Innovation and the New Year

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This is Celia Hirschman with On the Beat for KCRW.

I had the occasion to visit Shanghai last month. It's one of the most culturally cosmopolitan cities in China with a population of 18 million.

Since the late 70's, China has embraced many facets of capitalism, though elements of Chinese communism still remain. While in Shanghai, I was able to attend presentations from the regional government there to learn about the focus of their market development. What I found most interesting, is how China is fostering innovation in the 21st Century.

The Chinese government believes their economic vigor depends upon transforming their manufacturing and agricultural economy over time. Areas around Shanghai boast huge innovation complexes hosting technological, scientific, financial and cultural businesses with the country's brightest individuals. These complexes benefit from a more open exchange of dialogue between companies, driving innovation.

It's ironic in a way. China has long been recognized for its rampant disrespect for copyright and intellectual property, yet the government is now focused on becoming the world leader in cultivating new ideas and technologies.

And they are not alone. Countries like Singapore and Finland are also investing heavily to attract some of the most creative and interesting minds for the purpose of becoming world leaders in intellectual ideas.

So what does all this have to do with the record business? The record business is a perfect example of an industry, filled with creative copyrights, that has been decimated by advances in technology here in the US. The industry's best response has been to try and sue copyright infringers, but it's a fool's errand. Music is far too ubiquitous in society to stem the tide of technological advancement.

Nonetheless, the Recording Industry of America uses strong-arm tactics. Traditionally, they send pre-litigation letters to universities, asking them to name the names of infringing students and distribute the letters. Many schools have obliged. These letters offered quick settlements, demanding thousands of dollars in payments to the RIAA.

But the University of Oregon received a subpeona for the names of 17 students and refused to follow instructions. Now, the State Attorney General there has filed a motion to nullify the subpoena, arguing that the students' privacy has been infringed without supplying evidence. Until the RIAA can show specific violations from each of these students, the State does not want the University to offer any information..

The irony is that there are several reasonable solutions known within the industry that eliminate copyright infringement, yet the RIAA refuses to innovate, opting instead to sue their music fans.

With technological innovation the focus of so many countries, it will be interesting to see what the RIAA's strategy will be for protecting creative copyrights in 2008.

This is Celia Hirschman with On the Beat for KCRW.