The Cost of Inexperience

Free market entry is vital in preventing concentration of market power and eliminating large deadweight losses Yet in recent years studies show that newcomers are less successful than existing firms that have diversifies their products in the market What might explain this phenomenonThis Article unveils a regulatory catch 22 It reveals that although a regulation may be efficient in correcting a certain market failure its distributional effects may create another It exposes the degree to which economies of experience in regulation create significant disadvantages to newcomers and provide substantial advantages to oldtimers Being wellversed in their marketplace oldtimers possess knowledge familiarity and influence over the rulemaking process New or green entities entering regulated market or dealing with a new rule face proportionally larger costs to obtain regulatory insight Consequently an anomaly exists when government choice may de facto hamper innovation and survival of newcomers the same goals it seeks to promoteTo remedy this inconsistency the Article suggests ways to offset these distributional asymmetries through the use of information cooperatives regulatory sandboxes and compensatory mechanisms These solutions offer policymakers greater regulatory efficiency without resorting to deregulatio

The Illusory Promise of Free Enterprise: A Primer to Promoting Racially Diverse Entrepreneurship

The U.S. Census reports that Minority business ownership exceeds the corresponding racial makeup of U.S. demographics. Based on these figures, the principle of free enterprise seems to be acting on equal grounds. Could entrepreneurship be the social panacea for abolishing racial biases and the inequality gap? This Essay argues that this parity of Minority entrepreneurship is misleading. The Kauffman Foundation and Small Business Administration most recently reported that Black-owned firms represent only 7% of all U.S. businesses, Asian-owned firms represent only 4.3%, and Hispanic-owned firms represent only 10.6%. These businesses typically do not grow or expand, leaving the number of people employed by them relatively constant. Overall, minority-owned firms experience more business failure, turnover, and job loss than traditional businesses. This disparity in American free enterprise is, in and of itself, a source of systemic racism and social injustice. Seemingly, American Minority entrepreneurs are given a false hope of economic independence. In fact, this Essay illustrates that current legal programs destine many of them for insolvency, bad credit, debt accumulation, or, at best, being rendered small and meaningless in the marketplace without the proper tools and opportunities to increase equity and wealth. The Essay concludes by proposing new legal methods to increase dedicated access to capital, networking, guidance, and education for racially diverse entrepreneurs. Specifically, it proposes relaxing bureaucracy, fixing biases in lending, forming racially inclusive networks, and cultivating the role of lawyers as social agents who can inform Minorities about impediments and opportunities to accumulate wealth and economic growth

The Cost of Inexperience

Free market entry is vital in preventing concentration of market power and eliminating large deadweight losses Yet in recent years studies show that newcomers are less successful than existing firms that have diversifies their products in the market What might explain this phenomenonThis Article unveils a regulatory catch 22 It reveals that although a regulation may be efficient in correcting a certain market failure its distributional effects may create another It exposes the degree to which economies of experience in regulation create significant disadvantages to newcomers and provide substantial advantages to oldtimers Being wellversed in their marketplace oldtimers possess knowledge familiarity and influence over the rulemaking process New or green entities entering regulated market or dealing with a new rule face proportionally larger costs to obtain regulatory insight Consequently an anomaly exists when government choice may de facto hamper innovation and survival of newcomers the same goals it seeks to promoteTo remedy this inconsistency the Article suggests ways to offset these distributional asymmetries through the use of information cooperatives regulatory sandboxes and compensatory mechanisms These solutions offer policymakers greater regulatory efficiency without resorting to deregulatio

Innovation Agents

The standard narrative of entrepreneurship is one of self-employed creative individuals working out of their garage or independently owned start-up companies. Intrapreneurship— where employees are responsible for being alert to new opportunities inside firms—is another model for developing innovations. Relatively little is known, however, about the latter process through which large, complex firms engage in groundbreaking corporate entrepreneurship. This Article’s focus is on these types of innovation agents. It provides a thorough account of the positive and negative spillovers of intrapreneurial firms while making the following key points: First, intrapreneurial companies utilize their economies of scale, scope, and age to deliver innovations to the masses. They transform ideas, labor, and raw materials into tangible assets that can be traded in the market. Second, in doing so they offer individual entrepreneurs opportunities to capitalize their knowledge. Sustaining entrepreneurs’ prospects for supra-competitive profits is the main engine that motivates the latter to invest in discoveries in the first place. Lastly, intrapreneurial firms also serve asgreenhouses for entrepreneurship through the migration of their own talented labor in the market. While these spillovers have tremendous societal benefits, they can also introduce harms. First, the race for the next breakthrough might result in anticompetitive behavior by rivals who conspire with employees-intrapreneurs to leave their firms and take with them confidential information. Second, intrapreneurs often aspire to undertake their own independent journey. In so doing, they leave secure positions and high salaries while carrying valuable knowledge and expertise. This, in return, often prompts intrapreneurial firms to act opportunistically and lock-in or lock-out intrapreneurs in restrictive and wasteful arrangements. As a solution, this Article proposes ways law can balance the positive and negative spillovers of intrapreneurship and ways the tax system can help achieve such result

Unintended Legislative Inertia

Institutional and political forces create strong inertial pressures that make updating legislation a difficult task. As a result, laws often stagnate, leading to the continued existence of obsolete rules and policies that serve long-forgotten purposes. Recognizing this inertial power, legislatures over the last few decades have increasingly relied on a perceived solution -- temporary legislation. In theory, this measure avoids inertia by requiring legislators to choose to extend a law deliberately. This Article argues that temporary legislation is a double-edged sword. While some temporary laws ultimately expire, many perpetuate through cycles of extension and reauthorization. Temporary legislation often creates its own inertial force, leading to the unintended permanence of what was originally believed to be provisional. Using a case study from a large public subsidy adopted as a localized fix to a temporary problem, this Article demonstrates how the subsidy has inadvertently grown in scope and in size, creating its own inertial pathways that made its repeal exceedingly difficult. Path-dependent dynamics of temporary legislation affect not only present-day policies, but also the ability of legislatures to resist status quo bias and bring about legal change. This Article concludes with normative insights on ways to utilize flexible rulemaking whilst circumventing legislative inaction. Careful design of expiring provisions that is aware of the inertial power of temporary legislation can effectively ensure that laws are kept or discarded given their merits, not by force of the past

Through the Lens of Innovation

The legal system constantly follows the footsteps of innovation and attempts to discourage its migration overseas. Yet, present legal rules that inform and explain entrepreneurial circumstances lack a core understanding of the concept of entrepreneurship. By its nature, law imposes order. It provides rules, remedies, and classifications that direct behavior in a consistent manner. Entrepreneurship turns on the contrary. It entails making creative judgments about the unknown. It involves adapting to disarray. It thrives on deviation as opposed to traditional causation. This Article argues that these differences matter. It demonstrates that current laws lock entrepreneurs into inefficient legal routes. Through specific legal classifications, it points to significant distortionary effects. It theorizes that a legal culture that wishes to entice entrepreneurship is one that requires legal agents to think like entrepreneurs. Thereafter, it offers a bridge between law and entrepreneurship by providing policymakers with tools to recognize its distinctive modus operandi

Innovation Agents

The standard narrative of entrepreneurship is one of self-employed creative individuals working out of their garage or independently owned start-up companies. Intrapreneurship--where employees are responsible for being alert to new opportunities inside firms--is another model for developing innovations. Relatively little is known, however, about the latter process through which large, complex firms engage in groundbreaking corporate entrepreneurship. This Article\u27s focus is on these types of innovation agents. It provides a thorough account of the positive and negative spillovers of intrapreneurial firms while making the following key points: First, intrapreneurial companies utilize their economies of scale, scope, and age to deliver innovations to the masses. They transform ideas, labor, and raw materials into tangible assets that can be traded in the market. Second, in doing so they offer individual entrepreneurs opportunities to capitalize their knowledge. Sustaining entrepreneurs\u27 prospects for supra-competitive profits is the main engine that motivates the latter to invest in discoveries in the first place. Lastly, intrapreneurial firms also serve as greenhouses for entrepreneurship through the migration of their own talented labor in the market. While these spillovers have tremendous societal benefits, they can also introduce harms. First, the race for the next breakthrough might result in anticompetitive behavior by rivals who conspire with employees-intrapreneurs to leave their firms and take with them confidential information. Second, intrapreneurs often aspire to undertake their own independent journey. In so doing, they leave secure positions and high salaries while carrying valuable knowledge and expertise. This, in return, often prompts intrapreneurial firms to act opportunistically and lock-in or lock-out intrapreneurs in restrictive and wasteful arrangements. As a solution, this Article proposes ways law can balance the positive and negative spillovers of intrapreneurship and ways the tax system can help achieve such result