New Research on Innovation, Immigration, Antitrust and Data, and State and Local Business Subsidies

New Mercatus research from the week of October 14th

Innovation Unbound

Arthur Diamond | Policy Brief

Inventors and entrepreneurs are key drivers of innovations that result in improvement in human welfare. Peter Thiel and Tyler Cowen worry that in recent decades, except in information technology, innovation has been sparse. Thiel suggests the sparseness will end when entrepreneurs and potential entrepreneurs show more courage. Cowen suggests that the sparseness will end when the stock of entrepreneurial opportunities is replenished (since at present all the low-hanging fruit has been picked). Contra Cowen, Arthur Diamond believes we do not need to wait for the low-hanging fruit to grow back; plenty of opportunities can be created by innovative entrepreneurs right now—if society lets them. In this new policy brief, Diamond blames the sparsity not mainly on too little courage, but mainly on too much government regulation.

Is the United States Keeping Pace in the Global Competition for Skilled Talent?

Daniel Griswold and Jack Salmon | Policy Brief

The job market in the United States is strong, and the technology industry, in particular, is booming. Interest in US tech jobs from foreign workers, however, is not. An increasingly restrictive and burdensome US immigration system is resulting in talented workers looking elsewhere for jobs. This trend is worrisome, because evidence shows that temporary foreign workers increase both employment and wages of American workers. This shifting pattern of skilled immigration raises two questions: Where are these skilled workers going, if not the United States? And why are they choosing these places over the United States?

Antitrust and the Debate Over Data Privacy

Jennifer Huddleston | Testimony

America is a leader in many technologies, including the internet, in part because of the permissionless policy framework that created low barriers to entry and allowed entrepreneurs to find unique ways to serve consumers.Technology continues to evolve and change in a dynamic fashion. Sometimes the best competition comes from unexpected sources that change the nature of the market and topple once seemingly unstoppable giants. With this in mind, while antitrust laws do serve a purpose when it comes to consumer protection and competition in the free market, the focus should remain on consumer welfare rather than seeing antitrust as a way to address a variety of policy concerns for which it is ill-suited.

The State of State and Local Subsidies to Business

Kenneth P. Thomas | Policy Brief

State and local subsidies to business are a significant factor in the distortion of the US economy. This is because subsidies, while not always bad policy, have major potential drawbacks that need to be considered any time such a policy is contemplated. In this policy brief, after examining those drawbacks, the author addresses two major questions about state and local subsidies. First, how much do different states (and their cities) provide in subsidies to business? Second, how do states compare in the way they administer subsidies?