Culture of patents is killing innovation?
Written by Anil Sharma on March 29, 2015 in Innovation

Culture of patents is killing innovation?

Thanks to the low barrier to entry, startups are coming up at a much faster pace giving big enterprises a run for their money. Good for economy. Good for customers.

How are big companies responding to this new dimension of competitive landscape? Well, it isn’t that new, but it is definitely getting high paced, making it very difficult to play the catch up game. So how are the companies responding to this threat really?

It depends:

Some companies strongly believe in their leadership position and never seem to think they are under threat. By now, we have many big names who don’t even exist today. They never thought it was time to change, or time to do things differently, or time to innovate. Very costly lessons to learn!

Some companies react sharply, or rather some times very slowly. These are the companies carrying the burden of existing knowledge, and its legacy holds them back to original thought processes that has served them well till yesterday. They are in pain because of the fast paced, disruptive innovation happening around them. They have to react, and react faster. They protect their turf by forcing the ‘culture of innovation’ as one of the means to retain leadership. Right intention, may not be the right way. Here, innovation becomes synonym with number of patents getting filed. It is a potential indicator of an organization that may not believe in innovation culture fundamentally, as much as they want to build patents to protect themselves against possible threats and/or opportunities. Agile Plunge InnovationSince they are generally in reactive mode, any thoughts that are not aligned with their specific line of business are not entertained. In other words, the ‘innovators’ are forced to think in constrained environment. Their wings are already clipped as they must limit their flight (line of thought) to a particular direction in order to produce ‘meaningful’ patents. Creativity requires freedom. Many brilliant ideas get killed as they don’t relate to existing portfolio. Some brave folks have the courage to go out and realize those dreams outside. We have pretty good success stories here too (I am not naming them as they are well known to all of us). Net result – organizations falling in this category tend to lose their market share to those who are free to pursue and create what matters most to customers than worrying about how to innovate around existing stuff. Build the culture of innovation – stop running after patents. That’s an outcome anyways.

Some companies believe in innovation fundamentally. They are proactive. They don’t carry the burden of existing knowledge. They promote radical thinking. They promote the culture of innovation – patenting them is an outcome, not the driver. They keep on coming up with brilliant products in different domains, different in every way. We have super success stories – an online bookstore becoming biggest e-commerce player and then went on to become a major provider of cloud computing (Amazon), then there’s a computer company changing the game in music industry and hand-held devices and customer experience forever (Apple). We have many more names but I guess we get the drift here. These companies promote innovation as a way of moving forward and they believe in making a big difference in everyone’s life. Key thing again- they were not burdened by their existing knowledge. They were not burdened to think only about improving existing things. They understand the risks involved – even if it means uncertainty or the chance of failure. They take the risk and promote free thinking – Innovation is a free, creative thinking triggered by a simple thoughts to bring a change to existing way of working. They have been creative. And you can’t force creativity to happen! It happens – just provide the nurturing ground.

Talking about patents, the basic concept is sound: patents entice inventors by awarding them a monopoly on the use of their idea, in the hope that the cost of this monopoly is offset by the benefits of encouraging innovation in the first place. Whether patents actually get this balance right is an open question. Patents also fail to encourage some of the really important innovations. How many patents actually get productized or safeguard is another open question. It is also making real innovations slower, harder and costlier.

It’s far from clear that patents will encourage the innovations we really need. And number of patents is…. just another number. Coming back, build the culture of innovation in order to get lucky.

Reference: Adapt, Tim Harford

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