State of Innovation

Patents and Innovation Economics

Sarbanes Oxley: Relief May Be on the Way

I wrote about the damaging effects of Sarbanes Oxley in my book, The Decline and Fall of the American Entrepreneur.  It appears that the Republican presidential candidates have read my book.  See this video, J. W. Verret Discusses Sarbanes-Oxley on Fox News, which shows the candidates explaining that we need to repeal SOX.  Let’s hope that they don’t just tinker around the edges with SOX and while they are at it they need to repeal Dodd Frank.  This would be a big step toward restoring innovation and getting the economy growing again.

 

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November 1, 2011 - Posted by | Innovation, Regulatory bill of Rights | , , , , ,

2 Comments »

  1. I was just thinking about how some big corporations support patent reform and they argue that they need to protect the huge investment they make in research and development. I find it to be dishonest because the barriers to entry into tech businesses are huge. Just because I think up a new widget or chemical doesn’t mean I have the ability to start a factory, adhere to all product safety regulations, distribute the product, market the product, give customer support, and so on. The lone inventor still needs the large corporation in order to overcome those obstacles. Patents are not enough to put someone out of business.

    Comment by Matthew Artero | November 2, 2011 | Reply

  2. Matthew, I would argue that the lone inventor needs access to capital. There are three broad things that effect an inventor’s access to capital: 1) a strong and efficient patent system, 2) access to venture capital, and 3) the governmental tax and regulatory burden. SOX has affected access to venture capital (here I do not mean just institutional VCs) because the cost of going public make it much less likely as an exit strategy. This means that investors have to stay in investments longer and startups do not get enough capital to grow fast.

    Comment by dbhalling | November 3, 2011 | Reply


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