The Law of Rule: The Governance of Innovation

Prepared for CFFN, NRN-Canada, and NRNA as an input to the constitutional development process in Nepal

Ottawa, Canada
2009 March 10


A futuristic and sustainable system of governance must have four independent faculties: Legislative, Innovative, Executive, and Judicial. Of the four, the role and workings of the three have become a common knowledge for they existed in the industrialized West and copied by the rest of the world for some time. The governance of the innovative faculty is the subject of interest of this article. The role of the innovative faculty is to expand the sphere of innovation and knowledge for our collective prosperity. The key element of the governance of innovative faculty has been identified in this paper as: 1) transfer of jurisdiction of innovation from executive to the an independent one, 2) the presence of intransitive Power Relationship between legislative, innovative, executive, and judicial faculties, 3) special and constitutionally mandated funding of innovative faculty, 4) inter and intra constituency competition, 5) inter constituency exchange, 6) simple accounting scheme, 7) society taking custody of invention while rewarding the innovators, 8) the right to be wrong, and 9) distributed governance as the key elements of the governance of innovation. The innovative faculty should inspire innovation at grassroots level as well as professional level. The paper also proposes methodologies to reward those endeavors and resulting innovations.


“We can’t solve problems by using the same kind of thinking we used when we created them.” Albert Einstein [1]

Is there a way to avert recurring losses of human knowledge, inventions, and civilizations? That was the question I tried to answer through my earlier article “the fourth faculty of governance”. I proposed that a new faculty of governance, the innovative faculty, should coexist as an independent entity along with the currently established legislative, executive, and judicial faculties, in order to avert the eventual collapse of a civilization. However, when I introduced this concept to some colleagues, they enquired how such fourth faculty might be governed. This necessitated the writing of this article, which also attempts to answer: Who is innovator? Who governs innovation? Where are the means to support it? How do we benefit from it?

Before answering these questions, let me briefly introduce the rationale of the four faculties of governance. We, as humans, live with myriads of worldly desires, which can be broadly grouped into four areas: ambition, justice, system, and innovation. Our ambition feeds our urge to be a leader, executioner, or a successful people and make us build countries, army, industries and trade. Our ethical and compassionate self seeks justice and wellbeing for the whole of society, thus making us build safety nets and security apparatus including police, courts, and jails. Our attachments to comfort and familiarity seek to repeat proven techniques through systems and institutions. And our innovative self seeks to discard the obsolete, invent the “new” and explore beyond the present. An independent faculty is proposed for innovation so as to pursue, develop and disseminate universal knowledge, science, creativity, and innovation. We, therefore, seek to give dignified treatment to our never-ending thirst for knowledge, learning, and innovation while letting our industrial and productive sphere to thrive in its usual space. We seek to free the innovative faculty from the subservience of the market and the executive faculty because their innate nature is not innovation. And, we want to do this while keeping the innovative faculty within the framework of democratic accountability.

Therefore, when suggesting for an independent faculty of innovation, I am not suggesting to designate specified number of individuals as innovators and expect them to deliver innovation to satisfy our desire for the “new”. I am suggesting of a system that would harness the innovator hidden in all of us and impartially reward the innovators so that they would be encouraged to innovate more. We want to systematize the compilation, preservation and dissemination of that innovation for the benefit of the society and to further galvanize the innovation.

Who is innovator?

In my opinion, an innovator is the person who opens up a new area of understanding for others. An innovator is not an organization – a non-thinking entity that is a byproduct of human hands and minds at work although its culture can have strong influence on an innovator. Nevertheless, the ultimate innovator is a human mind at work while an organization being an institutionalized system for “production” of something. A human can be both the producer of the goods and services from what is innovated and the inventor of new processes, systems, goods and services. However, producer and innovator are distinct entities even when acting on the same field. They tackle the field from different perspectives. Invention is strongly rooted in individual humans while the production is strongly rooted in social group of humans. Production can be maximized by properly engineering the social environment of a workplace that involves implanting of peer pressure and expectations on obedient and organized minds. However, innovation is maximized in less pressured, patience-driven, and more contemplative environment by intensifying understanding, outlook and actions primarily due to individual’s liking of the field. Therefore, the true innovator is in all of us if we are pursuing a field due to our inner liking and if there is a reward in becoming an innovator.

Why industry is not the right caretaker of innovation?

“Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand.” Albert Einstein [1]

Today industry has been made to act as the caretaker of innovation because of our tendency to lump an entrepreneur with an innovator. An entrepreneur develops successful enterprise to produce and market new goods and services based on what is invented. In contrast, an innovator invents the “new”, irrespective of whether it translates into an enterprise. Even within a single person, the entrepreneur faculty is strongly correlated to industrial application of the “known” and the innovator faculty is related to science and inquiry in search of the “unknown”.

I would argue that the sustained progress of a society can only be possible when curiosity, imagination, knowledge, benevolence, and ambition complement one another. Curiosity is more intense in the presence of imagination; imagination is more productive in the presence of knowledge; knowledge is useful to society in the presence of benevolence. Without having any knowledge of its existence, Marie Curie discovered radium because of her pursuit of inquiry. Having domain knowledge was useful for the discovery but was not the cause of the discovery. Subsequent knowledge of radium was put to use to make bombs against the imagination of Madame Curie due to omission of benevolence from the equation. Therefore, I would define progress, or lack thereof, as an outcome of interplay of different human qualities. A simplified understanding can be that:

Curiosity seeks to question all,
Imagination seeks to see all,
Discrimination seeks to differentiate all,
Knowledge seeks to know all,
Ambition seeks to profit from all,
Benevolence seeks to love all.

Progress, therefore, is the growth in the aggregate sum of the production of all these qualities. Often one quality can be used as input to produce another. This can be explained to a logically inclined person through examples of relational equations as follows (note that the sub-fields and sub-steps of entrepreneurship field are summed up in one step because this article’s focus is in the production of knowledge):

If f(x) = y, where x is independent variable and the output y is dependent on x:

In Inquiry field: f(curiosity) = imagination ———————— (i)
In Innovation field: f(imagination, discrimination) = idea — (ii)
In Methodical field: f(idea) = knowledge ———————— (iii)
In Entrepreneurship field: f(knowledge) = money ————- (iv)

The knowledge subsequently expands the field for the inquirer to see ever more things not seen and contemplated before – leading to more inventions. This iterative cycle of knowledge endeavors in the end expand the total depth and breadth of the field thus leading to continual progress.

A casual reader who does not have much time to contemplate in these relational domains may know that industry’s core competency is to put the knowledge into action so as to produce goods and services, which in turn would bring money to our treasury. Therefore, knowledge is the most dominant input when it comes to industrial production. “All actions attain their consummation in knowledge” [2]. This is to say that all actions acquire their highest fulfillment when they unite with the knowledge. Industries flourish and wealth gets created in societies where ideas are created, then harnessed and translated into knowledge, and the knowledge is put to action. Therefore, knowledge is the ultimate frontier of all actions, and production of knowledge is as high in importance as any other work in a society. If given a special place for creativity and innovation in daily life, a society produces ever larger volume of knowledge, which, if put to good use, can bring material, moral, and intellectual prosperity to the society.

It is possible that an inventor can be inspired to enter into entrepreneurship seeing potential to profit from the invention. Then at that point the person as entrepreneur goes into the fold of industry, the rightful domain of the entrepreneur. If the innovator enters into system development, then he would be in the domain of knowledge.

The limitation of industry sponsored innovation is that it would not support any endeavor of innovation unless it increases the market share and profit for the sponsoring business. Majority of path breaking inventions, however, do not come not because an industry wants but because the thinking mind stumbles upon something new. Consequently, many inventions come ahead of time for extracting monetary rewards or whose applications cannot be found out right. Such inventions can only be preserved and advanced by an inquiry driven society and not by an industry whose mandate is to generate profit and do it “now”, which it should.

Industry’s primary focus cannot be in fundamental research because it is naturally inclined to the field of application. I can, however, confidently say that industry can greatly appreciate applied research, which can in retrospect advance knowledge including in fundamental science. Nevertheless, industry’s treatment to innovation is similar to its view towards a commodity. Industry does not support a quest of knowledge not because of inquisitiveness but because of necessity to make profit. And market driven governments allocate disproportionately large amount of resources to high profile and capital intensive fields like military, nuclear, and space while marginalizing other fields thereby inviting a threat to balanced and sustainable development. For example, since World War II, increasingly large numbers of scientists are drawn by defense industry reaching 30 percent by 1970s and 33 out of 2000 institutions of higher learning today draw 50 per cent of federal science funding in the USA [3]. And this trend continues despite the fact that most revolutionary innovations in history have not been the product of vast capital investments. The most revolutionary scientists like Newton, Darwin, and Einstein never drew large research grants.

On the contrary no tool is a safe tool or no invention is a safe invention because the safety of the tool or invention depends on how one applies it. That is the reason the invention and production should belong to separate faculties related to one another by an intransitive relationship [4], which is beyond the scope of this article. If both innovation and industry belonged to the same faculty, we would have no checks and balances. And all abuses of power come into existence and system’s transparency disappears where checks and balances are missing.

What is wrong with our innovation policy?

Today we are practicing privatization of the collective (the production) and collectivization of the private (the innovation). Consequently, the heads of organizations are considered individually powerful and paid hundreds of millions of compensation while the intellectual property contributed by the scientists, engineers, thinkers, and inventors belongs to the collective – the organization. And because the organization is private, the intellectual property indirectly belongs to the private “owner” but not to the actual creator of that property. Therefore, we are creating two classes of people: the “owner” and the “creator”, where creator is owned. And the society as a whole is incurring a heavy cost in protecting the “owner” by forbidding anyone else to use the intellectual property. We are thus over glorifying expertise, which is “a procedural knowledge whose sphere of application has been mystified by those enjoying exclusive access to that knowledge” [5]. We have misunderstood value of the potential innovator residing in the hearth of all of us and converted ourselves into mere consumers.

Today, knowledge is becoming increasingly inaccessible to the public and to the “competitors”. This is the division between those who have exclusive access to knowledge and those who have not. In doing so, we are isolating the knowledge domains while assembling increasingly integrated and complex products. The resulting system of production is immensely interdependent spanning vast geography, while creating expertise silos that are deliberately disconnected. Consequently, we are creating a world that is prone to spectacular failures when some of these crucial silos fail due to unforeseen circumstances. We are, therefore, slowly choking our capacity to deliver “public good” through knowledge on the name of protecting the profitability of the corporations. Besides, an individual innovator today either is subservient to a corporation or is not rewarded adequately for the innovation unless the invention generated immediate profit through entrepreneurship, a less likely prospect for most innovations.

To what end should we govern innovation?

The primary aim of having the innovative faculty is to continue producing knowledge and inventions even at times the society’s ambition and systems encounter unforeseen pitfalls. Such condition can only be satisfied when curiosity, imagination, knowledge and benevolence complement each other, which, by the way, may not always be true. In bringing benevolence into picture, we have to introduce accountability in the faculty of knowledge. The interest of the society in sustaining the progress would, therefore, be served well if the innovative faculty is governed under the framework of a democratic accountability with maximal public participation while giving respectable room to prosper for dedicated innovators and scientists.

Since society as a whole is the beneficiary of philosophical and scientific inquiries, learning, and innovation, it must have a direct responsibility in its governance. The society as a whole must claim the innovation from the stranglehold of the big government and big businesses while remaining within constitutionally enshrined checks and balances. Steve Fuller, an American philosopher, said, “Science itself should be governed by the principles scientists use to govern their inquiries into the nature” [6]. Thus the innovative faculty should be governed with an intention of bringing general enlightenment in the society. Its objective is to make things demystified and transparent.

While we want innovators, scientists, philosophers, and thinkers to be freed from the subservience to the executive and legislative branches, we want them to be fully accountable to the people. While we want people of knowledge to take us to the depth of their disciplines, we do not want to produce vast amount of “output” that is not going to be read again, simply on the name of our endless desire to innovate; we want a balance between the production and the consumption of knowledge and innovation. While we respect the knowledge possessed by successful people in their own field, we acknowledge that the very same people may not have sufficient knowledge in fields other than their own. While practitioners of a field may want to have an exclusive access to certain knowledge from the rest of the society to protect their expert status, we as members of society want cross-pollination of knowledge so that fruit of ever more innovation may be enjoyed by all. While established institutions may want research and innovation to remain in their exclusive domain, we may want research and innovation to spread in the society. While innovators want their work to be recognized and rewarded, we want to know what it would do for the society. While experts seek ever larger funds for ever more specialization in their fields, we may want to maximize overall benefit to the society. While scientists seek freedom of inquiry, we seek right to inquire them for their services to the “public good”. While applied science “experts” may want rewards to be concentrated on industrial research, we want to fairly reward all innovators who advance our sphere of knowledge, be it theoretical or practical.

How to govern the innovative faculty?

A constitution with four faculties of governance is a document to be developed through intensive public discourse. What is to be presented here is a brief protocol deemed necessary in my eyes in such a system. The detail discussion of each element is beyond the scope of this article. These elements are discussed here briefly.

  1. Reconfiguration of Power: The governance of knowledge production and innovation is to be transferred from the executive faculty, which is holding the power at present, to the proposed innovative faculty. The executive faculty is responsible to utilize the innovation for advancing the industries and enterprises in the country along with all other role it plays now.
  2. Intransitive Power Relationship: The relation between legislative, innovative, executive, and judicial faculties should be such that each of them is independent of the other in its own designated domain but not in any other domains. Consequently, each branch is powerful and powerless at the same time depending on the context. The power dynamics of the four faculties is thus balanced in such a way that no one faculty is free to operate beyond the boundaries set by the constitution. And all branches must be directly accountable to the people. In today’s Nepal for example, only the legislative branch is ratified directly by the people and the judicial and executive are essentially on the hands of the political party that controls the legislature. Each faculty publicly scrutinizes the allocated budget based on the designated scope of governance, which must be accountable to the welfare of the public.
  3. Funding of Innovative Faculty: The mechanism of allocating the budgetary resources of the legislative and the judicial faculties in the contemporary governance should be applicable to the innovative faculty for its proper functioning. In this model, for all faculties of governance, the executive faculty proposes a rational budget, which gets to be thoroughly and publicly debated by all the concerned faculties. This budget will be passed only after its ratification from each faculty: executive, legislative, judicial, and innovative.
  4. Inter and Intra Constituency Competition: The way political constituencies compete in public for limited resources, the innovative constituencies (various areas of knowledge competing for resources allocated for the innovation) should also be scrutinized by each other in public for winning civic support and, thus, funding for their work. People with knowledge must be able to speculate, challenge, and cross-examine the claims in open forums. The return of investment to the society should also be scrutinized and defended similarly. The innovative faculty must accept intuitive appraisal of performance as accepted by other faculties, especially the legislative (and executive in some countries).
  5. Inter Constituency Exchange: The way economic constituencies allow free flow of goods and services across geographical regions, we want knowledge and innovation to flow across the knowledge domains so that vertical barriers would be broken and cross-pollination of ideas would spread.
  6. Simple Accounting: Only simple systems, understandable to everyone, can promote transparency and accountability. The competing constituencies and interest groups should gain funding through public and democratic process. Similarly the project details, project outputs, ideas, inventions and their associated funding should be all public knowledge. The scrutiny that the competing constituencies do on each other and public judgment should be the democratic mechanism for controlling corruption and misuse.
  7. Reward to Own: All patents should belong to the country or the state, which in return reward the inventors. The innovators should be awarded non-monetary honors as well as rewarded monetarily using a public and transparent process. If international patents are in the best interest of the society, such patenting initiatives should be taken by the state or the country. The philosophy of and procedure for rewarding the innovators is proposed in subsequent sections of this article.
  8. Right to be Wrong: The innovative faculty shall be granted the right to be wrong as granted to journalists by US Supreme Court in 1964 [7], while making the faculty accountable through other public procedures noted in earlier points. However, this rule shall apply to those who strictly remain in the field of knowledge and innovation, and not in enterprise or other domains.
  9. Distributed Governance: Only way the governance of innovation can be durable, resilient, and transparent is by not letting it become one “super tree” covering the entire country. Instead it should be created in the form of a forest consisting of trees of many species and many trees of the same species with a provision of independently producing seeds. Therefore, there should be an innovative faculty formally established in every local government and these faculties should be laterally networked through transitive protocols for continuous flow of knowledge and collaboration in the knowledge production activities.

Why should we reward an innovator?

A thoughtful society should put people’s imaginative spirits to use in serving society’s interests. It should make pursuit of knowledge, learning, creativity, and innovation a part of its culture. This is because, if the people who have useful imaginative power are not rewarded, their self-esteems will be adversely affected which hampers the production of innovative ideas. On the contrary, if the creative people were given genuine respect and honor, they would be inspired to innovate more. Moreover, creative people should not have to toil in areas outside their core competencies for their bodily survival.

The cultural aspect of innovation deserves a special emphasis. One of the most successful companies of our time, Google, requires that engineers spend one fifth of their time working on any idea of their choice. These ideas need not to be related to Google’s business. Many innovative products and services such as Gmail and Google News were born out of this culture and the Google is one of the most innovative companies of our time, as a result. Therefore, culture of brainstorming, developing ideas, spreading them rapidly, and recognizing contributions can help us harmoniously bring ever more public good while reducing discontent and friction in the society [8]. Therefore, an innovative society should be devoted in organizing such work structure which can give adequate room for innovation to flourish. Unless we can dedicate concrete time to contemplation, reflection and inquiry, we will find myriad of excuses to not innovate – blame it on important responsibilities!

Appropriately designed rewards convey a message that sharing our innovative ideas helps us prosper together. They encourage innovative behavior over excuse, spreading of knowledge over hiding of information, and cooperation over selfishness. They help everyone to participate and submit more ideas, and encourage those who innovate.

Appropriate rewards inspire the intrinsic innovator residing in all of us – the thinking humans – to be more creative. Only by rewarding creativity and creative ideas, we may grow more creativity.

How should we reward an innovator?

“Perform action abandoning attachment, being steadfast in neutrality of mind, and impartial in success and failure.” The Bhagwad Geeta [9]

Every aspiring society should develop its own incentives package for rewarding its innovators. The incentive package needs to be developed while giving considerations to the cherished values of the society through intensive public debate. Such debates would reveal that there would be many ways to reward the innovators. Despite variances in the possibility of means, the end remains the same. The end is that the innovators are adequately motivated in the work of continuing creativity, and the innovative potential of everyone is maximally utilized for building an ethical, united, harmonious, and prosperous society. The ancient wisdom in Geeta says that our virtue is in our ability to impartially recognize and reward the intensity and sincerity of actions and not to reward just the successes or punish the failures. Imagine if we went to a war with rules that condemned the dead and glorified the survivors! When creative minds run in various directions, we never know who stumbles upon what. Therefore, let all sincere seekers stumble upon new ideas while knowing that they will receive evenhanded honor and dignity.

In my opinion, the ultimate reward of an innovator should be the personal satisfaction from the discovery of his or her inner creative potential and the benefit his or her work brought to the public. Let the discoverers feel that it is in their self-honor to be able to give something to the community that has provided them belonging, dignity and security. Let our best reward be the joy of discovery itself and the subsequent propulsion from the domain of desires to the domain of inner happiness. However, there is a limit to how far an individual’s inner spirit can take if society is not aware and respectful of the contributions of the work of imagination; only a benevolent society can produce benevolent creators and vice versa; a cut-throat and selfish society cannot expect selfless service from the innovators.

Reward’s inclination should be to encourage not only the innovators but also the teams and communities that are supportive to the innovators [10]. The purpose of reward is also to remove fear of failure from those who tried unsuccessfully and to keep the esteem of every seeker of innovation at high level; therefore, not putting the strain of “victorious deed” and “high quality thought” at the grassroots. It has been an established fact that we could harness ever more ideas from the grassroots through a system of eventful peers and public recognitions.

I am proposing a method for advancing this important debate on rewarding innovators in the remainder of this section. I am proposing some responsibilities of the society towards the innovators. Given the need that all innovators should be rewarded, I would also like to emphasize that there should be some distinction between a grassroots innovation and institutionally funded contractual innovation on how we treat them.

Grassroots Innovation

“From the Son of Heaven down to the mass of the people, all must consider the cultivation of the person – the root of everything besides.” Confucius [11]

Rewarding the grassroots level innovator is the most potent way to develop an innovative society. The sheer numeric volume of the grassroots tells us that the reach of a monetary reward can be severely limited. Therefore, the rewards should be small and financially light but loaded in meaning and symbolism of solidarity and integrity. Organizing communion of innovators and successful people from various fields and letting them foster connection would help build esteem, cross- pollinate ideas, spread ideas farther, and elicit more innovation. Rewards, recognitions, certifications, honors, paying back in services and discounts, assurance of archival of innovated knowledge, timely recognitions over delayed big recognitions, and periodic recognition of past contributions may be desirable in inspiring grassroots innovation.

The sense of transfer of innovative culture to future generations and anticipation of being referred and being referred would also help maintaining inner happiness and motivation of the creative minds. The society should, therefore, happily associate the ideas with the inventors and let stories of inventions be spread so they amount to invaluable recognitions. Let system encourage the contributors of ideas, knowledge, and creativity to be recognized at their workplaces and communities. Let them be nominated for higher awards and recognitions. At a higher level, the system should recognize and reward the innovators along with the teams and communities who promoted such people because a team is often required to translate ideas into knowledge, the knowledge into systems and business inventions. An individual innovator may be better rewarded with position promotion and recognition than with money. Organize competitive knowledge fairs to bring together innovative social capital and cross-pollinate creativity. But this cannot happen in an unfair environment where the “generals” extract most of the benefits disregarding their “soldiers”.

Rewarding for best rated ideas should not be introduced until the culture is advanced and a fair system of rating and rewarding is developed; or else people may be discouraged to bring out their ideas in fear of failing. Only those ideas that required substantive funding for further development should undergo competition for the acquisition of public resource. However, at such point the whole team or community would be behind the innovators. Professional Innovation

A society inclined to harness all the grassroots ideas and integrate them with broader body of knowledge to expand the sphere of total knowledge, must take additional measures on top of grassroots innovation. They must adopt institutional mechanism to advance higher learning and systemic production of knowledge. Further, the society may have a need to give extra attentions in areas of knowledge that help it harness benefit from its natural potential and realities, which are called competitive advantages by the economists. It would, therefore, mean that public resources would be put into action through the hands of knowledge professionals. Consequently, the issues of quality, utility, transparency, and accountability come to prominence with the introduction of professionalized sector of knowledge domain.

Big monetary rewards to individuals are often sources of disputes and contentions than solutions, and therefore are generally better avoided, even in the world of professionals. However, money is a necessary commodity in advancing the professional work of knowledge. Therefore, institutional funding, research grants, research contracts, and similar endeavors would become integral part in soliciting knowledge production. For these endeavors drain public purse, there should be public accountability in what is being done with that purse and, therefore, a fair and transparent mechanism to evaluate them. Public should have the right to know how they can benefit from, influence on, and contribute to the advancement of knowledge sought by the professionals. Therefore, these endeavors should be presented, defended, and scrutinized in widely viewable public forum involving media.

Although rewarding innovation is our primary focus, we should also acknowledge a domain of compensation in its own right. When an innovator develops immediately profitable idea, we should not only reward the innovator like others but also monetarily compensate for its use for the benefit of society. The use of the invention by the society to generate money without fair compensation to the innovator could discourage the innovator to disclose the invention and hoard it inside him or her unless the person also has entrepreneurial charisma.

To foster production of knowledge for public good, we seek to minimize the financial or legal censorship on inquiry by other faculties of governance but we strongly seek public accountability in inquiry. We want to take the pursuit of inquiry and knowledge at every part of society than concentrating all our resources and efforts in heavy duty centers filled with designated knowledge producers who are neither scrutinized by nor accountable to the public. American philosopher Steve Fuller quotes another philosopher Feyerabend to argue against grand scale inquiries in saying that science in the spirit of inquiry can only exist where people can “freely and publicly cross-examine each other’s claims” [12]. If inquirers are seeking public resources on the name of advancing public good, let them defend to the public how their work would be of value so that public could decide if it grasps on their competitive advantage or delivers public good.

Who owns the invention?

The conventional wisdom is that an innovation is owned either through non-disclosure or through patenting by the corporation or individual who obtained the patent. However, this has discouraged the grassroots innovator to bring out inventions for the expenses incurred in the process of patenting and the bureaucratic nature of the process. In a globalized world where the entire world in interconnected, cost of international patents start somewhere from US$100,000, which is a prohibitive amount for any individual and an impossible amount for people of third world countries.

A way to ensure that money does not enslave the ideas and innovative spirit of people would be to bring the ownership of the patents to the country which made the invention. The country should take the burden of compensating the inventors, and patenting internationally, and making them available to industries so they can bring prosperity to the country. Let people invent for the country and the society as a whole. The four faculties of governance should ensure that people’s ingenuity and hard work is not unethically siphoned off to serve a few. In case of a federal form of government, patents may be owned by the central government but each individual state producing inventions may be rewarded through a formula similar to one proposed in the next section.

Is there a model for innovation reward?

Since the notion of innovation is to flourish a broad based innovative culture, it is assumed that all non-monetary or minimally monetary instruments for promoting pursuit of inquiry in the broader society are taken care of. Also it is assumed that the system of harnessing ideas and innovations and translating them into systemic and publicly accessible body of knowledge is in place. Now, we enter into this monetarily intensive part of the innovative faculty. What I am proposing here is a system of evaluation and reward mechanism, which is intended to intrigue our collective deliberation and to serve as a benchmark for developing ever better schemes for rewarding innovation.

This is a mathematical model of reward system that attaches payout to innovators based on the score the innovative idea receives in a public evaluation process. The model has two actors: the performers and the spectators, and three major instruments: the pot, the plates, and the ladle. These items are described below.

The Spectators

The spectators are the general public evaluating the works of the performers which are presented, scrutinized, and defended in front of them. They would come from all background as the general public would. Each member of the public is allowed to give up to a maximum of 50 points to the work in the evaluation process. The knowledge workers vying for the reward are accountable to these people.

The Performers

The performers are the knowledge workers competing for the funding. They would come from all fields of knowledge. They are required to disclose all the inventions or proposals not only to themselves but also to the public. And in the public forum they are required to scrutinize each other in front of the spectators and defend their own work. Eventful public defense make the professionals to also work on making the field teachable and not just going into the depth of the field without regard for the value of spreading the knowledge. Thus they may win the trust of other performers one technical merits and the trust of the public by making the field teachable and knowable.

The Pot

The pot is the sum total of resources the faculty of innovation can garner from the department of finance of the executive faculty. Of the acquired resource, part of it would be used up for the basic maintenance of the innovative faculty’s organizational and technical infrastructure, which would be capped at some legislated number, say 20% for the sake of example. The rest goes to support and reward the endeavors innovation and the work of the innovators. The rest will go for two purposes, first to fund the works of knowledge and innovation, the second to reward the innovators for their works of inventions. The proportions at which they will be divided should not be fixed but should be altered with time to meet the need of the society. Let that work go to the hand of scientists, philosophers, politicians, and public. This article is not about that division.

The amount of money allocated for innovative faculty by the executive would end up in the pot as follows:

Pt = Pa + Pp + Pr ——————– (v)
Pt = Total capacity of the pot, which is the fund allocated by the executive for the innovative faculty,
Pa = Size of administrative pot, which is the fund allocated to maintain administrative infrastructure of the faculty,
Pp = Size of performing Pot, which is the fund allocated for support the knowledge work, research and development,
Pr = Size of reward Pot, which is the money allocated for giving reward to what has already been innovated.

These allocations are done through public debate. I have a tentative value thought of beginning with an allocation of 20% fund for A, 60% for performing, and 20% for rewarding it inventor.

The Plates

The plates are the proposals and recommendations that are owned by the performers and evaluated by the public: the performers and the spectators. The proposals or recommendations are thoroughly scrutinized by the competing performers and defended by the owners. In the end the each performer gives marks to other’s plates up to 50 marks, which are averaged out and stored as “professional marks” for each plate. Similarly the spectator public gives to each plate up to a maximum of 50 marks, which are averaged out and stored as “civic marks” for each plate. The marks are averaged out for each plate and placed in the plate as civic score. The result of the evaluation would be that each plate would have received total marks equal to the sum of professional marks and civic marks minus the minimum marks required to qualify for the reward.

Mt = Mp + Mc – Mq ——————— (vi)
Mt = Total marks (0 ≤ Mt ≤ 100); all negative mark plates are dropped off,
Mp = Professional marks given by the performers (0 ≤ Mp ≤ 50),
Mc = Civic marks given by spectators (0 ≤ Mc ≤ 50),
Mq = Minimum marks required to qualify for reward (a fixed number decided before hand collectively, say from the range: 25 ≤ Mm ≤ 75)

Only those plates obtaining greater than 0 total marks will qualify to receive the reward. Now each plate is given a number of tokens based on a parabolic scale as defined as follows:

Four Faculties of Governance ——————- (vii) Where, T = Number of tokens issued to the plate, S = Steepness, which decides how linearly or steeply top and bottom performers are differentiated ( 1 < S < 1.2), Mt = Total marks obtained from the previous equation.

The Ladle

The ladle is the measure to scoop the right amounts of gravy from the pot and to pour into the plates that qualified for the gravy and arrived with the tokens assigned to them. The right amount is determined using a reward formula that takes the tokens earned by each plate as the input. The reward formula is as follows:

At the time of distribution of the gravy from the pot, each plate will receive a quantity dictated by the number of tokens it contained using the formula built in the ladle in the normalized scale of 0 to 100.

Four Faculties of Governance ——————————– (viii)
Rn = Reward assigned to a plate in a normalized scale in the range of 0 to 100,
T = Number of token as calculated previously,
Rq = Minimum reward a qualified plate (with marks reaching Mq) receives in scale of 0 to 100 with initial suggested value of 20,
m = The slope of the line used to convert Rg into actual money; this slope is calculated as follows:
Four Faculties of Governance —————- (ix)
Rh = Highest (maximum) reward, which is usually 100, but the logic allows it to be more or less,
Rq = Minimum reward of any qualifier as explained before,
Mq = Minimum marks required to qualify.

Substituting m in Equation (viii) from the value of Equation (ix) and T from Equation (vii) leads to:

Four Faculties of Governance ——————– (x)

The plot of normalized reward (Rn) in relation to Mt (the total marks obtained above cutoff point) for a proposed value of 20 for minimum reward (Rq), 100 for maximum reward (Rh), 50 as minimum marks required to qualify (Mq) is shown in the following diagram for varying values of S from 1.02 to 1.1. Please take R in the diagram as Rn, P in the diagram as (Mp+Mc), c as Mq, min as Rq, and max as Rh.

Four Faculties of Governance

Finally, the gravy is translated into actual money ($) using the following formula,

Four Faculties of Governance —————— (xi) Where,
Rg = Reward grant, the actual dollar reward issued to the plates,
Pr = The total size of the reward pot in dollars,
Rn = Normalized reward Rn of equation (viii) which is in the range of 0 to 100.

Finally, each qualified innovator team goes home with the reward of Rr for the betterment of his community and inspiration of the innovating team. Is there a model for innovation funding?

The process for funding of an innovation would be done in a similar fashion as the reward except when converting the dollar amount. Because the dollar requirement of projects are met through a different pot, performing pot Pp, and rating received are combined with the funding sought to come up with the final funding using yet another formula (which is modified from (xi)) as follows.

Four Faculties of Governance ——————- (xii)
Rg = Reward granted, the actual dollar reward issued to the plates,
Pr = Total size of the reward pot in dollars,
Rn = Normalized reward Rn of equation (viii),
Rp = Proposal amount, the amount of reward sought in the competing proposal.

Note to the Reader

Now that you have spent time in reading this proposal, it has become possible for you to know the normalcy or poverty of my ideas. On my side, it took years of contemplation and days of writing to bring this in front of you. The superior ideas on the subject that either have or would come to you may very well be inspired by the reading of these ideas. Similarly, if you also were to bring your ideas to the fore, through as simple an act as sending feedback, we may advance our ideas for our collective benefit. If we were to develop a culture of sharing knowledge, we would prosper collectively. Joseph Badaracco, Professor of Business Ethics at Harvard Business School, says, “Hoarding knowledge ultimately erodes your power. If you know something very important, the way to get power is by actually sharing it” [13]. Thus let us share knowledge and help each produce more knowledge!


Expansion of the sphere of innovation and knowledge is vital to our prosperity, for which governing an independent faculty of innovation separate from the legislative, executive, and judicial faculties has been proposed through this article and the article on which it has been founded. The key element of the governance of innovative faculty has been identified in this paper as: 1) transfer of jurisdiction of innovation from executive to the an independent one, 2) the presence of intransitive Power Relationship between legislative, innovative, executive, and judicial faculties, 3) special and constitutionally mandated funding of innovative faculty, 4) inter and intra constituency competition, 5) inter constituency exchange, 6) simple accounting scheme, 7) society taking custody of invention while rewarding the innovators, 8) the right to be wrong, and 9) distributed governance as the key elements of the governance of innovation. The innovative faculty should inspire innovation at grassroots level as well as professional level. The paper also proposes methodologies to reward those endeavors and resulting innovations.


[1] Albert Einstein quotes,, Online Quotations, 2008,
[2] The Bhagwad Geeta, Central Chinmaya Mission Trust, Mumbai, India 2002, Chapter IV, Verse 33, pp. 294.
[3] Steve Fuller, The Governance of Science, Open University Press, Buckingham, UK, 2000, pp. 118-119.
[4] Pramod Dhakal begin_of_the_skype_highlighting end_of_the_skype_highlighting, In Search of Wisdom: Where Does Corruption Live?, Canada Forum for Nepal, 2007,
[5] Steve Fuller, The Governance of Science [3]. pp. 126.
[6] Ibid. pp. 136.
[7] Ibid. pp. 152.
[8] Eric Schnell, The Medium is the Message, Ohio State University, USA, 2007
[9] The Bhagwad Geeta, Central Chinmaya Mission Trust, Mumbai, India 2002, Chapter II, Verse 48, pp. 122.
[10] Paige Levitt, Rewarding Innovation, American Productivity and Quality Center, USA, 2002,
[11] Confucius: The Wisdom, Edited by Peg Streep, Little, Brown and Company, USA, 1995, pp. 15.
[12] Steve Fuller, [3], pp. 38.
[13] Joseph Badaracco quotes, Online Quotation

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