Getting AI Innovation Culture Right

R Street Policy Study No. 281

21 Pages Posted: 13 Apr 2023

Date Written: March 30, 2023


Public and political interest is intensifying in artificial intelligence (AI), machine learning and robotics. As these technological capabilities advance, legislative and regulatory proposals for algorithmic systems will grow alongside them. Public policy will play a crucial role in shaping the so-called “computational revolution.”

To ensure that the United States can be a global leader in advanced technology sectors, we must create a policy innovation culture that encourages and rewards the entrepreneurial spirit of the American people. The danger exists that the United States could adopt the opposite approach, locking entrepreneurs and investors in an “innovation cage” that constrains their growth opportunities.

Ultimately, policymakers must make a choice between two general policy defaults that will govern most algorithmic systems: the precautionary principle or permissionless innovation. Under the highly risk-averse precautionary principle approach, algorithmic innovations would essentially be treated as guilty until proven innocent, a legal standard generally shunned as unfair to individuals. Under the permissionless innovation approach, AI entrepreneurism is generally given a green light and treated as innocent until proven guilty, ensuring that people are mostly at liberty to create new things.

This paper explores the dangers of adopting the highly regulatory precautionary approach and recommends continuing with the more permissionless approach to policy that helped spawn the digital revolution and made American tech companies global powerhouses. Although some safeguards will be needed to minimize certain AI risks, a more flexible, bottom-up (i.e., less regulation) governance approach can address these concerns without creating overbearing, top-down (i.e., more regulation) mandates, which would hinder algorithmic innovations.

The ramifications of this policy choice are significant because AI and algorithmic systems play an important role in America’s global competitive advantage and relative geopolitical power. With China becoming a major competitor in advanced information technology sectors and other nations racing to be at the forefront of the unfolding computational revolution, the United States must create a positive innovation culture if it hopes to prosper economically and ensure a safer, more secure technological base.

Keywords: artificial, intelligence, AI, ML, machine, learning, robot, robotics, data, innovation, regulation, policy, governance, existential, risk, default, precaution, permissionless, default

JEL Classification: K24, O33, L38, L51, O36, O25

Suggested Citation

Thierer, Adam D., Getting AI Innovation Culture Right (March 30, 2023). R Street Policy Study No. 281, Available at SSRN: or

Adam D. Thierer (Contact Author)

R Street Institute ( email )

1050 17th Street Northwest
Washington, DC 20036
United States

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