How Separation Of Tech And State Can Save Innovation

The 2025 Consumer Electronics Show (CES) in Fabulous Las Vagas just wrapped up, showcasing innovations such as robotics, AI, smartglasses, 3D VR projectors, rollable laptops, transparent TVs, in-dash auto displays, and even an electric salt spoon to cut back on your sodium.

Coinciding with CES, Gary Shapiro, the long-time leader of the Consumer Technology Association, released his fourth book, Pivot or Die: How Leaders Thrive When Everything Changes, in October 2024. Pivot or Die offers powerful lessons for business leaders on staying resilient and evolving in dynamic environments, as reviewers have noted.

But it’s also fuel for policy geeks inclined toward what we might call separation of tech and state. And given an incoming deregulatory-minded administration and Congress, the timing is particularly apt.

In Shapiro’s framework, a “pivot” is defined as:

“an intentional change in direction. Not more. Not less. It is not a change in who you are, a move away from your core beliefs, or an abandonment of your ethical principles.”

Shapiro showcases dramatically successful pivots such as Apple’s shift to mobile devices and Amazon’s transition to cloud computing, as well as failures to pivot and pivots that failed. He notes that many services we rely on today, from Netflix streaming to DoorDash, are the result of pivots that “reinvented the way we use the Internet.” Shapiro also examines pivots necessitated by external forces, such as COVID and government regulations.

Shapiro identifies key elements for success in other leaders, but notably, he embodies the characteristics he admires in transformative and visionary founders. His role in creating what became America’s largest trade show is a testament to his own pioneering spirit, as are his early achievements in antitrust battles, his defense of the once-threatened VCR, and his successful transition of CES to a fully digital format in 2021 amid the COVID-19 pandemic.

Shapiro recounts how innovators, investors and creatives all converge at CES’s one-of-a-kind setting, but it’s largely thanks to him. At one Leaders In Technology Dinner reception, I was transfixed as Shapiro casually introduced Black Eyed Peas co-founder and frontman will.i.am to inventor Dean Kamen right in front of me, as actress Lucy Lawless from Zena the Warrior Princess stood alongside. Things like that happen all the time at CES.

When I expanded my portfolio from general regulatory policy to tech policy, I wondered whether libertarian principles and spontaneous order would be tolerated by regulators. CES remains my annual recharge point, especially Eureka Park; and I’ve been fortunate to speak at the CES policy track. My Forbes dispatches from CES continue to champion maximal regulatory liberalization, making Pivot or Die especially relevant in considering how business and technological pivots might inform policy ones, and vice-versa.

Not So Wild West

Though the early Internet was often seen as a freewheeling domain, regulatory tensions were always simmering, in part a result of unrealized pivots that should have come decades ago. Early regulatory battles included antitrust, spam and online gambling, Digital Rights Management (particularly relevant again in AI disputes), followed by attempts to stifle Uber and Lyft by local taxi commissions. Continuing struggles include antitrust and competition policy, marketing to children (with new forms of congressional screen-time regulation now being proposed), privacy and surveillance concerns, Net Neutrality, free speech vs. censorship, and cybersecurity—up to and including a controversial proposal for a “kill switch” for the Internet.

Shapiro might not agree with all my libertarian proclivities, but his book bursts with opposition to tech mandates and opposition to tech bans. He repeatedly emphasizes that the Consumer Technology Association does not seek government funding, despite some members pushing for it, understanding the problems such funding creates. And amid all his inspiration and optimism, Shapiro sounds the alarm over the threat to innovation posed by America’s exploding national debt. Pointing to the outgoing Biden administration’s abuse of spending disbursements, Shapiro asserts, I believe correctly, that a constitutional amendment may be necessary to address the situation. Shapiro counsels that “we’ve now reached a point where vast cuts to programs benefiting millions of Americans are the only real solution,”

“Pivotal” Problems For Tech Innovation

Pivots can be voluntary or forced, and Pivot or Die’s Lessons for would-be techno-libertarian reformers abound especially in anticipating and countering the political predation of regulators who hide behind public interest claims to maintain their increasingly outdated but entrenched systems. Congress, too, overreaches, funneling trillions in subsidies, contracting and procurement and public-private partnerships (PPPs), and with its disregard of enumerated powers (e.g., the TikTok ban, the CHIPS and Science law, and intrusive social-media regulation).

Pivot or Die prompts one to reflect on the critical pivots needed to protect frontier-sector capitalism from overregulation and prevent its slide into the increasingly popular but less innovative model of business-government fusion. “Pivotal” challenges to tech innovation include:

1. Poorly defined and non-tradeable property rights in key technologies, networks, and resources, driven by agencies that keep sectors artificially segregated.
2. The persistence of market failure and agency expertise narratives, despite political failures and bureaucratic ineptitude being the true obstacles.
3. The continued tolerance of antitrust regulation.
4. The potential exploitation of the Internet of Things (IoT) to impose click-and-swipe regulation from D.C., bypassing both congressional lawmaking and the formal rulemaking process.

Pivot Toward Property Rights Matrices (and Tesseracts)

As Competitive Enterprise Institute founder Fred L. Smith Jr. pointed out, “[T]he genius of the Progressives in the late 19th century was to preempt or push large sectors of the emerging future (the environment, schools, electromagnetic spectrum, infrastructure, welfare, the medical world) into the political world.” Much of this remains true today, as reflected in the deference given to federal commissioners attending CES. This didn’t have to be the case.

After mankind learned to spin magnetic coils and transmit messages across wires in the 19^th Century, competitive electricity and communications services alike beckoned. However, the potential matrix of competition and cooperation in building networks and infrastructures—the grids themselves—was sacrificed to artificial monopoly franchises. Separate, permanent regulatory superstructures were established, isolating networks and infrastructures from one another. An early pivot could have delivered overlapping, redundant and cyber-secure hyper-infrastructures—energy, communications, water, sewer, transportation, splinternets—designed to work synergistically, or at least to evolve in that manner. Instead, we get the the Infrastructure Investment and Jobs Act (IIJA). It’s no surprise the power grid may struggle to accomodate AI when city sewers can’t handle flushable wipes and communities can’t even replace their own aging lead pipes. Even after a ransomware attack on the Colonial Pipeline, it’s only being reinforced not duplicated with other infrastructures.

Rather than relying on government-imposed solutions, we could pivot toward fostering new property rights, rights-of-way, and infrastructure systems from the ground up. In colonial America, settlers built cities where rivers met rocky terrain. Today, the cities themselves have become the rocks. Instead of rushing into regulated ventures like VTOL air taxis and smart cities, we should start by testing them in rural counties and outskirts on private land, creating new property rights, corridors, and infrastructure. This would allow new cities to emerge organically and provide valuable lessons to improve existing ones. Crucially, we should resist the imposition of IoT solutions as nationwide mandates and instead offer them as options. My rural neighbors and I have yet to be approached for locating charging stations and 5G cells, but you can bet government subsidized solar panel projects dot the landscape.

Capitalism has thrived because of tangible property rights, but we now need a fresh framework for long-and-thin and intangible assets—a John Locke for the digital age. The alternative is what we’re seeing now: trillions in subsidies, cronyism, public-private partnerships, public-utility mindsets, and “Mother-may-I” regulation in areas like AI, green energy, drone and self-driving car policy, smart-city rollout and space commercialization—all of which, as Fred Smith aptly put it for related endeavors, “drip with market socialism.” A recent example is the aforementioned IIJA’s Broadband Equity, Access, and Deployment (BEAD) program, which has squandered billions with no accountability.

Shapiro highlights how innovation is vulnerable to political forces resistant to technological progress, particularly from legacy industries that are reluctant to pivot. This resistance stems partly from the early failure to move away from politicized utility regulation in key sectors like communications and energy, leaving us with a system ill-suited to fostering competitive, free-market innovation—not only in the flows of goods and services but also in the very infrastructure that underpins them. One can only hope there’s a panel at the next CES focused on developing new matrices of property rights—maybe even tesseracts.

The Ultimate Pivot: Challenging Pretenses Of Market Failure And Agency Expertise

Most issues, even in tech, are not inherently public policy concerns, and “expertise” would entail moving them from the public to private decision-making sphere. Rapidly advancing technologies (such as GPS, data storage, mobility, AI) make make it easier, not harder, to discard the market failure premises alleged to justify collective ownership or top-down regulation of resources and infrastructures and instead allocate definable, divisible and tradeable property rights. Agencies, by their mere presence, often hinder the application of real expertise and the public’s access to its benefits.

For example, the current model of airspace allocation, based on decades-old frameworks, contrasts sharply with the potential for drone corridors that could populate the skies with the density of a neutron star (OK, slight exaggeration). Instead of being restricted to case-by-case waivers and regulatory approvals, drones could operate in a more flexible system. Similarly, Vehicle-to-Vehicle (V2V) communications and V2X (everything IoT) interactions are at risk of being shaped by a top-down approach. Note here again that rural landowners are not, or rarely, consulted about anything.

Without a pivot, the “expertise” we continue to receive will blur the line between business and government, escalating the multi-trillion-dollar subsidy, PPP and contracting economy and attendant laundering of regulation through it, while stifling innovation in critical areas like drone airspace, space exploration, and potential cross-sectoral infrastructure like 5G and battery charging networks. Even pricing regulation (airline, hospitality, credit cards) has resurfaced under recent administrations.

Social conditions and product features—such as privacy, cybersecurity, and safety—that regulators believe they can magically improve are, in fact, forms of wealth. The pivot here should be toward ensuring that government’s protective role doesn’t overwhelm the private sector’s superior capacity for self-regulation, avoiding misplaced dependency. True expertise would involve agencies offloading their ill-founded political and administrative oversight to the diverse constraints of competitive markets and other checks on misconduct. The pivot should also move away from any and all government supervisory structures that prevent the private sector from assuming this role in the future as technology and conditions evolve.

Pivot Away From The Regulatory State’s Original Sin: Antitrust

The critical needs of society make antitrust policies increasingly irrelevant, ridiculous and contradictory, as seen in the federal pursuit of PPPs and the belief that some things are too big for the market to handle. Adopting the consumer welfare standard in antitrust, rather than questioning antitrust’s inherent legitimacy, has been a mistake. The antitrust statutes should be abolished to promote consumer welfare, particularly since future private ventures, such as smart cities and space exploration, will require private enterprises much larger than today’s tech giants. Fred Smith critiques the “efficiency school” of antitrust, which suggests businesses don’t have the inherent right to dispose of their property freely, but only a conditional freedom based on social utility. This mindset has disrupted not only individual companies but entire business models, depriving consumers of the competitive responses that would have emerged in the absence of antitrust interference.

Shapiro referenced a time when the Federal Trade Commission (FTC) operated in a more bipartisan manner, carefully weighing the pros and cons of antitrust policy. In contrast, here we go farther in proclaiming antitrust has negative benefits. Our failure to pivot away from the consumer welfare standard has cost untold wealth over the past century, and the damage will only escalate without a pivot.

Even on its own terms, antitrust deprives consumers of the competitive responses that would naturally arise to address a “rogue” firm, were it not for antitrust intervention. The problems caused by antitrust today extend far beyond those of the smokestack era. For instance, Shapiro laments the FTC’s recent efforts to block large companies from acquiring smaller ones, which, as he points out, strips entrepreneurs of the freedom to build and sell their businesses. This undermines the very startups the FTC is meant to protect, replacing serial entrepreneurs with serial bureaucrats. The correct pivot in antitrust policy is to dismantle the antitrust bar entirely.

Pivot Away From Washington’s Pursuit Of Click-And-Swipe Regulation

Shapiro notes that “the IoT essentially runs anything we know as ‘smart’—from smart watches and security systems to driverless cars and smart cities,” and celebrates how data storage and processing enable “a world that’s healthier, safer, and more sustainable.” The key question, then, is who will own and control the IoT infrastructure. Without a shift, regulators will oversteer grids and flows and inject themselves into business and private affairs.

We highlight this because, beyond the IoT’s myriad benefits and potential for liberalization and access, it also opens the door to top-down controls and deplatforming. While the IoT effectively nullifies claims of market failure, without a pivot, it can also facilitate remote click-and-swipe regulation regulation without the need for new rules—examples include remote vehicle disabling technology (enabled in the IIJA), energy-use monitoring, and the political games both parties play with online censorship rather than protecting dissent.

Entrepreneurial and competitive disciplines within the IoT world are better positioned to ensure access, safety, privacy, fitness for use, free speech, and consumer protections than any bureau’s political or regulatory framework. For instance, with respect to privacy policy, the real question has never been whether the market can place us where we’d like to be on the spectrum between anonymity and authentication. Entrepreneurs can satisfy both preferences; the only real question is whether the government will allow privacy, or if it will push policies such as requiring nudie scanners at the airport, renewing FISA, or monitoring your $600 deposits from a distance.

Tech has not received the credit it deserves for the reductions in carbon intensities it makes possible. Shapiro spent considerable time discussing clean technologies and sustainability. The property rights pivot we suggested above aligns with a saner environmentalism and private conservation rather than remote regulation. As Pierre Desrochers’ work shows, markets practically compel reductions in product waste streams. Shapiro emphasizes the role of agricultural tech in sustainable agriculture, including reductions in the use of pesticides, water, seed, and fertilizer, while still yielding healthier, more abundant crops and reducing food waste through improved supply chains. Even closer to the table, smart home devices help reduce waste as well.

However, somewhat more unsettlingly, Shapiro mentions “an algorithm that pulls information about various edible products from published research papers, enabling the assignment of a carbon footprint to every food’s barcode,” and another firm’s “sensor that measures air pollution down to the block-by-block level within cities.” The challenge, then, is to foster continued technological advances in the multi-directional and dimensional IoT without succumbing to click-and-swipe nanny statism.

Conclusion: The Future of Innovation Lies in the Techno-Libertarian Pivot

Granted, most of Pivot or Die’s readers are probably concerned more with business and technological pivots and the policy ones that the book inspired me to reflect upon, and that is as it should be.

But the case for the Separation of Technology and State seems compelling, and the pivots involved require committed students and architects to legitimize the task and bring it to fruition. The federal government does not guarantee fairness or safety, and it certainly does not replicate the dynamics of competition with its sprawling presence and countless interventions. The same Washington that seeks to control tech infrastructures is also the nation’s largest employer and boasts of being the largest purchaser of goods and services on Earth. Echoing Shapiro’s warnings about spending and my own concerns regarding the laundering of regulation through this leviathan’s exploitation of technology, we need a bipartisan plan to dismantle the departments, agencies, and programs that disrupt the tech property rights matrix.

The abuses of the regulatory state increasingly force us to confront the core issue of a Congress that disregards its enumerated powers. Should we fail to pivot, industries ranging from local tap water to asteroid mining will no longer be defined by capitalism but by a series of fusions and partnerships between government and select businesses—an outcome already apparent in Washington’s recent executive directives on artificial intelligence. Gary Shapiro deserves better, I would say. When it comes to CES and the remarkable technologies showcased there, we hope that none of what happens in Vegas stays in Vegas. But in Washington, the techno-libertarian pivot demands that regulators’ overreach be confined to the echo chambers of an ever-dwindling group of bureaucrats—and their rules remain unwritten.