The problem
Ideas are the lifeblood of innovation, ideas that are developed and enhanced through free exchange and collaboration. In the 21st century technology gives us unprecedented opportunities to evolve ideas and implement them rapidly.
And yet conventional investment models treat ideas as ‘assets’ that can be bought and sold. To secure these assets, investing capital focuses first on a perceived need to prevent the exchange of ideas - cutting them off from the very collaborative processes that would accelerate and optimise implementation.
The impact
This confusion between capital assets and ideas leads to the notion of ‘intellectual property’. Bringing a new idea to fruition or to market is confused with the need to create the vehicle to own the concepts. Valuable time and energy is spent on creating the corporate vehicle, and tying the idea down with contracts.
Agencies that wish to promote innovation focus on the wrong outcomes:
- Economic development success is measured in a count VAT registered companies, social enterprise or cooperatives.
- Start-up programmes are measured in ‘first round, early stage, second round’ funding.
And the enterprises themselves focus on the wrong outcomes:
- Where innovation requires free, agile collaboration on how to realise the business idea, the invest-grow-exit paradigm focuses on realising capital value.
- The need to grow revenues and control costs takes second place to finding the next round of funding or preparing for exit.
The solution
The Innovation Cooperative is a place to share and co-develop ideas. A shared set of values and principles built in to the rules - and legally binding on members - helps foster trust. Simple, governance-mediated conventions enable rewards and risks to be shared.
The focus then is on developing the ideas and implementing them or bringing them to market.
Building a sustainable business model takes precedence over growing capital value.
Investors that understand can take part in the cooperative, and share in the innovation process. This helps them spot the ideas to nurture.
Ideas rarely benefit from being kept secret, but the boundaries of the cooperative can act as the container if it is felt important to protect ideas during product development. Adherence to the rules then ensures confidentiality where needed.
