Technology innovation and Legislation

“Atlas Shrugged” – Ayn Rand’s book on capitalists and innovators who get regulated out by politicians – though satirical, seems to put a point across. While legislation affecting businesses bring checks and balances to prevent unscrupulous profiteering,  legislation also curtails innovation, slows adoption and impedes societal progress.

Last week Aereo filed for Chapter 11 bankruptcy,

Aereo –  which created the amazing cloud DVR and  the microantenna – was regulated out by the courts. The firm fought the battle all the way till Supreme Court and lost. In this case, the competition ie. big cable operators and network lobbies had deep pockets to make litigation expensive for a startup. Here is a 5 minute video about Aereo’s scenario – about technology created by a startp that wants to transform the cable television industry.


  Another  regulated industry is the taxi industry. Taxi operators in cities like San Fransisco and Boston pay upward of 300,000$ to obtain a permit. There is also a  multi-year waiting time to obtain the permit if you have to get it from the city council.  Technology (mobile computing) enabled ridesharing services provides  the alternative – drivers can work  at their time while consumers can get a reliable ride. Ridesharing firms like Uber, Lyft, Hailo and a few others do a great job of filling this gap in society.

Recently Singapore  introduced a law to control mobile app based ride sharing services.  This law though is not as restrictive as the one needing to pay for a permit yet (sic). Is this because taxi operators are not yet powerful lobbies who can pay their way through legislation? OR Is it that taxi operators are not savvy enough to take on big venture funded  corporates?

Tesla motors produces the Model S( and D) electric car.  As ridiculous at it may sound, the best and safest car in the world, cannot be sold  directly in about 28+ states. This is because Tesla motors sells their cars directly to consumers, instead of through a car dealership. This is another instance where regulation slows adoption of new technology by creating roadblocks to adoption.

The Question

When?, How long? and Why? will legislation interfere with technology related innovation..