Technology, Business & Cool Toys

Written with Christopher Koopman and Brent Skorup (originally published on Medium on 4/10/17)

Innovation isn’t just about the latest gee-whiz gizmos and gadgets. That’s all nice, but something far more profound is at stake: Innovation is the single most important determinant of long-term human well-being. There exists widespread consensus among historians, economists, political scientists and other scholars that technological innovation is the linchpin of expanded economic growth, opportunity, choice, mobility, and human flourishing more generally. It is the ongoing search for new and better ways of doing things that drives human learning and prosperity in every sense — economic, social, and cultural.

As the Industrial Revolution revealed, leaps in economic and human growth cannot be planned. They arise from societies that reward risk takers and legal systems that accommodate change. Our ability to achieve progress is directly proportional to our willingness to embrace and benefit from technological innovation, and it is a direct result of getting public policies right.

The United States is uniquely positioned to lead the world into the next era of global technological advancement and wealth creation. That’s why we and our colleagues at the Technology Policy Program at the Mercatus Center at George Mason University devote so much time and energy to defending the importance of innovation and countering threats to it. Unfortunately, those threats continue to multiply as fast as new technologies emerge. Continue reading →

Today marks the 10th anniversary of the launch of the Apple iPhone. With all the headlines being written today about how the device changed the world forever, it is easy to forget that before its launch, plenty of experts scoffed at the idea that Steve Jobs and Apple had any chance of successfully breaking into the seemingly mature mobile phone market.

After all, those were the days when BlackBerry, Palm, Motorola, and Microsoft were on everyone’s minds. Perhaps, then, it wasn’t so surprising to hear predictions like these leading up to and following the launch of the iPhone:

  • In December 2006, Palm CEO Ed Colligan summarily dismissed the idea that a traditional personal computing company could compete in the smartphone business. “We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”
  • In January 2007, Microsoft CEO Steve Ballmer laughed off the prospect of an expensive smartphone without a keyboard having a chance in the marketplace as follows: “Five hundred dollars? Fully subsidized? With a plan? I said that’s the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good e-mail machine.”
  • In March 2007, computing industry pundit John C. Dvorak argued that “Apple should pull the plug on the iPhone” since “There is no likelihood that Apple can be successful in a business this competitive.” Dvorak believed the mobile handset business was already locked up by the era’s major players. “This is not an emerging business. In fact it’s gone so far that it’s in the process of consolidation with probably two players dominating everything, Nokia Corp. and Motorola Inc.”

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This week, my Mercatus Center colleague Andrea Castillo and I filed comments with the White House Office of Science and Technology Policy (OSTP) in a proceeding entitled, “Preparing for the Future of Artificial Intelligence.” For more background on this proceeding and the accompanying workshops that OSTP has hosted on this issue, see this White House site.

In our comments, Andrea and I make the case for prudence, patience, and a continuing embrace of “permissionless innovation” as the appropriate policy framework for artificial intelligence (AI) technologies at this nascent stage of their development. Down below, I have pasted our full comments, which were limited to just 2,000 words as required by the OSTP. But we plan on releasing a much longer report on these issues in coming months. You can find the full version of filing that includes footnotes here.

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Since the release of my book, Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom, it has been my pleasure to be invited to speak to dozens of groups about the future of technology policy debates. In the process, I have developed and continuously refined a slide show entitled, “Permissionless Innovation’ & the Clash of Visions over Emerging Technologies.” After delivering this talk again twice last week, I figured I would post the latest slide deck I’m using for the presentation. It’s embedded below or it can be found at the link above.

Along with colleagues at the Mercatus Center at George Mason University, I am releasing two major new reports today dealing with the regulation of the sharing economy. The first report is a 20-page filing to the Federal Trade Commission that we are submitting to the agency for its upcoming June 9th workshop on “The “Sharing” Economy: Issues Facing Platforms, Participants, and Regulators.” We have been invited to participate in that event and I will be speaking on the fourth panel of the workshop. The filing I am submitting today for that workshop was co-authored with my Mercatus colleagues Christopher Koopman and Matt Mitchell.

The second report we are releasing today is a new 47-page working paper entitled, “How the Internet, the Sharing Economy, and Reputational Feedback Mechanisms Solve the ‘Lemons Problem.'” This study was co-authored with my Mercatus colleagues Christopher Koopman, Anne Hobson, and Chris Kuiper.

I will summarize each report briefly here. Continue reading →

do not panicOn Sunday night, 60 Minutes aired a feature with the ominous title, “Nobody’s Safe on the Internet,” that focused on connected car hacking and Internet of Things (IoT) device security. It was followed yesterday morning by the release of a new report from the office of Senator Edward J. Markey (D-Mass) called Tracking & Hacking: Security & Privacy Gaps Put American Drivers at Risk, which focused on connected car security and privacy issues. Employing more than a bit of techno-panic flare, these reports basically suggest that we’re all doomed.

On 60 Minutes, we meet former game developer turned Department of Defense “cyber warrior” Dan (“call me DARPA Dan”) Kaufman–and learn his fears of the future: “Today, all the devices that are on the Internet [and] the ‘Internet of Things’ are fundamentally insecure. There is no real security going on. Connected homes could be hacked and taken over.”

60 Minutes reporter Lesley Stahl, for her part, is aghast. “So if somebody got into my refrigerator,” she ventures, “through the internet, then they would be able to get into everything, right?” Replies DARPA Dan, “Yeah, that’s the fear.” Prankish hackers could make your milk go bad, or hack into your garage door opener, or even your car.

This segues to a humorous segment wherein Stahl takes a networked car for a spin. DARPA Dan and his multiple research teams have been hard at work remotely programming this vehicle for years. A “hacker” on DARPA Dan’s team proceeded to torment poor Lesley with automatic windshield wiping, rude and random beeps, and other hijinks. “Oh my word!” exclaims Stahl. Continue reading →

Over at the International Association of Privacy Professionals (IAPP) Privacy Perspectives blog, I have two “Dispatches from CES 2015” up. (#1 & #2) While I was out in Vegas for the big show, I had a chance to speak on a panel entitled, “Privacy and the IoT: Navigating Policy Issues.” (Video can be found here. It’s the second one on the video playlist.) Federal Trade Commission (FTC) Chairwoman Edith Ramirez kicked off that session and stressed some of the concerns she and others share about the Internet of Things and wearable technologies in terms of the privacy and security issues they raise.

Before and after our panel discussion, I had a chance to walk the show floor and take a look at the amazing array of new gadgets and services that will soon hitting the market. A huge percentage of the show floor space was dedicated to IoT technologies, and wearable tech in particular. But the show also featured many other amazing technologies that promise to bring consumers a wealth of new benefits in coming years. Of course, many of those technologies will also raise privacy and security concerns, as I noted in my two essays for IAPP. Continue reading →

I want to highlight an important new blog post (“Slow Down That Runaway Ethical Trolley“) on the ethical trade-offs at work with autonomous vehicle systems by Bryant Walker Smith, a leading expert on these issues. Writing over at Stanford University’s Center for Internet and Society blog, Smith notes that, while serious ethical dilemmas will always be present with such technologies, “we should not allow the perfect to be the enemy of the good.” He notes that many ethical philosophers, legal theorists, and media pundits have recently been actively debating variations of the classic “Trolley Problem,” and its ramifications for the development of autonomous or semi-autonomous systems. (Here’s some quick background on the Trolley Problem, a thought experiment involving the choices made during various no-win accident scenarios.) Commenting on the increased prevalence of the Trolley Problem in these debates, Smith observes that:

Unfortunately, the reality that automated vehicles will eventually kill people has morphed into the illusion that a paramount challenge for or to these vehicles is deciding who precisely to kill in any given crash. This was probably not the intent of the thoughtful proponents of this thought experiment, but it seems to be the result. Late last year, I was asked the “who to kill” question more than any other — by journalists, regulators, and academics. An influential working group to which I belong even (briefly) identified the trolley problem as one of the most significant barriers to fully automated motor vehicles.

Although dilemma situations are relevant to the field, they have been overhyped in comparison to other issues implicated by vehicle automation. The fundamental ethical question, in my opinion, is this: In the United States alone, tens of thousands of people die in motor vehicle crashes every year, and many more are injured. Automated vehicles have great potential to one day reduce this toll, but the path to this point will involve mistakes and crashes and fatalities. Given this stark choice, what is the proper balance between caution and urgency in bringing these systems to the market? How safe is safe enough?

That’s a great question and one that Ryan Hagemann and put some thought into as part of our recent Mercatus Center working paper, “Removing Roadblocks to Intelligent Vehicles and Driverless Cars.Continue reading →

I’ve spent much of the past year studying the potential public policy ramifications associated with the rise of the Internet of Things (IoT). As I was preparing some notes for my Jan. 6th panel discussing on “Privacy and the IoT: Navigating Policy Issues” at this year’s 2015 CES show, I went back and collected all my writing on IoT issues so that I would have everything in one place. Thus, down below I have listed most of what I’ve done over the past year or so. Most of this writing is focused on the privacy and security implications of the Internet of Things, and wearable technologies in particular.

I plan to stay on top of these issues in 2015 and beyond because, as I noted when I spoke on a previous CES panel on these issues, the Internet of Things finds itself at the center of what we might think of a perfect storm of public policy concerns: Privacy, safety, security, intellectual property, economic / labor disruptions, automation concerns, wireless spectrum issues, technical standards, and more. When a new technology raises one or two of these policy concerns, innovators in those sectors can expect some interest and inquiries from lawmakers or regulators. But when a new technology potentially touches all of these issues, then it means innovators in that space can expect an avalanche of attention and a potential world of regulatory trouble. Moreover, it sets the stage for a grand “clash of visions” about the future of IoT technologies that will continue to intensify in coming months and years.

That’s why I’ll be monitoring developments closely in this field going forward. For now, here’s what I’ve done on this issue as I prepare to head out to Las Vegas for another CES extravaganza that promises to showcase so many exciting IoT technologies. Continue reading →

Earlier this week I posted an essay entitled, “Global Innovation Arbitrage: Commercial Drones & Sharing Economy Edition,” in which I noted how:

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.

That essay focused on how actions by U.S. policymakers and regulatory agencies threatened to disincentivize homegrown innovation in the commercial drone and sharing economy sectors. But there are many other troubling examples of how America risks losing its competitive advantage in sectors where we should be global leaders as innovators looks offshore. We can think of this as “global innovation arbitrage,” as venture capitalist Marc Andreessen has aptly explained:

Think of it as a sort of “global arbitrage” around permissionless innovation — the freedom to create new technologies without having to ask the powers that be for their blessing. Entrepreneurs can take advantage of the difference between opportunities in different regions, where innovation in a particular domain of interest may be restricted in one region, allowed and encouraged in another, or completely legal in still another.

One of the more vivid recent examples of global innovation arbitrage involves the well-known example of 23andMe, which sells mail-order DNA-testing kits to allow people to learn more about their genetic history and predisposition to various diseases. Continue reading →