Notes from Launching the Innovation Resistance by Alex Tabarrok

After Murali’s talk in Gokhale Institute the previous week, I got around to reading this book. What follows are some of the highlights from my reading of the book on Kindle, along with a quick review of the book.

Key takeaways (for me):

  1. Alex Tabarrok ends his own post on the book over on MR by saying “although we share a few common themes that perhaps due to differences in personality Tyler focuses on describing problems while I am more excited to promote solutions!”
    That comes through in both the title of the book as well as what I think is they key question for Tabarrok: “What combination of incentives and foundation will bring the greatest innovation to the modern world? How can we create a 21st-century Renaissance?”
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  2. “But there is also a more fundamental critique: After hundreds of years of experience, there is surprisingly little evidence that patents actually do promote the progress of science and the useful arts.”
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    This has been an eye-opener for me: both from Murali’s talk as well as this book. There just isn’t that much evidence that patents have worked.
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  3. “Firms innovate because they know that if they don’t, someone else will. In this kind of industry, instead of stimulating innovation strong patents may create a “resting on laurels” effect. A firm with strong patents may reduce innovation, secure in the knowledge that patents protect it.”
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    And it may actually be even worse! Patents may actually discourage innovation, let alone protect it.
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  4. “Overall, however, the ODA did create real innovation, and as the number of new drugs for rare diseases increased, the mortality rate for people with rare diseases fell.”
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    The Orphan Drug Act seems to have been one of the few things that can be used as an argument in favor of patenting.
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  5. “When asked to rate various sources of competitive advantage only 4 percent of corporate managers regarded patents as highly effective. Much more effective was getting a head start, learning by doing, and investing in complementary sales and service.”
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    ..and…
    “The aircraft patent-war slowed innovation in the American aircraft industry so much that just prior to World War I the government forced the industry to share its patents for reasons of national security.”
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    …were real eye-openers for me
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  6. So what might be the solution, if not patents?
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    “The major vice of a prize fund is that it replaces a decentralized process for rewarding innovation with a political process.” In this regard, you might want to read this book, by Peter Diamandis
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  7. “I see two views of humanity. In the first view, people are stomachs. More people mean more eaters and less for everyone else. In the second view, people are brains. More brains mean more ideas and more for everyone else.”
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    And patents, of course, are a way to restrict ideas.
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  8. “From Florence in the 14th century to Great Britain in the 19th and the United States in the 20th, the leading economic power has always been a leading educational power.”
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    Alex Tabarrok goes on to speak about the usual econometrician’s worries about a statement like that, but all that notwithstanding, this is exactly why India’s education standards (outcomes?) need to be way higher.

 

Overall, definitely recommended.

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Links for 16th April, 2019

  1. ““Wow, they really train you over there,” our father said. In the weeks since her release, he had become a champion government booster, missing no opportunity to point out to Lulu how nicely the roads had been paved since she’d left, how grand the malls were that had been built. “There are so many opportunities for young people now,” he said. It was a new tic of his, and it grated. Earlier that day, as we strolled the neighborhood, he’d taken the chance to point out a set of recently upgraded public toilets across the way. “They even installed a little room where the sanitation workers can rest,” he said. “It has heating and everything. You see what good care they take of all the workers now?””
    A tale of what happens if you happen to against the authorities in our big neighbor to the east. Sobering reading.
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  2. “Friends and relatives in other parts of the developed world tell me that many of these services and speed are unique to India. While we were busy cribbing in India, a huge shift happened in the last 10-15 years in services—both public and private—that we’ve failed to notice. A mix of technology, cheap labour and super competitive firms have unleashed this service boom in the private sector. Technology, political will (across parties and governments) and the failure of the human government interface in public services has driven the public service boom. Just on the services metric, India will soon plunge ahead of most of the developed world. Take a moment and reflect on how far we’ve come in just a decade.”
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    Meanwhile, Monika Halan points out how much things have improved here, in India.
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  3. “And it reinforced a change in mind-set that already was bubbling up from Chinese urban planners—one that then got ratified in a startling way. In 2016 the Communist Party Central Committee and the State Council, the highest organs of the state, issued a decree: From now on Chinese cities were to preserve farmland and their own heritage; have smaller, unfenced blocks and narrower, pedestrian-friendly streets; develop around public transit; and so on. In 2017 the guidelines were translated into a manual for Chinese planners called Emerald Cities. Calthorpe Associates wrote most of it.”
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    There is much to excerpt from this article about how urbanization is changing, taking root and improving (mostly) the world over. A great bird’s eye view to urbanization in various parts of the world today.
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  4. “A brief description of Lambda School for the uninitiated: A live, fully online school that trains people to become software engineers, data scientists and designers which is free until you get a job. Instead, students pay a percentage of their income each year after they’re employed, the maximum of which is capped at $30k.”
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    Rahul Ramchandani explains what Lambda School is, in case you haven’t heard of it before. Also a good article to learn about Bloom’s 2 sigma problem.
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  5. “But remember: gravity was considered creepy occult pseudoscience by its early enemies. It subjected the earth and the heavens to the same law, which shocked 17th century sensibilities the same way trying to link consciousness and matter would today. It postulated that objects could act on each other through invisible forces at a distance, which was equally outside the contemporaneous Overton Window. Newton’s exceptional genius, his exceptional ability to think outside all relevant boxes, and his exceptionally egregious mistakes are all the same phenomenon (plus or minus a little mercury).”
    In praise of having bad ideas, and how one bad idea (or even a few of ’em), shouldn’t really define a person for you.