 And welcome back to Ohio Means Business. Business regulations have been around throughout history. As new rules come and go, effective strategies are needed to help companies navigate through the changes and even grow new business. Joining us now to go inside the research is Lance Schneer, adjunct faculty member at Ohio State Fisher College of Business. He teaches a course on governmental regulations and business strategies. Lance, thanks for joining us. We do appreciate it. Welcome. Thank you. The regulatory state of the regulations right now in our country and in Ohio. What is it? Ever-changing, as it has been for centuries and centuries. The only thing that we know for sure is that the regulatory environment will continue to change. It'll ebb and flow. It'll go from regulation to deregulation and sometimes, again, to re-regulation. We hear red tape, and that's a hated phrase by some, but a needed thing by many, a large part of our society. What's your take on it? How much of a role should government have? They have to have some sort of role, don't they? Well, the irony is that we don't like big government until we need the government for our purposes, and businesses are no different than that. So one person's regulation is another company's opportunity, and we see that in every industry, both the ones that are historically regulated like energy and telecommunications, but others as well, including startup and entrepreneurial internet companies. Part of what you do is help businesses navigate through all the regulations and that you teach that as a course at Fisher College. What do you teach? What's part of your course? The main thrust is to have the students be able to look beyond the stereotypical regulation is bad for business, but rather, why is there a regulatory scheme? What's behind it? What's the rationale for it to help them better prepare themselves for it? And then the part that I enjoy the most is the winners and losers from changes in regulation because regulation provides opportunities for upstart companies and for traditional companies to change their strategies and flourish. Let's get into some specific examples which are interesting and talk about though, a little bit about the history of regulations. This isn't just a new thing in the past couple of decades. This goes back centuries, doesn't it? Well, the joke is that when Moses came down from the mountain, he had the two tablets and behind him was a stack of regulations on a whole bunch more tablets. But we've always had regulation and it's gone in phases. Back a century or so ago, we had the progressives that started to begin to think that perhaps the laissez-faire government approach to business was not appropriate and standard oil and the trust busters and started to get regulation over certain industries as a result of that. And it continues to, as I said, ebb and flow where we go through periods of regulation and then, for example, in the 70s and 80s where we had deregulation of energy and airlines and telecommunications, financial services and of course now, we regulation of financial services. You can see this continuum going forward. And those periods of deregulation seemed to be the opportune time for certain companies to strike. Let's talk about one example specifically, Southwest Airlines, they did it well, right? They did it well. Southwest Airlines is a clear example of one man literally with a napkin, Herb Keller drawing on a napkin, a triangle between Dallas, Austin and Houston. And he used the emerging deregulation of the airline industry to create a new standard for airline service. The flip side of that is names like Pan Am and Eastern and TWA are in the dustbin because their management just didn't grasp the strategy that was required in an evolving and changing marketplace and regulatory environment. So we have example over example of those kinds of upstarts. We don't think of Southwest Airlines as an upstart anymore but whether it's Ted Turner or Charles Schwab, all the result of new business models that were created as a result of regulatory change. And because of when deregulation happens it doesn't necessarily mean automatically that everything's peachy. You still gotta navigate those changes and I guess is what you're saying. We talk about the winners and losers and we talk about the incumbents and the new entrants. Just because you are an incumbent doesn't mean that your place in the business world will continue that way. And just because you are not doesn't mean that you don't have a chance. So for every AT&T there's an MCI or a Vonage or a Skype. What about in Ohio specifically, how do we compete and compare I guess with the rest of the nation as far as our environment right now? We have environment not to use it as a pun but as I think people are aware now we have drilling opportunities in Ohio with the discovery within the Ohio shale and the regulatory environment that's going to oversee that drilling activity is going to have a significant impact on our economy going forward. I can't predict which way it'll go or which way it should go. But there is once again regulatory change of foot with respect to our oil and gas industry. That's a great example because I was going to ask you about the benefits versus costs. And I guess who we're serving really is society. The benefits of to our state and the cost to our state you brought up the fracking debate, something like that. There is a line to tiptoe across there and government has a role and then big business should have a role and a voice as well right? And one of the things that I try to point out in the course is to use the vernacular get inside the other guy's head. I mean, what's the rationale? Why are certain people so opposed to let's say fracking? Why are people so in favor of fracking? What's the rationale for them? Is it based in science? Is it based in fact? Is it based on emotion? What do you think the challenges are for businesses in this day and age? In the year 2012, what stage are we at? And you talked about that roller coaster before. Do you know if we're going up or down as far as the regulatory roller coaster goes? Well, on the national scene, if you listen to all the candidates debate and including the president's statements, everyone is for less regulatory burden on business. But I don't believe for one second that we're going to see regulation go away. On the contrary, we'll see continued regulation as to it the financial services industry that has undergone major re-regulation. So I believe that every business will continue to be impacted by regulation. And again, what their strategy is for dealing with that will determine in large part their measure of success going forward. And just earlier in the show, we heard from a CSI representative here in Ohio. It's one of Governor Kasich's new initiative to give a little bit of power back to the businesses so at least that their voices are heard and to bring companies into the state of Ohio. Do you have to have a friendly regulatory system in place to attract businesses to our state? I rather think that if your business strategy is appropriately matched, you can prosper in any regulatory environment and that an astute business person recognizes the challenges and once again, the opportunities associated with regulatory schemes. Your background is in energy deregulation, correct? Tell us a little bit about that and how tricky of an environment that was. Well, it continues to evolve. But 20, 30 years ago, there was not an opportunity for competitive energy suppliers in Ohio or elsewhere. And with the advent of deregulation in other industries, we started to see cracks in the veneer and it created an opportunity for my company and others to offer services to purchase back then natural gas directly from the supplier. It's now institutionalized, if you will. So we don't think anything of choosing your natural gas or electricity supplier just as you choose your telephone supplier. Final thought from you, where do we go from here as far as regulations go? Are we still gonna see those drastic swings over the course of a number of years or is it gonna flatten out a little bit if that makes any sense? I believe we'll continue to see incredible swings because regulation is fundamentally in a democratic society that we have, it's the will of the people. And as the people get emotional, if you will, about certain issues, there will be greater regulation associated with those issues. The financial services regulation is a perfect example. We may see it here with fracking. We may see it in the airline industry if there's problems there. So I continue to think that there will be lots more regulation coming down the pike. All right, very interesting subject. Lance Schneer from the Fisher College of Business, Lance. Thanks, appreciate it. You're welcome, thanks for inviting me.