Privatize, Innovate and Export: The United States needs to transfer more activities of government to the private sector
- September 1, 2017: Vol. 4, Number 9

Privatize, Innovate and Export: The United States needs to transfer more activities of government to the private sector

by Chris Edwards

Congress should privatize federally owned businesses such as Amtrak, the postal service and the air traffic control system. Privatization would cut costs and improve customer service. It would also boost U.S. innovation and exports.

Typically, federal government businesses do not export their goods, services or technologies. They have no incentive to do so. They are content to live the quiet life, and they have little reason to innovate or seek foreign markets. As such, keeping business activities trapped inside of bureaucracies restricts growth opportunities for the economy.

An article on air traffic control from the Eno Center recently illustrated the theme, discussing how the privatized Canadian ATC company developed and implemented “electronic flight strips” years ago, while our government ATC bureau is still struggling to adopt this advance.

Canada privatized its ATC system in 1996 as Nav Canada. The company is a leader in ATC innovation and has developed numerous technologies, such as the flight strips that it exports abroad. Bob Poole, director of transportation policy at the libertarian Reason Foundation, a think tank, noted: “The technical expertise at Nav Canada has led to a thriving business marketing innovative ATC hardware and software and advising other air navigation service providers on modernization.”

Nav Canada earns income from foreign contracts and royalties, which in turn helps fund its ongoing research. Another interesting byproduct of Canadian privatization is Searidge Technologies, a Canadian company that is a leader in selling “remote tower” services to ATC systems worldwide. Nav Canada was an early investor in Searidge and today is co-owner.

Now consider another industry run by our government: currency printing. Our money is printed by the U.S. Bureau of Engraving and Printing, but Canada has long contracted out the printing of its money to the Canadian Bank Note Co. and other firms. Canadian Bank Note Co. has used its domestic expertise as a base to go global, and today it prints money, stamps and high-end security products for clients in 60 countries. Meanwhile, the Bureau of Engraving and Printing supplies only the U.S. market and does not export.

The lesson is that we deny opportunities to American entrepreneurs when we keep businesses entombed in the government. Moving ATC, currency printing and other activities to the private sector would allow American workers to capitalize on their skills and sell their innovations worldwide.


Chris Edwards is the director of tax policy studies at the Cato Institute, a think tank, and editor of To read the complete blog post on the Cato site, go to this link:

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