"The Information Puzzle"

Read the full article By Sam Palmisano (CEO of IBM) in Newsweek (December 2, 2005).

IBM has a unique perspective on innovation. It has earned the most U.S. patents of any corporation in each of the past 12 years, yet it is also the leading business investor and innovator in the open movement. Its CEO explains the apparent contradiction. He distinguishes between "open source" and "open standards" as follows:

* Open source is a method of tapping a community of experts to develop useful things.....In a sense, open source fuels innovation much the way science fuels technology. Science is created by communities of experts, whose fundamental discoveries are typically made available to all, including individuals and companies that are able to capitalize on the new knowledge in novel ways.

* Open standards, in contrast, are not a methodology, but an underlying condition for economic or social progress because they make possible the free flow of capital, information and ideas. A currency system is an open standard. A highway system is an open standard. The Bill of Rights is an open standard of sorts. The Internet's founding protocols—http, html, etc.—are important open standards.

He also distinguishes between "intellectual property" and "intellectual capital".

"More and more of the innovation that truly matters today functions not only as intellectual property (the brilliant work of individuals), but as intellectual capital (a deep well of knowledge created collaboratively). As with open standards, this is about enlarging the pie and fostering innovation on top of what is available to all. And it's not about gizmos, but about new enterprise models—such as "networkless" telecoms, online auctions or real-time retail systems. Our intellectual-property laws, based on an earlier paradigm, will have to catch up."

In the end, the new, emerging model of collaborative innovation—balancing different aspects of openness and different kinds of ownership, and drawing on the historic and deeply productive relationship between science and technology—has the simplicity and clarity that we always find in big, game-changing shifts.