10 ways regulators need to change in 2020

regulations

(Bill Oxford, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Lisa Witter, Co-Founder and Executive Chairperson, Apolitical & Jaee Samant, Director-General, Market Frameworks, Department for Business, Energy and Industrial Strategy of the United Kingdom


  • We need a more agile approach to regulation that supports and adapts to the change of the Fourth Industrial Revolution.
  • Agile regulators can “lean into the latest technology trends and proactively shape them.”
  • The UK, South Korea, Canada and other countries show how regulation can be used to foster innovation and improve technology governance.

It can take weeks to introduce a new idea or business model but years to pass a change in the law. Our rules can block innovations that can power productivity and solve our most pressing social and environmental challenges, and fail to protect our citizens as they struggle to adapt to a new era.

A more agile approach to regulation is needed to maximize the potential of the Fourth Industrial Revolution. Through the Global Future Council for Agile Governance, we have gathered the latest evidence from across the world on how our rule-making system needs to adapt to this new environment.

 

Here’s our 10-point pitch for how regulators need to adapt:

1. Embrace the future

Recent history is littered with examples of regulators being caught short by disruptive innovation and reacting suboptimally. Agile regulators lean into the latest technology trends and proactively shape them, using foresight methods to identify possible futures and make preparations to adapt.

Singapore has embraced foresight thinking and set up a Centre for Strategic Futures in the Prime Minister’s Office to create a “strategically agile” public service. Other governments are now following suit.

What's blocking Blockchain?
What’s blocking Blockchain?

2. Focus on outcomes

Too many rules focus on process, not outcome, stifling businesses that find new ways of doing things.

Agile regulators are designing “tech-neutral”, outcome-focused regulatory regimes. Not only do these generally perform better in adapting to technological change, they can actually stimulate businesses to innovate to meet outcomes.

Japan is implementing a new governance model in areas such as health and safety. Instead of setting requirements around the design of factory facilities and processes, it looks at how well factory systems are able to monitor safety, reduce risks and intervene when issues are detected, giving businesses greater freedom in their operations.

3. Experiment and learn.

Agile regulators are creating space for businesses to trial and test new approaches – and learning about how their rules need to adapt along the way.

Many administrations have emulated the UK Financial Conduct Authority’s “regulatory sandbox”, in which regulators permit businesses to test novel products and processes for a trial period.

The UK is driving a new wave of regulatory innovation through its Regulators’ Pioneer Fund. Established in 2018, it has invested in 15 novel experiments – from stimulating tech entry to the legal services market to supporting testing of AI-powered medical devices.

4. Be responsive

Agile regulators are harnessing the power of technology to monitor and evaluate the performance of these outcome-focused regimes more effectively – enabling them to intervene in more targeted ways to uphold performance.

The Dubai Financial Services Authority has developed its own “in-house regtech” to crunch through huge volumes of financial data and enable more sophisticated management of risk. As well as enabling better risk-based enforcement, regulators are increasingly using these techniques to monitor whether regulation is really working and, if not, to reform it.

5. Bring business on board

Laws cannot – and should not – be frequently revisited. Agile regulators are using mechanisms such as regulatory guidance and industry standards to help fill the governance gap, especially in areas of rapid technological innovation.

The UK’s Centre for Connected and Autonomous Vehicles has created a role model of public-private collaboration. It has created a code of practice to help steer the testing of self-driving vehicles without the need for repeated changes to legislation as the technology evolves, alongside working with the British Standards Institution on standards for self-driving vehicles.

6. Connect with your peers

In the Fourth Industrial Revolution, innovation often cuts across sectoral and regulatory boundaries.

Agile regulators are working with their peers to ensure a joint response to new products and services so that innovators don’t suffer “death by a thousand paper cuts” and that bad actors can’t exploit gaps between institutions. The Danish Business Authority, for example, has established a “one-stop shop” for new business models to help businesses find their way through the regulatory landscape and bring their ideas to market quickly.

7. Talk to the provinces (or “death by a thousand paper cuts”, part two)

Agile regulators are also co-ordinating at the sub-national level, where innovators in areas such as mobility can find themselves navigating new rules and processes across different towns, states and regions. The 2017 Canada Free Trade Agreement seeks to create a more open and efficient internal market across the Canadian provinces, enhancing the diffusion of innovation.

8. Have a global outlook (or “death by a thousand paper cuts”, part three)

Agile regulators are putting increased efforts into international cooperation and reducing barriers to trade and the scope for “rule-shopping” across administrations by internationally mobile businesses. For example, the Global Financial Innovation Network is developing a framework for cross-border testing of innovations, building on the development of regulatory sandboxes in more than 20 countries worldwide.

9. Design for your innovators

Innovative new entrants frequently have lower capacity than incumbent firms to shape and implement new rules.

Agile regulators are addressing this bias and finding new ways to make it easier for innovative firms to engage with regulation. For example, New Zealand’s Better for Business programme has created an AI-powered chatbot to answer firms’ regulatory queries, lowering the cost of understanding the rules.

10. Put citizens at the centre

We’ve saved the most important point till last. As governance evolves, it is crucial that it addresses the priorities of the citizens it is meant to serve and earns their trust in its processes and outcomes.

Agile regulators are finding creative ways to enhance citizen involvement in the design and implementation of rules for new technology. For example, Korea has integrated citizen democracy into the design of its latest smart city initiatives – ensuring that consideration of societal needs is underwritten into the testing and introduction of new technology. Elsewhere, the OECD is promoting enhanced citizen involvement in governance through its Open Government Initiative.

What is the World Economic Forum doing about the Fourth Industrial Revolution?

The World Economic Forum was the first to draw the world’s attention to the Fourth Industrial Revolution, the current period of unprecedented change driven by rapid technological advances. Policies, norms and regulations have not been able to keep up with the pace of innovation, creating a growing need to fill this gap.

The Forum established the Centre for the Fourth Industrial Revolution Network in 2017 to ensure that new and emerging technologies will help—not harm—humanity in the future. Headquartered in San Francisco, the network launched centres in China, India and Japan in 2018 and is rapidly establishing locally-run Affiliate Centres in many countries around the world.

The global network is working closely with partners from government, business, academia and civil society to co-design and pilot agile frameworks for governing new and emerging technologies, including artificial intelligence (AI), autonomous vehicles, blockchain, data policy, digital trade, drones, internet of things (IoT), precision medicine and environmental innovations.

Learn more about the groundbreaking work that the Centre for the Fourth Industrial Revolution Network is doing to prepare us for the future.

Want to help us shape the Fourth Industrial Revolution? Contact us to find out how you can become a member or partner.

These case studies are just the start: this April, we’ll be showcasing the world’s best practice through the Agile Governance Awards, which are now open. We want to recognize the most exciting and impactful practices from across the globe and foster their dissemination.

At the same time, we are developing an Agile Governance Scorecard to help governments to assess and improve their regulatory system. In 2020, expect regulators to make big strides in improving their technology governance.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

No way out for Eurozone’s stagnating economy

COVID-19 lockdown hits working mothers harder than fathers

Global aid appeal targets more than 93 million most in need next year

The Commission favours the cultivation of more GMOs in Europe

Eurozone close to agreeing on a Banking Union

Boeing WTO case: The EU puts in place countermeasures against U.S. exports

GSMA outlines new developments for Mobile World Congress Shanghai 2018

“Only through energy policy we can trigger competitiveness”. The Sting live from #EBS2015: Energy Union – When will it happen?

The COP22 is under full deployment while Donald Trump threatens openly to withdraw the US from the Paris agreement

What cryptocurrencies will do to the integrity of politics

He died so I could live: UN peacekeeper pays tribute to fallen colleague

New tech infrastructure will help economies recover after COVID-19

We can’t tell if we’re closing the digital divide without more data

Embracing technology as a service will fuel the circular economy. Here’s how.

Migration situation at the Greek-Turkish border: ensuring the right to asylum

Airships, solar planes and Soviet-era sea skimmers … here’s how we fix air travel

The EU spent €158 billion on vague, open-ended rural projects

The Parliament sets the way for the European Banking Union

The challenge to be a good healthcare professional

Intel @ European Business Summit 2014: Better decisions now, the new business dashboard 

‘The time for action is now’ senior UN peacekeeping official says, urging support for regional force combating Sahel terrorism

Europe turns out more jobs this summer

EU-U.S. Privacy Shield: Second review shows improvements but a permanent Ombudsperson should be nominated by 28 February 2019

Asylum: MEPs call for more solidarity among EU member states

Why and How: Advocating for the inclusion of Palliative Care in Universal Health Care

The European Parliament declares climate emergency

EU citizens want more competences for the EU to deal with crises like COVID-19

Further reforms in Japan needed to meet the challenges of population ageing and high public debt

EU budget deal struck with Parliament negotiators

China Unlimited: the dragon’s long and winding road

Why precision medicine won’t transform healthcare – but governance could

A 10-step plan to save our seas

Is this a turning point in the fight against slavery?

‘No safe way’ into battle-scarred Afghan city of Ghazni to deliver aid as traumatized children search for parents

The new era of Matriarchy?

Why the 21st century’s biggest health challenge is our shared responsibility

Top global firms commit to tackling inequality by joining Business for Inclusive Growth coalition

Estonia is making public transport free

Why embracing human rights will ensure Artificial Intelligence works for all

The financial world upside-down: debt failure closer

Rise in violent conflict shows prevention ‘more necessary than ever’: UN chief

Sweden is fighting loneliness by housing older and younger generations together

Joint advocacy letter template to sign and ratify the Treaty on the Prohibition of Nuclear Weapons

Quicker freezing and confiscation of criminal assets to fight organised crime

Five years on from ISIL ‘caliphate’ proclamation in Iraq, Security Council makes first-ever visit

End racist discrimination against Afro-European people in the EU

Deal on EU funds for common asylum, migration and integration policies up to 2027

Climate change is threatening Switzerland’s stunning scenery

Global spotlight on world drug problem ‘is personal’ for many families, says UN chief

Dare to be vulnerable, and three other lessons in leadership

Two States ‘side-by-side’ is the ‘peaceful and just solution’ for Israel-Palestine conflict: Guterres

How do we upskill a billion people by 2030? Leadership and collaboration will be key

November infringements package: key decisions

Capitalism’s greatest weakness? It confuses price with value

End ‘political opportunism’ that’s letting hate speech flourish, urges top UN genocide official

Security Council discusses chemical weapons use in Syria following latest global watchdog report

Safe spaces offer security and dignity for youth, and help make the world ‘better for all’: Guterres

Change is happening – and young people are leading the way forward

Which country offers the cheapest mobile data?

Finnish Council Presidency priorities debated in plenary

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s