Regulatory systems are increasingly struggling to cope with the nature and speed of technological change. In this report we show how, through changes in practice, regulators and governments can become more anticipatory in their approach to disruptive emerging technologies and innovation.
Adopting these principles may require regulators to develop, or further develop, new kinds of capabilities. They do not imply more or less regulation or require that regulators dial risk up or down in the areas they regulate - rather, they aim to empower regulators to better manage evolving risks and take advantage of emerging opportunities.
Six principles of anticipatory regulation
Our age of disruption - technological, political, social - is demanding the renewal and reimagination of institutions of all kinds, and the regulatory system is no exception. Navigating this transition will be challenging but for countries such as the UK, with its strong track record of regulatory innovation, it also presents many opportunities and now is the time to seize them.
Initiatives such as the Regulators’ Pioneer Fund (RPF) in the UK represent an opportunity for regulators to experiment with anticipatory approaches and learn from one another. But more needs to be done. To embed these practices and way of working into the UK’s regulatory system we believe there are a number of interventions that need to be made:
Skills and capability building
It may be hard for regulators to know when to use these anticipatory regulation practices or how to deploy them, and even if they know what they want to do they do not necessarily have the right skills or capacity to be able to do it.
Recommendations:
- As well as supporting learning-by-doing through more initiatives like the RPF, the Government should invest in training, cross-sector learning and capacity-building programmes.
- The Government should also invest in the development of toolkits and best practice guides covering innovative regulatory approaches.
Understanding and spreading what works
Future initiatives must be paired with robust evaluation to understand the impact of different approaches and to identify how public (or other) funding can be best spent. Little robust evidence currently exists on the impact of different regulatory practices or the context in which they ‘work’.
Recommendations:
- Any government-funded project should include defined funding and support for robust evaluation (least 10 per cent of the total value of the fund).
- UK Research and Innovation should lead a wider research programme looking at the impact of regulation and regulatory practice on meeting the UK’s Industrial Strategy priorities including Grand Challenges, sector deals and innovation investment targets. This could be partly be achieved through specific research funding from the research councils, drawing on wider academic and industry expertise.
- A new hub for expertise bringing together theory and practice in regulatory innovation could be set up to collate and provide well-evidenced advice to regulators.
Coordination and collaboration
A large part of the change explored in this paper is a move away from individual regulatory action towards a more collaborative, coordinated and systematic approach. International collaboration will also become more critical post-Brexit if the UK is to reap all the potential benefits of an innovative regulatory system.
Recommendations:
- As well as individual regulators setting up access points for innovators (such as the Medicines & Healthcare products Regulatory Agency’s innovation office) the Department for Business, Energy & Industrial Strategy should set up a cross-regulatory single entry point for innovators, that itself capitalises on the best available technology to enable innovators to “self serve” to a much greater extent than is currently possible.
- Regulators and government should develop more structured approaches to international collaboration, building on the opportunities ‘regulatory diplomacy’ could create, for example by building partnerships with relevant international regulators or potentially running a version of the RPF jointly with another relevant country.
Moving first and responding quickly
Identifying emerging opportunities and challenges in a timely fashion is important but ultimately pointless unless the Government and regulators are also able to respond quickly. This would require flexible and fast ways to mobilise the right stakeholders and resources to make something happen.
Recommendations:
- To ensure resources are available to for regulators to put responses in place once new opportunities or threats are identified through horizon-scanning activities, the government and regulators should identify and set aside small budget pots to facilitate timely action around emerging areas.
- The decision on when and how to use these funds would need to be taken quickly, but is also potentially highly political. An independent panel, similar to the RFP’s judging panel, could be convened at various cycles to highlight areas where and what kind action should be taken, potentially with the power to allocate these small budgets.
Role of politicians
Politicians have a crucial role to play in providing regulators with the mandate to be more innovative in the way they function so they can better support or stimulate innovation in the economy. Without political support, pressures on regulators will push them to focus on short term priorities and avoiding risk.
Recommendations:
- Ministers should make clear future commitments to this agenda through further funds and other supporting initiatives to give regulators the confidence and backing to adopt the principles of anticipatory regulation.
- The Ministerial Working Group should also make a commitment to openly explore deeper systemic regulatory questions that may stand in the way of achieving a system wide anticipatory regulation approach.
