in the Cloud
How does technological innovation happen? It’s an urgent question, of course, for business leaders seeking new sources of profit and competitive advantage. But it’s also critical for policymakers trying to find a balance between boosting innovation and regulating markets for the benefit of society.
According to Gerald Berk and AnnaLee Saxenian, opinion on the question falls largely into two camps. Some experts argue that innovation is advanced through intense market competition as companies seek advantage over rival firms and new entrepreneurs. In this view, antitrust actions that break up large firms can help maintain a competitive market. The other camp makes the case that big corporations are the players with resources to generate and scale new ideas, and so a minimal regulatory approach is best.
Recent rapid advances in cloud computing—built on open-source collaborations—provide a useful case study for rethinking those preconceptions. “To gain insights into the organizational conditions for innovation and its implications for policy,” Berk and Saxenian write, “we spent two years interviewing software developers, attorneys, entrepreneurs, foundation executives, and managers working on data transformation in the cloud.” What they found suggests a new set of policy tools that could be used to speed innovation and economic transformation.
What does the revolution in cloud computing reveal about innovation policy?