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What Washington Can Learn From Apple

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What Washington Can Learn From Apple

September 10, 2014

Apple CEO Tim Cook’s announcements confirm the rumors: the long-awaited Apple Watch will hit stores late this fall. Plus, after September 19, you will not be able to board a train or walk down the street without seeing people staring down at the new, larger iPhone 6 Plus. 

As those in Washington debate how to get the economy growing faster than an anemic two percent, they should not be looking back to the industries that dominated the 1950s, but rather to the sector of the economy that has been driving innovation—technology, epitomized by Silicon Valley. And what company is more synonymous with Silicon Valley than Apple?

Apple’s latest product launches continue to amaze die-hard fanatics and casual consumers alike. The new iPhone features multiple upgrades. It is faster, thinner, and has better resolution. The Apple Watch promises to be an improvement over the current offering of smartwatches and could revolutionize the consumer payment industry. 

Government bureaucracy is rarely described as innovative—much less revolutionary—as every Department of Motor Vehicle or U.S. Post Office visitor knows. Instead, by-the-book application of arcane rules is a bureaucracy’s general mode of operation. Is it any wonder that the shining point of the economy is one of the least-regulated? Compare Apple or Uber to the heavily-regulated utility industry. When did Time Warner Cable or Comcast last manage to delight rather than anger you?

In addition to learning from Apple’s current product launches, Washington can learn from the company’s past. Steve Jobs, Apple’s late, legendary co-founder and CEO, understood that business success does not come from following impersonal, uncompromising commands. At Apple Jobs created a demanding but flexible work environment. The creativity necessary to develop and perfect Apple products requires time and informal interaction with others. 

The best ideas are spurred at the water cooler, in casual conversations in the hallway, and during what was Jobs’s favorite activity—taking long walks outdoors. The headquarters of Apple and Pixar (another Jobs company) were specifically designed to facilitate these sorts of spontaneous interactions. This type of layout stands in stark contrast to traditionally-planned government office buildings.

Jobs knew that there is no manual that provides by-the-books steps to create transformational products. Pursuing the next game-changing technology takes effort and dedication, and a heavy dose of experimentation. While not every foray into a new product line, partnership, or process change will be right for a business, a major part of success is learning from prior efforts to inform future choices and better understand companies’ completive advantages. Businesses must be free to make these changes without undue monetary and time costs that accompany complying with myriad government regulations. 

Success in business is a dynamic, not static, process, and requires constant reevaluation and reinvention of the company—its processes, purpose, and products. Steve Jobs saw that when companies grow too large and successful, they begin to believe the process achieved their success. For Jobs, the innovative products created lasting value. However, innovation does not arise though some pre-determined formula. The line, “Well that’s the way we’ve always done it around here” was seen by Jobs as the death knell of corporations. 

Regulators are inherently slow to change, and are all about process. Without competition, government organizations have little incentive to become more efficient. Alternatively, private businesses have no choice—they must adapt to change or go bankrupt, because the bottom line of profit provides continuous challenges. Bureaucracies lack this crucial loss component of the profit and loss system. In this absence, bureaucrats instead have the incentive to grow, even if they are not adding value. 

Success in business requires much more than reading the latest Richard Branson book on management or entrepreneurship. No matter how hard regulators in Washington try, they will never be able to approach the achievements brought about by diverse individuals across the globe. It is much better for Washington to leave the task of economic growth to those who can actually make it happen. 

No government bureaucrat could have foreseen the economic appeal or effect of the iPad—much less designed it. Simply put, government cannot dictate economic growth. Innovation arises through individuals taking chances—trial and error, success and failure. People must be free to experiment and put to their unique knowledge to use. Every time politicians and regulators look down at their iPhones, iPads, or soon-to-come Apple watches, they should be reminded just how the economy actually grows.

New technology drives a stream of fresh services, and the Apple Watch and iPhone 6 are just two examples. Government policies should foster creativity and human progress, not maintain the status quo. If outdated regulations and obsolete regulators are allowed to stifle innovation, everyone will lose.


Jared Meyer is a policy analyst at Economics21 at the Manhattan Institute for Policy Research. You can follow him on Twitter here

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