Internetdagarna Day 2, Yochai Benkler

Day 2 of Internetdagarna started with two keynotes. The first speaker was Yochai Benkler from the Berkman centre at Harvard University.

I had been following the tweets from day one of Internetdagarna tagged #ind11 and Yochai Benkler had given a talk entitled ‘Wikileaks and the future of the press’, which had been very well received, so it was with some expectations I sat down to listen to the keynote.

The keynote examined the concepts of innovation and open source as the primary motors of a new economy vs. the traditional industrial economy based on traditional industries.

Yochai emphasized some of the key aspects of these drivers, one of the terms he used was “imperfect rapidly learning system”. Much of what he mentioned seemed to have it’s roots in the agile movement or the other way around, so it was not completely new to me and if you are into software development methodology you could easily follow the patterns mentioned by Yochai.

Some of the classic examples mentioned by Yochai of open source success was the HTTP server. This market is still dominated by Apache, but also other open source candidates like nginx are showing on the graph (this is not the graph used by Yochai, but I think the data are from the same source and the tendency demonstrated is the same).

Another interesting aspect was based on IBM. IBM is the largest patent holder in the US, now make more money on Linux based activities that their traditional business of activities based on proprietary hardware and software.

Conclusion open source has become a serious factor.

Another interesting factor Yochai mentioned was the network aspect. The example was how Wikipedia has outcompeted Encarta from Microsoft, which historically outcompeted something like Encyclopedia Britannica distributed using dead wood. The network outcompeted the CDROM based distribution, which again outcompeted the book. Looking at the distribution chain and logistic differences in distributing the three, it is easy to spot why the first is the victor.

What the above example demonstrates is that innovation is the key in competition, but as Yochai states: Innovation as an industry is fundamentally different from traditional commodity based industries.

Yochai mentioned that historically innovation had earlier been on the side of the traditional industries. From there Yochai started talking about people and knowledge, making a point that innovation come from people. I understand how he made the connection, but I do not understand how you can dismiss traditional innovation, after all innovation has always been around, but I might have missed one of Yochai’s points.

Yochai then stated that knowledge is tacit and sticky and is transferred with people. Creativity cannot be controlled, which makes motivation of people an important parameter. Other aspects of this could however also be observed such as behavioral value shift where earlier peripheral activities are becoming core value and social aspects become a great motivator. Humans are pro-social beings hence humanization becomes an important factor.

Yochai started to talk about people vs. companies. His examples was of course taken from the USA. A funny thing he mentioned was in the comparison in legislation between California and some other states. He referred to this as the historical accident in California. Apparently the legislation in the state of California makes it easier for employees to change employer. What can be observed elsewhere is competition regulating laws and what I expect to be competition clauses and the like.

He presented a resource WIPO, which has an article entitled ‘Trade Secrets and Employee Loyalty’ stating employees are the biggest threat – hilarious, but yet scary taking into consideration Yochai’s claims that we are facing a paradigm shift in economy models, where innovation becomes the prime factor.

Yochai mentioned lots of interesting resources throughout his presentation, by the end of the talk, he came to the topic of start-ups, not with the focus on the idea of starting up, but focussing more on what it is that these start-ups do differently and why they succeed.

I noted the following:

- Sunlight Foundation working with open data and government transparency

- www.ushahidi.com mash-ups: violence maps in Kenya, wildfires in Russia and damage control in Haiti

- Skype/KaZaa, using open standards to innovate

His observations are that these new companies come from the edge, do something which is said cannot be done and it is not necessarily allowed due to the traditional way of protecting trade secrets and business models. One of his examples here was Apple’s Appstore where Google Voice and Skype was allowed after FCC leaned on Apple.

Yochai’s conclusion was that freedom required to do innovation in decentralized and open systems.

I am not sure but I do I hope I captured the essence of Yochais keynote.