Go Ahead and Copy This Blog
Albert Einstein once joked that the “secret to creativity is knowing how to hide your sources.” Testifying to the broad meaning of this much-repeated line, relativity as a concept and a principle did not start with Einstein in 1905 but with Galileo in 1632. Principles, however, are just raw materials. It’s what Einstein did with Galileo’s concept that revolutionized centuries of physics.
Increasingly in the modern world, what applies in the scientific sphere also applies to economic life. A thought-provoking article in the Economist on the economics of copying and imitating has strong implications for goods producers in a challenging global environment. While acknowledging the well-accepted benefits of innovation, the article notes that in the real world companies not only copy but “copy and succeed.” The iPhone was not the first smartphone. The iPad was not the first tablet. Apple imitated existing products but added appealing features. The pharmaceutical industry is another example. Now split between inventors and imitators, some innovators such as Pfizer have joined the “copy cats,” starting generic drug businesses themselves. The list goes on. Pampers imitated Chux, the first disposable nappies. Ray Kroc, who built McDonald's, copied White Castle.
The article cites one management expert, Oded Shenkar of Ohio State University, who asserts that the pace and intensity of legal imitation has accelerated in recent years, likely in no small part due to the fact that imitators often end up winners. While imitation can be legally risky and must be done carefully, the article asserts that there is usually plenty of scope to imitate safely. Unfortunately, all too many firms seem to pay too little attention to the art of safe copying and miss the rewards.
The broader, societal implications of copying need to be explored. This is an area that calls out for economic research. For one thing, it is yet another nuance that raises the consistently asked question of what innovation really is. One can argue that copying and adding features to existing products, as Apple has done, is itself a form of innovation. Every innovation cannot be—and will not be—completely new and disruptive. Very possibly, legal copying is one way of spawning derivative innovations that only increase the economic value of the original breakthrough. In many ways, the innovation/imitation/copying nexus might be said to explain the Facebook phenomenon and could be the appropriate model for understanding the economics of social media.
Someday, economists will have a better grasp of the innovation/imitation relationship. Until then, go ahead and copy this blog. Perhaps you can even add a few thoughts.