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Why Disruption Matters

· June 1, 2012

Disruptive innovation, by definition, threatens the status quo and the current sources of economic and political power. This is a good thing: it prevents stagnation and drives economic growth and societal advancement. As cutting-edge political and economic research is beginning to illustrate, a society’s long-term success depends upon its ability to construct political and economic institutions that enable disruptive innovation.

America’s modern economic success has been based on its ability to give innovators the freedom to bring new ideas and products to the market. Our nation’s economic and technical leadership has benefited from a sound and flexible legal system that encourages entrepreneurship and promotes Darwinian, meritocratic competition. Silicon Valley arose in the United States because we had a better legal and economic framework than the rest of the world. Forward looking policy positions, including balanced intellectual property protections and smart intermediary liability laws, gave birth to a business ecosystem that incentivized innovation while also not shielding incumbents from aggressive competition and new ideas. DisCo seeks to preserve and promote the policy foundations that proved so crucial to innovators in Silicon Valley and throughout the United States.

The rapid pace of Internet-enabled disruption spawns frequent political backlashes by politically active interests faced with disintermediation, obsolescence, or irrelevance. DisCo will push back against interests that aim to curtail change and will champion those disrupting the status quo, whether they be small startups or large enterprises. Disruptive competition is not about the actor, but the act: disruption is good for consumers, good for the economy and essential for America’s competitiveness going forward.

Our team of contributors will explore how technology and the Internet are constantly evolving with new disruptive technologies and business models, how policy makers can embrace them, and the positive impact this will have on consumers, the economy and society as a whole.

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.