Maybe it is my location in Silicon Valley and Stanford University, or the people I talk to and the things I read, but everywhere I turn, I seem to run into discussions, written material, , meetings, and conversations extolling the importance and virtues of radical creativity and innovation. I, of course, agree. But it was almost a breath of fresh air to read the Schumpeter editorial of the May 12-18, 2012 issue of The Economist, entitled Pretty Profitable Parrots. It is a defense, perhaps even an encouragement, of more attention being paid to legal imitation—or copying. It emphasizes that violating intellectual property laws results in such things as expensive lawsuits, hence stress on the word "legal". But the article points out that many companies, from Apple to Panasonic, have profited greatly from taking advantage of what others have done. It refers to work done by Ted Levitt, a powerful business guru of the 1960, who pointed out the advantages of imitating.
There is a book entitled “Copycats: How Smart Companies Use Imitation to Gain a Strategic Edge” (Harvard Business Review Press, June 2010) by Oded Shenkar, a management professor at Ohio State University that apparently makes this argument. I haven’t read it , so I can’t recommend it, but I have ordered it, because it sounds somewhat unique in this day and age of universal extolling of the new and different. Innovation seems to evoke brilliance. People are dazzled by Facebook’s IPO and want another “information revolution”. Imitation is talked about only in hushed tones. Companies brag about their intellectual breakthroughs, not their skill at “industrial espionage”. But good businesses have always tried to find out as much as they could about what their competitors were up to in order to incorporate it into their products, and not too long ago reverse engineering was a popular topic of conversation.
The lack of standardization in present day industrially produced products may be a symptom of this emphasis on uniqueness. I wish there was more copying of seat-belt releases, gas tank locations, coffee making machines, foldable baby equipment, fasteners used to assemble knock-down furniture and equipment, portable computer latches, projector connectors, and hotel radio/alarm clock units. I do not see anything on the horizon that would result in standardization at the level that used to be common, but we consumers could sure use more of it, and maybe the present emphasis on innovation is part of the problem.
Copying also can aid product quality. People who make lower quality imitations, perhaps in order to reduce cost, are properly looked down on. But the production of higher quality legal imitations, although inconvenient for the originators, and perhaps not as gee-whiz as radical innovation, raises the quality bar, and often results in nice profit margins. As is well known in countries such as India and China, it is convenient to let others (the U.S.?) pay for the R and D.
The Economist article ends by repeating Joseph Schumpeter’s worry that too much copying would result in a system that suffered from a loss of innovation because it did not offer innovators sufficient support and reward. But the piece ends with the words “Copying is here to stay; businesses may as well get good at it”.
Maybe lots of room for creativity in learning to legally copy better.
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