The Fourth Quadrant

The Steven Johnson all-conquering media barnstorming tour continues in the New York Times today when he talks about a curious fact of innovations: it’s often born in nonprofit situations, which you’d think is odd if you’re a fan of greed-is-good style capitalism. He elaborates:

…[T]here is what I call the “fourth quadrant”: the space of collaborative, nonproprietary innovation, exemplified in recent years by the Internet and the Web, two groundbreaking innovations not owned by anyone.
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Why has the fourth quadrant been so innovative, despite the lack of traditional economic rewards? The answer, I believe, has to do with the increased connectivity that comes from these open environments. Ideas are free to flow from mind to mind, and to be refined and modified without complex business development deals or patent lawyers. The incentives for innovation are lower, but so are the barriers.

I’ve only started to read Anna-Lee Saxenian’s Regional Advantage, her account of why Silicon Valley surpassed Boston’s Route 128, even though they appeared to be evenly matched at the outset of the 1970s, and many of the points match Johnson’s ideas well: before the region became Silicon Valley, it was primarily agricultural—it grew almonds, mostly—and as such had little experience with industrial or technological economies; the founders of the big companies in those days were Midwesterners who were quite willing to migrate out West alone, far outside their familial structures; moreover, they despised the “Eastern Establishment.” (For more in this vein, see Tom Wolfe’s “The Tinkerings of Robert Noyce”). This kind of environment is many things, but probably the most important is a tabula rasa. The products they pursued were fairly far removed from ordinary experience and as such did not exactly have established interests claiming their pieces of turf.

I think the turf war concept is an important one to keep in mind about the innovation that didn’t happen in the previous decade. The innovation that did happen was mostly in fields that no one had turf to claim, or where those who held the turf lacked the legal power to force would-be innovators off of it.

What innovation happened? Google happened, but before the internet the idea of a search engine was incredibly farfetched. You might say “the media” but this is exactly my point. Print media gets disrupted easily—wikipedia kills encyclopedias; Craigslist and various new media ventures disrupt newspapers; one presumes the Kindle and other e-readers will do to the book what the iPod did to the CD (interesting little digression: it’s also interesting that of the disrupters of print media, there’s a high proportion of not-for-profit ventures, as Wikipedia and Craigslist are. I have no idea what to conclude to this, but found it relevant to mention.). Music has been disrupted because the .mp3 is such a small piece of media that it’s easy to handle for a computer; combine that with some decent copyright law (legal to copy, not legal to distribute, though good luck enforcing the latter on a consistent basis on account of the former) and you have an industry that is fairly easy to use the platform of the internet to build off of.

Compare this to the hassle of watching TV on the internet and you’ll see the innovation that didn’t happen and perhaps will happen these days. (See Google TV troubles and the Hulu-in-Europe troubles for reference.) I should be able to watch ESPN 3 regardless of what ISP I use; I should be able to watch TV shows at whatever time I want; I should be able to do similarly for movies, and be able to own or stream at my discretion. These things are difficult to do legally, so many people do them illegally. The reason they’re difficult to do is because of the interlocking lattice of rights and copyright law that give various stakeholders the right and ability to block people from watching video the way their audience would like.

The same platform that’s been built off of for print, music, travel, and so on through this recitation of “NOW That’s What I Call The Internet’s Greatest Hits” hasn’t quite been able to conquer TV, and it hasn’t quite been able to conquer health care either, for similar reasons. (If you’d like to see why in a quick demonstration, ask to see your electronic medical record next time you go to the doctor. You either don’t have one, or, if you do, it probably looks like it was designed in 1995, which is not particularly reassuring for its overall functionality.) Of course that too has a nexus of rightsholders who very jealously guard each piece of turf; if you have to ask for everyone’s permission to take their turf away, chances are you won’t get it, and if you do—well, the result will not be close to optimal (SEE: Health Care Reform, 2009.)

So how do we go about the business of creating more fourth quadrants?