Enterprises want things to change. They want more sales, more profits, less overhead, market domination (by us, not them). A lot of things that require change.

But a lot of people want things to remain exactly as they are too. They want all that stuff, but they don’t realize one critical point. You can only change the exterior stuff if you change the interior stuff first.

And if you change in the wrong way, you actually create the exact opposite to what you set out to do.

Now all that may be as clear to you as the nose on your face, but do you live life that way. Think about it in the context of the music industry and some of the things that we repetitively go on about in the writings on this blog.

The music industry is constantly striving for more sales – regardless of whether you have a record company, a music publishing company, or you are selling merchandise – or swag as they call it in the trade. Nothing wrong with that – it is all part of that rich tapestry that we call capitalism.

So along comes the whole concept of file sharing and what you get is entirely predictable – you get a giant push back from the record companies and publishing companies. They see file sharing as the ultimate evil. Their music is going to be passed from hand to hand to hand with no transaction fee. And then they look at who gets to benefit and what do they see? ISP’s.

It is really quite natural that the music business sees ISP’s as people who deriving huge benefit from their intellectual property.

So they spend a huge amount of money on lawyers to look for ways to use the law against the downloaders. They try suing them and then start to realize that in doing that they are creating lots of column inches for newspapers. At first that seems like a good thing, because the music business loves to get stories in the papers – it helps sell their music. Then they realize that the stories that resonate most in the eyes of the public are the ones that make the music business appear to be a bunch of thieving bastards. That didn’t work. What next?

Next they try hiring a bunch of geeks to write code that goes onto the CD’s that they sell, that stop CD’s being ripped. Unfortunately it turns out that the geeks they hired weren’t so cool after all and the CD’s that were manufactured put malware onto the consumers’ computers. More bad press, and worse still, now some bright attorneys general think that the music companies should be sued. Even more bad press.

In the meantime the music companies, along with a bunch of other businesses that rely on selling bits of shiny plastic with zeroes and ones on them where you buy the plastic but not the zeroes and ones, have gotten a win through the introduction of the Digital Millennium Copyright Act. This gives the music companies the absolute knowledge that no one can mess with their IP because they have the law on their side.

So then the music companies figure out that they should go after the ISP’s. But the ISP’s aren’t too keen on this idea as you can imagine. So they push back. And they have the benefit of understanding what they do better than the music companies understand.

The problem here is that the music companies wanted to remain in their comfort zone. They thought – and continue to think – that because they appear to have a moral right, seen from their perspective, their will should prevail.

It won’t. Not if they keep doing things the way that they have, anyway.

They need to think like salesmen instead of thinking like academics.

Wait a minute… hard-bitten, cigar chewing music honchos thinking like academics!?

Well, maybe not wittingly thinking that way, but thinking that way nonetheless.

It is actually a mindset.

It is a way of thinking that I have encountered in almost every company or enterprise, large and small that I have worked with in the last 30 odd years. And without criticising academia too harshly, they often get into this mindset when they are faced with having to deal with engagement with the commercial world…

When faced with having to change their ways in order to deal with the commercial world, there is a strong tendency to pull down the shutters and start writing another grant application.

And who can blame them? If you can do something successfully more than once, it probably means that you have a talent for it, so why not keep repeating it ad nauseam….?

Which is what the music companies did too.

There really wouldn’t be too much of a problem with this approach if it were not for one thing that changes everything. Digital.

The concept and the reality of digital is such a massive disruptor it is incredible. It doesn’t just enable nice orderly progressive change. It creates jagged huge tectonic shifts in everything it touches.

And it is touching absolutely everything.

We all know it has touched music and entertainment – first with the advent of the CD and DVD and then, as noted above, with file compression making it cost effective to shift data across networks, as, at the same time, Moore’s Law made storage of content orders of magnitude less expensive, all at the same time.

It has hit the food industry, making genetically modified crops possible and relentless in their incursion into our diets. Genetic modification couldn’t take place without digital technology making it possible to map and then split and splice genes.

It is gradually wrapping itself around every industry and every industry is going to find that it faces the kind of challenges that were first felt in the music business. All business likes to control the space it occupies. And the tendency of business, when it perceives a threat, just like people and nations, is to stand their ground and then to fight back.

But digital is not something that you can fight using the weapons that most managers think of when trying to keep control of their space.

The big lesson that every business should start taking from what has happened to the music business is that P2P is a ghost. It can’t be held. It permeates everything.

P2P is a small subset of the asymmetric modality of life that we have entered.

I wrote a year of so ago about the Chinese Colonels who wrote a book on asymmetric warfare and how they discussed, back in about 1998, the concept of an economic war with the US in where economic damage would be able to be done by attacking computer networks and significant infrastructure. That of course happened.

On the other side of this coin is the concept of asymmetric business models. These are the business models that shift the transaction of information to the edge of the network, where all value is actually in the information rather than in the commodity itself.

Think about it. In a world where GM foods are an inconvenient truth where is the value in the food supply? It is in the information as to where it was grown and by whom using what means. That information is going to remain at or near the edge of the network.

In a world where energy is no longer something that we can take for granted how can asymmetric distribution of the energy resource based on information about the energy, be valued? My thoughts on this are only embryonic, but my sense is that if we are going to move to a world in which solar and other alternative energies are fed into the grid they will need to be certified and tracked and that can happen primarily by thinking about their value in informational terms rather than just as electrons moving along some copper.

This stuff has enormous connotations for the way we exist. Businesses and enterprises – along with academia – have a massive need to start thinking in entirely unconventional ways. As do governments. And governments themselves will need to reconstruct themselves in a totally new way. There will need to be a move away from centralized power and decision making. There will almost certainly need to be a further layer of government rather than one less. I would see community co-operative government being the way to go, with local trade being driven partially by the adoption of simple barter systems based on local information exchanges which primarily function to keep financial energy circulating through local economies as much as possible.

These ideas will emerge from all parts of the world over the next few years and will create a totally new kind of wealth for the people that participate in them. Countries as we know them, will radically change, and those areas of the world that are able to develop and incorporate asymmetric, P2P thinking into the way that they operate will become the leaders.

Not the light on the hill, but many lights on many hills.

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Posted in Intellectual Property Main Page Strategy by Chris Gilbey No Comments Yet