Further stories in the news illustrate the important issue of external innovation fatigue factors as raised in our book. Recent examples:
- The Feds vs. Fruit Juice: The FTC goes to war against those who promote the health benefits of the pomegranate.
- Small-Scale Regulation May Bring Big-Time Troubles for Wisconsin Nanotech
- Licensing to Kill from today’s Wall Street Journal: A “study to be released this week by the Institute for Justice … has collected dozens of examples of regulations choking economic growth by taxing and over-licensing small businesses. In a survey of eight major cities, the study found that entrepreneurs routinely face obstacles of bureaucracy and red tape that deter them from otherwise promising opportunities.”
- “CSPC Issues Final Rule on Definition of Children’s Products” (My take: let’s make products for children or that could even conceivably be used by children up to age 12 more expensive and riskier than ever, with a huge cloud of uncertainty about what products are covered just to keep innovators nervous and in the dark.)
Here’s an excerpt from the first story about pomegranates by L. Gordon Crovitz:
These days, pomegranates are far down the pecking order of fruits, though some think it was a pomegranate, not an apple, which Eve offered to Adam. Fewer than 4% of Americans had tried the fruit before 2002, when marketing mavens Lynda and Stewart Resnick launched the 100% fruit juice they call POM Wonderful. It’s since become a top seller, in its curvy hourglass-shaped bottle.
The Resnicks, who also owns the Teleflora and FIJI water businesses, invested in orchards in California in the 1980s. They’ve also commissioned research on the anti-oxidant properties of pomegranatesâ€”too much research, according to a Federal Trade Commission (FTC) complaint last month alleging deceptive advertising. “Any consumer who sees POM Wonderful products as a silver bullet against all diseases has been misled,” said David Vladeck, who runs the agency’s Bureau of Consumer Protection.
This is hyberboleâ€”no POM ads claim the pomegranate can cure “all diseases.” But the complaint is a stalking horse for the agency’s more radical position: that health-food companies now need to get Food and Drug Administration approval for scientific claims, similar to the process pharmaceutical companies follow for drugs.
Ms. Resnick told me last week that the FTC complaint is “a 20th-century idea in a 21st-century world.” She says that “there is so much information available that consumers can make up their own minds. They are smarter than the FTC gives them credit for.”
I’m a huge fan of healthy food and a lifelong pomegranate eater (decades before POM helped people appreciate how delicious this fruit is). My introduction to pomegranates came from my mother who and her southern Utah roots (my mother was raised in hot “Dixie,” the St. George area in southern Utah, where pomegranates grew in her backyard. In fact, the photo below shows the flowers of a pomegranate tree in my grandmother’s backyard. It’s an amazing tree with beautiful, healthy, delicious fruit. But thanks to the Federal Government’s attitude about such things, one innovative company faces a surprising external “fatigue factor” from bureaucrats who might be happier if we all just drank Kool Aid.