The Internet And The Global Brain

Michael Orme - Mon 30 Jul, 2007

One of the most powerful new factors in the global economy is the emergence of whats dubbed Generation C. This title refers to tens of millions of people across the world who both consume and create content on the Net. This ranges from blogs and Wikipedia (encyclopaedia) to Flickr (photo-sharing) and the BBCs citizen reporters. Broadband-enabled, and armed with professional class equipment, Generation Cs advance guard is forming a true global brain. Forward-looking companies can tap into this to help them develop new products and services, but incumbents with hardened arteries will find themselves increasingly mugged by them from left field. Apart from the internet, at the core of this new movement is a superficially counter-intuitive notion of property, based on thou shalt share and distribute.

Wrap the internet around millions of brains across the
planet, spin the brains and create a global current of
collaborative creativity and expert input.

This rather beautiful image is the brain child of Eben
Moglen, a famous American law professor, who calls it a
Corollary to Faraday’s Law. For readers who may be a
little rusty on their physics, the standard schoolboy
demonstration of Faraday’s Law was to wrap wire round a
magnet and spin the magnet, so setting up an electric
current. Moglen neatly uses this analogy for the world’s
‘spinning brains’.

So how ‘disruptive’ a force will Moglen’s ‘Corollary’ Law
turn out to be? Your guess is as good as mine. But
‘disruptive’ it is, and has already been. Of course, as
with Faraday’s Law, Moglen’s is subject to counter-
balancing powers: in its case, intellectual property
rights, patents, and lavishly remunerated phalanxes of
legal eagles.

But one of the most powerful new factors in the global
economy is the emergence of what’s dubbed ‘Generation C’.
This title refers to tens of millions of people across
the world who both consume and create content on the Net.
This ranges from blogs and Wikipedia (encyclopaedia) to
Flickr (photo-sharing) and the BBC’s citizen reporters.

Broadband-enabled, and armed with professional class
equipment, Generation C’s advance guard is forming a true
global brain. Forward-looking companies can tap into this
to help them develop new products and services, but
incumbents with hardened arteries will find themselves
increasingly mugged by them from left field.

Apart from the internet, at the core of this new movement
is a superficially counter-intuitive notion of property,
based on ‘thou shalt share and distribute.’ A variant on
‘from each according to his ability to each according to
his need.’ Chuckle headed Marxism?

Surely, the only way to motivate and sustain innovation
is via fierce protection of IPR and patents? Not so. Many
Generation C people get their rocks off doing great work,
for free, which is perceived as such by their peer group.

This was the driving force that, then a Helsinki
university student, leveraged back in October 1991 to
help him develop a software operating system, Linux,
which would be free in its naked form. By the mid-
nineties Linux had started to give the Microsoft top
brass, notably Bill Gates, apoplexy, as well as the
purveyors of proprietary unix like HP and
SUN Micrososystems.

The whole Microsoft raison d’etre is based on ‘closed
source’ core software code, which is used as the basis
for ‘customer lock-in’ to what has been a series of
‘buggy’, leaky, and frequently unsatisfactory ‘Windows’
software programs, which because everyone else uses
them they have had install and upgrade too for the sake
of compatibility.

Torvalds turned this inside out and upside down. He
offered his ‘source code’ to all-comers on the strict
understanding that whatever they did with it would be
returned to the open public pool for others to monkey
around with.

The result?

At least 750,000 software programmers and developers
worldwide participated in the massive Linux collaborative
adventure and Linux became more robust and more reliable
than anything Microsoft or the unix vendors, with their
‘closed’, rental, model could produce.

This is why Linux now runs most of the Internet servers
and embedded computers in the world, having not seriously
tried to dislodge Microsoft from the desktop. Linux
showed the benefits of operating on the basis of a
massive process of ‘peer review.’

As Eric Raymond, an ‘open source’ afficiando, has put it:
‘’given a sufficient number of eyeballs, all bugs are
shallow.’’
This explains why Windows has sported ‘deep’ bugs.

It’s easy, when one first studies ‘open source’ and the
Linux story, to rapidly conclude that the ‘open source’
mentality and business model will gobble up everything
and lift the business world off its hinges. This
won’t happen.

An opportunity for Big Pharma to go ‘open source’

But one area where it might well happen is in the $300bn
pharmaceutical sector, where R&D productivity has fallen
dramatically, with only half the number of drugs making
it to human trials today compared to 1997, and where the
patent protected ‘blockbuster’ business model is subject
to the law of diminishing returns.

Berkeley political scientist Steve Weber trained as a
medical doctor, and is a keen student of the ‘open
source’ movement as a way of sustaining large scale,
voluntary collaborative ventures, over long periods,
to bring home complex projects. He is a leading champion
of the proposition that Big Pharma is a suitable case
for treatment. And Weber has won a growing number of
influential adherents within the industry to his way
of thinking.

The pharmaceutical industry has a lot in common with the
software industry.

It’s characterised by hefty front-end R&D spending and
more and more of its work is carried out ‘in silico’ and
itself takes the form of ‘source code.’ One of the
industry’s key problems is its inability to ‘debug’ its
work in progress fast and efficiently enough. Another is
the extent to which its ‘blockbuster’ business model
means that a lot of promising molecules are left on the
shelf simply because resource constraint has prioritised
others. Finally, the industry has not been able to find
ways, again due to resource constraints, to tweak its
growing body of ‘off patent’ drugs to serve as therapies
for different medical conditions.

There is a large body of talent in university labs and
start-up companies that the industry could, and almost
certainly will start to tap, to tackle the problems
cited above.

Without doubt ‘open source’ is a threat to incumbent
business models, which is not to say that it won’t
complement rather than obliterate them. Few ‘open source’
adherents are rabid socialists. After all, a lot of money
has been made making Linux fit for business application.
And contrary to the received wisdom, the open source
movement is not an exercise in anarchy. It is a hard
nosed rules-based operation, and those who break the
rules are shamed and ostracised.

Moreover, in the case of Linux, Torvalds has a cadre of
top-notch computer scientists who manage the operation
and monitor and filter its product. As I said at the
outset, I don’t know any better than you where all this
might lead but one thing I do know is that the ‘open
source’ movement and Moglen’s Law make the future even
more ‘open’ than it was before.

Regards.

Michael Orme
For The Daily Reckoning 

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