On Monday morning, everyone was talking about Amazon’s future plans to use personalized drones to deliver purchases within 30 minutes to certain destinations.  Several years ago, prognosticators started proclaiming that drones would be as ubiquitous as cell phones and would be used for everything from deliveries to data collection.  Indeed, last year at the Consumer Electronics Show, I was introduced to about 15 startups focused on consumer drone applications.  The University of Alaska at Fairbanks is developing a regional entrepreneurial ecosystem around drone technology.
What I found most fascinating about the Amazon piece was the remark by Jeff Bezos’ that Amazon needed to work through several details with the Federal Aviation Administration.  Amazon….talking to the FAA?   I thought Amazon was in the retail and logistics business.  Most of its packages are delivered by contractors like Fedex and UPS anyway.  Those are the folks who talk to the FAA about air travel and cargo.

Actually, the fact that Amazon is talking to the FAA reflects a major change in the way innovation, entrepreneurship and technology are effecting the federal government.   In a series of fields, we are seeing technology and innovation “bleed” across verticals and economic sectors, forcing policy makers to quickly learn about complicated technologies, and causing confusion among federal agencies about jurisdiction and regulation.    Most of our modern federal bureaucracy was developed to meet the challenges of specific industries or address macro-economic trends.  The Department of Energy is for traditional sources of energy like fossil fuels and nuclear.  The Department of Agriculture is for farmers.  The Department of Labor helps train America’s working class.
The global, innovation economy doesn’t organize itself so neatly.  Let’s just start with entrepreneurship.   Entrepreneurs start as small business but strive to become big business.  We have no agency for them.  The Small Business Administration is for small businesses that, for the most part, stay small.  The Department of Commerce is there to serve the needs of big companies and collect data that could be useful to industry.  While both have made efforts to support entrepreneurs, they are not organized for it.  The Departments of Labor and Education, similarly, are organized to educate and train Americans for an economy with lots of big employers who can provide long-term job security and little need for constant retraining.
Innovation and technology are rapidly making this business model obsolete and eliminating their raison d’etre.   There are startup companies, like Witricity, that are able to recharge batteries through wifi networks.  Some of these startups are looking at recharging car batteries while you drive on the highway.  This is amazing for the consumer but will confuse federal bureaucrats and policymakers.  Is this an issue for the Department of Energy (recharging/batteries), the Department of Transportation (highways) or the Federal Communications Commission (wifi networks).  How do you get three agencies that have a limited history of working together to collaborate to help these startups to succeed, create jobs and give America a competitive edge?
Another example is in biofuels.  During a federal grant competition a few years ago, a consortium of universities and startups were looking to create an innovation and entrepreneurship hub around biofuel technology.  It was looking for federal funding and technical assistance from the federal government. The consortium got the classic bureaucratic treatment – bumped around from Commerce to Energy to Agriculture before giving up on the technical assistance and some of the money it had won in a grant challenge.
They actually needed help from all three agencies.  The Department of Agriculture had the expertise around biofuel technology because it is crop-based. The Department of Energy can help biofuel startups connect to the grid and energy services sector.  The Department of Commerce is supposed to help the region develop its ecosystem.
Because of its high profile, size and power in the marketplace, Amazon’s plan to use drones may be just the tipping point in this government transformation.  The plan may or may not work, but Amazon is not going to let government inaction be the reason for that.  In addition to the FAA, I am sure the Department of Defense, Commerce and the White House will have something to say about Amazon’s plans.  I recommend that federal agencies prepare for this and come up with a better blue print to assist innovation and competitive practices than it currently does.
This could have huge consequences for the future of government.   We could have regulation and oversight in a much more collaborative, and less territorial, manner.  There is no doubt that Amazon’s drones or biofuels or energy need to be regulated and that proper government oversight and strategic support is required.  That oversight must be multi-agency and nimble enough to adjust to changes in technology.  If our companies and organizations are global, collaborative and innovative, then our government must be too.