Peer Production and Industrial Cooperation in Alternative Energy

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URL = http://cyber.law.harvard.edu/commonsbasedresearch/Alternative_Energy

Description

Summary from the Industrial Cooperation Project:

"The second sector is one of enormous importance, but one for which there has been practically no work done on innovation policy to foster cooperation and knowledge sharing — Alternative Energy. Here, the practices are less well developed, there is no real structure for commons-based practices, but there is substantial and interesting support from the current United States Department of Energy to embrace innovation-sharing practices as part of the global effort to address climate change and sustainability. In this regard, the area is important, and particularly fertile for developing new political alliances around questions of innovation and development as checks on IP. See the AE Synthesis here and working papers here." (http://cyber.law.harvard.edu/commonsbasedresearch/Alternative_Energy)


Discussion

Synthesis

"In Alternative Energy, we found enormous recent activity and investment in the development of new tools and products worldwide, and an exponential grown in the number of patents mirrors this activity. We began our research with the intention of limiting our scope to the US only, but given the global scope of the alternative energy market, and the fact that almost all the market leading companies have grown in foreign countries where the markets for this technology have been biggest and which can be considered historical centers of technology innovation, we chose to include Germany, Denmark, and Spain. Additionally, among the countries considered emerging economies, we decided to look at China for the geopolitical implications relating to its relationship with the United States, but also for its surprising and fast growing number of patents.The potential reasons for this may be many, but some are attributable to consistent combination of push and pull policy choices in some of those countries.

We chose wind, solar and tidal/wave technologies with the expectation that we would find variations among their approaches to openness and closedness, since the technologies represent different levels of maturity and patenting activity. The maturity can be measured both by the stage of development of the technology and the stage of development of the market. For instance, wind is considered a mature technology because it is fairly well understood, and the cost of generating electricity with wind turbines is closer to the cost of conventional sources of fossil fuel generated electricity - though it is still more expensive. Solar photovoltaic (PV) technology is less mature and can be quite expensive, therefore the research and innovation around solar PV technologies is sure to play a critical role in bringing its costs down and generating more efficient technology. Tidal/wave technology is relatively immature compared to wind and solar, and is mostly in the demonstration phase at this time.

What we found was relatively traditional industrial innovation practice - research and development at big companies, venture-backed startups, investment by governments in national laboratories with traditional knowledge and technology transfer processes in place. The end products and their industrial sellers appear to be much less affected by emergent commons-based processes than software, culture, and educational materials. They are products like massive wind turbines or solar arrays, physically manufactured at high expense, covered by entire families of patents, and subject to a very traditional innovation paradigm. The wind market is concentrated amend some top industries that have been acquiring small innovative companies for many decades. We did find some uptake and endorsement of open source software, especially around the advance of Smart Grid technologies, though we did not research deeper on that, as well as intriguing new projects around access to energy data, which point to intriguing hypotheses about how CBP could emerge in the field and begin to disrupt the industry in the future.

There is clearly a desire by many of the key stakeholders in energy to “change the game” and increase the overall rate of innovation in renewable energy. This desire has been expressed in the US very clearly in President Obama’s innovation strategies, including by Energy Secretarty Chu and Commerce Secretary Locke. The OpenEI (to share smart grid data in a manner consistent with the US data.gov system), U.S. OpenLabs, and the Database of State Incentives for Renewables and Energy (DSIRE) all point towards the intrusion of new market forces into what has been a fairly traditional industrial sector, one that has had more in common with the creation of airplanes or automobiles than with software engineering or educational materials construction. The Obama administration is also working with new market forces via the Kauffman Foundation for entrepreneurship, hosting (and even webcasting) events at the White House and in general positioning itself as a force for more openness in energy data and potentially in technologies. In a recent meeting (05/08/2010), knowledge sharing and new way to bring research from universities into development and the market were key themes, in addition to the necessity of generating jobs within the US borders.

It is estimated that, until recently, 2/3s of investment into alternative energy R&D within the USA came from the private sector, however, there is a broad acceptance that the government should be the responsible for investing in new, risky, and possible disruptive, basic research for innovation within AE. This is due also to the disappearance of large corporate laboratories - such as Xerox Lab, BellLab, and others - which has increased the importance of national labs and universities as key players for early stage innovative research. Thus, after a couple of decades with low public investment in renewables R&D - as of 2007, federal support for energy R&D had fallen by more than half since a high point in 1978, and private-sector energy R&D has similarly fallen - , a recent major investment under the recovery plan (ARRA 2009) was devised. By analyzing the innovation pipeline of alternative energy a series of programs were devised by the DOE. At the basic research level, 46 Energy Frontier Research Centers (EFRCs) within Universities and National Labs were created. The EFRC represents an increased emphasis on the importance of university based research, and expands the R&D funding for this research. At the translational level, the Advanced Research Projects Agency-Energy (ARPA-E) was created and modeled after the Defense Advanced Research Projects Agency (DARPA). ARPA-E will fund energy technology projects that translate scientific discoveries and cutting-edge inventions into technological innovations, and will be distributed through awarding grants, cooperative agreements or Technology Investment Agreements The program should also accelerate technological advances in high-risk areas that industry is not likely to pursue independently. And, finally, the Energy Innovation Regional Clusters (E-RIC) aimed spur regional economic growth while developing innovative energy efficient building technologies, designs, and systems.

This desire by the US is actually preceded by private and public interventions elsewhere. Denmark saw industrial cooperation on “vertical stacks” of wind technologies in the 1990s, in which competition was voluntarily restricted by companies in order to achieve greater interoperability, and the wind industry in the US also collaborated via informal “club” arrangements hosted at Stanford to achieve more reliable gearboxes without demanding new patent applications and licensing. So the US government entry is not without precedent, but the power of the US government to change the market is indeed a major new player in the industrial cooperation arrangements we expect to see in the next decade." (http://cyber.law.harvard.edu/commonsbasedresearch/ICP_Sectors)


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