The well-publicised trials and tribulations that disruptive innovations like Uber, Airbnb and Bitcoin have had with regulators could lead you to believe that regulators can be the nemesis of innovation.
But as I recently discovered, while speaking at a major international conference for regulators jointly hosted in London by the Foreign and Commonwealth Office and the World Bank, there is certainly a great deal of appetite from some regulators to support innovation.
Regulators as innovators
Our regulators are at the leading edge of their industries and have the opportunity to spot the signs of tension between disruptors and the existing legislation before they arrive. If they had the tools and support to highlight these tensions, they have the opportunity to not only protect an end-user, but improve or enhance their experience.
Let’s take life sciences as an example. No-one would suggest for a moment that we need to take risks with people’s health, and we need to know that medicines are safe before they are administered to trusting patients.
But if we could find a way to make the regulatory process easier or swifter to navigate that could lead to dramatically improved outcomes, and a game-changing quality of life improvement for thousands of people right across the world. That is the ultimate prize here.
Our innovators and entrepreneurs don’t have the time and the resources to navigate a complex regulatory environment, let alone influence one. They may struggle to find the shortcuts that larger firms with specialist teams know about and are adept at using.
That means they need help to find their way through the regulatory environment.
The experts in the UK’s innovation landscape, Innovate UK, the Knowledge Transfer Network, Catapult centres, Tech transfer offices in universities and trade bodies will all try their best to help, but that’s not really their area of expertise.
If our regulators considered the needs and objectives of innovators in their work, and provided regular feedback to those creating, updating and improving our legislation, we would go a long way to achieving the Government’s objective of making the UK one of the most innovative countries in the world, and increasing the amount that we spend on research and development to 2.4% of GDP.
Creating the new normal
There is already some good practice out there such as the Financial Conduct Authority’s FinTech Sandbox, or the Civil Aviation Authority working with Nesta as part of the Flying High drones in cities challenge.
But we need to make these approaches the norm, and not the exception, because the pace of change in our society and economy is placing far more pressure on regulators and those who draft the legislation than ever before, and tensions between disruptors and legislation drafted in another age are likely to become more and more prevalent.
The £10 million Regulators Pioneer Fund, that Innovate UK are delivering on behalf of the Better Regulation Executive, is attempting to resolve some of these tensions. It provides funding to regulators to show how they can address real barriers to innovation faced by businesses and clearly demonstrate how they will be overcome.
The Business Secretary recently announced the 15 winning projects and they show the creativity that it is possible to take in a regulatory environment to make it fit for the future, protecting the public and consumers while promoting economic growth and increasing productivity.
Spread the good news
What we need now is for the findings and best practice from those projects to be shared and celebrated. Only by doing this do we stand a chance of normalising this sort of approach:
- listening to the businesses that are on the receiving end of regulations
- being responsive
- trying something different
- seeing the potential for wider economic, social and environmental benefits
I know that organisational inertia, reaction from vested interests and the pressure of doing the day job will all compound to resist change. But from the work Innovate UK has been doing in this area, we have seen the ambition and creative thinking is there to make it happen, and the prize is certainly one worth having.
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