 It gives me great pleasure to invite the first speaker in a series of engagements that we have for you, Prof. Shishir Jha here, he is from our School of Management and he works in the area of intellectual property rights, IPR, globalization and all these kind of things. I read a phrase about your research area saying exploring alternatives, is it to a democratic and sustainable globalization alternatives, right? Hopefully we will discover a little bit about that also today, okay? The reason why we have arranged these particular talks is that we thought it would be meaningful for you. Why is it meaningful for you? Because the world in which you guys live now and are going to live in the future is going to be very different from anything that we have experienced or from what your parents have experienced. So whenever people ask me, young people ask me about what should we do and so on, I say the last people to ask is your parents, maybe after that us, but really the information, the best information you will get is by keeping abreast with news and with the developments happening in the world, social networks, media networks and kind of press and explore the kind of work which is happening in academia because they are abreast with the kind of changes which are happening in things like policy and legislation and all these kind of things. This brings home another point years ago, but almost 10, 12 years ago, a friend of mine, LC Singh, he was the head of marketing in TCS. He is the guy behind the accounting venture that EX accounting package and all that kind of stuff. He was the head of marketing in TCS, which is a major, major, well, company. And he came very excitedly to me once. He said, Kavi, you know, the world has changed. He was soon to leave TCS, right? World has changed. It is not money that makes money. It's ideas that make money, right? And that was a revelation to him at that time. And as we are going along, we are seeing this more and more and more, right? Sometimes I cannot understand things like how Flipkart is considered to be a very successful business when it's in huge debt. And every day is running up its debt more and more and more, right? So what is it that is making is actually driving these things, right? So you folks need to be aware of these kind of changes which are happening and the new kind of wealth which is being created, which is digital wealth. And how to protect that wealth, right? So we'll start by exploring these kind of topics starting with Professor Jha here. So have I kind of put my finger at the right spot? So this is for us also to explore. So should they ask questions at the end, middle? Yeah, I guess we have questions in the middle which sort of requires some brief explanation. So we'll have time at the end to more substantive questions. Thank you. So thank you. I was not sure really what or how to put together some slides or what kind of a talk should I give because I'm not acquainted with what are the challenges that you have facing you. So Kavi spoke to me about a week back and said, would you like to share something? So I said, well, there are things that I'm interested in and maybe hopefully through some exchange conversation, hopefully, we can get to or raise some questions, right? So what I'll present to you is an alternative as Kavi was saying. An alternative to what you see normally around you. What do we see in terms of economic basis, right? So please do stop me in between for clarifications, right? Because as I said, I do not really know your background very well. So when we talk about economic activity around us, right? Most of it is organized by two entities, right? Which would be, what, which are the two major entities, organizations that create economic activity around us? Can you tell me the state for, right? This IIT is made or keeps running by funding from the state, right? Although we are quote unquote autonomous, but we get funding every year, year after year. So this is a state organization, right? With some autonomy, etc. So state is one, what would be the other one? The market, right? The market-based economy or a state-based economy, right? These are the two most prevalent ways that we think about how economic activity is organized. World over, not just in India, yes? But we seem to forget that there is actually a third way of organizing economic activity, right? Which has also been concurrent with the state and the market for a long time, right? What do you think that would be? Can you think of an example which is outside the state and outside the market in terms of how it is organized on a day to day basis? Any economic activity, individual entrepreneurship, okay? But what would the incentive be, finally, to be able to manufacture for the market, perhaps, yes? So any activity which is fairly self-sustained, the incentive is not by the market, not by the state, sustains itself for something other than the market and state. Can you think of anything? It need not be a very pure activity, but, so do you stay on, are you staying on campus or are you commuting from outside? Are you staying off campus or on campus? On campus, okay. But I'm sure you've gone off campus, right? So the roads that we have outside IIT or wherever they are, is that organized, does economic activity, let's say, for the first thing, does economic activity take place on the roads? Yes, yes, transport takes place, right? And people go back and forth. Would the creation of road, the road infrastructure, right? It's created by the state, but do we have to pay, for instance, each time we use the road? Yes, you'll say, sometimes we do, we have to go to Pune, you have to pay quite a bit. But largely so, unless it is a towed road, most of the times, we do not pay all the time when we use road. But it is an extensive way to create economic activity. So that's one example. In my lifetime, I've seen water, for instance, right? Water go from something I'm calling now the commons, right? Which we all own collectively, to what? Water was something that we did not have to pay for, yes? For 30 years back. Now, almost everyone has some bottled water, right? It is priced, it's monetized, right? There's a market scheme, there's a branding of it, Bistlery versus whatever it is, right? Depending on the shape, sometimes you are very intrigued by the kinds of bottles that they put water in. It must be very good water to taste because it is sort of shaped very differently, the glass I'm talking about, right? But water is basically something that is part of the commons, right? So there are many other things that are around us, air, for instance. Right now, we still have air, which is fairly, I would say fairly, but it is free, yes? It may not be, right? In a near future, 20, 30 years, we may all, because, you know, Delhi is already the most polluted city in the world, right? And next, very close to that comes Patna. I don't know how Patna is very close to Delhi, but nevertheless, right? There's a lot of pollution happening in our cities, and we have not yet really industrialized to the extent that China has. So it's our turn to industrialize. If it's our turn to industrialize, the water and the air, etc., will nevertheless, or sorry, will even inevitably become polluted, right? And it's a challenge to do that differently from what America did or what Europe did. That's a different, you know, question altogether. But what I'm saying is roads, water, right, what is that I mentioned? Anything else? Air, there are many other things? Ideas, right, you mentioned ideas, right? So many of these things are what are outside, so called, they sometimes get influenced, but they are mostly outside the control, complete control of the state or the market. I'll give you many more examples, right? So when I title my talk as towards innovating a new knowledge commons, I'm trying to make a simple argument. That after a long time, and because of several devices around us, including, say, smart phones, but not just limited to smart phones, many electronic devices around us, we have access to abundant amount of knowledge, right? You have, in fact, you know, if you are very much engaged in entertainment, you love entertainment, you might in the next few years. And I think Apple has already announced it, right? Millions of catalogs of music will be available to you, you know, on your, sorry, on your whatever, devices, right, palm-top devices. So almost the majority of the content of the world is going to be made available very easily, right? This is something unthinkable when I was doing my PhD, right? Often, if you go to, you know, many of us, I don't know, Kavi, if you'd go to the library very often, but I end up not going to the library very often because almost all the journal articles, et cetera, is now available on my desktop, right? Through IITs or ministry support. So a lot of the knowledge that we now use is almost available for free. Would you agree? We do pay for some of it, but most of it, right? The journals that we write in, the books, you can get it from the library. Yes, you pay for them, but also, but ideas basically in many ways is becoming part of a general commons, okay? So what I'm trying to get at this early stage is to, for you to get a bit of a sense of what this word commons means, right? We use it, but we don't sort of characterize it very clearly, okay? So let me proceed. I'll talk about basically commons and how the knowledge commons is something that we need to think about very clearly, okay? Because it will affect our lives and in a good way. This green, yeah, thanks, okay? So I'll talk about these four things. Importance of the knowledge commons, significance of IP, how does IP interfere or, you know, enhance the role of the commons, okay? We'll get to IP. It's not a very difficult word because we throw about, throw patents and copyright as if it's a very arcane topic. It's not at all a complicated topic, right? The emergence of knowledge-based networked economy, okay? And finally, what are the motivations for building such an economy, right? So I'm going to give you a talk which is not embedded in, you know, in economic terms, not embedded typically in understanding of market in the state. You know, there's something different about what we're going to discuss today. So let's at least have a working definition of the commons. It's an independent shared resource. It could be cultural or it could be natural, right? Knowledge, land, water or air that is held in common and it's generally not strictly regulated by the state or influenced by the market. We all hold, you know, I can't say that or IIT or, you know, whatever, computer science department can't say that all the air in this part of the building is owned by computer science, right? Or whatever in anything as silly as that, right? But you can say computer, you know, CSE department could say the use of this classroom is regulated to a large extent by their demands, right? So we hold most of these things like the, you know, land, water, et cetera in common. It is a part of a common heritage, okay? So the natural commons is finite and depletable, okay? This building as we speak of is deteriorating, not terribly so, so that we have to evacuate right away. But it is, right? Anything that is physical is deteriorating, right, including us, right? There's a finiteness to it, yes? But there's something very different about our knowledge commons. What do you think? Anybody? Is it finite and depletable? No? Not really? What you learnt in 12th century, is it useful in 20th century, 21st century? Yes, no? Well, yes, it could be yes and no. So give me some other examples, more contemporary examples. What do we use today which is not depletable? Louder, sorry. Sunlight, okay? We're talking sunlight is probably, you know, a more physical resource in the sense, although you can't really catch sunlight, but I'm talking about something which is more knowledge based. Okay. Knowledge is something what we call non-rivalrous. Have you heard of that term? A rivalrous versus non-rivalrous. So, you know, if you have a bottle of water, for instance, right, at one time from that bottle, one of you can drink water, right? It's rivalrous to that extent, right? That property, right? Nobody else, you know, nobody else can simultaneously drink from that same bottle as you can. But the fact that I'm showing this slide, right, and all of you can see this slide simultaneously, right? Does it mean that if I'm looking at it, does it deplete your use of that? Certainly not. So knowledge in that way is non-rivalrous, right? The unique property of knowledge or way it is represented really does a lot of disruption to our understanding of property, right? When it is non-rivalrous and it is abundant, and then I will add other things like it is easy to share, right? Depending on the bandwidths available, at least in IIT we have good bandwidths so we can easily share a lot of stuff, but it's going to be the case almost everywhere, right? We can share content very quickly. So when information becomes non-rivalrous, many people can see the same thing without it getting depleted. When it is abundant, when it is easily shareable, then we have a different kind of economics being created, right? The old economics is about the natural commons. It's about resources that are limited, constrained. The new economics is one which is about abundance. It's about sharing. It is about non-rivalrous. If you begin to think about it very seriously and, you know, in many more examples which we'll do that later, you'll see there's a huge difference between how we look at old versus new economy, okay? So in the old economy, when you share, you have to give, right? If I exchange an apple versus a banana, right? If you have a, you know, and what happens? You get the apple and I get the banana, right? But both of us, on the other hand, if you share knowledge, actually you have some new idea and have some other idea. We both end up having, right, two ideas to end up with, right? So you could say that when you use one candle to light another, the original candle remains bright. Its light is not diminished by being shared. On the contrary, the two candles together enhance each other's brightness and increase light. So knowledge commons works on this kind of premise, right? Abundance is growing, right? So let's go more into, you know, our theme for today. Knowledge really for centuries has advanced collectively and collaboratively. And I'm going to give you some examples that are quite counter-intuitive, okay? But we will, I don't think there's too much controversy about that, right? 19th century physics or 20th century physics would have had to require the advancements in 19th century physics, right? For it to be advanced. So each century or each decade requires the collective endeavours of people before to be able to go further, right? So there are just premises of Einstein and Newtonian physics that are being challenged, but nevertheless you need to build, right? So as Newton said, we see further because we stand on the shoulder of giants. He didn't say literally giants in the sense, right? But giants in the sense people who could see very far. Because we stand on the shoulders, we can see even further, right? So knowledge has really been a collective enterprise, okay? And now as I was saying earlier, I'm going to add some other features. The near ubiquitous distribution of physical machinery is available now for all of this knowledge to be shared, right? Now we have Internet of Things which are, you know, so in fact everything is going to be almost except for human beings. Perhaps we'll be the last. We'll probably also be coded somewhere, I'm sure. Science fiction is already alluding to that, but somewhere down the road we will be having codes inside us, right? We can't escape surveillance. I'm just joking, but perhaps if you've seen that film, I think, what is it, X-Mush Makina, where the robot... Anyway, we can get to movies a little later. So the primary raw materials in the knowledge economy and unlike the industrial economy are public goods. Public goods and the commons are something that I'm going to use interchangeably, right? Listing information, knowledge and culture with an actual marginal social cost is zero. Now what do I mean by that? Marginal social cost is zero. Anybody can tell me when the cost... Marginal cost of production is almost zero. What does that mean? Cost of production, you understand? What is the marginal cost of production? Sorry? A little louder. Not maximum. Marginal cost is the cost for producing an extra unit of that same product, right? So what is the marginal cost of me sharing this slide with all of you? What is it? So piracy is obviously dependent a lot on the actual, you know, very close to zero distribution cost, but even otherwise, what is the cost of distributing this slide through, say, Prof. Kavya Arya to all of you? It depends on the infrastructure. Yes, we need a reasonably good infrastructure with internet availability, but we'll increasingly take that for granted, like we take the roads for granted, right? So when the marginal cost is almost reduced to zero, but the cost of producing an extra, let's say, a car or motorcycle or whatever it is, is it zero? Not really. If you have the entire infrastructure laid down, right? Your next Innova or next whatever it is, Mercedes-Benz will have a cost. It may not be actually 40 lakhs that you end up paying for, but there will be a cost for that. But what is happening in the knowledge economy is that the cost is almost being reduced increasingly to zero, right? Compress more and more information on smaller and smaller devices, right? So imagine all of this is coming to boil, right? It is having a huge impact, but here is the challenge, right? The current, and this is my sort of work where I am engaged with, you know, looking at IP in a more critical way. The current configuration of intellectual property does not adequately recognize the intangible, reproducible or shared aspects of knowledge creation. Before you understand this, let me give you just a very brief idea about intellectual property, right? There are several facets to it. We cannot really in the hope, you know, in this short time talk about all of it. But the more important ones we usually think about is what? Patents. What else? Copyright. Copyright. Trademark, right? Geographical indicators, right? Then the others like trade secrets, etcetera, right? These three or four are more prominent. Why is IP created to begin with? Anybody? Why do we need IP, intellectual property? We have property, you know, this belongs to someone, right? This is property, this building, right? Most of the things that you see in this room is all property in the physical sense. Why create intellectual property? Quickly. Do what? To give in recognition. Okay, good. To give in recognition or to give incentive to somebody because if you create something, if it belongs to you, quote-unquote, right? Then you may want to again produce, you know, do more innovation, do more creative work later on, right? That's the general idea. While that idea is not wrong, what I'm going to try and say that increasingly, if you, what I said earlier was right in the sense that we can more easily share information, devices around us, right? Then what we are finding is that there is a kind of inconsistency, if you will, or a contradiction developing between the way IP has been designed so far as a law and the way information is actually getting to be shared or getting to be reproduced. In other words, IP has been designed for an industrial economy, right? That's my, you know, we can discuss and debate this a little later, right? But my problem is that intellectual property is not adequate to the task of understanding fully how information is so easily shareable, right? And the reason we have IP really is to make the free flow of information scarce, right? Only when you have scarcity, then you have some idea of value, right? If I put in your mind that the water from the tap, when you go home, if you should not drink the water from your tap, why? Why should you not drink the water from your tap? If you go to United States, you know, you drink it. Or perhaps people don't drink water in Europe, I'm told, but in India, we normally don't. Perhaps we do, but you know, we are encouraged to have, you know, some kind of system which filters that. So, our minds have been somewhat influenced that the abundant source of water around us is not really a very good quality. It's only when we make it scarce, how do we make it scarce? Good quality water is scarce, right? It is either to be filtered or it either has to be bottled. So, when you make something scarce and that is what is branding all about, right? Branding is to create in the imagination of the consumer that this is something scarce, it's got a lot of value to it. So, you want to pay an extra price, right? So, I want to pay extra price for the bottle of water because perhaps it is not contaminated, right? So, similarly IP works the same way. There's abundant information around, but why should you come to IIT Bombay and listen to Professor Shishit Jha? Because maybe I've thought through these questions more carefully, right? All of this is available, right? If you sit down for a day, what I'm talking about is available, you know, easily on the net, right? But you don't have time perhaps or it requires an effort. Why don't I assimilate all of that for you? And so, you are, what I'm doing is creating some value out of the information, right? And that's what IP does, it creates a bit of artificial scarcity because IP is not a permanent property. You know that, unlike physical property, right? I can bequeath, right? My cell phone to my son, although he will have the least concern for it, right? But, you know, because it's mine, you know, I can give it in my will that this cell phone that I bought in 2010 will be given to you, right? But you can't do with that with intellectual property. You can't say that this is my and forever into the future, seventh generation onwards, you know, this idea will only belong to them. Why not? If it's property, why can't I give it to my generation after generation? What's the problem? Anyone? Same property, right? One is intellectual, one is physical. Why not give it away for, you know, why not allow me, somebody said about incentive, right? How does it work here? Allowing me, the owner of the intellectual property to have complete ownership forever into the future. Why not? No, then I'll charge you, no? If you make a modification, then you make, you take permission for me. It's like a flat. If I rent the flat to you, you know, you pay me some fees. I'm trying to see your right. So there's a lifetime of intellectual property, but I'm trying to get you to think why. Why is it the first place that physical property is forever, whether it's value or not is a different thing, but intellectual property is not forever. Patience is 20 years. Copyright is life of the author plus 50 years in India, 60 years in US, different parts of the world. It's still quite a long time, but why that terminal period? Why does it end? Yes. So what is interesting and unique is that intellectual property in between for interim period, like patents, 20 years, it gives you a 20 year monopoly to begin with. But this is one situation where the government is actually what? Encouraging a monopoly. All the time, we want to prevent monopolies from being created. But the idea of creating a monopoly with patents and intellectual property, et cetera, is that we want to really, as somebody said, encourage people to create more and more of it. And because it is so easily reproducible, I'm going to give to this gentleman the sole right for 20 years. But I will not give it forever because then the ideas broadly speaking will get limited. Then we'll start carving out ideas that this idea belongs to me, that idea belongs to him. And science in the way that it requires assimilation will not happen in the same way. Patience is universal. Copyright varies a lot. But I've never been able to frankly find out why the 20 year period, magic. There is no... So the magical number, 20 years of patents, I've tried very hard, but I've never been able to find out why the 20. So it's interesting. So let's move on. So IP has been made central to the development of a knowledge-based economy because it creates scarcity out of abundance. When you create something scarce, you create value. And in a digitized economy, in a knowledge-based economy, abundance is going to be almost taken for granted. It's there everywhere. Music companies have actually in the US gone bankrupt because of the ubiquity abundance of music. Yes? I'm sure you've heard of, you know, most of you are very avid music listeners. How many of you have bought, and this is a lovely question I asked in the class, you know, last time you bought a CD, music CD. Even if you bought, you will not put your hand up, right? Because it's such a stupid thing to do. Why would I ever buy a music CD? Right? It's available, right? In every platform, I can get the music that I want. That was not true 15 years back. 15 years or 20 years back, I had to buy a CD, 20 songs, four of those which I wanted to listen to, 16 of them really didn't want to listen to, but I had to buy it because it was packaged that way. 250 rupees for 20 songs, 12.5 rupees per song, right? My interest was only 50 rupees. The rest 200 rupees was being given for other musicians. Now what is it? You know, either it's free, or if you go to iTunes, you pay per download, 99 cents, which is even quite high, I think. Music is available abundantly, right? News is available abundantly, right? Not that quality of that is something else to imagine, right? At least evening news, right? But we want to create value, so we have to create scarcity, okay? So basically what IPR does is it strengthens the prices that those who invest in producing information today must pay to those who did so yesterday. If you want IP, you have to do what? You have to have a higher price to the same information that was lower yesterday, right? There is an increase in pricing, right? So price today is equal to price yesterday plus IP. The IP part is your innovation, right? I've looked at the same equations, but I've come up with a new synthesis, right? This is my IP. So price has increased because I've created something creative and innovative, right? But if IP is equal to zero, then price today is equal to price yesterday. So the IP question is how high does it go? If it goes very high, next generation has a problem because I can't access the same content. I have to pay a lot. You know, how many, you know, what is your background? Science, engineering, kind of? Do you access journals for your work? Yes? Do you know the cost of those journals? No? Please find out. Do go to your libraries and find out the cost of most of these journals. Some of the, I was told and actually I was doing some research on that. The average cost of a good chemistry journal is about $3,000 per annum. An ordinary college cannot afford that. Seven hundreds of them, right? Journals, right? So price is really increased for access to knowledge, right? If IP becomes high, price of innovation rapidly increases and you have other kinds of problems. If price becomes zero, then you have other problems. What is the right kind of IP to have? Million dollar question, right? But we don't want to be here almost always at the either end. But the point I'm making is that the access to information is pushing ubiquitous access to knowledge. So what kind of IP system should we have in place which is different from yesterday is a new challenging question, okay? Just quickly. So what you see here is these four tables. But basically what has happened is over the ages, most of the things that we took for granted in sharing have all become copyrighted. So we need permission all the time. I'll just tell you a very quick story. Mickey Mouse, everybody knows, right? Who owns Mickey Mouse? Walt Disney? So in 1998, Mickey Mouse, you know, the icon was coming into the public domain. It was lapsing, right? Copyright of the... So Walt Disney basically approached the U.S. Congress, right? Like Raj Sabha or Lok Sabha, they have Senate and Congress. So they approached the Congress saying please extend the copyright of not just Mickey Mouse, but Mickey Mouse is lapsing. So we want to extend the copyright. That time it was life of the author plus 50. Please make it life plus 70, extra 20 years. Now why would Congress, U.S. Congress, want to listen to Walt Disney which is into entertainment, right? And Mickey Mouse, yes, a lovable character depends on whether you like it or not. But why would the U.S. Congress want to listen to Walt Disney? Tell me, anybody, quickly. One company approaches the U.S. Congress making this gesture, this point that it's lapsing into public domain, please increase the copyright term. If you are a congressman, why would you listen to Walt Disney? What would be the reason? Good point. If it is able to increase the economy, but would... Does it increase the economy? Does Walt Disney increase the economy? Yes, no? How? Sorry? Entertainment tax. Entertainment tax. Doilty. Doilty. Yeah, all of those are very important. The second highest export earning commodity in the U.S. after what? Which is the highest? Come on. Defense. Defense has to be, right? One B-52 bomber costs 500 million dollars, more than that. More than its weight in gold, right? If you build it in gold, it will be, you know, more expensive to actually... So after defense, and Pakistan and India ever willing to buy lots of planes, right? Because if they buy, we have to buy, right? So after defense, entertainment is the second highest entertainment, sorry, export earning commodity. Isn't that amazing? We're not talking about cars. We're not talking about steel. We're not talking about God knows any other manufacturing entity. We're talking about a non, you know, an entertainment product. I can share that with you. So there would be, you know, I think if you Google and look at the, you know, exports from U.S., you know, you'll get a... But I'll do that. So basically what is happening is one episode of, you know, what is your favorite U.S. cereal? Come on. Sorry? Super. Super? Super. You don't see? Or... So one episode, you know, for instance of friends, I don't know, you might have heard that, right? Yeah. So one episode is to make, you know, they used to say it cost $1 million to make one episode. But then it is shown in 182 countries. And how many, how much royalty flows back? 100 times that. It's amazing the amount of royalties that you get. And then you don't even own that as a property, right? The friends is just copyrighted for life of the author for so many years, right? So it's not even investment in physical property. I made one episode of friends and I made maybe hundreds of such episodes. And each episode because U.S. characters are so loved all over the world, right? We want to see them again and again, right? So we invest in that, right? And I think, Jung, what is a recent film? It's already smashing records, right? Jurassic. Jurassic. So entertainment is really big business. So U.S. Congress listened to Walt Disney because it said, Walt Disney said, Boss, we make a big change in your economy. You better listen to us. So it was the U.S. Congress which was on the defensive saying, Yes, we have to change the copyright. And it was because of Walt Disney that the copyright term was extended. It was called the Sony Bono Act. Only in the U.S., only in the U.S. So copyright is something, see there's a distinction. Patent is a much more geographical bound entity. But copyright is governed by Byrne Treaty, which is a Wipo organization, U.N. organization. So copyright has much more universal tenants. Patents also has it, but it's much more tightly geographically controlled. But yes, the answer would be more or less, the U.S. copyright would not be very different from the Indian copyright. So the laws, for instance, Indian patent laws are a bit different. We have a section 3D, for instance, which the U.S. pharma companies are not liking. They want to change that. You might have been reading about that. So anyway, what we see is that here is quickly, well, I don't know, maybe just for this sake. So what has been happening is that copyright and patents have been very easily been made available to the public before. Very liberal terms. And this is a U.S. patent 6004596A. It's quite hilarious. It's not a typical patent, but I'm just giving an example of how easy it was to get patents for quite some time in the U.S. It reads as the following. A sealed crust sandwich for providing a convenient sandwich without an outer crust, which can be stored for long periods of time without a central filling from leaking outwardly. The sandwich includes a lower bread portion and an upper bread portion, an upper filling and a lower filling. Between the lower and upper bread portions, a center filling, sealed between the upper and lower fillings, and a crimped edge along an outer perimeter of bread portions, so sealing, etc. I mean, you get a patent for this. Good. I don't know who would enforce, right? Who would see that you are violating my patent, right? There is another one, right? Peanut butter and jelly food size, right? And there are many such examples. I'm not taken out. So what has happened for a long time that the IP culture in U.S. was very liberal. You could get patents left, right and center. They are trying now to reverse that, thankfully, right? And India has already done that, but, you know, we can get into that later. So this one reads the following. A non-spread sliced peanut butter and jelly slice containing jelly that is completely surrounded by peanut butter. Oh, interesting. The peanut butter and jelly slice when placed in the sandwich will exhibit the same textures, flavors, qualities of peanut butter and jelly sandwich that is made by hand, etc. Okay, right? So what I've told you so far is that we have something like a commons. Knowledge is an important part of the commons, an increasingly important part because it can be shared easily, right? Ideas can be shared, right? Device is around. And knowledge has some particular characteristics. It's non-rivalrous, right? It's non-depletable, it's abundant, right? So an IP is what? IP is an attempt to maybe create some value out of this abundance. This abundance was not around every time, you know, not around for a long time. It just appeared on the horizon last 20 years. Before that, the IP system that is in place was made for something 50 years back or 80 years back. So it needs change. Because of reproducible nature of information and knowledge, the IP system also needs to recognize that, okay? So I'm going to give you some examples of how information is so easily available and what people are doing with that, right? So here is a company called Gold Cop, right? A mining company. Very far away from knowledge, not necessarily, but physical, right? Physical infrastructure. Gold Cop is the lowest cost and fastest growing gold producer in the world based in Canada with operations and development projects situated throughout the Americas, but mostly in Canada. Red Lake Gold Mine is Canada's gold... sorry, Canada's largest gold mine, and in 2009 produced so many ounces at a cost of, you know, 288. One of the world's religious gold mines and lowest cost producer. Now it had a challenge, okay? Gold Cop had a challenge that it owned... don't read that, listen to me, right? It had a challenge that it owned a large piece of whatever, one land, and it was quite sure that in this piece of land, there was gold, right? I mean, you can sort of scientifically figure that out, but it wanted more precise information. Right? But to dig that land or to get to that level of precision would require an enormous amount of investment. Right? So what did Gold Cop do? It basically what it did was, and this was very radical because mining companies don't do that, what it did was the data that it had for prospecting that piece of land, the data that it had, it put it out in the public domain. And the CEO of Gold Cop said, anybody anywhere in the world can look at this data and please crunch it and tell us if you can make sense of this data. Right? There's enormous amount of data available. So release some 400 megabytes worth of information of information over 55,000 acres of property. That was the amount of property it had, and it had this data on that. Right? A total of quarter, half a million dollars, roughly, and in prize money was made available to participants who submitted the best methods and estimates to find out gold from this place. Right? About a thousand virtual prospectors from 50 countries got busy crunching the data. Finally, what is the result? The contestants identified 110 targets on the property more than 80% of which yielded substantial quantities of gold. Right? 8 million ounces of gold worth well over 3 billion dollars. What is the point of this story? Why am I saying it now? Anybody? Information in the older paradigm was all in-house. Right? The R&D enterprise. You had an R&D manager who'd take care of all the information. Right? The reason now is because the availability of expertise anywhere in the world. There's a law in companies, even mining companies, to open up its information vault, if you want to call it. Right? And there are many such examples. Right? Gold cop is one. They actually got a 3 billion dollars increase in gold because of access, because of people submitting fresh ideas. Right? Which their own company may not have been able to do. Exactly. Exactly. Yes. I'm saying there is an interesting paradigm shift for that even for a mining company to have faith in people outside its traditional R&D to be able to crunch the data and find out something meaningful. Mining companies have never really revealed the data. That's right. The other example also illustrates this. For instance, there's a crowd sourcing model called Innocentive. So what this basically does, I think Procter & Gamble used something similar. Procter & Gamble might have heard of that company, right? It has a lot of products which sells in India also. So it could not, again, do a lot of its R&D in-house. Right? And it wanted to do things quickly. So what it did is to put out these problems out in the public domain and give prizes. How can I solve this chemistry problem? For instance, one of the problems, I don't know how to solve it, although I have a chemistry bachelor's, is that how do you put toothpaste into the tube? Right? How do you do it? I don't know really. The tooth, you know how to do it? So somebody solved that problem. You make, I mean, it's a very squishy problem, right? So basically it ended up giving about 685 awards, total award, award dollars posted to 24.2 million. Average success rate is 1 in 2. 50% of people are able to solve problems anywhere in the world. Right? So in our present, you know, present in, how should one say, present surrounding, present environment, present economy, increasingly solutions are going to come through collaboration. Collaborations between the firm and the outside world. Right? Collaborations have to be increasingly become central to the way that we discover new knowledge, right? And it's, if I, if you remember what I said earlier, R&D is becoming also cheaper, right? You heard of 3D printing, right? Still very expensive, but the costs are lowering, right? You can do a lot of stuff with 3D printing now, right? So the fruits of innovation, right, are getting lower and lower. You can in your garage, for instance, start some new R&D lab, which you could not do 30 years back, because you have all the information in the world. You have R&D, sorry, you have 3D printing machines. You have many things which you could not do 30, 40 years back. I think we are, how are we doing with time? I have, yeah. Is there an upper limit? Okay. So this is a scanner, obviously. So this is basically the US, Google was trying to scan 10 million books in the US from four major libraries. And the idea of Google was to scan these books. The ones in public domain, it will allow them. Google books, for instance, if you go, they send a lot of books in public domain, but they dispatched all these books to China to get it copied, right? And this is, you're laughing for some reason. So the Chinese were, well, the labor was cheap, you know, perhaps cost of machinery was not that, you know, so it was easier to dispatch and get them scanned there in China. So the Chinese were smart. They kept one e-book for themselves, right, sent the original physical books back to, back to US, back to Google. So now almost all the books are, you know, easily available. So what we are having really at the end of, you know, if we summarize a lot of the things that I've said, you know, the second part is that we are basically democratizing production of knowledge and the democratizing of the distribution of that. Wikipedia, many, many of us make fun of it, but I think it's pretty good, reasonably good at least, not as a source for research in the sense that you write a journal article and you know, you mention references to Wikipedia, but as a source for first, you know, first site of entry in terms of understanding something, Wikipedia is not that bad. 100 million man hours of contribution in Wikipedia. Not a small amount. So production of music, as I said earlier, there was one guy in Boston, Sean Fanning, 18-year-old guy who wrote some code which basically allowed in, I think it was 99, 2000 thereabouts. He wrote a piece of code which allowed all the, you know, most of the people to be able to look into each other's hardware, sorry, look into each other's memory sort of and figure out what kind of music that they wanted which they didn't have. They could share music with that code. The music companies were up in arms saying this is, you know, not right, et cetera. They took it to Supreme Court. Sean Fanning lost the case, which was a Napster, but the problem was that the music companies never recovered. They never offered something like what Napster could offer and then somebody enters in the music business which had nothing to do with music. Who was that? Apple. Apple was good in making computers, right? But it got a good interface, iTunes, good device, iPod first, then iPad, et cetera later, right? But the brilliant thing that Apple did was that it put together millions of catalogs of music. It got a good bargain from all the big four music companies. It has the largest music catalog. So Apple is doing very well. One in five songs in U.S., digital songs goes through the iTunes interface. That is a huge amount of revenue. So coming back to basically for a long time, the market, we've had a system which was decentralized, right, and which was price-based, okay? So we basically, before capitalism came in the horizon, you know, if you can imagine 500 years before, basically we negotiated in the marketplace based on price, right? Price could be sort of contextualized in any way, right? It need not always have been currency. It could have been many other ways, right? Pricing was the way we exchanged commodities. As capitalism developed, things began to consolidate, right? So what we had was firms developed, right? What we call companies, right? They became the more prominent players in the market-based system. Companies, right? Nothing very strange, right? We all know this. In the non-market-based area and in a centralized way of working, we've had mostly the government and nonprofits. Governments are mostly working in a centralized way and mostly nonprofits work in that. So we have one space left, non-market-based and decentralized. This is a space which is increasingly being filled by sharing and exchange. When I say sharing and exchange, basically all the things that we talked about, different kinds of R&D, exchange of information, all of that is being filled in that space. It's non-market-based, most of it. Open source, for instance, would be a good example. Some of it is overlaps with market-based, but there is a whole creative economy, common being created here which is outside the state and the market, right? So this is a space that you need to think about a lot more. I've given you some examples, but I've also made you want to think about this, you know, space more, you know, more significantly. I'm going to go a little more quickly. I just have a few more slides and then we'll close. Here is something I found in a history of science book. Impact of markets and networks on technological innovation for last 200 years, 1800 to present. If you have four quadrants, one quadrant at the top left is people who innovated because they were inspired by the market or because they had individual curiosity. So those are the innovations in that quadrant, okay? The quadrant below is those who are not inspired by the market, they didn't care about the market, they just innovated because they liked it as individual. Right at the top are those who were inspired again by the market, but they did collaborative work, not individual work. And the last is those who are not sort of had any incentive from the market and again collaborative. Which of these four quadrants? One, two, three, four. From 1800 to 2000, right? Which of these four quadrants do you think had the maximum number of innovations? You say two. Who says four? How many of you say four? Four or five of you, okay? Others have no three. Why three? Because market. Without market we can't do anything, right? We are lifeless beings. Yes, good. So intuitively it should be the market and it should be collaborative, right? Good. Let's see. At least according to this author. So market individuals, this is a list for instance of innovations that to, you know, I'm just mentioning some, not all of them exhaustively, right? Tesla coil, dynamite, revolver if you want to call it, right? But in terms of actual products, physical products, okay? What he found was that, you know, science and innovation, most of us it was actually quadrant four. Network was collaborative. So you're not doing it individually. You actually collaborated with a set of people. It was not an individual, for instance, I'm not really a historian of science, but revolver for instance was invented by somebody who did it alone, okay? But for the most of it in the fourth category required people to collaborate, right? And non-market was that people who did that work did not have in their minds a requirement that I work for the market as an incentive, right? So moral of the story, very good. Is that the commons where you're not working for the market and you're not working for the state is giving you abundant amount of innovations. So it's not like hot air. I'm not just saying out of the blue that commons is a good thing to think about because, you know, it gives you, you know, it's a good feel. I'm saying at the end of the day, if you look at the history, if you look at from 1800 to 2000 what you actually see is evidence of the fact that this is fourth is commons based production. Out of passion, out of collaboration. But it, at least for me when I read this it was counterintuitive because as somebody said industrialization should have meant that we have, you know, we should get most of the innovations driven by the market. Yeah? Yes. Yes. So this is where you're interested in the, you know, your passion, your curiosity, your, you're not interested in whether I get a million dollars for my product. You're doing it because of the sheer joy of it. It may end up getting money but that was not why you did it. Right? Okay. So universal truth but I, I don't know, how many of you think it is very intuitive that four is the, many of you did not even put up your hands but those who did, or those who did not say four, was it very intuitive that it should have been four? Or rather what, yeah, different countries, different continents. It doesn't have to be your neighbor. Sorry? A good point. I mean, it may not have been, you know, the acceleration of innovations happened more after 1950s. But yeah, you have a good point. But it, people still wanted to collaborate. Right? So if you look into the history of science, you get amazing instances of people collaborating in spite of all the odds. Okay, so let me leave you with one last example and then if you have questions, we'll, we'll try to address them. Okay? There's this, you know, computer science department, how can I not talk about software? It's amazing that open source has even survived to 2015. I mean, how can lines of code be written by people who are not inclined to get money right away from, you know, from this hard labor? Right? At the end of the day, and I, you know, I teach in the business school, I don't know if Kavi Arya has, perhaps Kavi Arya has a different experience in computer science department. Right? And all of you, you know, you can be candid about this, but, you know, placements is the key. The moment we enter IIT Bombay after one year of hard work, placements become important. Yes, it's important. I'm not trying to diminish the importance of placements. Right? The anxiety of where you'll get a job, what kind of compensation you'll get, et cetera. It's so driven into us by our families, by our, you know, community everywhere, right? Our status in some ways depends on it, et cetera. So here you have the lines of code being written by folks who are saying, well, let me be a little blunt to help with this whole gamut of incentives and, you know, about market, et cetera. I'm just going to write code. I'm making it simpler. It's not probably as simple as that, but I'm going to write code because it's sheer joy. It's a pleasure. It needs to be done. It needs to be done. And it's not like, you know, not like my 10-year-old, you know, on a lovely, well, I don't know what you call it, lovely, but, you know, an afternoon like this, doing some painting, right? And the value of that painting may be great for him and for me, but it will not have much value. It will fetch our outside. So it's not like code being written, which is flawed or which has lots of bugs, right? How is it that lines of code can be written, which is, you know, in the heart of millions of machines? Servers, I don't know what is the right number, about 70 to 80% of servers around the world have open-source software. So how do you account for this? What is this weird animal called open-source software where people all over the world, to use the word, you know, that I've been using today, are doing something for the commons, yes? But we are talking about even young folks, you know, 30s, et cetera, who, you know, who want to do this. Maybe that's one way, but something else is also happening. So commons is something I've tried to give you, repeated examples, is worth thinking about. And if you are a computer scientist or even if you're not, right, a political scientist has said that what oil was for 20th century, software is going to be for the 21st century. Everywhere there's software. And soon, you know, like the film that I said, X-machine, right, the robots are going to be smarter than us, right? So software is here, right? The representation of knowledge is through software, right? This has some software in it, right? The phones that you have are software in it. The cars that you drive soon will have more software in it, right? So software is going to be ubiquitous everywhere. Who controls that software is going to be very important, like who control the oil? Yes, so the point being made, very good, is that countries like India, I think, and I think the ministry is beginning to realize it, countries like India should invest considerably more in what? Open source software, right? Because then you can change lines of code, right, depending on what are your requirements. It's not just a moral and ethical thing to do. It is also a political economic thing to do. If India has six lakh villages, then you need perhaps 60,000 libraries at least, one library for every 10 villages, right? Not a bad thing to think about. We can't have 60,000 books being replicated. It will be enormously prohibitive. What we can do is have e-books or something like that, right? But for that, we need what? IP, we should be not expensive. So all of these things, right? We are on the cusp of major development in our world, right? Transformation. And what I'm saying is the commons and the knowledge in that commons is going to play a very critical role. That's because I say things will not change, obviously. But we need to begin to realize the problems and how do you articulate those problems, right? Or think about the problems. Let me pause at that because I've said a lot of things. So last thing I'll say are new commons make it possible to imagine a shared global infrastructure that is far less expensive than a similarly global and shared infrastructure would necessarily have been in a physical environment. So we need to create an infrastructure which is far less expensive. Otherwise, the economies will be so prohibitive. Very expensive. Anyway, let me just pause there and take questions. Yeah, so if you dig deeper into the open source, I think what has happened is that people write for the open source not because of money but because of, say, the reputation, right? So because it is documented so well that you've written the code which is very critical for a particular part of the software and they document who's written the software. So you don't entirely depend on open source for your income. In the morning you probably code for Microsoft in the evening. You know, you do open source, right? Yeah. But the fact is that, you know, being able, I think even, you know, Professor Kannan, right? The whole MATLAB versus, yeah. So being able to create alternative open source infrastructure, I think it's so crucial. And Latin America is far ahead of us. Again, developing countries. Brazil, perhaps Argentina, I don't know, but Brazil certainly. India, home to, you know, a lot of quote-unquote software giants has been very slow on the open source side. Only last five to seven years, I think, ten years. No, I'm talking about the software part. You're not software. So any skepticism about the fact that the market in the state can be, you know, bypassed. Not completely, but as I'm trying to argue through the role of the commons. Do you find that, are you skeptical of that? Are you agree with that? Do you disagree? Vimentary disagree? Whatever, you know, please share. No? You agree with me everything? Don't agree with me so easily. Otherwise then there'll be a problem. Disagreement. You can, you know, there are no questions which are necessarily, you know, profound or stupid. You know, any question is welcome. But beyond a few yawns, have I made myself understood? Yes? So one of the things I would urge you to do is that, please, you know, there is an article I shared. Wiki Common. Sorry, Wikonomics. It's a, you know, easily readable article. It's not like dense journal article. Please read that. But also start looking for designs and patterns in your everyday life where the role of commons, either physical commons or the knowledge commons, has considerable importance. Water, air, land, et cetera, I was telling you about. Other things, right? Where we do not easily price it right away, right? It's very difficult for instance to price knowledge, right? So there are many things, you know, there's always a, you know, tension between how the market prices something and how the commons values it. Most of the land that we have, we are using, you know, England had the traditional revolution where people were driven away from the land, right? Industrial revolution required cheap labor. So you had to put people, you know, away from the land into the factories. The way to do that was to take over the land. India, we are at the cusp of that, you know, what is a good model that people leave their land to work in the factories. But we have learned from 150 years of what has happened elsewhere. So there is anxiety and also the desire for development. So we, you know, it's more difficult for us to do that than it was for the English kings and whatever, you know, for them to drive people. It wasn't easy, but they didn't have 200 years of experience of other countries before them. We have. So we are thinking about it, right? But these are very critical, you know, land is a common. What do you do with it? Okay, so thanks for listening.