>> >Many regulations are terrible and serve as a huge hindrance to innovation
What is an example of a regulation that was a "huge" hinderance to innovation?
Looking at the past 40 years of the US technological progress and the only thing I seen hindering innovation are the tech companies themselves through monopoly, monopsony, patents, and regulatory capture. (Unless the last one is what you meant, but that's a regulation put in place by a monopoly to maintain its monopoloy and not to protect the air we breathe).
EDIT: I am referring to "innovation" not "execution".
Speaking from personal experience running a non-profit seeking to disrupt the entrenched prison communications industry, there have been several. FCC data reporting requirements that took an FTE 200 hours to complete, accessibility requirements that have to be in place before you can (legally) even launch a pilot or MVP, endless legalese documents to parse through, compliance requirements that have to be checked even if they don't make any sense for the application, and some of the best ones: arbitrary requirements like "to be eligible for a proposal/contract, you must be in business at least 10 years and have a minimum $50M in annual revenue" (a requirement clearly written by our incumbent competitors to exclude us that was adopted by the regulators). Oh and all of that stuff you have to deal with before you can even close your first deal.
– Dodd-Frank Wall Street Reform: Intended to stabilize the system post-crisis, but its complex compliance requirements made it difficult for small and mid-sized banks to offer new products or compete with large incumbents.
- State by state money transmission licensing: Fintechs like PayPal and Stripe had to get 50+ separate state licenses, creating huge compliance costs and delaying product launches.
- FDIC De Novo Bank Rules: caused a collapse in new bank formation for nearly a decade (only a handful of new banks were approved between 2010–2016).
– Over 20 state laws restricted cities from building their own broadband networks, protecting incumbents and stalling fiber deployment.
- Slow spectrum auctions and rigid allocation by FCC delayed rollout of 5G infrastructure compared to countries with faster processes.
- State-based regulation patchwork for insurance: each US state has its own insurance regulator requiring 50+ separate filings for new products, slowing national rollout of innovations
- ACA: while expanding coverage, created heavy administrative burdens for smaller insurers and startups trying to innovate in plan design or digital enrollment
- Conflicting state laws and lack of federal standards created uncertainty for companies like Waymo and Cruise, delaying scaling of self-driving technology.
- Drone FAA rules: heavily limited commercial drone use, slowing the rise of delivery and mapping applications until modernized rules came into effect.
- California's recent, very nuanced "Transparency in Frontier Artificial Intelligence Act" targeting frontier models and "safety" and "risk reporting" like "critical safety incidents"
Thanks for listing these, this is really an impressive compilation. I see how naive I was. I assumed everyone agreed that Dodd-Frank was a great bill, and protection of FCC from being carved up by billionaires was also a good thing. Same goes for keeping drones from filling the skies, and putting guardrails on AI billionaires from running wild and breaking big important things. But clearly political alignment determines what is considered innovation. I think almost all but a few of these regulations are spectacular (except for the broadband one) and don't stifle innovation: they protect us from centibillionaires' greedy, vile nature to take more for themselves at our expense while providing a net negative (e.g., Amazon, Facebook, Oracle, megabanks, cryptobros, Private Equity for medical and insurance, etc.). I can see we are on opposite sides of the political spectrum here.
In the U.S., McKinsey estimates that large infrastructure projects typically take 4 to 5 years to go through federal permitting before construction can begin.
Deployment is necessary for innovation. You can't iterate on designs if you don't deploy them in the real world and if you don't scale up their production.
Most regulations are meant to limit a person or organization's ability to do something, which almost by definition will limit creativity and potential innovation. The challenge is getting the right balance of freedom and regulation that people are suitably protected while also allowing for innovation. And, of course, that balance exists in different places for different people.
Complete de-regulation of a sector, say banking or medicine, would certainly encourage a lot of innovation. A lot of people would also be hurt in the process.
Out of curiosity, have you ever attempted to create something from scratch and bring it to market? Not as an employee, but as someone trying to figure it out?
Your work history will impact the way you view this issue IMO.
Yes. 28 years ago I founded a small a software company (4 employees) that made test software for a Tier 1 automotive vendor's ECUs. I sold the IP to them in 2007. Next question? Or do you think my background makes my opinion invalid for another reason?
It was amazing just being able to build things back then. These days you need to cough up $1500 for a PDF of ISO 26262 to even think about doing something commercially with automotive ECUs. Depending on what you're trying to do, there are dozens of additional standards with thousands of pages. Not even to mention CARB compliance.
That sounds really cool. The background does provide a lot of perspective on your views. It makes a lot of sense. Thank you for keeping us safe on the road!
It's confusing how someone who has tried to build anything of substance, in say California, couldn't have run into a regulation or ten stifling innovation.
I for one have seen mid-5 figures spent on a dumpster enclosure, because of building codes.
What is an example of a regulation that was a "huge" hinderance to innovation?
Looking at the past 40 years of the US technological progress and the only thing I seen hindering innovation are the tech companies themselves through monopoly, monopsony, patents, and regulatory capture. (Unless the last one is what you meant, but that's a regulation put in place by a monopoly to maintain its monopoloy and not to protect the air we breathe).
EDIT: I am referring to "innovation" not "execution".