Rigid categories hamper all sorts of unanticipated business ideas. Every new financial product must get shunted into an existing regulatory classification, regardless of its uniqueness. African-style hair braiders find themselves subject to licensing standards designed for hairdressers who use chemicals. Eyebrow threaders run into similar problems.
The world of potential goods and services has an infinite number of potential new development directions, any one of which might be the next big thing.
Regulatory power, by contrast, requires a finite number of rigid categories into which every new idea must be crammed, no matter how it is deformed in the process. The more regulations extend throughout the economy, the tighter is the corset hampering innovation.