Innovation & Entrepreneurship

In recent months, my colleagues and I at the Mercatus Center at George Mason University have published a flurry of essays about the importance of innovation, entrepreneurialism, and “moonshots,” as well as the future of technological governance more generally. A flood of additional material is coming, but I figured I’d pause for a moment to track our progress so far. Much of this work is leading up to my next on the freedom to innovate, which I am finishing up currently.

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Over at the Mercatus Center Bridge blog, Trace Mitchell and I just posted an essay entitled, “A Non-Partisan Way to Help Workers and Consumers,” which discusses the new Federal Trade Commission’s (FTC) Economic Liberty Task Force report on occupational licensing.

We applaud the FTC’s calls for greater occupational licensing uniformity and portability, but regret the missed opportunity to address root problem of excessive licensing more generally. But while FTC is right to push for greater occupational licensing uniformity and portability, policymakers need to confront the sheer absurdity of licensing so many jobs that pose zero risk to public health & safety. Licensing has become completely detached from risk realities and actual public needs.

As the FTC notes, excessive licensing limits employment opportunities, worker mobility, and competition while also “resulting in higher prices, reduced quality, and less convenience for consumers.” These are unambiguous facts that are widely accepted by experts of all stripes. Both the Obama and Trump Administrations, for example, have been completely in league on the need for comprehensive  licensing reforms. Continue reading →

I’ve always been perplexed by tech critiques that seek to pit “humanist” values against technology or technological processes, or that even suggest a bright demarcation exists between these things. Properly understood, “technology” and technological innovation are simply extensions of our humanity and represent efforts to continuously improve the human condition. In that sense, humanism and technology are compliments, not opposites.

I started thinking about this again after reading a recent article by Christopher Mims of The Wall Street Journal, which introduced me to the term “techno-chauvinism.” Techno-chauvinism is a new term that some social critics are using to identify when technologies or innovators are apparently not behaving in a “humanist” fashion. Mims attributes the term techno-chauvinism to Meredith Broussard of New York University, who defines it as “the idea that technology is always the highest and best solution, and is superior to the people-based solution.” [Italics added.] Later on Twitter, Mims defined and critiqued techno-chauvinism as “the belief that the best solution to any problem is technology, not changing our culture, habits or mindset.”

Everything Old is New Again

There are other terms critics have used to describe the same notion, including: “techno-fundamentalism” (Siva Vaidhyanathan), “cyber-utopianism,” and “technological solutionism” (Evgeny Morozov). In a sense, all these terms are really just variants of what scholars in the field of Science and Technology Studies (STS) have long referred to as “technological determinism.”

As I noted in a recent essay about determinism, the traditional “hard” variant of technological determinism refers to the notion that technology almost has a mind of its own and that it will plow forward without much resistance from society or governments. Critics argue that determinist thinking denies or ignores the importance of the human element in moving history forward, or what Broussard would refer to as “people-based solutions.”

The first problem with this thinking is there are no bright lines in these debates and many “softer” variants of determinism exist. The same problem is at work when we turn to discussions about both “humanism” and “technology.” Things get definitionally murky quite quickly, and everyone seemingly has a preferred conception of these terms to fit their own ideological dispositions. “Humanism is a rather vague and contested term with a convoluted history,” observes tech philosopher Michael Sacasas. And here’s an essay that I have updated many times over the years to catalog the dozens of different definitions of “technology” I have unearthed in my ongoing research. Continue reading →

Over at the Mercatus Center’s Bridge blog, Chad Reese interviewed me about my forthcoming book and continuing research on “evasive entrepreneurialism” and the freedom to innovate. I provide a quick summary of the issues and concepts that I am exploring with my colleagues currently. Those issues include:

  • free innovation
  • evasive entrepreneurialism & social entrepreneurialism
  • technological civil disobedience
  • the freedom to tinker / freedom to try / freedom to innovate
  • the right to earn a living
  • “moonshots” / deep technologies / disruptive innovation / transformative tech
  • innovation culture
  • global innovation arbitrage
  • the pacing problem & the Collingridge dilemma
  • “soft law” solutions for technological governance

You can read the entire Q&A over at The Bridge, or I have pasted it down below.

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We hear a lot today about the importance of “disruptive innovation,” “deep technologies,” “moonshots,” and even “technological miracles.” What do these terms mean and how are they related? Are they just silly clichés used to hype techno-exuberant books, articles, and speeches? Or do these terms have real meaning and importance?

This article explores those questions and argues that, while these terms are confronted with definitional challenges and occasional overuse, they retain real importance to human flourishing, economic growth, and societal progress.

Basic Concepts

Don Boudreaux defines moonshots as, “radical but feasible solutions to important problems” and Mike Cushing has referred to them as “innovation that achieves the previously unthinkable.” “Deep technology” is another buzzword being used to describe such revolutionary and important innovations. Swati Chaturvedi of investment firm Propel[x] says deep technologies are innovations that are “built on tangible scientific discoveries or engineering innovations” and “are trying to solve big issues that really affect the world around them.”

“Disruptive technology” or “game-changing innovations” are other terms that are often used in reference to technologies and inventions with major societal impacts. “Transformative technologies” is another increasingly popular term, albeit one focused mostly on health and wellness-related innovations. Continue reading →

In recent essays and papers, I have discussed the growth of “innovation arbitrage,” which I defined as, “The movement of ideas, innovations, or operations to those jurisdictions that provide a legal and regulatory environment more hospitable to entrepreneurial activity.” A new Economist article about “Why startups are leaving Silicon Valley,” discusses innovation arbitrage without calling it such. The article notes that, for a variety of reasons, Valley innovators and investors are looking elsewhere to set up shop or put money into new ventures. The article continues:

Other cities are rising in relative importance as a result. The Kauffman Foundation, a non-profit group that tracks entrepreneurship, now ranks the Miami-Fort Lauderdale area first for startup activity in America, based on the density of startups and new entrepreneurs. Mr Thiel is moving to Los Angeles, which has a vibrant tech scene. Phoenix and Pittsburgh have become hubs for autonomous vehicles; New York for media startups; London for fintech; Shenzhen for hardware. None of these places can match the Valley on its own; between them, they point to a world in which innovation is more distributed.

If great ideas can bubble up in more places, that has to be welcome. There are some reasons to think the playing-field for innovation is indeed being levelled up. Capital is becoming more widely available to bright sparks everywhere: tech investors increasingly trawl the world, not just California, for hot ideas. There is less reason than ever for a single region to be the epicentre of technology. Thanks to the tools that the Valley’s own firms have produced, from smartphones to video calls to messaging apps, teams can work effectively from different offices and places.

That’s the power of innovation arbitrage at work.  Continue reading →

by Adam Thierer & Trace Mitchell

[originally published on The Bridge on August 30, 2018.]

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What is an entrepreneur?

While it may seem straightforward, this question is deceptively complex. The term can be used in many different ways to describe a variety of individuals who engage in economic, political, or even social activities. Entrepreneurs affect almost every aspect of modern society. While most people probably have a general sense of what is meant when they hear the term entrepreneur, it can be difficult to provide a precise definition. This is due in no small part to the fact that some of the primary thinkers who have given substance to the term have placed their focus on different aspects of entrepreneurialism.

How Economists Talk About Entrepreneurs

Austrian economist Joseph Schumpeter thought that the purpose of an entrepreneur was “to reform or revolutionize the pattern of production by exploiting an invention.” Schumpeterian entrepreneurs are highly creative, disruptive innovators who challenge the status quo in order to bring about new economic opportunities. American economist Israel Kirzner viewed the defining characteristic of entrepreneurs as “alertness.” Kirznerian entrepreneurs are individuals who are able to identify the ways in which a market could be moved closer to its equilibrium, such as recognizing a gap in knowledge between different economic actors.

In the time since Schumpeter and Kirzner helped lay the groundwork, a number of George Mason University-affiliated scholars have made major contributions to our understanding of entrepreneurialism. Continue reading →

Yesterday was National Lemonade Day. Over at the Mercatus Bridge blog, Jennifer Skees and I used the opportunity to highlight the increasing regulatory crackdown on kids operating ventures without first seeking the proper permits from local authorities. We ask, “wouldn’t it be better to teach them the value of hard work and entrepreneurial effort instead of threatening them with penalties for not getting costly permits to do basic jobs?” Here’s our answer:

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Today is National Lemonade Day. For many Americans a lemonade stand was their first experience in entrepreneurship. But unfortunately, this time honored tradition that teaches the value of hard work, entrepreneurship, and innovation may be under threat from overzealous grown-ups.

Should we really force kids to get licenses to start lemonade stands, sell bottles of water outside a ballpark, or mow lawns for a little extra money? And wouldn’t it be better to teach them the value of hard work and entrepreneurial effort instead of threatening them with penalties for not getting costly permits to do basic jobs?

Recent news stories have highlighted examples of kids being confronted with local regulations that essential tell them not to be entrepreneurial until they’ve gotten someone’s blessing–or else face fines or other penalties for those efforts.

Out in San Francisco, for example, a neighbor threatened to call the police on an eight-year-old girl selling water to raise money for a trip to Disneyland after her mother had lost her job. The neighbor berated the little girl for “illegally selling water without a permit.” Luckily, national outrage seems to have fallen in favor of this rogue entrepreneur instead of “Permit Patty.” But this is far from an isolated case.

Another story went viral earlier this year involving kids and lemonade stands. Country Time lemonade pledged to pay the fines received or the permit cost for children’s lemonade stands. Who thought we’d reach the day when we need a Lemonade Legal Defense Fund? But just prior to the launch, Stapleton, Colorado police were called to shut down the lemonade stand of  four and six year-old brothersfor failing to have a business license. Kids who probably can’t read or fill out the necessary forms are expected to obtain a formal license for a tradition that dates back about 120 years. Continue reading →

I recently posted an essay over at The Bridge about “The Pacing Problem and the Future of Technology Regulation.” In it, I explain why the pacing problem—the notion that technological innovation is increasingly outpacing the ability of laws and regulations to keep up—“is becoming the great equalizer in debates over technological governance because it forces governments to rethink their approach to the regulation of many sectors and technologies.”

In this follow-up article, I wanted to expand upon some of the themes developed in that essay and discuss how they relate to two other important concepts: the “Collingridge Dilemma” and technological determinism. In doing so, I will build on material that is included in a forthcoming law review article I have co-authored with Jennifer Skees, Ryan Hagemann (“Soft Law for Hard Problems: The Governance of Emerging Technologies in an Uncertain Future”) as well as a book I am finishing up on the growth of “evasive entrepreneurialism” and “technological civil disobedience.”

Recapping the Nature of the Pacing Problem

First, let us quickly recap that nature of “the pacing problem.” I believe Larry Downes did the best job explaining the “problem” in his 2009 book on The Laws of Disruption. Downes argued that “technology changes exponentially, but social, economic, and legal systems change incrementally” and that this “law” was becoming “a simple but unavoidable principle of modern life.” Continue reading →

The ongoing ride-sharing wars in New York City are interesting to watch because they signal the potential move by state and local officials to use infrastructure management as an indirect form of innovation control or competition suppression. It is getting harder for state and local officials to defend barriers to entry and innovation using traditional regulatory rationales and methods, which are usually little more than a front for cronyist protectionism schemes. Now that the public has increasingly enjoyed new choices and better services in this and other fields thanks to technological innovation, it is very hard to convince citizens they would be better off without more of the same.

If, however, policymakers claim that they are limiting entry or innovation based on concerns about how disruptive actors supposedly negatively affect local infrastructure (in the form of traffic or sidewalk congestion, aesthetic nuisance, deteriorating infrastructure, etc.), that narrative can perhaps make it easier to sell the resulting regulations to the public or, more importantly, the courts. Going forward, I suspect that this will become a commonly-used playbook for many state and local officials looking to limit the reach of new technologies, including ride-sharing companies, electric scooters, driverless cars, drones, and many others.

To be clear, infrastructure control is both (a) a legitimate state and local prerogative; and (b) something that has been used in the past to control innovation and entry in other sectors. But I suspect that this approach is about to become far more prevalent because a full-frontal defense of barriers to innovation is far more likely to face serious public and legal challenges. Continue reading →