The least resistance to new ideas

 

Kevin Kelly:

Many years ago the San Francisco Chronicle published a short column in which the writer mentioned that he had been traveling in India, and when he told the clerk at his hotel in New Delhi that he was from the San Francisco Bay Area the clerk responded, “Oh that is the center of the universe” Um, mumbled the traveller, and why do you say that? “Because the center of the universe is wherever there is the least resistance to new ideas.”

I have not been able to come up with a better description of San Francisco’s special relation to futurism. In my experience this is true: more new ideas per person bubble up in the Bay Area than anywhere else on Earth — at this moment.

Do read the whole thing.

 

Create new Silicon Valleys by exploiting regulatory arbitrage

Marc Andreessen is co-founder of the venture capital firm Andreessen Horowitz. Marc has a very smart article out last week on what works and doesn't work to grow centers of innovation in new locations. He titled this piece aptly Turn Detroit into Drone Valley as you can see here [emphasis mine].

Imagine a Bitcoin Valley, for instance, where some country fully legalizes cryptocurrencies for all financial functions. Or a Drone Valley, where a particular region removes all legal barriers to flying unmanned aerial vehicles locally. A Driverless Car Valley in a city that allows experimentation with different autonomous car designs, redesigned roadways and safety laws. A Stem Cell Valley. And so on.

There’s a key difference from the if-you-build-it-they-will-come argument of yore. Here, the focus is more on driving regulatory competition between city, state and national governments. There are many new categories of innovation out there and entrepreneurs eager to go after opportunities within each of them. Rethinking the regulatory barriers in specific industries would better draw the startups, researchers and divisions of big companies that want to innovate in the vanguard of a particular domain—while also exploring and addressing many of the difficult regulatory issues along the way.

Why this approach? Compared with previous innovation-cluster efforts where governments contrived to do something unnatural, this proposal flows from what governments naturally do best: create, or rather, relax laws.

This is one of those ideas that seems completely obvious once you have seen it. We can quibble with that last phrase “what governments naturally do best: create, or rather, relax laws.” because governments are terrible at relaxing laws. But the possibility was demonstrated in America by airline and telecom deregulation.

I see this sort of regulatory competition as a variation on Paul Romer's theme of Charter Cities. I've not succeeded to think of a way to apply Romer's concept directly to an advanced economy which is being drowned by a mountain of obsolete law and regulation. There are far too many powerful forces who like the status quo just fine. But perhaps Marc's ideas could be implemented at sufficiently small scale that the regulatory reform could be implemented before the status quo interests squashed the innovation.

There is much more to this Andreeseen essay, so be sure to read the original at Politico.

For background on why this will be so hard to implement in the US see Steven Teles on Kludgeocracy.

Homework assignment: how can we structure such a proposal so that politicians would be motivated to take on the change?