Articles by Adam Thierer 
Senior Fellow in Technology & Innovation at the R Street Institute in Washington, DC. Formerly a senior research fellow at the Mercatus Center at George Mason University, President of the Progress & Freedom Foundation, Director of Telecommunications Studies at the Cato Institute, and a Fellow in Economic Policy at the Heritage Foundation.
Capital moves like quicksilver around the globe today as investors and entrepreneurs look for more hospitable tax and regulatory environments. The same is increasingly true for innovation. Innovators can, and increasingly will, move to those countries and continents that provide a legal and regulatory environment more hospitable to entrepreneurial activity. I was reminded of that fact today while reading two different reports about commercial drones and the sharing economy and the global competition to attract investment on both fronts. First, on commercial drone policy, a new Wall Street Journal article notes that:
Amazon.com Inc., which recently began testing delivery drones in the U.K., is warning American officials it plans to move even more of its drone research abroad if it doesn’t get permission to test-fly in the U.S. soon. The statement is the latest sign that the burgeoning drone industry is shifting overseas in response to the Federal Aviation Administration’s cautious approach to regulating unmanned aircraft.
According to the Journal reporters, Amazon has sent a letter to the FAA warning that, “Without the ability to test outdoors in the United States soon, we will have no choice but to divert even more of our [drone] research and development resources abroad.” And another report in the U.K. Telegraph notes that other countries are ready and willing to open their skies to the same innovation that the FAA is thwarting in America. Both the UK and Australia have been more welcoming to drone innovators recently. Here’s a report from an Australian newspaper about Google drone services testing there. (For more details, see this excellent piece by Alan McQuinn, a research assistant with the Information Technology and Innovation Foundation: “Commercial Drone Companies Fly Away from FAA Regulations, Go Abroad.”) None of this should be a surprise, as I’ve noted in recent essays and filings. With the FAA adopting such a highly precautionary regulatory approach, innovation has been actively disincentivized. America runs the risk of driving still more private drone innovation offshore in coming months since all signs are that the FAA intends to drag its feet on this front as long as it can, even though Congress has told to agency to take steps to integrate these technologies into national airspace. Continue reading →
I’ve just released a short new paper, co-authored with my Mercatus Center colleagues Christopher Koopman and Matthew Mitchell, on “The Sharing Economy and Consumer Protection Regulation: The Case for Policy Change.” The paper is being released to coincide with a Congressional Internet Caucus Advisory Committee event that I am speaking at today on “Should Congress be Caring About Sharing? Regulation and the Future of Uber, Airbnb and the Sharing Economy.”
In this new paper, Koopman, Mitchell, and I discuss how the sharing economy has changed the way many Americans commute, shop, vacation, borrow, and so on. Of course, the sharing economy “has also disrupted long-established industries, from taxis to hotels, and has confounded policymakers,” we note. “In particular, regulators are trying to determine how to apply many of the traditional ‘consumer protection’ regulations to these new and innovative firms.” This has led to a major debate over the public policies that should govern the sharing economy.
We argue that, coupled with the Internet and various new informational resources, the rapid growth of the sharing economy alleviates the need for much traditional top-down regulation. These recent innovations are likely doing a much better job of serving consumer needs by offering new innovations, more choices, more service differentiation, better prices, and higher-quality services. In particular, the sharing economy and the various feedback mechanism it relies upon helps solve the tradition economic problem of “asymmetrical information,” which is often cited as a rationale for regulation. We conclude, therefore, that “the key contribution of the sharing economy is that it has overcome market imperfections without recourse to traditional forms of regulation. Continued application of these outmoded regulatory regimes is likely to harm consumers.” Continue reading →
Writing last week in The Wall Street Journal, Matt Moffett noted how many European countries continue to struggle with chronic unemployment and general economic malaise. (“New Entrepreneurs Find Pain in Spain“) It’s a dismal but highly instructive tale about how much policy incentives matter when it comes to innovation and job creation–especially the sort of entrepreneurial activity from small start-ups that is so essential for economic growth. Here’s the key takeaway:
Scarce capital, dense bureaucracy, a culture deeply averse to risk and a cratered consumer market all suppress startups in Europe. The Global Entrepreneurship Monitor, a survey of startup activity, found the percentage of the adult population involved in early stage entrepreneurial activity last year was just 5% in Germany, 4.6% in France and 3.4% in Italy. That compares with 12.7% in the U.S. Even once they are established, European businesses are, on average, smaller and slower growing than those in the U.S. The problems of entrepreneurs are one reason Europe’s economy continues to struggle after six years of crisis. The European Union this month cut its growth forecasts for the region for this year and next, citing weaker than expected performance in the eurozone’s biggest economies, Germany, France and Italy. This week, the Organization for Economic Cooperation and Development delivered its own pessimistic appraisal, with chief economist Catherine Mann saying, “The eurozone is the locus of the weakness in the global economy.”
[…]
Europe’s unemployment crisis may be eroding a deeply ingrained fear of failure that is a bigger impediment to entrepreneurship on the Continent than in other regions, according to academic surveys. “Fear of failure is less of an issue because the whole country is a failure, and most of us are out of business or have a hard time paying our bills,” said Nick Drandakis of Athens, who in 2011 founded Taxibeat, an app that provides passenger ratings on taxi drivers.
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Yesterday, the Article 29 Data Protection Working Party issued a press release providing more detailed guidance on how it would like to see Europe’s so-called “right to be forgotten” implemented and extended. The most important takeaway from the document was that, as Reuters reported, “European privacy regulators want Internet search engines such as Google and Microsoft’s Bing to scrub results globally.” Moreover, as The Register reported, the press release made it clear that “Europe’s data protection watchdogs say there’s no need for Google to notify webmasters when it de-lists a page under the so-called “right to be forgotten” ruling.” (Here’s excellent additional coverage from Bloomberg: “Google.com Said to Face EU Right-to-Be-Forgotten Rules“). These actions make it clear that European privacy regulators hope to expand the horizons of the right to be forgotten in a very significant way.
The folks over at Marketplace radio asked me to spend a few minutes with them today discussing the downsides of this proposal. Here’s the quick summary of what I told them: Continue reading →
This Thanksgiving holiday season, an estimated 39 million people plan on traveling by car. Sadly, according to the National Safety Council, some 418 Americans may lose their lives on the roads over the next few days, in addition to over 44,000 injuries from car crashes.
In a new oped for the Orange County Register, Ryan Hagemann and I argue that many of these accidents and fatalities could be averted if more “intelligent” vehicles were on the road. That’s why it is so important that policymakers clear away roadblocks to intelligent vehicle technology (including driverless cars) as quickly as possible. The benefits would be absolutely enormous.
Read our oped, and for more details check out our recent Mercatus Center white paper, “Removing Roadblocks to Intelligent Vehicles and Driverless Cars.”
The Mercatus Center at George Mason University has just released my latest working paper, “The Internet of Things and Wearable Technology: Addressing Privacy and Security Concerns without Derailing Innovation.” The “Internet of Things” (IoT) generally refers to “smart” devices that are connected to both the Internet and other devices. Wearable technologies are IoT devices that are worn somewhere on the body and which gather data about us for various purposes. These technologies promise to usher in the next wave of Internet-enabled services and data-driven innovation. Basically, the Internet will be “baked in” to almost everything that consumers own and come into contact with.
Some critics are worried about the privacy and security implications of the Internet of Things and wearable technology, however, and are proposing regulation to address these concerns. In my new 93-page article, I explain why preemptive, top-down regulation would derail the many life-enriching innovations that could come from these new IoT technologies. Building on a recent book of mine, I argue that “permissionless innovation,” which allows new technology to flourish and develop in a relatively unabated fashion, is the superior approach to the Internet of Things.
As I note in the paper and my earlier book, if we spend all our time living in fear of the worst-case scenarios — and basing public policies on them — then best-case scenarios can never come about. As the old saying goes: nothing ventured, nothing gained. Precautionary principle-based regulation paralyzes progress and must be avoided. We instead need to find constructive, “bottom-up” solutions to the privacy and security risks accompanying these new IoT technologies instead of top-down controls that would limit the development of life-enriching IoT innovations. Continue reading →
In my previous essay, I discussed a new white paper by my colleague Robert Graboyes, Fortress and Frontier in American Health Care, which examines the future of medical innovation. Graboyes uses the “fortress vs frontier” dichotomy to help explain different “visions” about how public policies debates about technological innovation in the health care arena often play out. It’s a terrific study that I highly recommend for all the reasons I stated in my previous post.
As I was reading Bob’s new report, I realized that his approach shared much in common with a couple of other recent innovation policy paradigms I have discussed here before from Virginia Postrel (“Stasis” vs. “Dynamism”), Robert D. Atkinson (“Preservationists” vs. “Modernizers”), and myself (“Precautionary Principle” vs. “Permissionless Innovation”). In this essay, I will briefly relate Bob’s’ approach to those other three innovation policy paradigms and then note a deficiency with our common approaches. I’ll conclude by briefly discussing another interesting framework from science writer Joel Garreau. Continue reading →
I want to bring to everyone’s attention an important new white paper by Dr. Robert Graboyes, a colleague of mine at the Mercatus Center at George Mason University who specializes in the economics of health care. His new 67-page study, Fortress and Frontier in American Health Care, seeks to move away from the tired old dichotomies that drive health care policy discussions: Left versus Right, Democrat versus Republican, federal versus state, and public versus private, and so on. Instead, Graboyes seeks to reframe the debate over the future of health care innovation in terms of “Fortress versus Frontier” and to highlight what lessons we can learn from the Internet and the Information Revolution when considering health care policy.
What does Graboyes mean by “Fortress and Frontier”? Here’s how he explains this conflict of visions:
The Fortress is an institutional environment that aims to obviate risk and protect established producers (insiders) against competition from newcomers (outsiders). The Frontier, in contrast, tolerates risk and allows outsiders to compete against established insiders. . . . The Fortress-Frontier divide does not correspond neatly with the more familiar partisan or ideological divides. Framing health care policy issues in this way opens the door for a more productive national health care discussion and for unconventional policy alliances. (p. 4)
He elaborates in more detail later in the paper: Continue reading →
Evan Selinger, a super-sharp philosopher of technology up at the Rochester Institute of Technology, is always alerting me to interesting new essays and articles and this week he brought another important piece to my attention. It’s a short new article by Arturo Casadevall, Don Howard, and Michael J. Imperiale, entitled, “The Apocalypse as a Rhetorical Device in the Influenza Virus Gain-of-Function Debate.” The essay touches on something near and dear to my own heart: the misuse of rhetoric in debates over the risk trade-offs associated with new technology and inventions. Casadevall, Howard, and Imperiale seek to “focus on the rhetorical devices used in the debate [over infectious disease experiments] with the hope that an analysis of how the arguments are being framed can help the discussion.”
They note that “humans are notoriously poor at assessing future benefits and risks” and that this makes many people susceptible to rhetorical ploys based on the artificial inflation of risks. Their particular focus in this essay is the debate over so-called “gain-of-function” (GOF) experiments involving influenza virus, but what they have to say here about how rhetoric is being misused in that field is equally applicable to many other fields of science and the policy debates surrounding various issues. The last two paragraphs of their essay are masterful and deserve everyone’s attention: Continue reading →
Last week, it was my pleasure to speak at a Cato Institute event on “The End of Transit and the Beginning of the New Mobility: Policy Implications of Self-Driving Cars.” I followed Cato Institute Senior Fellow Randal O’Toole and Marc Scribner, a Research Fellow at the Competitive Enterprise Institute. They provided a broad and quite excellent overview of all the major issues at play in the debate over driverless cars. I highly recommend you read the excellent papers that Randal and Marc have published on these issues.
My role on the panel was to do a deeper dive into the privacy and security implications of not just the autonomous vehicles of our future, but also the intelligent vehicle technologies of the present. I discussed these issues in greater detail in my recent Mercatus Center working paper, “Removing Roadblocks to Intelligent Vehicles and Driverless Cars,” which was co-authored with Ryan Hagemann. (That article will appear in a forthcoming edition of the Wake Forest Journal of Law & Policy.) I’ve embedded the video of the event down below (my remarks begin at the 38:15 mark) as well as my speaking notes. Again, please consult the longer paper for details.
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