America Needs More Boing Boing Economics

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My favorite site for all things weird, innovative, and creative is Boing Boing and not just because the site is–as it correctly describes itself–"a directory of wonderful things." It's also that it reminds me of how important innovation and creativity are for the future of the U.S. economy. (Yes, that's how my mind works.)

A recent analysis by the economics consulting firm Macroeconomic Advisers predicted that American productivity growth will average about 2.2 percent this year and next, down from an average of 3.0 percent over the six years from 2000 to 2005. This is important because slower productivity can mean slower economic growth. Investment firm JPMorgan, for instance, has concluded that the potential noninflationary growth rate of the U.S. economy has slowed to 2.5 percent from an estimated 3.5 percent from 1996 to 2002, with lagging productivity a big reason for the decline.

In particular, as the Macroeconomic Advisers study points out, the slowdown "reflects less rapid technological advance in the sector that produces computer hardware and software. Even more important, it reflects a slowdown ... outside the computer- and software-producing sectors." This is where making America more innovative comes in.

Inside-the-Beltway think tanks have all sorts of ideas for doing this, but so do plenty of non-Washington wonks. So I asked a variety of people–Boing Boing's Cory Doctorow, Dallas Mavericks owner Mark Cuban, law professor and Instapundit blogger Glenn Reynolds, design firm CEO Tim Brown, among others–how they would make America more innovative.

Cory Doctorow, coeditor of Boing Boing and an award-winning science fiction writer, including the novels Down and Out in the Magic Kingdom, Eastern Standard Tribe, and Someone Comes to Town, Someone Leaves Town:

1) I would repeal the Digital Millennium Copyright Act so that it would once again be legal to create technology that competes directly with incumbent technology–for example, to make a device that plays all the songs on your iPod. It's presently illegal to do so, because you have to break Apple's copy prevention to get the songs to play on non-Apple hardware.

2) I would then create a black-letter law that repealed the "inducement" standard set out in the Grokster Supreme Court decision. That's the standard that says that if you designed your technology with the idea that some users might use it unlawfully, then your technology is illegal. The problem is that it's often impossible to know which uses will and won't be lawful until a court rules on them. Under this standard, the videocassette recorder would be illegal, since Sony advertised it as a machine for time-shifting (which the Supremes found legal) and for making libraries of shows (which they didn't find legal). It's inducement that's at the heart of Viacom's ridiculous lawsuit against YouTube.

3) Finally, I would regulate telcos to enforce a neutral Internet. These companies are creatures of enormous regulatory largess–without government handouts, like rights of way into every basement in the country, they wouldn't exist–and if they don't want to play fair, let's get someone else to run the phone network. Government monopolies aren't a right; they're a privilege.

Glenn Reynolds, law professor at the University of Tennessee, writer of Instapundit, and author of the 2006 book An Army of Davids: How Markets and Technology Empower Ordinary People to Beat Big Media, Big Government, and Other Goliaths:

1) I'd try to eliminate the hassles involved in doing new stuff. That includes streamlining the patent process and drastically narrowing patent protection–the current system favors big enterprises that use patents as bargaining chips, not innovation.

2) I'd decouple healthcare from employment and make companies offer unitary risk pools, so that everybody of the same age and gender gets the same rate, so that people don't stay in jobs they don't like just for healthcare.

3) And I'd make it easier to bring new products to market without jumping through too many regulatory hoops.

Tim Brown, CEO of global design consultancy IDEO:

1) Include design thinking as an integral part of the K-12 education system as it already has been in many countries in Europe. This doesn't mean lots of art classes. It means more specifically teaching kids, through projects, to be human centered, creative, and collaborative.

2) Establish a national innovation index (equivalent to the J.D. Power quality index in the car industry) that does a good job of highlighting the companies, and institutions, that are creating growth through innovation.

3) Fund universities to set up innovation institutes like the D-school at Stanford. These institutes act as a place for business thinkers, design thinkers, and technologists to come together to incubate new ideas.

4) Create an "Innovation in government services" program funded by the federal government much as the Design Council has done in the United Kingdom. Government badly needs to change the way it delivers services to its citizens, and it could help foster a broader acceptance of innovation through this initiative.

Jeff Cornwall, director of the Belmont University Center for Entrepreneurship and author of the Entrepreneurial Mind blog:

1. Implement a politically neutral tax system, such as the much-touted Fair Tax.

2. Create blanket exemptions for privately owned (by individuals) businesses with fewer than 500 employees for all federal regulations. If exceptions would be made for this policy for a specific regulation on business, it would only be on a case-by-case basis. This would in effect reverse the current practice set up by the Regulatory Flexibility Act. Put the burden on regulators to justify including small, privately owned businesses, one regulation at a time.

3. Propose a constitutional amendment to reverse the Kelo eminent domain decision.

Niti Bhan, founder of Bhan LLC, a San Francisco-based strategy think tank that offers early-stage research and development of products and services for markets in developing nations:

1) Universal healthcare. This would allow people, particularly women, to leave their corporate jobs to try some entrepreneurial activities without fear of risking the health of themselves or their families. As it is now, leaving the healthcare benefits of a corporate job discourages the kind of macro activities that accelerate innovation.

2) Attract more women into fields like science and engineering, a key shortage felt not only in terms of women in these fields but in absolute numbers–women will bring the little extra "empathy" or "user centered" point of view toward their inventions and work–i.e., will this benefit or improve the quality of life?

3) Like James Dyson's school of design for 16-to-19-year-olds, programs can be set up to educate high school juniors and seniors about design and innovation as well as science and technology in a series of workshops. Making design very hands on in schools, particularly in urban areas, is another powerful approach.

The United Kingdom has really taken the lead on this, and with the increasing need to design and develop products and services that are sustainable and ecologically responsible, creativity and good old-fashioned Yankee initiative become even more crucial to help conserve our planet and the system within which we all reside.

Read about the innovation ideas from Kevin Kelly, founding executive editor of Wired magazine, Mark Cuban, owner of the NBA's Dallas Mavericks and founder of the HDNet cable channel, and Guy Kawasaki, Apple Computer legend.