Wednesday, 21 March 2018

Isaac

How to encourage Innovation?

The Government of Rwanda (GoR) has sought and now received a very large amount of money to stimulate local innovation. The African Development Bank (AfDB) has pledged 30 million USD to be used by the GoR to support innovation and the innovation economy; essentially, the AfDB and the GoR is now the largest source of venture capital available to SMEs and others in the innovation economy.   The idea behind the fund is to attract additional funding through private investors and to "develop sustainable innovation ecosystems, spur entrepreneurial growth, address funding gaps, reduce poverty, and promote socio-economic growth." The news is reported here among other places.

This move is entirely consistent with other actions taken in Rwanda, where a great degree of government involvement is typical. It is also somewhat in contrast with neighbouring Kenya, where government involvement takes a back seat (relatively speaking) to private initiatives.  This blogger is not taking any position as to which model works "better", but does wish to take the opportunity to suggest a solution to a long-discussed challenge to innovators in the region.

Two things are pretty well established: (1) there is very low utilisation of formal IP systems in East Africa (Kenya has fewer than 1000 locally granted patents, and registers fewer than 500 copyrights yearly); and (2) there is substantially more innovation occurring in the region than would be suggested by looking only at the low utilisation of formal IP systems.

Some people have suggested that formal ("western") notions of IP are not appropriate for the traditional culture of "Africa" (whatever that means). This relies on a belief that African innovators are always willing to share their ideas openly for the good of the community. In this blogger's experience, this belief sounds great but is almost universally untrue. Most innovators are intrigued by the concept of a system with no formal IP, until, that is, they observe or perceive the theft (i.e., unattributed use) of one of their own innovative ideas.

There is substantial merit in the idea of a system that is not bogged down by overuse of formal IP (e.g., patent thickets, patent trolls, etc.). How, though, do you reward innovators without stifling the innovative economy?

This blogger proposes that the GoR should use the funding (in part) and offer to buy patents from innovators. For example, offer a fixed amount (e.g., $1000, or $5000) to buy any granted patent or utility model filed by a local applicant, regardless of the commercial viability of the patented invention. For this to work, however, the GoR must also pledge that it will never enforce and never re-sell any of the patents that it buys.

This proposed scheme would incentivise innovation, would immediately release the innovation to the public, and would still allow flexibility - e.g., the patentee can decide to sell the patent for a quick profit or can keep the patent and attempt to commercialise the invention using traditional methods.  Everybody wins! 

Isaac

Isaac

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