‘Liberating Start-Ups and Entrepreneurs’: The importance of innovation

The Conservative Reform Network (CRN) launched its Room to Grow Series on Tuesday afternoon at Google’s Washington, DC headquarters, with a panel discussion on start-ups and entrepreneurship. (Watch it here.) The lecture series builds from 18 “briefing books,” released over the course of this summer, which present data and policy solutions in response to what Reihan Salam, the host of today’s panel, called an “aching need for domestic policy reform.”

The panel featured James Pethokoukis, columnist and blogger at AEI, Kristen Soltis Anderson, Daily Beast columnist and founder of Echelon Insights, and Pete Snyder, entrepreneur and a Republican active in Virginia politics. In his opening remarks, Pethokoukis, author of the “Start-Ups and Entrepreneurship” briefing book, emphasized the “deep magic” in the American economy when it is fully free to create new jobs, build companies, and make the marketplace more competitive and dynamic. This, he said, is a critical part of American exceptionalism. He cautioned, however, that Silicon Valley spreads a false impression that innovation is growing. Available data point instead to a 30-year decline in start-ups, coinciding with a decline in productivity growth. Only by reducing regulation to produce “maximal competitive intensity” in the marketplace will companies, incumbent and new, develop the risk strategies and healthy fear of failure that drive a growing economy.

Piggybacking on how to reach “maximal competitive intensity,” Anderson highlighted the benefit to the consumer derived from competitive markets. “Not everyone wants to be an Uber,” she said, but everyone benefits from an environment in which Uber can make a disruptive innovation. In response to the issue of regulation, Snyder insisted that “each industry offers its own stranglehold” and that all new businesses face high barriers to entry put in place by both government and the lobbying of rich incumbents.

The panelists also breached the subject of how championing start-ups might allow the conservative movement to gain traction with young voters and increasingly entrepreneurial minority populations. Citing the Republicans’ support of Uber in Virginia, Snyder stressed that traditionally-conservative principles of free enterprise attract 18-25 year olds profoundly dependent on technology and less concerned with vested interests. Anderson too added that any such mobilized effort could powerfully strip the GOP of its “grand old” connotations and help move conservatism towards a successful twenty-first century program.

The hour moved to a close by discussing what measures, beyond deregulation, government can take to improve the “ecology” for entrepreneurial behavior. Pethokoukis remarked that a social safety net is essential to encouraging individual risk-taking: the social safety net must protect the individuals who start businesses. It cannot protect companies, who instead should constantly feel the threat of another company’s innovation. Snyder added that discomfort is necessary and good: “Rarely do entrepreneurial ideas come from happiness and comfort.”