In April of 2012 the Senate passed a bill (S. 1789) after two days of floor debate that would seek to reform the broken business model of the U.S. Postal Service. The bill contained an interesting proposal to create a Chief Innovation Officer.
At a Conference on Research into Regulated Industries I presented the attached paper that argues that this is a good idea that will be rendered ineffective by the current thinking that would seek to “regulate” innovation initiatives on a case by case basis. To ask a government regulator such as the Postal Regulatory Commission to review market research that sought to “prove” that a new product or service was in the public interest or that the public wanted to have the USPS deliver the service in advance is a standard that even the great innovators of Silicon Valley could not meet.
To give innovation a chance, there is a need to think about it more broadly, to see its interconnections and to better define the mission of the USPS in the modern marketplace. If the purpose of the postal service is to “bind the nation together”, as the law says, and to “provide service to all communities” there will be a need to give the institution the opportunity to pay for this service. Innovation should be a core part of this aspiration, but the vehicle should be opened up to public-private partnership and restructured to make it successful.