Part 9/17:
A core theme of the discussion revolves around how regulation—or the lack thereof—affects innovation. Scott argues that the U.S. has an advantage due to its comparatively weaker employment protections, which facilitate easier firing and hiring. This flexibility encourages risk-taking, entrepreneurship, and rapid pivoting—key drivers of American innovation.
He contrasts the U.S. approach with Europe, where stringent firing regulations create risk-averse cultures that hesitate to invest heavily or take big bets. European companies often maintain zombie routines, keeping around employees who do not contribute significantly, due to the high costs and legal barriers associated with firing.