OPPORTUNITY FOR INNOVATION
Innovation is essential to the health of any industry. The Free Enterprise Alternative encourages innovation by placing rail carriers in a free, competitive market. Carriers are given the freedom and flexibility to try new ideas. They are given the opportunity to succeed and the opportunity to fail.
Under the traditional railroad structure innovation typically follows a slow and torturous path. Because each railroad company provides exclusive service over its own tracks, any innovation must meet not only the physical requirements of the railroad company but also its commercial standards. A proposal must adhere to that particular company's business philosophy, profitability objectives, and operating procedures.
Innovation also faces formidable obstacles at the industry level. The railroad industry is highly interdependent, because each railroad has access only to its own tracks, and the commercial philosophies of a few conservative companies often dominate the rail industry. To be effective, innovations usually must be accepted by several railroads, if not the entire industry. This slow process involves considerable second-guessing by other railroads and brings any innovation down to the least common denominator level. The committee approach to creativity stifles many new ideas in the railroad industry.
The burden of proof traditionally has been upon those desiring change, so many worthwhile ideas have been denied a trial in the rail marketplace. The new structure would promote innovation by opening the roadway network to any carrier. As long as basic safety standards were met, any commercial concept would be fair game for the competitive marketplace. New ideas could be tried easily with complete freedom to fail or to succeed.
The market would reward those carriers which met shipper needs; carriers which ignored shipper needs could not survive. Innovation would be imperative, not optional. New ideas, once proven, would be quickly accepted and move all competitors ahead. Improvements in efficiency would prompt other carriers to follow suit, thereby lowering prices and
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Publication information: Book title: Railroads, the Free Enterprise Alternative. Contributors: Daniel L. Overbey - Author. Publisher: Quorum Books. Place of publication: Westport, CT. Publication year: 1982. Page number: 183.