Innovation & Entrepreneurship

Today, the U.S. Department of Transportation released its eagerly-awaited “Federal Automated Vehicles Policy.” There’s a lot to like about the guidance document, beginning with the agency’s genuine embrace of the potential for highly automated vehicles (HAVs) to revolutionize this sector and save thousands of lives annually in the process.

It is important we get HAV policy right, the DOT notes, because, “35,092 people died on U.S. roadways in 2015 alone” and “94 percent of crashes can be tied to a human choice or error.” (p. 5) HAVs could help us reverse that trend and save thousands of lives and billions in economic costs annually. The agency also documents many other benefits associated with HAVs, such as increasing personal mobility, reducing traffic and pollution, and cutting infrastructure costs.

I will not attempt here to comment on every specific recommendation or guideline suggested in the new DOT guidance document. I could nit-pick about some of the specific recommended guidelines, but I think many of the guidelines are quite reasonable, whether they are related to safety, security, privacy, or state regulatory issues. Other issues need to be addressed and CEI’s Marc Scribner does a nice job documenting some of them is his response to the new guidelines.

Instead of discussing those specific issues today, I want to ask a more fundamental and far-reaching question which I have been writing about in recent papers and essays: Is this guidance or regulation? And what does the use of informal guidance mechanisms like these signal for the future of technological governance more generally? Continue reading →

Dominos pizza droneJust three days ago I penned another installment in my ongoing series about the growing phenomenon of “global innovation arbitrage” — or the idea that “innovators can, and increasingly will, move to those countries and continents that provide a legal and regulatory environment more hospitable to entrepreneurial activity.” And now it’s already time for another entry in the series!

My previous column focused on driverless car innovation moving overseas, and earlier installments discussed genetic testingdrones, and the sharing economy. Now another drone-related example has come to my attention, this time from New Zealand. According to the New Zealand Herald:

Aerial pizza delivery may sound futuristic but Domino’s has been given the green light to test New Zealand pizza delivery via drones. The fast food chain has partnered with drone business Flirtey to launch the first commercial drone delivery service in the world, starting later this year.

Importantly, according to the story, “If it is successful the company plans to extend the delivery method to six other markets – Australia, Belgium, France, The Netherlands, Japan and Germany.” That’s right, America is not on the list. In other words, a popular American pizza delivery chain is looking overseas to find the freedom to experiment with new delivery methods. And the reason they are doing so is because of the seemingly endless bureaucratic foot-dragging by federal regulators at the FAA. Continue reading →

In previous essays here I have discussed the rise of “global innovation arbitrage” for genetic testing, drones, and the sharing economy. I argued that: “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’ve been working on a longer paper about this with Samuel Hammond, and in doing research on the issue, we keep finding interesting examples of this phenomenon.

The latest example comes from a terrific new essay (“Humans: Unsafe at Any Speed“) about driverless car technology by Wall Street Journal technology columnist L. Gordon Crovitz. He cites some important recent efforts by Ford and Google and he notes that they and other innovators will need to be given more flexible regulatory treatment if we want these life-saving technologies on the road as soon as possible. “The prospect of mass-producing cars without steering wheels or pedals means U.S. regulators will either allow these innovations on American roads or cede to Europe and Asia the testing grounds for self-driving technologies,” Crovitz observes. “By investing in autonomous vehicles, Ford and Google are presuming regulators will have to allow the new technologies, which are developing faster even than optimists imagined when Google started working on self-driving cars in 2009.”  Continue reading →

Juma book cover

“The quickest way to find out who your enemies are is to try doing something new.” Thus begins Innovation and Its Enemies, an ambitious new book by Calestous Juma that will go down as one of the decade’s most important works on innovation policy.

Juma, who is affiliated with the Harvard Kennedy School’s Belfer Center for Science and International Affairs, has written a book that is rich in history and insights about the social and economic forces and factors that have, again and again, lead various groups and individuals to oppose technological change. Juma’s extensive research documents how “technological controversies often arise from tensions between the need to innovate and the pressure to maintain continuity, social order, and stability” (p. 5) and how this tension is “one of today’s biggest policy challenges.” (p. 8)

What Juma does better than any other technology policy scholar to date is that he identifies how these tensions develop out of deep-seated psychological biases that eventually come to affect attitudes about innovations among individuals, groups, corporations, and governments. “Public perceptions about the benefits and risks of new technologies cannot be fully understood without paying attention to intuitive aspects of human psychology,” he correctly observes. (p. 24) Continue reading →

In a terrific little essay on “Local Economic Revival and The Unpredictability of Technological Innovation,” Michael Mandel, the chief economic strategist at the Progressive Policy Institute, makes several important points regarding the fundamental folly for future forecasting efforts as it pertains to new innovations. He notes, for example:

There are plenty of candidates for the “next big thing,” ranging from the Internet of Things to additive manufacturing to artificial organ factories to autonomous cars to space commerce to Elon Musk’s hyperloop. Each of these has the potential to revolutionize an industry, and to create many thousands or even millions of jobs in the process–not just for the highly-educated, but a whole range of workers.

Yet the problem–and the beauty–is that technological innovation is fundamentally unpredictable, even at close range. Consider this: The two most important innovations of the past decade, economically, have been the smartphone and fracking. The smartphone transformed the way that we communicate and hydraulic fracturing has driven down the price of energy, not to mention shifting the geopolitical balance of power.

But few saw the smartphone and fracking revolutions coming, he notes. The pundits and the press were too focused on technologies of the past. Continue reading →

Yesterday, Hillary Clinton’s campaign released a tech and innovation agenda. The document covers many tech subjects, including cybersecurity, copyright, and and tech workforce investments, but I’ll narrow my comments to the areas I have the most expertise in: broadband infrastructure and Internet regulation. These roughly match up, respectively, to the second and fourth sections of the five-section document.

On the whole, the broadband infrastructure and Internet regulation sections list good, useful priorities. The biggest exception is Hillary’s strong endorsement of the Title II rules for the Internet, which, as I explained in the National Review last week, is a heavy-handed regulatory regime that is ripe for abuse and will be enforced by a politicized agency.

Her tech agenda doesn’t mention a Communications Act rewrite but I’d argue it’s implied in her proposed reforms. Further, her statements last year at an event suggest she supports significant telecom reforms. In early 2015, Clinton spoke to tech journalist Kara Swisher (HT Doug Brake) and it was pretty clear Clinton viewed Title II as an imperfect and likely temporary effort to enforce neutrality norms. In fact, Clinton said she prefers “a modern, 21st-century telecom technology act” to replace Title II and the rest of the 1934 Communications Act. Continue reading →

I’m pleased to announce the publication of my latest law review article, “Guns, Limbs, and Toys: What Future for 3D Printing?” The article, which appears in Vol. 17 of the Minnesota Journal of Law, Science & Technology, was co-authored with Adam Marcus. Here’s the abstract:

We stand on the cusp of the next great industrial revolution thanks to technological innovations and developments that could significantly enhance the welfare of people across the world. This article will focus on how one of those modern inventions–3D printing–could offer the public significant benefits, but not without some serious economic, social, and legal disruptions along the way. We begin by explaining what 3D printing is and how it works. We also discuss specific applications of this technology and its potential benefits. We then turn to the policy frameworks that could govern 3D printing technologies and itemize a few of the major public policy issues that are either already being discussed, or which could become pertinent in the future. We offer some general guidance for policymakers who might be pondering the governance of 3D printing technologies going forward. Contra to the many other articles and position papers that have already been penned about 3D printing policy, which only selectively defend permissionless innovation in narrow circumstances, we endorse it as the default rule across all categories of 3D printing applications.

More specifically, we do a deep dive into 3 primary public policy “fault lines” for 3D printing: firearms, medical devices, and intellectual property concerns. Read the whole thing for more details.

In theory, the Food & Drug Administration (FDA) exists to save lives and improve health outcomes. All too often, however, that goal is hindered by the agency’s highly bureaucratic, top-down, command-and-control orientation toward drug and medical device approval.

Today’s case in point involves families of children with diabetes, many of whom are increasingly frustrated with the FDA’s foot-dragging when it comes to approval of medical devices that could help their kids. Writing today in The Wall Street Journal, Kate Linebaugh discusses how “Tech-Savvy Families Use Home-Built Diabetes Device” to help their kids when FDA regulations limit the availability of commercial options. She documents how families of diabetic children are taking matters into their own hands and creating their own home-crafted insulin pumps, which can automatically dose the proper amount of proper amount of the hormone in response to their child’s blood-sugar levels. Families are building, calibrating, and troubleshooting these devices on their own. And the movement is growing. Linebaugh reports that:

More than 50 people have soldered, tinkered and written software to make such devices for themselves or their children. The systems—known in the industry as artificial pancreases or closed loop systems—have been studied for decades, but improvements to sensor technology for real-time glucose monitoring have made them possible.

The Food and Drug Administration has made approving such devices a priority and several companies are working on them. But the yearslong process of commercial development and regulatory approval is longer than many patients want, and some are technologically savvy enough to do it on their own.

Linebaugh notes that this particular home-built medical project (known as OpenAPS), was created by Dana Lewis, a 27-year-old with Type 1 diabetes in Seattle. Linebaugh says that: Continue reading →

DM coverOn May 3rd, I’m excited to be participating in a discussion with Yale University bioethicist Wendell Wallach at the Microsoft Innovation & Policy Center in Washington, DC. (RSVP here.) Wallach and I will be discussing issues we write about in our new books, both of which focus on possible governance models for emerging technologies and the question of how much preemptive control society should exercise over new innovations.

Wallach’s latest book is entitled, A Dangerous Master: How to Keep Technology from Slipping beyond Our Control. And, as I’ve noted here recently, the greatly expanded second edition of my latest book, Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom, has just been released.

Of all the books of technological criticism or skepticism that I’ve read in recent years—and I have read stacks of them!—A Dangerous Master is by far the most thoughtful and interesting. I have grown accustomed to major works of technological criticism being caustic, angry affairs. Most of them are just dripping with dystopian dread and a sense of utter exasperation and outright disgust at the pace of modern technological change.

Although he is certainly concerned about a wide variety of modern technologies—drones, robotics, nanotech, and more—Wallach isn’t a purveyor of the politics of panic. There are some moments in the book when he resorts to some hyperbolic rhetoric, such as when he frets about an impending “techstorm” and the potential, as the book’s title suggests, for technology to become a “dangerous master” of humanity. For the most part, however, his approach is deeper and more dispassionate than what is found in the leading tracts of other modern techno-critics.

Continue reading →

Permissionless Innovation 2nd edition book cover -1I am pleased to announce the release of the second edition of my book, Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom. As with the first edition, the book represents a short manifesto that condenses — and attempts to make more accessible — arguments that I have developed in various law review articles, working papers, and blog posts over the past few years. The book attempts to accomplish two major goals.

First, I attempt to show how the central fault line in almost all modern technology policy debates revolves around “the permission question,” which asks: Must the creators of new technologies seek the blessing of public officials before they develop and deploy their innovations? How that question is answered depends on the disposition one adopts toward new inventions. Two conflicting attitudes are evident.

One disposition is known as the “precautionary principle.” Generally speaking, it refers to the belief that new innovations should be curtailed or disallowed until their developers can prove that they will not cause any harms to individuals, groups, specific entities, cultural norms, or various existing laws, norms, or traditions.

The other vision can be labeled “permissionless innovation.” It refers to the notion that experimentation with new technologies and business models should generally be permitted by default. Unless a compelling case can be made that a new invention will bring serious harm to society, innovation should be allowed to continue unabated and problems, if they develop at all, can be addressed later.

I argue that we are witnessing a grand clash of visions between these two mindsets today in almost all major technology policy discussions today. Continue reading →