Every state wants to lead in innovation, but too many try to do it by picking winners. In practice, that means writing tax credits, grants, procurement rules, and compliance standards so narrowly that only certain firms or technologies can realistically qualify. Even when this is not explicit, the effect is the same. Government tilts the playing field toward incumbents and against new entrants.
That strategy almost always backfires. Policymakers cannot reliably predict which companies, tools, or business models will create the most value over time. Technology moves faster than legislation, and statutes designed around today’s frontrunner can become tomorrow’s barrier to progress.
A better framework is straightforward. Do not pick winners. Set fair ground rules. Measure real outcomes. Fix what fails, and repeat. If states want durable growth and public trust, five principles should guide state technology policy.
1. Policy Neutrality
Laws should regulate conduct and outcomes, not pick platforms or vendors, so markets stay open to competition and new ideas.
Laws should regulate conduct and outcomes, not endorse specific vendors or technical architectures. If a statute is tailored to one platform’s design, it will age poorly and suppress competition. Neutral rules keep markets open to new entrants and better ideas. They also reduce the incentive for firms to lobby for carveouts instead of competing on performance.
2. Market First Governance
Free markets and consumer choice allocate resources better than government mandates; intervention should be narrow, clear, and tied to demonstrable harm.
States should err on the side of free markets and let businesses do their thing. In most cases, competition, price signals, and consumer choice allocate resources better than centralized direction. Government should intervene narrowly and clearly where there is demonstrable harm like fraud, coercion, or anticompetitive conduct. Outside those cases, heavy handed mandates often create compliance theater while slowing useful experimentation.
3. Transparency for Public Tech Spending
When taxpayer dollars fund technology projects, states should publicly report what was promised, what was delivered, and what it cost.
When taxpayer dollars fund broadband, cloud migration, digital services, or AI tools, the public should be able to see what was promised, what was delivered, and what it cost. States should require standardized reporting on project timelines, performance metrics, and budget variance. Transparency deters waste, and helps officials correct course early before underperforming projects become permanent liabilities.
4. Outcome Based Oversight
Tech programs should be held accountable to measurable results, service quality, error rates, user satisfaction, not just process compliance.
Policymakers should define success in measurable terms and hold programs accountable to results, not process checklists. For broadband, that means service quality, adoption, and cost efficiency. For digital government, that means reliability, response times, and user satisfaction. For public sector AI, that means accuracy, error rates, and meaningful appeal mechanisms. Process has a role – but outcomes must always remain the North Star.
5. Built In Policy Maintenance
Technology moves faster than legislation; states need sunset provisions and regular review cycles to keep rules aligned with reality and promote innovation.
Tech policy should never be set once and forgotten. States need sunset provisions, periodic review, and clear triggers for revision. Rules that solved yesterday’s problem can become today’s bottleneck. Utah’s regulatory sandbox model, which allows temporary exemptions from certain laws, is one way to test innovation without committing to permanent statutory changes. A maintenance mindset keeps regulation aligned with reality and prevents outdated requirements from turning into a hidden tax on growth.
Good tech policy creates conditions where better solutions can emerge, compete, and scale. States that follow these principles will protect the public while preserving the flexibility innovators need to build. In a fast moving economy, that is how you lead without overreaching.
Author: Devin McCormick is the Policy Analyst at Libertas Institute, where he applies his diverse experience spanning tech sector equity trading and advanced AI/ML solutions. Before joining Libertas as a policy analyst, Devin developed strategic technologies at the State Department and interned at the Libertas Institute during the 2024 legislative session.
A graduate of the School of Global Policy and Strategy (GPS) at UC San Diego, Devin holds a master’s degree that complements his bachelor’s in International Affairs from Florida State University. His academic and professional journey is further distinguished by his service as an Officer in the U.S. Navy Reserve.
Driven by a commitment to integrate technology with sound policy, Devin joined Libertas to advocate for policies that harness technological innovations for societal benefit.