An Open World is Possible

An open world is a world where all information is openly and freely available for anyone to use, is possible, desirable and necessary. This is the key driver behind the Open Revolution movement.

“All information” means all “public” information; that is, information which can be legally or legitimately transferred to anyone else whether for free or for a fee. It includes published software from operating systems like Windows to the code behind online applications like Google’s search engine. It includes databases from stock prices to streetmaps, train timetables to trade statistics. It includes our cultural content such as books, films, music and games. And finally, it includes all published human knowledge from research articles on particle physics to the design of new computer chips.

In the coming information age this is the material that will be at the heart of our economies and societies. Information, and the services and infrastructure around it, will be the great majority of what we create, use and trade.

That an open world is both possible and better is a bold statement — we appear to be a long way from that world right now. However, we are not as far from it you might think. More importantly, that an open world is possible desirable is a claim grounded in simple logic and common sense.

In contrast to physical things, information is costlessly copyable and shareable. Sharing it openly and freely means that everyone who needs it gets it — whether that’s a cancer patient getting their medicine, or a child getting a textbook.

However, there is a “but”. If we make information open and free how do we pay to create information in the first place? Allowing people to charge for access by creating monopoly rights like copyright or patents is one obvious way to fund the creation of information in the first place — though, of course, it does limit access and use.

Fortunately, it turns out there are other better ways to fund creating information than imposing monopolies. By banding together — usually through our taxes — we can raise the money to pay for information goods “up front” — much as we raise money to pay for national defense or roads. Moreover, we can do this, if we want, without in any way removing choice from consumers or freedom from the market: the state can coordinate raising the money but leave the market and entrepreneurs to decide what information gets created and consumed — what movies get made, what medicines get researched, what software gets written.

Two distinct points are being made here. First, that an open world is possible. Second, that it is desirable. Possible means that we can create information at the level we want and for that information to be open. Desirable means it is better than a closed one — it delivers more of what matters to us: freedom, wealth and well-being.

If an open world is possible then its desirability follows directly. Information is shareable costlessly. Thus, if information exists, we can share it openly and costlessly. Moreover, sharing information openly ensures that everyone who needs it gets access to it — no-one is denied that essential medicine or access to that textbook. Furthermore, openness ensures not only access for immediate use — taking the drug — but also ensures access for those who want to build on that information to create new information — using the existing drug formula as a basis for designing new and better drugs. By contrast, closed information limits both of these activities: it denies access to some people who need it and it slows innovation and creativity by restricting reuse. Thus, open is always better than closed once information exists. Hence, if an open world is possible — that is, we can resource creation of information in an open-compatible ways — it then follows from what we have just said that an open world is desirable — preferable to a closed one.

The big question then is whether an open world is possible? As we shall demonstrate, the answer to this question is a resounding: yes. Even better, almost every aspect of the open approach has already been tried and tested in one area or another. We therefore have solid experience and numbers to support it.

To illustrate, let’s look at one concrete example: medical research. This produces new information — new recipes for drugs, new methods of treatement — that underpin the advances in modern healthcare. This is a very important area: healthcare is now one of the largest areas of expenditure, often more than 10% of annual GDP and growing rapidly.

How does the creation of this new medical information get funded? One answer today is via patent monopolies or other exclusive rights. In this model, pharmaceutical companies do research to identify and test new drugs and treatments. In return they receive a patent monopoly that enables them to make money by through a legal guarantee of monopoly: the right to prevent anyone else from using that information without their permission.

You might imagine this is the only source of funding for medical research — it is these companies and their products that we are familiar with from stories in the papers or from seeing their name on the a box of pills. However, you would be mistaken: a very sizeable portion of funding for medical research is provided by governments and philanthropists “up-front” with the results being openly available. Take the US for example. There nearly half of all medical research and development is funded by government and public institutions. We are often less aware of this substantial funding for open information because it is less visible. Government funding tends to go to more basic research. For example, rather than looking for a specific cancer drug, governments fund the research to understand the science behind how cancer cells function. This work is absolutely crucial as it this knowledge that is the basis for the search for specific drugs, but it is less likely to lead to headlines in the papers.

The role of public funding is even larger if we move away from the richer countries and look at diseases that matter to the poor and less well-off. For these so-called “neglected diseases” like HIV, Malaria and Tuberculosis public and philanthropic funding is by far the majority. For example, of the $3.4bn in spending in these areas in 2014, only 16% came from industry whilst 82% came from public and philanthropic sources¹. Moreover, public funding in these areas is not just for basic research but covers the entire drug development pipeline from discovery through testing. So public funding is not just good for basic research but can resource end-to-end medical research. And this example, is not limited just to neglected diseases. Public funding in the US and Europe was behind the discovery and clinical testing of major breakthrough drugs like Taxol for cancer and AZT for HIV/AIDS.

What this shows is that we are already using an open model to create a good portion of new medical innovation — and doing so efficiently and effectively. Billions of dollars a year are spent under an open-style model and almost every new treatment or drug will have built on some open research — even those that are patented. Moreover, we have good evidence that, in contrast to the open approach, the closed patent-based approach is hugely inefficient.

For example, in 2014 the US spent $374bn purchasing pharmaceutical drugs. Many of these drugs are covered by patent monopolies so that they are very expensive, and much more expensive than their actual cost to manufacture — ten to a hundred times more expensive. Now, the logic of having a patent monopoly is to allow the owner of the patent to get money so they can pay for the research to create the information. So how much money are patent holders receiving? To determine that we subtract the actual costs of manufacturing and distribution the drugs. We will put this at a generous 15%. Then allow a 10% profit rate (a very reasonable level when compared to companies as a whole). Together that is 25% which if we subtract from the total revenue of $374bn leaves around $280bn. This is the money going to the patent holders so that they can do the research and development to create the information — the chemical formulae — behind the drugs. But here’s the odd thing. If you add up all the medical R&D in the United States it only comes to just over $100bn, and, half of that is publicly taxpayer funded. Thus, industry are getting $280bn from their patents to spend on creating information but ultimately only spending $50bn. That is a huge gap. It suggests that under a patent monopoly system, consumers are paying $220bn more than they need to. If you moved to an open model you could save all that money and still be spending just as much on medical research — a move that would immediately save an ordinary US citizen nearly two thirds of the average $1000 a year they spend directly and indirectly on buying drugs. And there would be an even bigger benefit: freedom for fear and access to drugs for people who are today denied — or risk being denied — access because of cost.

This example of medicines demonstrates our practical experience of the fact that open information is both possible and desirable. In fact, it is so compelling you might even asking: why are we not already in a fully open world? This is an excellent question that deserves a blog (or book!) in itself we can address it briefly here.

The basic reason is that there are powerful, concentrated forces who oppose change because they fear losing out — even if overall we all would gain. To overcome this opposition requires collective action which can be hard. Take our example of pharmaceuticals. A move to open information would benefit US citizens to the tune of $220bn plus the benefits of increased access (probably another $220bn if not more). However, at least some of that $220bn comes at the expense of the largest pharmaceutical companies — “big pharma” as they are known. In large part because of patents, the pharmaceutical industry is both very concentrated — a few very large firms dominate — and very rich — these companies are among the largest and wealthiest in the world. And a good chunk of their money gets spent influencing politicians: the pharmaceutical industry has the largest expenditure on lobbying of any industry in the US, spending nearly $250m dollars a year in total — individual companies such as Pfizer alone spend more than $10m per year. And that’s the just the numbers they have to disclose — and it excludes much of the “soft” money spent on informal influence. That kind of money buys you a lot of access and a lot of influence. To overcome it you need coordinated collective action from citizens and public interest groups. It is not an impossible task but neither is it an easy one.

An Open World is possible, desirable and, with determine effort, politically feasible. And for this, the Open Revolution needs you!

Join us and be part of the movement that reclaims the original vision of the internet, and ensures that the digital era is open, inclusive and the spirit of innovation continues to thrive.

Footnote

(1) These numbers come from the 2015 G-Finder report which reports results from the 2014 survey http://policycures.org/gfinder.html.

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