1. This document was prepared by a special Kauman Foundation Task Force, whose members are listed in the Appendix. We dedicate this document tothe memory o Larry Ribstein, a distinguished law proessor at the University o Illinois Law School or many years, who prepared the initial drat o thisdocument and who has been valuable member o the network o scholars that the Kauman Foundation has worked with as part o its “Law, Innovation,and Growth” initiative.
KAUFFMAN TASK FORCE ON ENTREPRENEURIAL GROWTH | EWING MARION KAUFFMAN FOUNDATION
Unortunately, despite the deregulation o price andentry controls over the past three decades at the ederallevel in much o the transportation industry and some o thetelecommunications industry, the U.S. legal landscape stillis littered with legal entry barriers. These impediments exist
primarily at the state and local levels
, where they essentiallyhave operated under the radar.This white paper outlines some o the remaining statebarriers and a ew ederal ones and how they preventdisruptive innovations by entrepreneurs and establishedrms alike that potentially could bring new and moreecient business models to the market. In the case o thelegal sector, the barriers we identiy not only adverselyaect legal innovation, but also impede innovation inother sectors o the economy. Similarly, in health care,pharmaceuticals, K–12 education, the nancing o growthbusinesses, and many consumer services, legal obstructionshinder innovation and the provision o ecient, aordable,high-quality services and products.We conclude by surveying the main options orreducing or eliminating these impediments, proposing,in eect, ways to provide a “license to grow.” Althoughmost o the ideas we list are relevant only to state andlocal governments, we do not recommend, howevertempting it may be, ederal preemption as the means totheir abolition. Apart rom the political diculty o gainingconsensus on a sensible preemption approach in a time odeep partisanship with the Congress, it is not necessary orcitizens to look to Washington to solve all problems.There is value not only in state experimentation,but danger in one-size-ts-all proscriptions imposed bythe ederal government. Thereore, we opt instead or amore fexible “mutual recognition” approach that wouldrequire some ederal action—a simple law requiring states
Innovation and rapid economic growth require not only a acilitative legalinrastructure, which the United States already has to a signifcant degree, butalso no or low legal barriers to entry into productive lines o activity.
A LICENSE TO GROW: ENDING STATE, LOCAL, ANDSOME FEDERAL BARRIERS TO INNOVATION ANDGROWTH IN KEY SECTORS OF THE U.S. ECONOMY
Kauman Task Force on Entrepreneurial Growth