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Does open government equal more innovation?

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Does open government equal more innovation?

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Whilst it goes without saying that most governments could do more to be more transparent in their dealings, it would be trite to suggest that they have not done anything at all in recent years.  There has been a considerable move to open up data to the public in a whole host of areas in the past few years.  Whilst transparency has been one motivation for doing so, it has also been designed to feed innovation.

A recent paper has set out to explore whether any connections can be made between the transparency of a government, and the innovative output of its people.  The paper takes Transparency International’s Corruption Perceptions Index (CPI) score as its measure of transparency, with the number of patent applications per year as its innovation metric.

Using World Bank data for 95 countries over a 15 year period, the paper found no direct link between transparency and the number of patents that were registered in a country.  That isn’t to suggest that openness does not play a big role in innovation, but the openness may be more in terms of how patents are protected than in the transparency of government data.

Research from the University of Buffalo nicely emphasizes the point.  The study suggests that the benefits of giving up patent protection far outweigh the risks of surrendering market share.  Their findings reveal that by opening up their original innovation to further research it helps to stimulate demand for the product, whilst at the same time enabling it to evolve more rapidly.

“This research arose from the notion that a too-tight patent protection actually may hinder technological progress, reflected in sovereign acts taken by firms who give it up,” Gilad Sorek, author of the study explains.

A paper published a few years ago by Josh Lerner highlights this quite starkly.  He analysed changes in IP law in 60 countries over a 150 year period.  That meant over 300 distinct policy changes.  He found that when patent laws were strengthened, whether in developed or developing countries, the number of patents issued dropped. So when the system was altered to encourage greater innovation, it actually produced less.

Central to this is the old game theory strategy of tit-for-tat.  The way we behave influences how other people behave towards us.  A recent study published in the Academy of Management Journal highlights how a similar affect can be seen when we share ideas on a personal level, within our organizations.  It suggests that there are similar processes at play on an individual level as there are at an organizational level.

“More specifically, employees who intentionally hide more knowledge seem bound to receive such selfish behavior in return from their co-workers, which will ultimately hurt them and decrease their creativity,” the researchers wrote in the study.

So in other words, just as shielding intellectual property behind patents encourages other organizations to do the same, so does shielding knowledge from your colleagues.  The research went on to reveal some of the systemic factors that tend to produce such an environment.  Highly competitive environments for instance not surprisingly do little to promote sharing.

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