Imagine a Bitcoin Valley…!

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Imagine a Bitcoin Valley…!

(Politico) The popular recipe for creating the “next” Silicon Valley goes something like this:
  • Build a big, beautiful, fully equipped technology park;
  • Mix in R&D labs and university centers;
  • Provide incentives to attract scientists, firms and users;
  • Interconnect the industry through consortia and specialized suppliers;
  • Protect intellectual property and tech transfer; and,
  • Establish a favorable business environment and regulations.

Except … this approach to innovation clusters hasn’t really worked. Some have even dismissed
these government-driven efforts as “modern-day snake oil.” Yet
policymakers are always searching for the next Silicon Valley because of
the critical link between tech innovation, economic growth and social
opportunity.

Previous efforts at such clusters failed
for a variety of reasons, but one big reason is that government efforts
alone simply don’t draw people. That’s why a recent crop of experiments
has focused more on building entrepreneurial communities, urban hubs and districts, and hackerspaces. Still, we’re “splitting the logic” on how to create an innovation ecosystem, according to MIT expert Fiona Murray in Technology Review:
We’re either going top-down by focusing primarily on
infrastructure—plunking down an office park next to a university—or
bottom-up by focusing on just the networks. None of these efforts
successfully pursue both paths at once, with government, academia and
entrepreneurial communities proceeding together in lockstep—as was the
case in the development of Silicon Valley.  

But policymakers shouldn’t be trying to copy Silicon
Valley. Instead, they should be figuring out what domain is (or could
be) specific to their region—and then removing the regulatory hurdles
for that particular domain. Because we don’t want 50 Silicon Valleys; we
want 50 different variations of Silicon Valley, all unique from each other and all focusing on different domains.

Imagine a Bitcoin Valley, for instance, where some country fully
legalizes cryptocurrencies for all financial functions. Or a Drone
Valley, where a particular region removes all legal barriers to flying
unmanned aerial vehicles locally. A Driverless Car Valley in a city that
allows experimentation with different autonomous car designs,
redesigned roadways and safety laws. A Stem Cell Valley. And so on.

There’s
a key difference from the if-you-build-it-they-will-come argument of
yore. Here, the focus is more on driving regulatory competition between
city, state and national governments. There are many new categories of
innovation out there and entrepreneurs eager to go after opportunities
within each of them. Rethinking the regulatory barriers in specific
industries would better draw the startups, researchers and divisions of
big companies that want to innovate in the vanguard of a particular
domain—while also exploring and addressing many of the difficult
regulatory issues along the way.
Why this approach? Compared with
previous innovation-cluster efforts where governments contrived to do
something unnatural, this proposal flows from what governments naturally
do best: create, or rather, relax laws.
Another
advantage of this approach is that it’s a way for clusters to
differentiate from each other and successfully compete for resources.
Think of it as a sort of “global arbitrage” around permissionless innovation—the
freedom to create new technologies without having to ask the powers
that be for their blessing. Entrepreneurs can take advantage of the
difference between opportunities in different regions, where innovation
in a particular domain of interest may be restricted in one region,
allowed and encouraged in another, or completely legal in still another.
For example, the laws and guidelines for using drones or taxing bitcoin already vary widely across the globe, just as they do for ride-sharing services across different cities in the United States.
But
the biggest advantage of the 50-different-Silicon Valleys approach
isn’t just in what it affords isolated regions or entrepreneurs—it’s in
accelerating innovation everywhere. Removing regulations across
different regions allows multiple innovation categories to advance
together at once, in parallel, without being bottlenecked by time or
place.
So what are the risks? Well, there’s a real possibility
that advanced regions will essentially outsource or “regulate away”
their own risk at the expense of less advanced ones. To get ahead,
poorer countries may become more tempted to take on the very things
wealthier countries are fencing out of their borders. But as long as the
innovations aren’t life-threatening—and many of the restricted domains
aren’t (the restrictions are often protecting incumbent interests)—a
model like this one provides a much faster and more feasible way for
developing regions to catch up. Especially when you consider the
advantage that previous innovation clusters didn’t have: mobile.

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Satoshi
Satoshi

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