Who will own the next #Industrial #Revolution?

“If you really want to understand a society don’t look at what is argued about but what is taken for granted.” – Larry Lessig

baxter-robot Up until the 1970s the idea that you could own a joke was, actually, laughable. Up until that point, explains Stewart Lee, jokes were mostly told by comics circulating local working mens’ clubs, as part of a kind of folk tradition, “drawing from a shared collective pool of jokes – admittedly in different regional accents.” Suddenly, through the late 70’s and early 80’s, the ‘alternative’ comedy movement began to change that. So what had happened? Although at the time it was billed as an artistic or cultural revolution, with hindsight we can see that what had actually happened was Television. The fundamental technology behind the creation and distribution of jokes had changed, and with it the economics behind the industry.

In the world of music, the same revolution had already begun some time before, driven not so much by television but by the vinyl record. For centuries, musicians had toured local music halls, performing from a shared songbook of folk or written music. Now, a few companies controlled the production & distribution of music on a massive scale. As a musician, if one of those companies signed you, you had it made. As Mick Jagger argues, ‘the era in which it was possible for an artist to make a lot of money was actually very short’.

In the world of physical products, it was not so short. That progression, from local smithies to large centralised industrial factories and supply chains had already taken place over a century earlier. The idea that a design was something you could own had been growing slowly for centuries. Patents first emerged from the medieval Venetian glass-making industry, but it wasn’t until the industrial revolution when their use exploded. As Indy Johar points out, it’s often forgotten that patents were actually originally conceived as a means to encourage open sharing of design ideas, by guaranteeing a return on investment made into innovation provided it was published. But what they established was the philosophical idea that a design could be owned, which in turn allowed the patent system to gradually mutate into its opposite: something often used as a weapon for maintaining an artificial monopoly. Driven by the natural interests of industrial lobbies, the idea of design ownership has continued to slowly expand – and in 2020, the UK government will extend the copyright period applying to designs of furniture from 25 to 75 years. The reality of that concept is not abstract, it is brutally tangible; captured recently when a Danish restaurant was forced to destroy its (perfectly functional) new chairs because they were unlicensed ‘fakes’.

It’s interesting to note that many design industries simply never went through that transition at all. It remains impossible to own a recipe or any functional aspect of an architectural design for example. They are – and always have been – mostly copied; drawn (albeit inefficiently) from a shared pool of collective knowledge. Creators may make their reputations by adding to that canon of knowledge, but they still make their money in the commercial equivalent of the local music hall or workshop; that is to say, by selling their services or ingredients rather than licensing copyrighted or patented innovation.

So to describe the digital transition that we are living through as a ‘Third Industrial Revolution’ isn’t hyperbole. Like previous industrial revolutions, the questions it’s raising aren’t just technological, they are social, political, ethical, legal, commercial, even philosophical. It is re-visiting our basic underlying set of assumptions about what can and should be owned. And that, of course, is really going to kick capitalism where it hurts.

Plenty has been expertly written (by Jeremy Rifkin and others) about how this digital revolution has already reshaped, for example, the music industry. Almost as soon as it became possible to copy and distribute music for close-to-zero cost, and the music industry could be disintermediated and decentralised, the idea that a song could be owned was called into question.

Plenty has also been written about the way that different industries have responded to that transition. Where the music industry fought a defensive rearguard action to re-establish its (powerful, but fragile) position as a centralised intermediary (eg. Spotify), the software industry has embraced the idea that code doesn’t always need to be owned, unleashing a vast tide of creativity through open source sharing that can outperform closed proprietary models. As a recent Wired article put it, ‘Open source is now mainstream, and the mainstream is open source.’

The question now is: what happens as that same revolution arrives into the world of physical-making? What happens when more and more physical products can be redesigned & replicated by anyone? What happens when anyone can set up a factory in their garage and, in Keynes’ words, it really does become “easier to ship recipes than cakes and biscuits”? For the last century or more, the battle between industrial capitalism, and its political counterpart, industrial socialism, has both been fought over a single question: Who should own the means of production? Increasingly, as production tools become cheaper and more decentralised, it is becoming harder and harder for anyone to do so.

So, what is left to own?

This has been described as ‘paradox’ of capitalism – that it drives technological innovation, and yet leaves itself with less and less to own. And it is a paradox, but capital isn’t just going to shrug and go away. Instead, it moves. It finds something else to own. And it seems to be moving into four key areas.

First, hard assets.

Anyone who lives in a metropolitan area in a developed economy doesn’t need any explanation of the way that speculative investment in land is driving up the cost of land, fuelling a housing crisis in many of the developed economies.

Less immediately obvious are materials, but already we see large companies such as IKEA & Apple buying-up their supply chains, from vast forests to stocks of finite raw materials. I would be unsurprised if quite soon Apple refuse to actually sell us a device, but instead only rent it to us. Environmentalists may celebrate that moment, but from the perspective of open market competition & innovation, it could be called a disaster.

Second, soft assets.

Intellectual Property
The most likely response will be – as with the Music industry – a defensive one, namely: spending a lot of money on lawyers and lobbyists to try to get the cat back into the bag. Where one form of intellectual property might not be defensible, another might be deployed instead. For example, designing copyrightable 2D patterns or trademarkable logos onto the surface of an unpatentable 3D product in order to protect it from 3D scanners and printers – a form of ‘mountweazel’ which will play out in an amusing (and ultimately, probably futile) arms race with customers.

Perhaps the more important intellectual property will be the automation algorithms that are capable of producing both designs & products. As these tools replace human labour, the race to own them will be relentless. Professor Stephen Hawking has suggested that this issue alone should be considered the single biggest threat to a successful, equitable society.

Personal Data
We are already now well into the era of data capitalism, where companies provide goods & services seemingly for free in exchange for personal data sold to marketing firms. The (un)democratic implications of this are already widely debated, and civic entrepreneurs such as Sarah Gold are looking hard at new forms of data licensing to support robust citizen’s data rights. But we can also be fairly sure that the worst is still to come, as investors seek to own (and sell) not just our personal data, but also control over our behaviour. It may turn out that our minds are the last form of Real Estate.

The idea of monopolies emerging in any of these domains is less than appealing; from a perspective of innovation and inequality. But there is a more optimistic version. Because many more companies will embrace the power of open making, the recognition that in some senses we can return to something more like the pre-industrial idea of the local smithy, producing designs from a common, evolving vernacular library, but with world-class digital tools. Open source works because it can outperform its opposite, it allows us to move from a world where design problems are continually re-solved again and again, to one where no problem ever needs to be solved twice, and we share the best solutions in commons, each of us making a perfectly good living by selling our services as designers, manufacturers or suppliers. You can publish the recipe, but that doesn’t stop people wanting to buy cakes from the best, most convenient bakery. Put simply, most of the time a design doesn’t need to be owned, or it only needs to be owned in a much more tacit sense, especially if you’re committed to providing the most trusted, most affordable or easiest-to-access version of it. All you really need to own is your trademark. There are plenty of good examples of this, from Arduino to Soylent.

There are also some design elements that it just doesn’t make practical or ethical sense for one person to own, ever – such as a language (the idea of a spoken language where you have to pay a licence fee for each word you use would be considered absurd), or a systemic change that no one company can deploy alone (eg Tesla or Wikipedia), or because the base elements of a design are considered universal in the first place (eg biomimicry and biotechnology.)

But many of these approaches still rely on one thing: infrastructure. The digital platforms that make it possible for distributed, collaborative communities of open makers to share designs, establish standards and combine forces in a common marketplace. The Wikipedias, Twitters, Spotifys, Ubers & AirBnBs of the open making world. In hard legal terms, they may be little more than a trademark and a thin web interface, but they will hold considerable power.

So who owns them?

In the Silicon Valley ‘tech startup’ model, these platforms are treated like anything else: commodities to be owned and traded for profit. But there’s a problem. In many cases they are not commodities. Actually, in design terms, these platforms are more like social and economic infrastructure – they are the pavements, roads, railways, bridges, agoras and market squares of our time. In real terms, they are closer to public utilities or guilds. When VC investors become shareholders in those platforms, they are, in effect, seeking to place themselves beyond competition – to erase themselves into the system; and into a monopoly position above the market.

Inevitably, there comes a point when the aims of those shareholders (namely, extracting continuous year-on-year growth in profits) will no longer align with the interests of those individuals & businesses using the infrastructure. In order to extract continuous growth from stable systems, the owners have to start deliberately reducing the usefulness of the infrastructure, by increasing prices, adding more advertising, selling more personal data or paying producers less. It’s the equivalent of a toll bridge which actively stops the traffic in order to extract a fee, simply to pay the shareholders, who keep demanding more and more. One obvious example of this might be Twitter.

Neither does it make much sense for these global digital platforms to be owned by one national government. They might quickly lose trust if they were.

So the question of ownership is not one of belief, it’s pragmatism. If you get the model wrong, sooner or later it will break.

That is the realisation that led us to create WikiHouse Foundation as a non-profit; an entity that exists only to host core assets, infrastructure and standards for the common good, and allow the work of any one company to be interoperable with that of any another. But neither is it a charity; it’s a common armature that needs to work for every business & individual that uses it, not just a few shareholders. Effectively it exists to take the issue of ownership, as far as possible, off the table.

The obvious problem is how do you then raise the money you need to build such a platform? In the case of WikiHouse, we’ve taken inspiration from a concept which has been buried in the DNA of the project from the beginning; Dugnad, a Norwegian word (for which there is no direct translation in English) which captures a concept of collaborative production which has always existed in many cultures across the world. We tend to associate it with the idea of a traditional barn raising, but it refers to any kind of project where members of the community come together for a set period of time to build something together that none of them own, but from which all then benefit. It’s a model of investment that has worked at a local community scale throughout most of history, why could it not apply to the global community too? Can we bring together a temporary consortium of companies, organisations & citizens to build something that none of us could build on our own, but from which all benefit? It’s an approach that echoes, for example, Tim Berners Lee’s World Wide Web Foundation and the Unicode consortium (the organization behind the fonts & emoticons on your phone). Could it also apply to the digital infrastructure of the next industrial revolution?

It’s far from a perfect answer (it makes for slower development, for example) but it is an approach that leaves the freedom to find an even better one in future; to keep asking the question of ownership.

Projects like WikiHouse are far from alone in trying to find a pathway between the 20th century monoliths of state & market ownership. There is a whole generation of civic designers, makers & entrepreneurs who are thinking similarly; who recognise that the core digital infrastructures of the third industrial revolution have yet to be built; and that they have extraordinary potential to transform our economies and produce value for society if done well, or to do harm if done badly. But society doesn’t quite know how to finance them yet. If your project is a decent one, the chances are that there will be no shortage of venture capital investment offered in return for ownership of equity, but far less offered on the condition that is owned by everyone. There just isn’t a standard pathway for that. There are no default templates.

This is the big conversation that we need to have about open making and about the digital society as a whole, and it needs to include everyone: governments, businesses, investors & pioneers. We need to focus not just on the business models around open hardware, but also on the basic questions of what needs to be, what can, and what should be owned, and by whom. There is no one correct answer, there are many possibilities, most of which are still in their infancy: from digital co-operatives to commons foundations, from decentralised autonomous organisations using the blockchain to the possibility that (for example) devices might simply own themselves. Alternatively, there might be new kinds of bond, and revivals of the core concept behind patents; investment that expires after a pre-set period or return.

We’re not going to get it right first time, but we do need to start, knowing that what we’re prototyping are not just the technological innovations for an industrial revolution, but also the invisible civic frameworks that will come with those technologies; the shape of everything that will later be taken for granted.

Published by Alastair Parvin on 5 November 2015

@AlastairParvin CC-BY-ND 2015


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