IES scholars are working on identifying entrepreneurial solutions to a variety of societal challenges. Below is a partial list of our current ongoing projects.
Evolution of Technology
Forensic Science Reform
Licensing in Low-Tech Service Industries
Regulation of Technological Innovation
Theory of Experts
Problems such as pollution, homelessness, and public safety are too complicated for any one person or organization to solve. We often assume such complex problems can only be handled by governments, especially national governments. Yet, individuals and organizations of various types often cooperate creatively to address these problems at the local level. By developing networks, many different entrepreneurial organizations become locally engaged and improve collective well-being. The top-down solutions governments often employ can be helpful, but their effectiveness depends significantly on local conditions. Alternatively, or as a complement, civic organizations such as police departments, volunteer fire departments, and schools can address problems locally. When there are more civic organizations focused on the same goal in a community, each organization can specialize and focus on a smaller part of the problem. The overall diversity of civic organizations in a community matters because the actions taken by different civic organizations have important interactive effects. IES research shows multiplicity in engaged civic organizations makes government funding more effective by enabling communities to craft solutions tailor-made for their specific needs.
Evolution of Technology
Technological change brings us new and better things. However, it also creates disruption and uncertainty for both entrepreneurial startups and established businesses. Yet, some technological changes may be manageable. We think of technology as the latest in modern devices. Fast computers, and smart cars. But the stone tools of our pre-human ancestors were the high-tech devices of their day. Today’s technology is far from those first crude tools. And yet the process of technological evolution is the same. From the earliest beginnings, technology has changed by bringing together existing tools or actions to make something new. Combining a hand axe and wood club gives you a powerful new weapon: the stone axe. Combining a glider and a gasoline engine gives you the first airplane. Technological change is manageable and even somewhat predictable when the elements being combined are mostly unchanged and the rules of combination are stable. But when the elements are rapidly changing or the rules of combination are volatile and changing, the future is more radically uncertain. Modern businesses need to learn how to negotiate this unplanned order. IES research helps both entrepreneurial startups and established businesses to learn which industries have a greater tendency to process rapid unpredictable change and which industries are more regular and predictable.
Forensic Science Reforms
Flawed forensics may be contributing to at least 20,000 false felony convictions per year in the US alone. This means that in at least 20,000 situations, innocent people are convicted while those who committed a crime go free. Reform is needed. IES research identifies structural factors that may be contributing to forensic science errors. These include the widespread practice of funding crime labs, in part, per conviction. This method of funding gives crime labs an incentive to produce incriminating evidence even when the defendant is innocent. Most reform advocates call for centralized, top-down measures. The entrepreneurial point of view suggests that such command-and-control measures will not make forensic science more reliable. Stricter rules and better oversight have limited value. We need structural changes that include a substantive defense right to expertise, forensics vouchers for indigent defendants, redundant testing and ending inappropriate funding methods. Rather than trying to control and direct forensic scientists from the top down, we should create systems that align incentives with the truth. IES research shows that forensic science systems that better conform to the structural logic of the adversarial system in criminal justice would be more reliable, and a better guard against false convictions.
Community responses to crisis usually involve a variety of organizational forms, including non-profit, for profit, public, formal, and informal. The complex multilayered connections among them can prevent effective control from any unified center such as a state governor’s office. The decision-making configuration among organizations influences who responds, what responses are possible, and how they can be executed. IES research investigates how alternative decision-making configurations influence a community’s resilience to crises. For example, IES research shows that counties with more autonomy in public health get better COVID-19 outcomes (on average) than counties more dependent on state-level decision-making. As decision autonomy increases, public health orders are executed more quickly. Communities are able to react rapidly and flexibly to new information about the virus, as well as their specific needs. These results have significant practical and policy implications for better protecting the community. IES research shows state and county governments how to structure decision-making authority for better crisis outcomes, including better COVID-19 outcomes.
Homelessness is a persistent social challenge throughout the world. In the United States alone, millions of people endure homelessness each year. IES research investigates the effectiveness of alternative practices and housing programs encouraged at both the federal and local level. By doing so, IES research highlights the potential for regulation and public policies to either hinder or enable effective organizational responses to homelessness. IES research has also shown the value and importance of entrepreneurial responses to the homelessness crisis. A central theme of this research is the potential for nonprofits that serve the homeless to implement innovative solutions to reduce homelessness. Because homelessness varies considerably across communities and individuals, entrepreneurial responses can be effectively tailored to local conditions and are responsive to changing client needs. Emergent, “bottom-up” solutions to homelessness are driven by community stakeholders and guided by clear performance criteria. IES research highlights the long-term potential for entrepreneurial innovation to democratize housing markets and provide dignified affordable housing to persons in need.
Licensing in Low-Tech Industries
Recent years have seen a substantial increase in licensing requirements in low-tech service industries such as household moving, construction, auto repair, and body art. These restrictions are meant to protect consumers. But the potentially high costs of licensing may lead to higher prices. Importantly, they may also drive some entrepreneurs into the informal sector, where they sell the same service without a license. More businesses operating outside the formal economy can damage consumers, especially those in disadvantaged communities, especially in low-tech service industries, where enforcing compliance is particularly difficult. IES research shows that licensing can encourage business creation in new and emerging industries because licensing provides legitimacy and helps entrepreneurs acquire the resources they need to create their businesses. However, licensing loses much of its value when new sources of legitimacy become available, such as certification from trade associations and organizations such as Yelp.com that share consumer-provided information online. IES research points to the need to reconsider licensing in well-established low-tech industries and to explore alternative ways to protect consumers such as self-organized consumer groups and consumer protection organizations.
Every year millions of refugees are forced to flee their countries due to conflicts and human rights violations. Even after leaving their country, they continue to experience extreme hardships in refugee camps as they await permanent resettlement, sometimes for decades. Since 1975, more than three million refugees have permanently resettled in the USA. Often facing scarce employment prospects, many of them turn to entrepreneurship. IES research shows that, lacking the option of emigrating back to their homeland, refugees tend to develop a long-term perspective and have strong incentives to integrate into the host society, often addressing needs and business niches overlooked by the host population. They also form strong ties with their new communities and embed themselves in local economies. Over time, this deep integration helps them gain access to resources, knowledge, and support that are particularly relevant for new ventures. IES research suggests that refugees, particularly refugee entrepreneurs, are contributing members of American society, and that policymakers should recognize these contributions and take them into serious consideration when making future decisions on refugee admissions.
Regulation of Technological Innovation
Our ability to innovate determines our living standards. Innovation, in turn, is influenced by its regulatory environment. Regulations determine the size and positioning of a bicycle’s handlebar, the maximum weight of a drone, even the maximum amount of ink in a pen. Regulations are usually thought of as altering the quantity and speed of innovation via patenting and R&D. In reality, their effects are substantially more nuanced and extend not only to the quantity but also to the type of innovation. Regulatory boundaries placed on a technology can shape the distribution of innovation within an industry, a firm’s decision to explore new opportunities or exploit existing opportunities, as well as a firm’s decision to enter or exit a regulated market segment. IES research can help guide the political strategy of entrepreneurial startups and established businesses seeking to enter emerging industries by revealing how regulations alter the course of technological change. Regulations can mitigate or enhance the disruptive effects of a new technology and the evolution of some market segments. These effects are present in all industries, but they are more impactful and pervasive in emerging industries. IES research shows how ill-designed regulations may impede radical innovation and how well-designed and more permissive regulation promotes radical innovation and technological progress.
Theory of Experts
Experts are everywhere. In our private lives we rely on experts like car mechanics, financial advisors, and lawyers. Governments rely on experts such as epidemiologists, economists, and social workers. We need experts because different people know different things. Each of us knows a lot about a few things and little or nothing about most things. But experts are people with all the quirks and foibles of non-experts. They are not infallible, and they may even sometimes put their own interests ahead of the interest of their clients or the general public. Expert failure is a problem. The problem is to know when to trust the experts and which experts to trust. IES research shows what conditions make expert failure more likely and what conditions make it less likely. Monopoly experts have the exclusive right to offer advice, which can lead to expert failure. Competition among experts tends to improve the clarity and overall quality of expert advice. When experts choose for us, they may choose badly. Restricting experts to a merely advisory function tends to improve the prudence and overall quality of their advice. IES researchshows individuals, businesses, and governments how to structure the provision of expert advice to get better, more prudent, and more reliable advice from experts.
Wildfires are a major problem and climate change is making it worse. The problem affects many parts of the world, including the United States, Australia, and much of Europe. But governments should not manage wildfires the same way everywhere. They should tap into local knowledge to craft more effective policies. IES research studies how citizens, local organizations, and governments can work together to address the growing threat of wildfires. Using the case of California, IES research identifies how various members of local communities, both individuals and organizations, can self-organize to complement state and federal actions against wildfire. Residents and local organizations are an important part of the solution to wildfire problems. They are particularly effective in preventing, as opposed to extinguishing, large-scale wildfires. The most successful communities collaborate with governments by sharing their local knowledge of specific physical and social challenges the community faces. Such collaborations help communities to protect themselves. Landowners should first talk about fire risks to develop powerful networks of collaboration. For example, residents can educate their neighbors about evacuation routes if their top concern is safety. Or, residents can undertake projects that reduce the risk of fires spreading through the community. When residents communicate what they are doing, public agencies can then better direct their efforts. IES research is building better ways to manage wildfires and other complex natural disasters.