State of Innovation

Patents and Innovation Economics

Natural Laws of Innovation – 1

What do we mean by innovation?  We mean the creation of something new.  Because of conservation of matter (and energy), new does not mean creating something out of nothing.  As used here innovation means a new combination of elements and connections that has positive value to a human being.  Combinations of elements and connections that are new but have no value to any human being are generally noise.  However, in the case of failed attempts to solve a problem the new combination may have value in what does not work.  For instance, Edison considered his attempts to create a light bulb as having negative value.  He told a reporter, “I now know definitively over 9,000 ways that an electric light bulb will not work.” 

Every innovation can be described as a combination of elements and connections.  For instance, music is a series of notes connected by timing.  A food dish is a combination of food elements connected by ways of preparing each element and the time at which the elements are combined.  Methods of investing are the elements of stocks and  financial parameters or technical parameters connected together by a purchase or sale.  The connections can be as important as the elements.  For instance, stereoisomers are chemical compounds that have exactly the same elements and bonds between the elements, but are mirror images of each other.  The two chemical compounds of a stereoisomer are commonly characterizes as being right handed or left handed.  They are often readily distinguished by biological systems, however, and may have different pharmacokinetic properties (absorption; distribution, biotransformation. and excretion) and quantitatively or qualitatively different pharmacologic or toxicological effects.[1]

An invention is an innovation that has a well defined structure and an objective goal.  For instance, a new song is an innovation and it has a well defined structure, but it is not an invention since its goal is the subjective esthetic pleasure of the listener.  A management strategy, such as total quality management, is not an invention because the implementation is only an outline and the goal cannot be objectively tested.  A software program can be an invention because it has a well defined structure and it may have an objective goal.  For instance, find the cheapest published airfare on the internet between L.A. and New York on a certain day.

Earlier we stated that all innovations are combinations of elements and connections.  In order to create these combinations the elements and connections must first be known.  As a result, discovery proceeds innovation.  We must discover those elements and connection found in nature first before we can use them to make an innovation.

An innovation is not the physical embodiment.  For instance, one of Edison’s inventions was a high resistance incandescent light bulb.  The physical light bulb he built was not the invention, it was an embodiment of the invention.  The invention is how to build a high impedance light bulb.  A song is not an instance of the song being played.  That is a performance of the song.  The song is the recipe for the performance.

In summary, all inventions are innovations but not all innovations are inventions.  Inventions are innovations that have a well defined structure and an object goal.  All innovations are combinations of elements and connections.  An innovation is not a specific individual embodiment, but the recipe for making or practicing the innovation.  Innovation is proceeded by discovery.

With this background, I will now list the Laws of Innovation then each of the Laws will be discussed in more detail.

List of the Laws of Innovation


Conservation Law of Innovation:

All innovations are combinations of existing/known elements.

Causality Law of Innovation:

Invention precedes production, production precedes consumption and discovery precedes invention.

Set Law of Innovation:

The number of potential innovations is essentially infinite.

Rate Law of Innovation:

The rate of innovation is dependent on the number of innovators, the size of the set of elements the innovators can access, and the size of the set of goals.

Commons Law of Innovation:

Innovations are not subject to overuse.  The creation of innovations is subject to under investment without property rights in innovations.  The diffusion of innovations is subject to under investment without property rights in innovations.

Income Law of Innovation

The per capita income of a large population can only increase over the long term if their level of technology increases.

[1] “Development of New Stereoisomeric Drugs”,, viewed 7/14/09, first published May 1, 1992, updated July 6, 2005.

July 15, 2009 - Posted by | -Economics, Innovation | , , , ,

1 Comment »

  1. None of these things will matter once humankind has gone extinct.

    Comment by David Mathews | September 25, 2009 | Reply

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