The Party of Innovation: Copyright Reform, Anyone?Posted: May 14, 2014
For The American Conservative, Derek Khanna writes: In 200 years the United States went from being a colonial backwater to being the world’s dominant economic and military power. How did our nation arise from obscurity, break free from the grip of the most powerful empire on earth, and skyrocket to global leadership? With a government focused on innovation—not control.
“…If Republicans understand this and thereby embrace the mantle of innovation, not only will they be expediting a new wave of ingenuity, but they will also share credit with entrepreneurs for the next tech boom.”
Historically, the Republican Party has led on technological innovation. President Abraham Lincoln earned a patent and facilitated the first transcontinental railroad system. President Hoover played a key role in the early development of radio broadcasting, and President Coolidge created our national airways system. Dwight D. Eisenhower inaugurated NASA and DARPA, while Richard Nixon launched the cable television industry through deregulation. President Ronald Reagan made GPS available for civilian use and greatly expanded science research.
But today policymakers and the regulatory state are smothering the force that allowed us to become the world’s economic superpower. Incumbent industries have co-opted the legal and regulatory systems to go after their competitors, and both political parties have been complicit in this cronyism. Acceptance of these regulatory and legal barriers is a root cause of our abysmal “new normal” of 2 percent annual GDP growth.
To confront cronyism we must revise our laws and regulations to foster what Joseph Schumpeter called “creative destruction.” Market entry by entrepreneurs is the disruptive force that spurs economic growth, even as it destroys the value of established companies. For new and more efficient market models to evolve and competition to be robust, companies that don’t innovate must die.
Real innovation, particularly disruptive innovation, often—though not always—comes from the small players and new entrants into the market. Clayton Christensen’s classic work The Innovator’s Dilemma details this phenomenon in depth, explaining how big, successful companies are often slow to innovate, yet it is the big companies that hold the most sway in influencing policy.
The GOP used to understand this; it was traditionally the party of small businesses. Today, however, for many Republicans “small businesses” means mom-and-pop grocery stores rather than cutting-edge innovators. Both are important, but one is where expansive job growth is coming from.
Start-ups have been the heart of America’s economic success story. New research proves that job growth does not come from small businesses in general but specifically from new small businesses. A recent report published by the Kauffman Foundation, a nonprofit that specializes in entrepreneurial research, found that without new businesses job creation in the United States would have been negative over the last three decades. Incredibly, almost all net new job creation comes from companies less than one year old….(read more)
- DEREK KHANNA: GOP Should Fight Crony Capitalism By Being Party of Innovation. Yes…. (pjmedia.com)
- Reality Check: Patents Foster Innovation and Economic Activity (ipwatchdog.com)
- Entrepreneurs Reaffirm Need for Immigration Reform (hispanicallyspeakingnews.com)
- Israel’s Chief Scientist Bringing Innovation Economy to Israeli Arabs With 200 Hours Start-Up Consulting, 85% R&D Funding (INTERVIEW) (algemeiner.com)
- The innovators: Britain’s economic future relies on seeking out the new (theguardian.com)
- Budget 2014 – Budget kills ‘vital lifeline’ for tech startups: StartupAus (techworld.com.au)
- S.C. Department of Commerce awards $2.4M in grants for innovation (thetandd.com)
- Entrepreneurs power the best economies (telegraph.co.uk)
- Permissionless Innovation: Why It Matters (circleid.com)
- Dirty Harry Reid Goes Around the Bend (powerlineblog.com)