“Permissionless Innovation” & the Grand
Tech Policy Clash of Visions to Come
Adam Thierer
Senior Research Fellow
Mercatus ...
Outline of Discussion
1. The Digital Revolution… How’d It Happen?
2. Competing Policy Visions: “Permissionless
innovation”...
New
Mercatus
Book
3
www.permissionlessinnovation.org
Where Did All This Modern Tech
Innovation Come From?
4
5
How Did
All This Happen
So Quickly?
Question: How Did U.S. Become Global
Tech Innovation Leader?
6
Source: Booz & Company
• 9 of the top 10 most innovative gl...
7
How Did This US-EU Tech Imbalance
Develop?
Source: Alberto Onetti, Mind the Bridge Foundation
Answer = “Permissionless Innovation”
• Permissionless innovation = the general
freedom to experiment & learn through trial...
In the old days, the Internet was
“permissioned” (pre-1990s)
This warning to students appeared in a 1982 MIT
handbook for ...
But once we opened up the Net, the digital
revolution took off
• Again, before early 1990s, online innovation &
commercial...
What’s good for cyberspace
is good for meatspace!
We need same general policy approach to other
sectors and technologies,
...
But What about the Risks?
(or, Why Some Still Favor “Precautionary
Principle” Policies)
12
The “Precautionary Principle”
= Crafting public policies to control or limit new
innovations until their creators can prov...
General problem with
“permissioning” innovation
If we spend all our time living in constant fear of
worst-case scenarios—a...
Specific problems with
“permissioning” innovation
• less entreprenurialism / lost opportunities
• diminished marketplace e...
But hey, seriously,
what about those risks?!
16
Better way to respond to risk
posed by technological innovations
Bottom-up approaches to new tech risks:
• Education / eti...
Give adaptation a chance!
• Remember, faced such challenges before & muddled through
• Recall reaction to camera & photogr...
The Precautionary Principle vs. Permissionless Innovation
A Range of Responses to Technological Risk
Prohibition
Censorshi...
Future Fights
20
Future Tech
Flashpoints
21
Internet of Things
• Wearable Tech
• Smart Homes
• Smart Cities
Health Issues
• Medical Devices...
Concerns Driving Calls for Precautionary
Tech Regulation
• Privacy
• Safety
• Security
• Economic disruption
• Intellectua...
23
Case Study #1:
“Internet of Things” & Wearables
• The Promise: “Always-on” sensor devices that
can collect data, track act...
25
The opportunities before us…
Addressing Concerns about IoT &
Wearables
• Privacy & security best practices (“privacy by design”)
• Education & tech eti...
Case Study #2: Intelligent Vehicles
• Autonomous cars on the way but legality remains
unclear in some states
• The Promise...
Addressing Concerns about Intelligent Cars
28
• Privacy & security best practices by industry
• Evolution of insurance & l...
Case Study #3: Private Drones
• Currently illegal to operate a drone for profit
– FAA must integrate commercial drones in ...
Addressing Concerns about Private Drones
• Common law adjudication
– already federal, state, and local laws that
protect p...
3 Other Big Disruptions to Watch
• 3-D printing
• “Biohacking”
• Genetic diagnostics (“23 & me” fight)
31
General Policy Lessons / Values
to Help Promote Innovation
• Forbearance (or “First, Do No Harm”): Don’t jump to
regulate ...
Related Mercatus Center Research
Books, Papers & Filings
• Book: Permissionless Innovation: The Continuing Case for Compre...
34
www.permissionlessinnovation.org
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“Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come

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Successful innovation, which is essential to better health, safety and security, requires freedom to experiment and develop. But there is an array of government rules and processes that increasingly prohibit “permissionless” innovation.

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“Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come

  1. 1. “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come Adam Thierer Senior Research Fellow Mercatus Center at George Mason University June 6, 2014
  2. 2. Outline of Discussion 1. The Digital Revolution… How’d It Happen? 2. Competing Policy Visions: “Permissionless innovation” vs. the “precautionary principle” 3. Future Tech Policy Battles / Case Studies – driverless vehicles – the Internet of Things & “wearable” tech – private drones – other emerging tech issues to watch 4. Principles to Foster Innovation 2
  3. 3. New Mercatus Book 3 www.permissionlessinnovation.org
  4. 4. Where Did All This Modern Tech Innovation Come From? 4
  5. 5. 5 How Did All This Happen So Quickly?
  6. 6. Question: How Did U.S. Become Global Tech Innovation Leader? 6 Source: Booz & Company • 9 of the top 10 most innovative global companies are based in U.S. • 7 of the 10 are involved in computing, software & digital technology
  7. 7. 7 How Did This US-EU Tech Imbalance Develop? Source: Alberto Onetti, Mind the Bridge Foundation
  8. 8. Answer = “Permissionless Innovation” • Permissionless innovation = the general freedom to experiment & learn through trial-and- error experimentation. • The U.S. embraced this ethos & made it the basis of policy for the digital economy in the 1990s and beyond. 8
  9. 9. In the old days, the Internet was “permissioned” (pre-1990s) This warning to students appeared in a 1982 MIT handbook for the use of ARPAnet, the progenitor of what would become the Internet: “It is considered illegal to use the ARPAnet for anything which is not in direct support of government business... Sending electronic mail over the ARPAnet for commercial profit or political purposes is both anti-social and illegal. By sending such messages, you can offend many people, and it is possible to get MIT in serious trouble with the government agencies which manage the ARPAnet.” 9
  10. 10. But once we opened up the Net, the digital revolution took off • Again, before early 1990s, online innovation & commercial activity wasn’t even allowed. • But the commercial opening of the Net changed all that. The rest is history. • Permissionless innovation has driven the explosion of Internet entreprenuerialism over past 2 decades. • Nobody needed a license or permission to launch the great technological innovations of the digital age. 10
  11. 11. What’s good for cyberspace is good for meatspace! We need same general policy approach to other sectors and technologies, whether based on bits (digital economy) or atoms (industrial economy). Our policy default should be Innovation Allowed 11
  12. 12. But What about the Risks? (or, Why Some Still Favor “Precautionary Principle” Policies) 12
  13. 13. The “Precautionary Principle” = Crafting public policies to control or limit new innovations until their creators can prove that they won’t cause any harms. – this “better to be safe than sorry” mentality – “Mother, May I” (“permissioned”) policy prescriptions & preemptive regulation – It is the opposite of permissionless innovation • Rationales for “precautionary” regulation – safety – security – privacy – economic (automation & job dislocation concerns) – IP 13
  14. 14. General problem with “permissioning” innovation If we spend all our time living in constant fear of worst-case scenarios—and premising public policy upon such fears—it means that best-case scenarios will never come about. Wisdom and progress are born from experience, including experiences that involve risk and the possibility of occasional mistakes and failures. 14
  15. 15. Specific problems with “permissioning” innovation • less entreprenurialism / lost opportunities • diminished marketplace entry / rivalry • stagnant markets & potential cronyism • loss of int’l competitive advantage • higher prices • fewer choices for consumers 15
  16. 16. But hey, seriously, what about those risks?! 16
  17. 17. Better way to respond to risk posed by technological innovations Bottom-up approaches to new tech risks: • Education / etiquette • Empowerment • Social pressure / media pressure • New social norms • Resiliency & adaptation • Self-regulation & new competition / choices • Torts, property rights, contracts • other targeted & limited legal interventions 17
  18. 18. Give adaptation a chance! • Remember, faced such challenges before & muddled through • Recall reaction to camera & photography in late 1800’s… “Instantaneous photographs and newspaper enterprise have invaded the sacred precincts of private and domestic life; and numerous mechanical devices threaten to make good the prediction that ‘what is whispered in the closet shall be proclaimed from the house-tops.’” — Samuel D. Warren and Louis D. Brandeis, 1890 • But we got through it! We adjusted our societal norms and personal expectations to accommodate photography. • Instead of rejecting cameras, we bought a lot of them! (But then learned how to use them respectfully, too.) 18
  19. 19. The Precautionary Principle vs. Permissionless Innovation A Range of Responses to Technological Risk Prohibition Censorship Info suppression Product bans Anticipatory Regulation Administrative mandates Restrictive defaults Licensing & permits Industry guidance Resiliency Education & Media Literacy Labeling / Transparency User empowerment Self-regulation Adaptation Experience / Experiments Learning / Coping Social norms & pressure Top-down Solutions Bottom-up Solutions Precautionary Principle Permissionless Innovation 19
  20. 20. Future Fights 20
  21. 21. Future Tech Flashpoints 21 Internet of Things • Wearable Tech • Smart Homes • Smart Cities Health Issues • Medical Devices • Biohacking • Embeddables • Genetic issues • Mobile medical apps • Telemedicine 3-D Printing Robotics • Smart cars • Private drones • A.I.
  22. 22. Concerns Driving Calls for Precautionary Tech Regulation • Privacy • Safety • Security • Economic disruption • Intellectual Property 22
  23. 23. 23
  24. 24. Case Study #1: “Internet of Things” & Wearables • The Promise: “Always-on” sensor devices that can collect data, track activities, and customize experiences to users’ needs and desires • The Fear: – Privacy: How much data are they collecting / sharing? – Security: What if all this stuff gets hacked? – Discrimination: Will these devices & services be used to disadvantage users? 24
  25. 25. 25 The opportunities before us…
  26. 26. Addressing Concerns about IoT & Wearables • Privacy & security best practices (“privacy by design”) • Education & tech etiquette efforts • Social pressure & social sanctions will play big role (current ex: phones in theaters & locker rooms) • Common law adjudication via existing legal standards (privacy torts, contracts, property rights) • Likely policy outcome – FTC (Section 5) “unfair & deceptive practices” enforcement – Targeted data use restrictions for most serious concerns • A certain amount of social adaptation will be required. 26
  27. 27. Case Study #2: Intelligent Vehicles • Autonomous cars on the way but legality remains unclear in some states • The Promise: – Huge reduction in car accidents & deaths – Traffic reduction – Potential environmental benefits • The Fear: – Will robot cars make smart decisions? – Who’s liable when accidents still happen? – Are driverless cars hackable? – What about privacy? How much info is collected? 27
  28. 28. Addressing Concerns about Intelligent Cars 28 • Privacy & security best practices by industry • Evolution of insurance & liability norms • Possible policy tweaks: – Revised licensing procedures for “drivers”? – Liability changes? (likely common law will handle) – Possible data use restrictions for privacy?
  29. 29. Case Study #3: Private Drones • Currently illegal to operate a drone for profit – FAA must integrate commercial drones in US airspace by 2015 – Regulations are under consideration now • The Promise: – Countless beneficial applications (agriculture, environmental monitoring, hazardous work, shipping, journalism, entertainment) – Could be safer than cars for routine delivery tasks • The Fear: – Safety (they’ll fall on our heads or run into stuff!) – Privacy (they monitor our every move) 29
  30. 30. Addressing Concerns about Private Drones • Common law adjudication – already federal, state, and local laws that protect property rights & privacy (ex: “peeping Tom” laws) • Possible policy tweaks: – Targeted FAA no-fly safety zones – Drone identification mandates? • Again, be patient! Social adaptation likely. 30
  31. 31. 3 Other Big Disruptions to Watch • 3-D printing • “Biohacking” • Genetic diagnostics (“23 & me” fight) 31
  32. 32. General Policy Lessons / Values to Help Promote Innovation • Forbearance (or “First, Do No Harm”): Don’t jump to regulate new tech based on worst-case scenarios. • Patience: Wait to see how individuals & institutions adapt. • Humility: Understand limits of knowledge & ability to predict the future. • Restraint: Limit & target interventions after exhausting all other options • Reevaluate (constantly): Conduct strict cost-benefit analysis for all new proposals & periodically sunset old rules before they hinder future progress. 32
  33. 33. Related Mercatus Center Research Books, Papers & Filings • Book: Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom (Thierer) • Mercatus filing to FAA on Unmanned Aircraft System Test Site Program • Mercatus filing to FTC on Privacy and Security Implications of the Internet of Things • Technopanics, Threat Inflation, and the Danger of an Information Technology Precautionary Principle (Thierer) • Bitcoin: A Primer for Policymakers (Brito) Articles & Blog Posts • Who Really Believes in “Permissionless Innovation”? (Thierer) • “Permissionless Innovation” Offline as Well as On (Thierer) • The Third Industrial Revolution Has Only Just Begun (Dourado) • Mr. Bitcoin Goes to Washington (Brito) • The Next Internet-Like Platform for Innovation? Airspace (Think Drones) (Dourado) • Domestic Drones Are Coming Your Way (Brito) • When It Comes to Information Control, Everybody Has a Pet Issue & Everyone Will Be Disappointed (Thierer) 33
  34. 34. 34 www.permissionlessinnovation.org

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