Innovation vs Regulation: Can Regulators Keep Pace with Technological Change?
October 6th, 2023
‘Innovation vs Regulation’ is the second of four tensions that we believe will define the next decade, as laid out in ‘Live Smart or Die’. Russell Patten explains.
If the pace of technological innovation makes one’s head spin, then the rate at which legislation and regulation move can seem positively glacial.
As noted in our recent paper on Regulatory Convergence, legislation in the field of technology in particular struggles to keep pace with the innovations coming forward. Given the international nature of technology, political leaders are recognizing with increasing clarity than fragmented national regulation limits all modern companies’ access to an immense customer pool and the associated opportunities for cost reduction and innovation. At the same time, national governments are coming under extreme pressure from heavily regulated market incumbents to level the playing field. The current debate over the very definition of Uber – technology company or transport company – in parts of Europe, is just one case in point.
As technology with no respect for national borders and a voracious appetite for collecting and sharing data becomes the norm, this tension between innovation and regulation will manifest itself more and more frequently, in court rooms and board rooms throughout the world.
Connections, Connections, Everywhere
As the Internet of Things (IoT) evolves and becomes a reality, more and more aspects of our lives will be linked and searchable, through devices that gather and share data as a matter of course. The potential benefits to the individual, to businesses, and to society, are huge. But with billions of devices connected together, the issue of security and privacy is a hot-button topic, which shows no signs of abating: Technology’s potential to facilitate crime, such as terrorist activity, drug trafficking, or cyber attacks, is a major concern of policy makers everywhere.
And that’s just one example. Working with clients in every sector from transport and logistics, to personal finance, food and drink to pharmaceuticals, we are already dealing with these issues every day. And when we speak to our colleagues on the West Coast, we can see more of these issues coming down the track, as technology forces law makers to find ways of balancing freedom and privacy.
The challenge for commercial organizations is whether they intend to influence the debate as these policies are formulated. They need a strong voice in Brussels, on Capitol Hill and the other major centers of power, or risk being regulated out of business.