Herding Cats: Governing Distributed Innovation

NORTH CAROLINA LAW REVIEW Volume 96 | Number 4 Article 2 5-1-2018 Herding Cats: Governing Distributed Innovation Albert C. Lin Follow this and additional works at: http://scholarship.law.unc.edu/nclr Part of the Law Commons Recommended Citation Albert C. Lin, Herding Cats: Governing Distributed Innovation, 96 N.C. L. Rev. 945 (2018). Available at: http://scholarship.law.unc.edu/nclr/vol96/iss4/2 This Article is brought to you for free and open access by Carolina Law Scholarship Repository. It has been accepted for inclusion in North Carolina Law Review by an authorized editor of Carolina Law Scholarship Repository. For more information, please contact . 96 N.C. L. REV. 945 (2018) HERDING CATS: GOVERNING DISTRIBUTED INNOVATION* ALBERT C. LIN** Do-It-Yourself biology, 3D printing, and the sharing economy are equipping ordinary people with new powers to shape their biological, physical, and social environments. This phenomenon of distributed innovation is yielding new goods and services, greater economic productivity, and new opportunities for fulfillment. Distributed innovation also brings new environmental, health, and security risks that demand oversight, yet conventional government regulation may be poorly suited to address these risks. Dispersed and dynamic, distributed innovation requires the development of more flexible tools for oversight and government collaboration with private partners in governance. INTRODUCTION ....................................................................................... 946 I. THREE EXAMPLES OF DISTRIBUTED INNOVATION ................ 948 A. DIYbio .................................................................................... 949 B. 3D Printing ............................................................................. 953 C. The Sharing Economy ........................................................... 957 II. CHALLENGES THAT DISTRIBUTED-INNOVATION TECHNOLOGIES POSE FOR REGULATORS ................................ 960 A. Law’s Categorical Nature...................................................... 961 B. Barriers to Applying Law ..................................................... 963 III. INDIVIDUAL BEHAVIORS AND ENVIRONMENTAL LAW ........ 965 A. Recognizing the Role of Individual Behavior in United States Environmental Law .................................................... 966 B. Options for Governing Individual Behavior....................... 969 1. Direct Regulation ............................................................. 969 * © 2018 Albert C. Lin. ** Professor of Law, University of California, Davis, School of Law. Thanks to Tseming Yang and participants at the Second Annual Sustainability Conference of American Legal Educators, as well as the editors at the North Carolina Law Review, for helpful suggestions. Thanks also to Dean Kevin Johnson, Associate Dean Madhavi Sunder, and the U.C. Davis School of Law for supporting this project, and to Victoria Bogdan Tejeda, Kelly Healy, and Amanda Saunders for their invaluable research assistance. 96 N.C. L. REV. 945 (2018) 946 NORTH CAROLINA LAW REVIEW [Vol. 96 2. Economic Incentives ........................................................ 971 3. General Permits ................................................................ 972 4. Upstream Regulation ....................................................... 974 5. Activating or Shaping Norms.......................................... 975 6. Technological Management ............................................ 977 C. Governance of Small-Scale Activities in Developing Countries ................................................................................ 978 IV. GOVERNING DISTRIBUTED INNOVATION ................................ 980 A. The Further Complexity of Governing Distributed Innovation .............................................................................. 980 B. Three Basic Approaches ....................................................... 983 1. Big Data/Big Government .............................................. 984 2. Nongovernmental Intermediaries .................................. 985 3. Self-Regulation ................................................................. 987 V. GOVERNANCE OPTIONS FOR DISTRIBUTED INNOVATION .... 989 A. DIYbio .................................................................................... 990 1. The Current Approach: Primarily Self-Regulation ...... 990 2. Applying Big Data/Big Government and Nongovernment Intermediary Approaches to DIYbio .............................................................................. 995 B. 3D Printing ........................................................................... 1000 1. A Potential Big Data/Big Government Approach ..... 1000 2. Nongovernmental Intermediaries ................................ 1002 3. Self-Regulation ............................................................... 1003 C. Sharing Economy ................................................................ 1004 1. Experimenting with a Big Data/Big Government Approach ........................................................................ 1004 2. A Governance Role for Nongovernmental Intermediaries ................................................................ 1007 3. Self-Regulation ............................................................... 1009 CONCLUSION ......................................................................................... 1011 INTRODUCTION Various technological advances are equipping ordinary people with new powers to shape their biological, physical, and social environments. Do-It-Yourself biology (“DIYbio”) offers amateur biotechnologists the chance to design new organisms. 3D printing enables individuals to design and manufacture a confounding array of objects. The sharing economy—and the technological changes behind it—facilitate constant innovation in providing goods, services, and information outside of traditional managerial hierarchies. On top of 96 N.C. L. REV. 945 (2018) 2018] HERDING CATS 947 these advances, the internet enables rapid and widespread diffusion of each of these technologies. DIYbio, 3D printing, and the sharing economy are examples of “distributed technologies”: technologies in which a wide range of users may participate in the innovation process. Distributed technologies are transforming how we live and interact, dispersing the innovation process, and giving individuals the power to invent, produce, and disseminate. The resulting changes can give rise to new products and services and new means of production. They may also offer environmental benefits by increasing efficiency or reducing waste. At the same time, distributed-innovation activities can generate new risks of chemical exposure or environmental release. Distributed-innovation activities may also circumvent legal protections or involve deliberate misuse. Normally, command-and-control regulation, market-based mechanisms, (...truncated)