A flat playing field can spread Western innovation.

• Author: Maibach, Michael C.
• Position: Economy - Essay

Globalization has made us more conscious of the successive technological revolutions that have driven the scale, scope and speed of change and modernization. "Globalization" itself in the modern era has been led by Western inventors and entrepreneurs. Wave upon wave of transformative technology has taken root on one or both sides of the Atlantic over the last several centuries. Globalization's first cutting-edge technology was the Transportation Revolution, exemplified by the Italian Christopher Columbus' voyages in wooden, wind-powered ships to America in the 1490s. Europeans, and later Americans, continued to lead the way in transportation technology through the 20th century, developing better and faster ways to travel by land, water, and air.

The Information Revolution, which has had an even greater impact on globalization, has also been a transatlantic enterprise since its inception. Ever since the invention of the telegraph in 1844, innovators from Hungary, Croatia, Germany, the U.K. and other European countries have joined forces with Americans on everything from the radio to cutting-edge Internet platforms.

These types of technology have two things in common. One, they connect capital, goods, services and ideas with people, companies and institutions all over the world in the service of others. Two, they have been created and advanced largely by European and American innovators and inventors. Now there is another "technology" required to facilitate transatlantic movement of capital and resources--the technology of law and regulation. Today governments must become regulatory partners if the benefits of globalization are to be fully enjoyed by their citizens. The challenge before the EU and U.S. today is whether they will be partners in a "Regulatory Revolution" with the same creativity, dedication and cooperation their citizens have shown in driving the Transportation and Information Revolutions across the Atlantic and around the world.

Throughout human history wealth, technology and service to others has continued to flow more and more on horizontal planes--aligned with Adam Smith's open markets, David Ricardo's comparative advantage, and Joseph Schumpeter's idea of creative destruction. In The Mystery of Capital, Hernando de Soto tells us that the innovation that creates wealth is found in the free association of individuals who come together to serve others through commercial enterprise. Such collaboration must be fostered across...