We need to be watchful of merging indicators of innovativeness and creativity. Creativity is an input to innovation and makes innovations more likely to happen. Creativity is a divergent, exploratory, opening out process and innovation results from a process of closing down and narrowing in, considering, making things work in reality. Importantly, though, innovations need the tenacity and spark of the initial creative work. A place cannot be innovative without first being creative. Traditional indicators of innovative strength may in fact hinder creativity.78 These include the percentage of patent registrations developed in a city - insisting on copyrights and intellectual property or registering too many minor patents, for example in a technological field, can reduce options and possibilities for others. This is why the 'creative commons' and open-source movements79 argue there should be flexible copyright licences for creative works or access to source codes in software to allow for multiple developments. This would enable communities of people or interests to flexibly develop ideas or products that in a proprietary world are guarded. Creative commons licences allow copyright holders to grant some of their rights to the public while retaining others. The intent is to avoid the problems current copyright laws create for sharing information.
The idea behind 'open source' is that when programmers can read, redistribute and modify the source code for a piece of software, the software evolves, because people improve it, adapt it and fix bugs. This develops software much faster than the conventional closed models and methods, in which only a few programmers can see the source.
Countries that show more evidence of innovation are richer and grow faster. Companies that show more evidence of innovation post better financial performance results and have higher share prices. But:
In a knowledge-based economy, the primary competition is competition to innovate first, not competition to cut prices as standard economics posits. Because sole ownership of an innovation bestows monopoly power, the economic laws of perfect competition do not govern innovators. Their monopolies reward their investment in innovation. But unlike monopolies in standard economic theory, innovation-based monopolies are temporary, for they last only until another innovator makes yesterday's innovation obsolete. Intellectual property rights prolong innovators' monopolies.80
In the past economists have assumed that intellectual property rights encourage more innovation by increasing economic rewards; now there is the view that they slow things down. So high patent counts do not necessarily mean a high level of innovation.
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