Political partisans are quick to judge each other, regardless of the policy issue. Republicans and Democrats often turn every policy discussion into an “us vs. them” story and imply that the other side has it entirely wrong.
On some important issues, however, there exists more common ground and shared values than some care to admit. Believe it or not, innovation policy is one of those areas.
In fact, despite some differences from one administration to the next, America has had a fairly consistent innovation policy vision over the past 25 years, especially as it pertains to the modern digital economy and information technology sectors. From Clinton to Trump, the past four administrations have steadily voiced a commitment to unleashing American innovation and entrepreneurialism by developing a predictable and simple legal environment wherein American ingenuity can flourish.
The Clinton Administration
The United States made “permissionless innovation” the foundation of internet policy when the Clinton administration published its Framework for Global Electronic Commerce in 1997. The Framework was a clean break from the top-down, inflexible regulatory model that had governed traditional communications and media technologies. Instead, the Clinton administration argued that “the Internet should develop as a market driven arena, not a regulated industry.”
To the extent that government intervention was needed at all, the Framework insisted that “its aim should be to support and enforce a predictable, minimalist, consistent, and simple legal environment for commerce.” This simple and predictable framework allowed entrepreneurs to try new business models without the permission of regulators, which has led to the technological cornucopia that we take for granted today.
The Framework is a powerful example of the positive relationship between attitudes, institutions, and incentives. That relationship fueled an explosion in entrepreneurial activity. Clinton’s vision for digital innovation has also served as a model for other sectors and technologies.
In 2015, for example, the US Senate unanimously approved a bipartisan resolution aimed at encouraging the development of the “internet of things” (IOT). The resolution called for the US to “develop a strategy to incentivize the development of the internet of things in a way that maximizes the promise connected technologies hold to empower consumers, foster future economic growth, and improve our collective social well-being.” This sentiment harkens back to the Clinton era innovation policy, showing a continuing commitment to permissionless innovation over the last few decades. Such efforts can help ensure that pro-innovation principles become the lodestar of future technology policy decisions in specific sectors.
Importantly, the Clinton administration made a commitment to using multistakeholder mechanisms to bring together diverse parties to devise superior governance solutions. Multistakeholder processes bring together diverse parties as part of an open, transparent, and inclusive effort to achieve broad-based consensus on thorny governance issues. Such processes have the advantage of being more flexible and responsive than slower-moving legislative or regulatory processes.
This is yet another way in which innovation policy has remained fairly stable over the past quarter century. As a recent law review article by Mercatus scholars noted, all four administrations have repeatedly tapped multistakeholder processes and other decentralized “soft law” governance mechanisms to address fast-moving technology sectors and issues. Generally speaking, more traditional top-down, “command-and-control” hard law mechanisms are giving way to more decentralized, bottom-up governance efforts, regardless of who controls the White House or Congress.
The Bush Administration
Moving into the new millenia, the Bush administration continued the trend of creating a policy structure that allowed technology to prosper. Indeed, President George W. Bush may have summarized his innovation agenda best when he noted that "the role of government is not to create wealth; the role of our government is to create an environment in which the entrepreneur can flourish, in which minds can expand, in which technologies can reach new frontiers." This pro-innovation stance was important for the various fields on which the Bush administration focused, such as space exploration, broadband expansion, nanotechnology, cybersecurity, and hydrogen fuel technology.
At the tail end of Bush’s presidential tenure, in 2007, his administration released the American Competitiveness Initiative to detail how the US would remain at the forefront of science and technology. President Bush reiterated his pro-innovation vision when he said, in the initiative’s opening lines, that “the great engines of our growing economy is our Nation’s capacity to innovate.”
The Obama Administration
Despite a changing of presidential parties and personalities on President Obama’s inauguration day, his administration’s approach to technology and innovation policy remained fairly consistent with previous administrations.
Shortly after Obama’s inauguration, his office released a memo titled A Strategy for American Innovation, which outlined how his administration would encourage innovation. Notably, the document stated that the administration wanted to “promote competitive markets that spur productive entrepreneurship” and that they recognized “the hazards of overzealous government intervention.”
This critical presidential pronouncement was a recognition of how the so-called “pacing problem” was becoming a more serious issue. The technology sector evolves much more rapidly than regulators can handle. Accepting that reality, the Obama administration built on the approach advanced in the previous two presidencies.
In 2015, the administration released an updated Strategy for American Innovation, which expanded upon its prior innovation advocacy. “For an advanced economy such as the United States,” the document noted, “innovation is essential for economic growth.” The document went on to state that “while many countries can grow by adopting existing technologies and business practices, America must continually innovate, because our workers and firms are generally already operating at the technological frontier.”
In the same document, the Obama administration also articulated how this would be done; they sought to create market conditions and rules that facilitate and incentivize the efforts of innovative, frontier changing entrepreneurs. Obama was right—the best way to spur innovative entrepreneurialism is to create a great incentive structure and then hand the reins to the entrepreneurs themselves.
In 2016, Obama expanded this sentiment to entrepreneurs outside of the US with the creation of the International Entrepreneur Rule, which helped promising startups to grow companies within the United States, contingent on factors such as significant financing from American investors. This rule was similar to the Bipartisan Startup Act, a bill that would also grow the number of international entrepreneurs in the US.
The Trump Administration
Compared with previous presidents—including Republican presidents—President Donald Trump has charted a very different policy vision on a wide range of issues, such as trade and immigration. But his tech policy has actually remained fairly in line with previous administrations.
On November 7, Michael Kratsios, Chief Technology Officer of the United States, delivered remarks at Web Summit 2019 in Lisbon, Portugal. He argued that that “[America’s] approach rejects the false dichotomy that somehow we must choose between the benefits of emerging technology on the one hand and following our moral compass on the other.” Importantly, he said, “we recognize that we don’t need to impose preemptive, overly-burdensome, and innovation-killing regulations to stay true to our values. The United States is demonstrating how this model of innovation works.”
An explicit commitment to permissionless innovation is a welcome sign from President Trump’s administration and is in keeping with the pro-innovation approach of his predecessors.
One of the first things President Trump did when he took control of the Oval Office was to create the White House Office of American Innovation. This office develops policies that improve government services and launches initiatives focused on innovation. It also brings together teams of public and private sector actors to promote and create innovative technologies for government agencies.
Meanwhile, the Trump administration has continued the multistakeholder governance efforts that began in the Clinton administration on issues as wide-ranging as driverless cars, commercial drones, and software transparency. Again, such soft law efforts appear to be the new norm for modern technological governance regardless of which party is in power.
Reasons for Optimism
Some may object to the idea that there has been a shared approach to technology policy across the last four administrations.
First, there certainly have been major policy differences at the margin. The so-called “net neutrality” wars largely fell along party lines. Meanwhile, Democrats have typically called for more sweeping privacy regulations, while Republicans have been more aggressive on certain cybersecurity or speech-related issues.
But beyond a handful of politically-charged issues net neutrality, there have been many others that witnessed a remarkable degree of shared advocacy. In the mid-1990s, for example, Section 230 of the Communications Decency Act and the Internet Tax Freedom Act enjoyed bipartisan support. (Ironically, in later years, both policies came under attack from a diverse coalition of bipartisan forces!) And even on R&D spending, there has been consistent advocacy from both parties in favor of increasing technology investments.
A second and related objection is that each of these administrations betrayed their own pro-tech principles numerous times. The Clinton administration defended the Clipper Chip and internet censorship. The Bush administration massively expanded digital surveillance with the Patriot Act, and the Obama administration just picked up where they left off. Meanwhile, President Trump and his allies frequently lambast America’s leading digital innovators.
This is to be expected, but it points to yet another shared reality of innovation governance: no administration will hold the line perfectly across the board. All will waiver at the margin. The question is: have they generally defended innovation freedom over the long-run? For the most part, we believe they have.
This is especially true when one compares America’s approach to technological governance to many other countries, which typically adopt tech governance regimes that are far more top-down. There’s a reason that the entrepreneurs of the world still flock to America to create new tech ventures: the “innovation culture” here still generally embraces entrepreneurial risk-taking and “permissionless innovation.” Not perfectly so, but strong enough to conclude that that innovation culture is still alive thanks to the efforts of the past four Democrat and Republican administrations.
It is often said that it is difficult to make predictions, especially about the future. Nevertheless, if the past is any indicator—notwithstanding when presidents betrayed their principles—we believe that policy related to technology and entrepreneurialism will continue with the American tradition of permissionless innovation that has been created and sustained by presidents of both parties for nearly three decades. That is our hope, at least.