Guest Post: A Post-Regulatory Recipe for Economic Leadership

William Devine
Guest Contributor
Managing Partner, William Devine Esquire
Adjunct Professor of Management, Menlo College

 

Apple has developed and distributed a curriculum that will teach students at 30 community colleges around the country to write code and create apps. What prompts this gift? A belief that we all bear responsibility for sustaining a functional economy.  At a time when some corporate leaders and their legal teams focus on the perils of overregulation, the greatest regulatory risk an enterprise confronts may not be high compliance hurdles, but rather the possibility that regulators can’t keep the economy functioning well enough for the enterprise to do its most commercially inventive and societally valued work.

Regulatory truth

There is no law that requires a healthy economy be here for us to capitalize on tomorrow morning when we wake up. Apple’s Tim Cook apparently knows this. In Andrew Ross Sorkin’s recent New York Times piece, Cook states, “I think we have a moral responsibility to help grow the economy.”

Why does this responsibility fall to us? “[G]overnment, for a long period of time, has for whatever set of reasons become less functional and isn’t working at the speed that it once was.”

He seems to have no interest in complaining. Perhaps that’s because he is focused on an unexpected point—at a time when some corporate leaders focus on the perils of overregulation, the greatest regulatory risk an enterprise confronts may not be high compliance hurdles, but rather the possibility that regulators can’t keep the economy functioning well enough for the enterprise to do its most commercially inventive and societally valued work.

Despite regulators’ best efforts, for example, a company like Apple may find that:

  • Land use policies may not be effective enough to prevent outsized demand from rocketing urban housing costs so high that employees with mission-critical skills must drive several hours per day to commute to work, which may damage both employee and company productivity.
  • Financial regulations may become so politically toxic that they are abolished, leaving less defense against a mix of corporate malpractice and consumer naiveté that could produce the next recession and drive company customers out of business.
  • Federal education regulations may not be aggressive enough to incentivize higher education to improve university graduation rates from today’s anemic 59% rate, which leaves too small a pool of qualified prospects from which to fill posts that the company, its suppliers and its competitors need to fill.
  • International trade agreements and accords that are beyond regulators’ control may be mismanaged into collapse, effectively cutting off the company from, say, European or Asian suppliers and customers.
  • Nationalism-driven shifts in government policy, again beyond regulators’ control, may also thwart the company’s ability to transact with suppliers and customers from around the globe.

Apple invests

Given that regulators may indeed have “for whatever set of reasons become less functional” in their ability to sustain the economy, how is Apple choosing to pick up the slack?  Education.

The company’s new curriculum, released in May, teaches community college students to write code to create apps. It is being offered directly by 30 schools around the country in the 2017-18 academic year. The curriculum focuses on the Swift programming language, which Apple debuted in 2014 as its preferred method for third-party developers to build apps for devices like the iPhone and MacBook computers. It builds on Apple’s prior educational initiatives for younger students, such as Swift Playgrounds and the Everyone Can Code program, a K-12 curriculum to teach the next generation the coding skills that will be necessary in future job markets.

What’s the upside? For students, the curriculum cultivates talents that will enable them to take a valued role in the economy, writing apps for Apple or other sophisticated new media companies. For Apple, the curriculum expands the pool of accomplished programmers from which it can hire, and increases the chances that there will be innovative iPhone apps on which it can someday profit.

And for the nation more broadly, the Swift curriculum’s rollout addresses what the Apple CEO calls a “geographic diversity” issue: “Right now, the benefits of tech are too lop-sided to certain states.” The Swift curriculum is being offered not just at schools in high tech hotbeds—e.g., Austin City College.  It is also being offered at schools in Kansas, Alabama and Mississippi, which means it will help fuel growth in regions that have been bypassed by tech’s benefits in the past.

Intelligent play

Is Cook correct in believing that this sort of economy-sustaining initiative is a “moral responsibility”?

Some will say no. They will argue that the Swift initiative lies well beyond the bounds of the traditional definition of capitalism, and well beyond the bounds of Apple’s legal duties, so Cook and Apple are wasting resources. In particular they may reject the idea that there could possibly be a “moral” element to sustaining an economy.

Set aside the morality debate, though, and what’s going on here?  Cook and Apple are making an intelligent play.

They have figured out that a strong economy is not guaranteed to them, especially today, when the cocktail of income inequality and macroeconomic uncertainty that afflicts so many nations around the globe makes the economy more fragile than we might suspect.

They have figured out how to generate enterprise success—Apple earned $52.9 billion in revenue in Q2 2017—and at the same time cultivate everyone’s economic future, their own included.

They have figured out that there is payoff in asking, how can we help the economy function?

Anyone who wants to be taken seriously as a global economic leader today needs to be asking this question.

 

 

William Devine runs a regulatory law practice in Silicon Valley and is Adjunct Professor of Management at Menlo College.

 

9 thoughts on “Guest Post: A Post-Regulatory Recipe for Economic Leadership”
  1. Beautiful business move. I wonder if this same strategy could have passed under the leadership of Steve Jobs…was there the same sense of responsibility in developing the economy/market?

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