Open Innovation in Africa: A Recipe for Death of Tech Start-ups?
The world today is flooded with good ideas. Some come from large, mature, well-organized companies. Some come from basement startups. Many are innovative. Some are brilliant. Most die a lonely death, never seeing the light of commercial success. Excerpt from Bruce Berman’s ‘From Ideas to Assets: Investing wisely in intellectual property.
A lot has been said about intellectual property (IP) and innovation in Africa. As pointed out in a previous post here, some argue that failure of tech innovators to protect IP would serve as an investment disincentive thereby affecting economic development. On the other hand, the Open AIR research network has with numerous examples, successfully put it out there that innovation in Africa is thriving in the absence of IP. Perhaps another perspective here would be to examine whether this could be true for tech innovation happening in an open environment.
For the purposes of this post, innovation is the process of bringing valuable new products to market- from idea/concept formulation stage to the successful launching of a new or improved product. In the African tech scene, the process involves a lot of idea sharing, partnering in concept development, pitching competitions, and knowledge and skills sharing. And as quoted above, Bruce Berman points out the reality that while a lot of new ideas are born, most die without ever seeing the light of commercial success. In this post, I consider whether the non-use of IP mechanisms to protect ideas in the open tech environment could be a reason why most ideas die without reaping full benefits, if any. The biggest bashers to this proposition would say outright that intellectual property rights do not protect ideas. Well, I invite you to think again.
An idea is the brain child of intellectual property.Thus, it ought to be protected for the great potential it poses to an entrepreneur. A well-guarded idea helps a business to maintain the innovative- based advantage of its product to the exclusion of others from commercially benefiting from it. What happens when creative thoughts are shared among fellow skilled persons in a given trade? Is there risk of recreation or reproduction of same ideas by different persons?
In the last 6 years there has been a proliferation of technology (tech) hubs in Africa which endeavor to encourage tech innovation in open environments founded on principles of knowledge and skills sharing.In these hubs, open innovation recognizes that joint or multiple sharing of ideas and their development leads to among other things; shorter time to develop a product, more innovation in the long term and increased quality of products and services.
While this may be true, it is important to examine the effect of open innovation to the ability of ideas to scale up into highly profitable businesses while excluding competitors dealing in almost similar products. The greatest risk in open innovation is that there is knowledge spill-over and flow towards possible competitors.
In a fast paced market, tech entrepreneurs aim at introducing a product to the market as fast as possible. It is almost like a race in which different products built on the same idea compete to get to the finish line… number one gets to the finish line and reaps big before number two joins to share in the glory. Soon, all products that got to the finish line are in the market and they compete equally. In this example, the initial ideas’ prospects to develop a viable product have been watered down by the spread of core knowledge to other competitors. Further, it is likely that the product bearing the original idea is among those that fail to scale up and eventually end up dying a ‘lonely’ death.
The inclusion of intellectual property mechanisms in open innovation can help to mitigate such occurrences. Through the use of trade secrets and non-disclosure agreements, innovative ideas can be treated as secret so as to enable a start-up gain and retain its innovation-based advantage by avoiding the unfair recreation of products.
This is not to say that not protecting ideas is the sole reason why tech initiatives may fail or that open innovation may not be as lucrative a model as is posed to be. It is an invitation to consider the potential benefits of protecting innovative ideas in Africa’s tech scene, particularly through the use of trade secrets and whether the same would lead to greater economic development. Thoughts?