Why We Need Enlightened Regulation, with David Weild

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David Weild describes the problem with the decline of IPOs. Weild is the Chairman and CEO of IssuWorks (http://www.issuworks.com/). This video is a highlight of Weild's presentation at Exponential Finance 2014, presented by Singularity University and CNBC.

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Transcript: Well there's been systematically growth in processing power in semiconductors. You know, Moore's Law at 1.8 improvements times improvement for every two years I think is about what the rate is. And we've, we used to fill up an entire room with what's now in your pocket. So there's been just remarkable ability to crunch data. And, of course, the intercon activity that's been created because of the Internet, all of these things are converging and it creates just massive paradigm shifts and capabilities that heretofore didn't exist. But on the point of bottlenecks, and I think this is one of the things that people need to understand generally is that that regulation creates massive bottlenecks. There's, you know, several areas -- obviously financial markets, capital markets are highly regulated and one of the things that I am very passionate about is getting capital into the hands of entrepreneurs because I believe that if you -- you have to fund scientists and engineers and put entrepreneurship together with capital in order to solve the major problems of the next generation.

And those are things like global warming, renewable energy. These things are tough problems and they have to be financed. And one of the things that has occurred is that because of major shifts in regulation over the years we compromised the initial public offering market in the United States. So we used to do literally 500 IPOs a year based on a smaller economy back in the early 1990s before the dot com bubble. And today since 2000 when the dot com bubble ended we've averaged 165 corporate IPOs. We did a paper for the Organization of Economic Cooperation and Development, the OECD. We estimated that we should be doing 900 IPOs a year if we hadn't changed market structure. That was a regulatory shift. So if you think about it all this great technology, but it's not helping yet capital to get into the hands of entrepreneurs.

You know two other examples of bottlenecks in totally different industries would be obviously fossil fuel development. You're concerned about the environment. Healthcare. Personalized medicine and the ability to mine patient records. Obviously there's concerns about privacy. And so anytime there's a concern, just like in capital markets about investor protections there tends to be a level of inertia that's driven by regulators, pharmaceutical development -- biotechnology for example. You have clinical trials. And so if we could do things ultimately to remove these bottlenecks which is one of the things we've worked on in capital markets, we think we can usher in a great new era of innovation and achievement and drive some of these exponential improvements, if you will, in other areas of the economy, not simply in technology.

It's interesting because when I was down in Congress I was asked, you know, by the republicans to say that there was too much regulation. And I was asked by the democrats to say that there was too little regulation. And I -- what I like to say is I don't think that there's enough enlightened regulation. You need regulation just like you need -- traffic lights are a form of regulation and if we didn't have traffic lights people would kill each other by going through intersections. In this particular instance though, the regulation that we need on the one hand has to be respectful of investors but it can't be the kind of the nanny state. And on the other hand it has to give -- make it more effective and efficient for entrepreneurs and their representatives to raise capital to get America back to business. I believe that the delta between what we've done in the way of IPOs and what we should do which is the difference between 165 IPOs and 900 IPOs a year is worth about ten million jobs to the U.S. economy over the course of a decade... [Transcript truncated]

Directed/Produced by Jonathan Fowler, Elizabeth Rodd, and Dillon Fitton