Stephanie WhittExecutive Vice President
If Tennessee is Going to Thrive in the Economy of Tomorrow, It Must Become an Innovation Leader Today
Tennessee has spent nearly $1 billion dollars since 2017 on economic development incentives trying to recruit companies like Amazon and Google to come here and create jobs, essentially ceding the hub of innovation in our nation to Silicon Valley and other costal cities. If Tennessee is going to thrive in this new economy built on rapid innovation and technological change, Tennessee needs to be the place where the next Jeff Bezos or Elon Musk wants to live, innovate, and build a company. Sadly, government usually gets in the way, applying archaic regulations to new technologies, making it harder on entrepreneurs and innovators.
Tennessee should create the boldest and broadest regulatory sandbox in the nation. By allowing more companies and entrepreneurs to test, develop, and bring to market their new innovations, Tennessee can lead the nation in innovation and create the jobs of tomorrow.
How It Works
A regulatory sandbox allows innovative companies and entrepreneurs to better test and develop their new product, service, technology, or other innovation by obtaining certification, as to which regulations do and do not apply to them, bringing much needed regulatory clarity.
This Act makes it easier for innovators to develop their new innovation by participating in the Regulatory Innovation Sandbox. The program has three main steps:
1. Applicants apply to the Dept. of Commerce and Insurance, explaining their new innovation and identifying the regulations that will inhibit them from bringing that new innovation to market.
2. The Commissioner can certify that the innovation was not considered when the regulation was originally created and therefore the innovation is not subject to that regulation for a limited time period.
3. With a backend reporting process, the legislature can examine the technology and contemplate revisions to statutes and rules to better accommodate the advances in technology.
Who This Impacts
Armand Lauzon was inspired to create his business when he observed how difficult it was for his cousin, who is a manicurist, to maintain her job after having a baby. Armand launched an app called Project Belle, allowing his cousin and others like her to be entrepreneurs, set their own hours and rates, and take control of their careers. Project Belle quickly found success in Nashville, with numerous cosmetologists and other beauty industry professionals, massage therapists, personal trainers, and nutrition coaches gravitating towards the model and offering their services on the app. Unfortunately, the state cosmetology board has issued a multitude of rules and regulations to prevent competition in the state. One of those regulations stated that it was illegal to practice cosmetology outside of a brick-and-mortar salon unless it was for a photoshoot or an invalid—an obviously arbitrary regulation. The Board took action, issuing Armand a $500 penalty and a cease-and-desist notice. Armand decided not to back down. He took on the board arguing that Project Belle was merely connecting buyers and sellers and not personally providing services. The counteraction was successful and the board backed down, allowing Project Belle to operate in peace. Had Armand been able to simply participate in a regulatory sandbox, he could have saved untold dollars and hours trying to launch his business.