The policymaker's dilemma

Scott D. Anthony

In this research, we use the telecommunications industry to examine the relationship between government intervention and innovation, and reach the perhaps not-surprising conclusion that government actions can have a tremendous impacton the market for innovation. However, we believe the relationship is not as clear-cut as is generally perceived. We believe that there is a more elaborate, complex, and predictable interplay between these two forces and in this paper attempt to present our theory that explains this understated connection. Policymakers' general lack of understanding of innovation has led to somewhat of a paradox, where decades of policies directed at creating economic welfare have fostered environments that have actually stifled the most dynamic type of innovation capable of delivering the same goal, disruption. Based on the insight that the true underlying drivers of...