Regulation seen as barrier to innovation

Less trade barriers help innovation, IT experts say

Innovation may be tough to define, but the best way to encourage it is to get rid of industry regulations and trade barriers, a group of IT-focused analysts said Wednesday.

The U.S. must do a better job of encouraging innovation, said panelists at an Association for Competitive Technology (ACT) forum. But the speakers didn't all agree on how to accomplish that goal.

Despite many U.S. lawmakers recently trumpeting their innovation agendas, the problem is that no one has a good way to define and copy innovation, said Veronique de Rugy, a fellow at the conservative American Enterprise Institute. "We know what it does, but we don't know what it is."

ACT, an advocacy group representing small and medium-sized IT vendors, on Wednesday released a report calling for the U.S. government to embrace three policies to promote innovation: robust intellectual property protection, market-based international trade, and minimal competition regulation. Countries enacting those three policies, including the U.S., have created the best environments for innovation in the IT industry and other sectors, said Steve DelBianco, ACT's vice president for public policy.

DelBianco decried efforts in other countries to block imports of U.S. technology. Countries such as France and Norway, which have complained about how Apple Inc. has tied its iTunes music download service to its iPod player, are attempting to regulate an innovative service for the benefit of a handful of local vendors, he said.

Many countries are looking for ways to cultivate innovation, he said. "The answers they seek will not be found in protectionism and centralized industrial policy, but in creating an environment that rewards innovations and embraces competition," he added.

While ACT called on governments to take a deregulatory approach to trade and competition, it asked the U.S. and other governments to take action to protect its members' intellectual property.

One major problem is the U.S. government doesn't see the large picture when other countries act to stifle U.S. products, said Robert Atkinson, president of the Information Technology and Innovation Foundation think tank. The U.S. reacts in a piecemeal fashion with trade complaints, but doesn't seem to recognize that tariffs may be part of a national policy against U.S. products, he said.

During a recent visit to India, Atkinson told IT leaders there that they depend on the U.S. to fuel their outsourcing industry, but the country maintained the second highest tariff worldwide on the import of U.S. computers. Indian leaders disputed Atkinson's numbers.

Atkinson suggested the U.S. government should be more action in pointing out such trade imbalances. "I think we're falling asleep at the switch in the U.S.," he said.

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