“permissionless innovation” & the grand tech policy clash of visions to come
DESCRIPTION
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.TRANSCRIPT
![Page 1: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/1.jpg)
“Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come
Adam ThiererSenior Research FellowMercatus Center at George Mason University
June 6, 2014
![Page 2: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/2.jpg)
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
![Page 4: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/4.jpg)
Where Did All This Modern Tech Innovation Come From?
4
![Page 5: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/5.jpg)
5
How Did All This Happen
So Quickly?
![Page 6: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/6.jpg)
Question: How Did U.S. Become Global Tech Innovation Leader?
6Source: 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
![Page 7: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/7.jpg)
7
How Did This US-EU Tech Imbalance Develop?
Source: Alberto Onetti, Mind the Bridge Foundation
![Page 8: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/8.jpg)
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
![Page 9: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/9.jpg)
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
![Page 10: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/10.jpg)
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
![Page 11: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/11.jpg)
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
![Page 12: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/12.jpg)
But What about the Risks? (or, Why Some Still Favor “Precautionary
Principle” Policies)
12
![Page 13: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/13.jpg)
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
![Page 14: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/14.jpg)
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
![Page 15: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/15.jpg)
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
![Page 16: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/16.jpg)
But hey, seriously, what about those risks?!
16
![Page 17: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/17.jpg)
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
![Page 18: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/18.jpg)
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.)
![Page 19: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/19.jpg)
19
The Precautionary Principle vs. Permissionless InnovationA Range of Responses to Technological Risk
ProhibitionCensorship
Info suppression Product bans
Anticipatory Regulation
Administrative mandatesRestrictive defaults Licensing & permitsIndustry guidance
Resiliency
Education & Media LiteracyLabeling / Transparency
User empowermentSelf-regulation
AdaptationExperience / Experiments
Learning / CopingSocial norms & pressure
Top-down Solutions
Bottom-up Solutions
Precautionary Principle
Permissionless Innovation
![Page 20: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/20.jpg)
Future Fights
20
![Page 21: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/21.jpg)
21
Future Tech Flashpoints
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.
![Page 22: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/22.jpg)
Concerns Driving Calls for Precautionary Tech Regulation
• Privacy• Safety• Security• Economic disruption• Intellectual Property
22
![Page 23: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/23.jpg)
23
![Page 24: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/24.jpg)
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
![Page 25: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/25.jpg)
25
The opportunities before us…
![Page 26: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/26.jpg)
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
![Page 27: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/27.jpg)
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
![Page 28: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/28.jpg)
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?
![Page 29: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/29.jpg)
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
![Page 30: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/30.jpg)
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
![Page 31: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/31.jpg)
3 Other Big Disruptions to Watch
• 3-D printing• “Biohacking”• Genetic diagnostics (“23 & me” fight)
31
![Page 32: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/32.jpg)
General Policy Lessons / Valuesto 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
![Page 33: “Permissionless Innovation” & the Grand Tech Policy Clash of Visions to Come](https://reader033.vdocuments.mx/reader033/viewer/2022060108/554d74dfb4c905390c8b491d/html5/thumbnails/33.jpg)
Related Mercatus Center ResearchBooks, 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