Chuck The Geek.com

No more closed doors?

February 5th, 2008 by Chuck Sharp

So, in thinking through the content from Wikinomics, it seems that proprietary, secret sauce, close door business mentality is becoming harder and harder to enforce. The whole world understands the concept of intellectual property, or some concept like it. It goes something like this: there’s this kind of thing that I own, or at least have the rights to control. It may be an idea, a type of product, or an internal company secret. Other people can interact with this type of thing only insofar as I let them. Maybe I keep it secret, and sell the products that result from using it. Maybe I sell access to it, but only under the condition that buyers cannot reproduce it, reverse engineer it, resell it, etc. If anyone violate my rules, I use brute force to get them to comply. I can sell these rights to others. I can also release this to the public domain for anyone to use as they wish.

This idea has been around for a long, long time. Artists, authors, inventors, businesses, and other creators have rights to their creations. Generally, people agree that property rights like this make sense. After all, the creators should be able to receive compensation for the hard work of developing their works. There are problems with this idea however. First of all, releasing this information to be used and reused and developed by outsiders can create innovation that is truly revolutionary. Second, technology is making it increasingly difficult, if not impossible, to control this kind of intellectual property.

The first problem relates to available human talent. The argument in Wikinomics is that any company has a certain amount of human talent within it. The bigger the company, potentially, the bigger the pool of talent. The problem is that no matter how big the company is, the outside world is bigger. Therefore, the pool of talent is always bigger outside than inside. If a company hides its intellectual property and keeps development closed within its doors, it cannot benefit from the talent of outsiders.

The second problem relates to control. It’s becoming impossible to control this stuff. There are a few scenarios. One scenario involves controlling an electronic gadget such as an iPod. Apple is going to some lengths to keep people from hacking the iPod and iPhone. However, they can’t keep individuals from doing so. A result of this war is that Apple has disabled many iPhones from working because they violated the terms of service. Users are outraged.

Another scenario involves controlling digital media, whether music, movies, information, or software. Consumers are becoming very adept at distributing Net-friendly versions of these products. As distributers5 are using more digital-rights-management (DRM) in their product (e.g, Microsoft’s Genuine Advantage, or iTunes’ proprietary format), users are getting more and more clever. Companies are resorting to suing their own customers.

Another scenario is that of the company which guards internal secrets of technology or operations. My take on this is as follows: technology is becoming very tightly coupled with humans, so much so that we are actually becoming crippled in the absence of these technologies. At the same time, these devices are becoming more and more connected with each other and the Net. These devices have the ability to capture sensitive information and distribute it far and wide, fast. In order to protect internal secrets, companies rely on contracts, retribution, and security practices like disallowing electronic devices inside certain parts of buildings. In effect, these companies may be crippling their employees by doing so. In any case, it’s becoming very difficult to hide information.

There are some interesting things we as the human race will be dealing with, soon. Things like privacy, connectivity, free information, business models that succeed without controlling distribution of products, and the effects of truly global, ubiquitous collaboration. We’ll see. I think it will be for good.

Entry Filed under: Information Technology, Philosophy