While the United States is still the top global destination for developing and bringing innovative technologies and processes to market — thanks to its diverse market-based economy and culture of entrepreneurship and risk-taking — inefficient and outdated regulation threatens U.S. competitiveness. Regulatory fragmentation, outdated and redundant standards, lack of clarity, impediments to testing and deployment, and cumbersome rules all stand as serious barriers to innovative activity. They undermine the nation’s ability to set the “rules of the road” and drive up costs and uncertainty in a way that can deter investment.
The United States needs to embrace a portfolio of new approaches to modernize its regulatory system for the innovation age. Regulation must be agile and light-touch, as well as clear, predictable and enforceable to accommodate a rapidly changing technology landscape. Given the importance of early adoption and widespread deployment, speedy reform is key to unlocking the transformative market potential of new technologies and establishing U.S. competitiveness across a wide spectrum of innovative technologies and industries with high growth potential.
Overstating the role of data in driving innovation and unlocking economic productivity is impossible. However, the proliferation and importance of data to the innovation economy is also reshaping thinking about privacy, security threats, and regulatory and legal framework requirements. The need for new frameworks that address questions around the governance of data, including privacy and cybersecurity, is clear and urgent.
The wrong regulatory solutions to these challenges can be costly. Fragmentation of privacy requirements creates inconsistent protections for consumers and unpredictability for American companies that must innovate and create new products and services to compete. Getting this piece of the regulatory puzzle right is a critical enabling condition for sustaining and building on U.S. innovation leadership.