I think you're touching on the very basic question relating to how a constrained system is always going to operate at a lower level of optimality than an unconstrained system. How do we go about making up for that gap?
I think part of it is to identify the areas within diversity that are different and where people who are different are disadvantaged. That was the goal of the U.S. 8(a) system. They had eight or nine different levels of disadvantage. Being a woman was one. Being a historically underutilized business area was another, as well as being a veteran or being a disabled veteran. They had eight different categories. Do we have a system that tries to even the playing field for people who are disadvantaged like that, but have much to contribute, or do we just let the market operate as it is? I think there is a lot of merit in being inclusive and diverse. The Conference Board has a business case for that, which I would cite.
It's certain that there would be economic losses in terms of constraining people. I think the idea is that those losses will get offset by the job creation and the innovation that would be endemic to the people who then take the contracts.