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D. Murali

How do you protect the `brains' in your company? Don't shut them up, get them to talk with the world and build your patent tally. And patent tally is something India needs to take note of.

KNOWLEDGE capital sits not in lockers but in the heads of your people. It walks and goes all over, making you worry whether rivals would lay hands on your precious capital. So, should you fetter your top performers and keep their knowledge bottled up to avoid competitive risk? Not necessary, Lee Fleming would say, in his brief article co-authored with Adam Juda - "A Network of Invention" that appears in a recent issue of Harvard Business Review. "Often, that risk is lower than you might think," he writes. "While many firms might be able to benefit from your company's knowledge, most of them don't compete with you directly." On the contrary, since the flow is two-way, your company would also benefit from ideas coming from other sources.

A chart in the article that looks like a galactic constellation or chemical reaction is a plot of patent ownership, where "each dot represents a patent holder, with dot size corresponding to productivity." There are joining lines when there is shared ownership of patent. And, interestingly, there are `gatekeepers' - "they bridge institutions and disciplines to link large number of inventors."

An earlier article by Lee and his team is "Why the Valley Went First: Agglomeration and Emergence in Regional Inventor Networks", published by Santa Fe Institute. It explores whether inventors of Silicon Valley are better connected than those of Boston. "Spillover" is what the authors use to mean information leaks that make businesses overprotective. They cite a start-up entrepreneur Pyare Khanna: He describes spillovers as bad - "that it took one year to train a scientist, and after which, he preferred to keep the scientist in isolation. He felt that the important connections across the firm boundary were at his level, and that scientists should work in silos. He sends his people to conferences, but only outside the Valley, in order to avoid their being poached by rival Valley firms." Another quote is from Kaufman: "At Digital, management thought we had all these great secrets to conceal; the engineers knew that the value was in collaboration."

Companies can have foolproof non-disclosure agreements, monitor e-mails, and tap phone conversations, yet a determined defector can spill the beans. How does one resolve the conflict between the need for networking, and risks of such openness? "Encourage employee movement in order to enhance spillovers," state the authors, and that may sound unacceptable, but they argue that it would be worthwhile to tolerate such movement and proprietary loss. Well, how to encourage movement? "Mobile pensions and retirement support, weakened or un-enforced non-compete and non-disclosure agreements, post-doc and visiting scientist programs, contingent and temporary technical employment, and venture capital that supports new firm formation."

One may not find many takers for these ideas as encouraging enough, but the recent HBR piece is more forceful. Lee exhorts companies not to retreat "behind corporate walls" because that would isolate them "from the innovative ferment". Instead, identify and nurture the highly connected "gatekeepers", he says. That way you can "maximise your ability to innovate while minimising the competitive risk." Therefore, the message is simple: "Encourage your gatekeepers to aggressively build connections outside of their specific disciplines and industries." Keyword is `outside' because "these less obvious connections produce surprising new combinations of ideas that can lead to unanticipated breakthroughs."

In India, if we were to do a similar plotting, dots are not going to be so clustered. Because, as noted by the CAG in its report a few years ago the number of patents sealed in India stood at a dismal 2,000 for a whole year. Among them, proportion of patents sealed in the name of foreign agencies and individuals were much higher than that by Indians. There are statistics to corroborate this in the site of Technology Information, Forecasting & Assessment Council (www.tifac.org.in) .

What is imperative, therefore, is to accelerate patent population, before we begin to network and leverage them. To encourage big money to flow into innovation rather than be siphoned off as fat dividends, disclosure norms may be refined to mandate corporates report also about their patent performance annually.

ITworks@thehindu.co.in

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