Balaji Srinivasan makes a great analogy:

Just like the Amish live nearby, peacefully, in the past – imagine a society of Inverse Amish that lives nearby, peacefully, in the future. A place where Google Glass wearers are normal, where self-driving cars and delivery drones aren’t restricted by law, and where we can experiment with new technologies *without* causing undue disruption to others. Think of this like a Special Innovation Zone similar to the Special Economic Zones that Deng Xiaoping used to allow China to experiment with capitalism in a controlled way.

9) In sum: I believe that regulations exist for a reason. And I believe that new technologies will keep coming up against existing rulesets. I don’t believe the solution is either to change the rulesets (which, again, exist for a reason) OR to give up on new technology. I think instead we need a third solution: a way to exit (whether to the cloud for purely digital technologies, or to a Special Innovation Zone or ultimately a startup nation), prove/disprove these new technologies among a self-selected, opt-in group of risk-tolerant early adopters, and report back to the mothership on what works and what doesn’t.

10) This concept – a Special Innovation Zone – is a new idea. It is really about humility, not hostility. USG is a big thing, it has a lot of responsibilities, it runs a nation of 300M people, and it can’t just change federal laws to permit some crazy tech guys to try (say) self-driving cars without affecting millions of people. A new region – like a Special Innovation Zone – can experiment with this kind of thing without bothering anyone who wishes to live under the previous rulesets.

Again: this is complementary to USG’s own efforts. I don’t see them as competitive, anymore than a startup competes with IBM’s research labs.