State of Innovation

Patents and Innovation Economics

Aligning Unions with the Knowledge Economy

The importance and influence of unions has declined dramatically over the last thirty years.  While more than one-third of employed people belonged to unions in 1945, union membership fell to 24.1 percent of the U.S. work force in 1979 and to 13.9 percent in 1998.  Is there a way that unions, especially blue collar traditional unions, can increase their membership, align themselves with the knowledge economy, and help the U.S. become more competitive?

Unions are often perceived as lining their own pockets at the expense of non-union workers, the companies they work for, and the country’s interests.  Perhaps the greatest accomplishment of American unions was the AFL-CIO support for Poland’s Solidarity Union in the 1980s.  This support was a significant reason why the Iron Curtain fell.  This support for Solidarity shows that American unions are not Marxist.  I believe that it is possible for Unions to reorient their focus while still protecting their traditional role of protecting worker’s rights.  America’s shift to a corporatist society since 2000 is providing unions with a historic chance to revive their importance and help their country.

How can unions seize this opportunity?  They need to focus their efforts on the most important asset in a knowledge economy, intellectual property.  Unions have generally opposed the patent reform bills being proposed by Congress because they believe the bills will hurt America’s competitiveness and therefore the availability and quality of work for their members.  Now they need to become agents for inventors and refocus their lobbying efforts on strengthening our patent laws and demanding the other countries provide strong intellectual property laws.  Forcing other countries to respect our patent laws and strengthen their patent laws will keep quality jobs in the US and also help these countries to develop a culture of innovation rather than a culture of imitation and theft and long term poverty.

How can unions become agents for inventors and serve their traditional members?  Unions have the advantage of a large number of members with strong mechanical skills that have numerous potential inventions.  Unions should nurture the inventive interests of their members by providing education about patents and the invention process.  They should also provide funding for their member’s inventions and act as agents for these inventions.  In return, the unions would receive a portion of any royalties.  Unions have an inherent advantage over their members taking these projects on themselves.  One advantage they have is a large installed base for the inventions of their members.  They already have a mechanism for communicating with their members including training classes.  This significantly reduces the risk of bringing an invention to market that would be used by their members.  In addition, unions have a ready source of funds for development.  The retirement funds of unions need to be invested.  A very small slice of these retirement funds could be used to fund the invention program.  From start-up funding experiences we know that most of these inventions will fail or only be moderately profitable, however a few will be spectacularly successful.  By spreading the risk over numerous inventions, the union can obtain above average returns with less risk than their members attempting to commercialize their inventions directly.

Besides the direct financial return from any inventions the union decides to pursue, an invention development program would increase their membership.  If just one union member becomes moderately wealthy because of an invention their union decided to represent, the news would spread like wild fire and result in flood of new union members.  In addition, the union can use their member’s inventions as a bargaining chip in contract negotiations.  For instance, an invention on a better, cheaper, or faster way of installing electrical wiring could be used as a bargaining chip with the automakers or building contractors.  The union could provide a bid using or not using the invention.  If the company chose not to select the union’s bid with the invention, then the union could deny the company from using the invention.  If the union won the contract a portion of the payment would be for royalties for using the invention.

I would suggest that unions focus their initial inventing efforts on tools that their members are likely to use.  These tools could be branded and sold to the general public as well as to union members or the companies that they work for.  This would be the least risky inventions to pursue.  I would not suggest that union’s make the tools themselves as this would result in a conflict between representing their members and being a manufacturer.  However, they could use these invention to negotiate employment contracts in the companies that they select to make the licensed product.

If the unions adopt an invention agent model as part of their portfolio of services they provide for members it would:

* Increase their membership; provide a return on the knowledge of their members

* Increase the productivity and quality of the products made by the companies that work with the unions

* Improve the image of unions in the mind of the public

* Provide a counterbalance to the corporatism that is infecting the US

* Keep quality jobs in the US.

For more information on creating an invention company see The Next Big Thing https://hallingblog.com/2010/02/19/the-next-big-thing/ and Jump Starting a Secondary Market for Patents https://hallingblog.com/2009/11/16/jump-starting-a-secondary-market-for-patents/

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March 29, 2010 - Posted by | Business Models | , , , , , , ,

1 Comment »

  1. […] This post was mentioned on Twitter by Dale Halling. Dale Halling said: Aligning Unions with the Knowledge Economy: http://wp.me/pwxHH-dH […]

    Pingback by Tweets that mention Aligning Unions with the Knowledge Economy « State of Innovation -- Topsy.com | March 29, 2010 | Reply


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