Science in the Triangle

Reading and hearing comments from some of the most forward-thinking media experts about how the Internet is changing the distribution of information, I couldn’t help but notice that the discussion lacks business sense.

A post on buzzmachine.com, a blog by Jeff Jarvis, author of “What Would Google Do?” and director of the interactive journalism program at the City University of New York, lists major differences between publishing information in print and publishing information on the Internet. Reading the list makes it clear how disruptive the Internet technology is - to borrow a favorite phrase from venture capitalists. Unfortunately, the list misses another essence of venture capitalism: Putting a price on ideas.

Despite its many flaws, capitalism has proven very good at turning ideas into innovation. Venture capital is part of the oil mixture that greases the U.S. innovation wheel. The Research Triangle area is studded with companies founded on ideas hatched in university labs, garages and at coffee shops near and far and brought to market with the help of venture capital.

This process works, because venture capitalists provide the cash necessary to turn an idea into a product. The amount of investment in turn determines how much an idea might be worth.

The guests on the Diane Rehm Show who spoke about the fate of the newspaper industry all talked about how important journalism is for a democratic society to function. So, how much is the information journalists write about worth? How much are voters willing to pay for information that gives them an idea whom to vote for in the next election? How much are companies willing to pay for information that gives them an idea which university researcher is working on a technology that would advance their business? How much are patients willing to pay for information that gives them an idea what treatments researchers are working on?

Considering that much of the information circulating on the Internet is free, the answer would have to be: “Nothing.” Any venture capitalist would tell you that is not a sustainable business model.