Competition or Collaboration: Which Generates Greater Innovation

We have always assumed that it is market economics, the forces of competition that drove innovation in our great country. In “Where Good Ideas Come From: The Natural History of Innovation,” Steve Johnson suggests it is something else altogether. He argues that the greatest innovations including the light bulb, the television and the Internet come from a complex network of innovators working off each other’s ideas. “Non-market, decentralized environments” he argues create powerful opportunities for good ideas to flourish. He argues that society, in its effort to allow inventors to make more money off their inventions, has gone too far in setting up barriers, including patents, that slow the free flow of ideas.The underlying scientific breakthroughs that allow for most large advances in technology, he points out, have occurred at universities where there is the most free flow of ideas. They create great platforms on which many ideas, and many businesses, can be created. One of the greatest sources for the exchange of ideas today, he argues, are the great cities. “Ideas collide, emerge, recombine; new enterprises find homes in the shells abandoned by earlier hosts; informal hubs allow different disciplines to borrow from one another.”

Not long ago, it was conventional wisdom that the source of our economic success was a combination of market economics and democracy. No country, many believed, would ever be successful without democracy. China has undercut that assumption. Now Johnson is challenging that other core belief: that market competition is what really drives innovation. His is a convincing argument. Especially when you consider that neither Google or Facebook arose out of some market effort to come out with a better product. In both cases, it was students having fun with something that launced the great idea. In both cases market pricing wasn’t even a factor: after all, both products are free.

The question this poses, of course is this: What can we do to encourage those forces of innovation? Johnson suggests more places where people across multiple disciplines can exchange, build and borrow each other’s ideas.

Johnson says that when he showed his manuscript to Ray Ozzie, Microsoft’s top technology thinker, Ozzie suggested the book was more about emergent technology and that there was another kind of innovation that was more about solving problems. Unfortunately, Microsoft has had problems with both kinds of innovation. Today it’s far too dependent on big marketing budgets to win marketshare.