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Communications of the ACM

Economic and business dimensions

Permissionless Innovation


Permissionless Innovation, illustrative photo

"Permissionless innovation," is the freedom to explore new technologies or businesses without seeking prior approval.14 It has already produced an explosion of goods and services in the IT industry.14 Vint Cerf, a father of the Internet, invokes it when he argues the Web must remain open.4 It is cousin to the end-to-end principle of placing application-specific functions at end points, where others can build, rather than in the core.11 It improves efficiency and moves innovation closer to people with ideas.3 Hundreds of thousands of iOS and Android apps were not created by Apple or Google, but by permissionless innovation made possible by published APIs (application programming interfaces) and resulting market evolution. It facilitates experimentation in parallel: actors launch their own experiments without depending on the results of others. Permissionless innovation greatly increases the speed of invention and allows the ecosystem to provide ideas its system designers never had.1

The pharmaceutical industry could benefit from this approach. A successful new drug can cost upward of $800 million.5,6 Uncertainty about winning patent races means firms race to secure intellectual property rights. Competitors need patent shears to trim patent thickets.5,6 Yet the awful expense of maintaining IP creates abandonment problems due to the lag between costs and revenues. Innovation slows8 while, ironically, only 8% of pharma firms measure the value of their orphan patents.2


 

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