people recognizes this is the case. Unfortunately it is still common practice to include patents as a metric of innovation, often with the justification that we don't have any better. Since it is very unclear whether patents are positively, negatively or not correlated to innovation it would be equally justified to include any other random indicator as a metric of innovation. For example the share of population being left-handed with blue eyes and dark hair.

Read the whole article of The Economist here

Image: Jac Depczyk

Stiglitz on innovation

It is quite rare that an economist understands innovation. Schumpeter was an exception, but it seems there is once again an economist who contributes to our understanding of innovation. Nobody less than Joseph E. Stiglitz wrote about the added value of innovation. It is to believed that innovation is a goal in it self, but why? What is the added value of innovation to our life, our income, to productivity? Stiglitz researches the added value of innovation to our life, well being and income:

 "NEW YORK – Around the world, there is enormous enthusiasm for the type of technological innovation symbolized by Silicon Valley. In this view, America’s ingenuity represents its true comparative advantage, which others strive to imitate. But there is a puzzle: it is difficult to detect the benefits of this innovation in GDP statistics.

What is happening today is analogous to developments a few decades ago, early in the era of personal computers. In 1987, economist Robert Solow – awarded the Nobel Prize for his pioneering work on growth – lamented that “You can see the computer age everywhere but in the productivity statistics.” There are several possible explanations for this.

Perhaps GDP does not really capture the improvements in living standards that computer-age innovation is engendering. Or perhaps this innovation is less significant than its enthusiasts believe. As it turns out, there is some truth in both perspectives."

Read more here"

10 Future technologies that could kill us all

Can America Afford Innovation?

In USA the discussion on the disappearance of the middle class is ongoing, but also in Europe and other developed nations many people looking forward to the impact of new technologies warn about this possible trend of disappearance of middle-income jobs. In an article in Slate, Matthew Yglesias analysis the feed-back that would have to innovation. How can you continue to innovate if there are only low-paid and very high paid jobs? Who will do the research/development/innovation? Read the article here

How to be Silicon Valley?

An old blog-post, but still relevant. Angel investor Paul Graham wrote 7 years ago about what to do to become like Silicon Valley. He summarizes you need rich people and nerds. And to have nerds, you need a strong university system, urban density and a cool factor through a strong cultural life (resembles Richard Florida's 3Ts somehow). His full length blog can be found here Some more interesting quotes from the blog: "Bureaucrats by their nature are the exact opposite sort of people from startup investors. The idea of them making startup investments is comic. It would be like mathematicians running Vogue-- or perhaps more accurately, Vogue editors running a math journal." "An article about Sophia Antipolis bragged that companies there included Cisco, Compaq, IBM, NCR, and Nortel. Don't the French realize these aren't startups?" "If you go to see Silicon Valley, what you'll see are buildings. But it's the people that make it Silicon Valley, not the buildings. I read occasionally about attempts to set up "technology parks" in other places, as if the active ingredient of Silicon Valley were the office space."