How Corporations Stymie Innovation


March 8, 2006


Browse in Corporations

One of the pleasures of the Wall Street Journal is the way the reportorial accounts on the news pages often undercut the editorials. The market dogmatists of the latter apparently have the same regard for “reality-based” thinking that the White House does. Truth is what they want to be true — it’s their space after all — and the dynamics of innovation are a case in point.

One tenet of the market faith is that profit and property rights are crucial to innovation. Without them, no one will lift a finger and progress will grind to a halt. In some cases that might be so, up to a point. But the belief system flounders when one gets to social innovation – that is, the kind that occurs spontaneously in language, music, fashion, food, and even technology in many cultures. Then there’s the matter of figure skates.

Like most sports today, figure skating has been drawn into the gravitational field of the corporate market, not always for the best. Television networks wanted more juice, so the official skating bodies eliminated the compulsory figures, which were unexciting, and emphasized the leaps and spins instead. The result has been higher audience ratings, but also a heavy toll on young bodies.

“Stress fractures in the legs and spines of skaters as young as ten years old are endemic,” the Journal reported recently. “Surgery to repair the hips of skaters still in their twenties is routine.” That includes Tara Lipinski, the pixie who won the Olympic gold medal in 1988.

The physics is unforgiving. Landing from a jump puts a load on the skeletal system that is eight to ten times the skater’s body weight, in addition to the associated twists and strains. Young skaters typically practice 50 or so of these every day. Yet the athletes still wear skates that are fundamentally the same as those used on the 1800s, when the sport was staid. In other sports, athletes diffuse impact by landing on their toes. Figure skates, being inflexible, require landings on the heel, which sends the jolt undiminished to the legs and hips.

As the Journal tells it, there was a professor at the University of Delaware whose lab was in the same building as the university’s ice rink. He took a personal interest in the problem; and through computer modeling he built a hinged design that enabled skaters to land on their toes. The new skates could reduce shock by up top fifty percent. The university licensed the design to the Bauer skate company; the professor, James Richards, says he got nothing besides his salary.

Market forces didn’t produce the new design, but they did proceed to stymie it. The Nike corporation bought Bauer, and decided to ditch the figure skate project. A Canadian coach pleaded with the company; there are 200,000 figure skaters in Canada alone he said. “Sir, we talk in millions,” a Nike executive replied. Now a small company in Canada by the name of Jackson Ultima has the design. It obviously does not have the resources of Nike, so the stress fractures and hip replacements will continue for now. (An official for the U.S. Figure Skating Committee says skaters will just have to learn to train differently.)

The same issue of the Journal has an example of what can happen when a design stays in the public domain where anyone can use it. Sometime in the 1960s, artists and designers started to inhabit lofts in old manufacturing buildings on lower Manhattan. A friend of mine had one. He built a makeshift living space in one corner, with a free-standing bathroom that was a little like the orgasmatron in Woody Allen’s Sleeper. The rest he used to design furniture.

Loft apartments became trendy and expensive, along with the neighborhoods. Rupert Murdoch bought one, which he sold recently for $25 million.

Now the idea is crossing over into middle America, the Journal reports. McLofts have appeared in Houston, Binghamton, NY, even Scottsdale, Arizona, where they come with bidets and Vulcan stoves, and can cost over $3 million. It is tempting to smirk at Manhattan loft wannabees in the land of Astroturf yards. But what’s interesting here is what the loft trend shows about the process of cultural innovation.

No one owns the idea of the living loft. Like the jump shot, dungaree, and double Dutch jump roping, it is part of our public domain – our cultural commons. Everyone owns it; and rather than stopping innovation, this is the very thing that has enabled innovation to flourish. Would there have been such spontaneous prolixity if, say, the McDonalds corporation had been able to patent the living loft back in the 1960s?

Instead we’d have a sprawling corporate bureaucracy to oversee every detail of loft design. The smallest innovation would require multiple layers of review. (It took McDonalds a year to develop a salad for its menu, something your local diner can do in a few minutes.) In the end we’d have pretty much the same lofts from Maine to California.

Gee, isn’t that a little the way the Soviets used to think?