The rapid pace of technological innovation presents both opportunities and challenges for regulatory effectiveness. This can help regulators improve their operations, automate routine tasks, and make more data-driven decisions. However, governments and regulators struggle to keep pace with technological change, design fit-for-purpose regulatory frameworks, effectively enforce rules on technologies which challenge existing notions of liability and span many different policy areas at both domestic and international levels. The OECD Recommendation for Agile Regulatory Governance to Harness Innovation provides guidance to countries on how to adapt their regulatory frameworks and institutions to the challenges and opportunities of innovation.
Regulation and innovation
Technologies are evolving at an ever-increasing pace. Each wave of innovation brings new opportunities to improve society, such as with Artificial Intelligence, biotech and quantum computing. However, they also challenge regulatory governance with new unknowns, shifting targets, and risks that need to be managed. Governments have a crucial role to play in fostering innovation while ensuring the right guardrails are in place to protect people, the environment and democracy. This requires a forward looking perspective that is agile, technology-neutral and risk-based to match the expectations of contemporary society.
Key messages
Regulatory experimentation involves testing new regulatory approaches, processes, or technologies in a time-bound manner with a limited number of participants. It is a key tool for fostering more agile and adaptive regulation that can keep pace with innovation and evolving policy challenges. By allowing regulators to trial new ideas and gather evidence on their impacts before implementing them more widely, regulatory experimentation helps reduce uncertainty, enables iterative learning and adjustment, and supports the development of more flexible, future-proof regulatory frameworks.
Anticipatory approaches enable regulators to proactively address potential risks and ethical concerns before they manifest, ensuring that innovation is both safe and socially beneficial. By employing strategic intelligence such as foresight and horizon scanning, combined with regulatory experimentation, governments can better understand the implications of new technologies and develop flexible regulatory frameworks that can adapt to future changes. The OECD's Framework for Anticipatory Governance of Emerging Technologies sets an approach for such mechanisms. An anticipatory stance helps prevent regulations from lagging behind innovation, while can also foster collaboration among stakeholders to align innovation with forward-looking goals.
Technologies are evolving at an unprecedented pace, with each wave of innovation bringing new challenges and opportunities. Regulators often struggle to keep up, as existing rules may not be fit for purpose and there is limited knowledge about the most effective regulatory approaches. However, governments have a critical role to play in managing the risks associated with digital activities while fostering innovation and realizing the benefits of technological progress. The OECD's "Better Regulation In the Digital aGE" (BRIDGE) initiative supports regulators by learning from their responses to past and current waves of innovation and providing guidance on using regulatory approaches effectively to meet society's expectations. This helps domestic and global audiences adopt risk-informed and technology-neutral approaches that can support future technological waves.
Context
Attracting talent to government is crucial but challenging due to uncompetitive salaries
Regulators are tasked with overseeing sectors based on their strong technical skills and practical knowledge, which are often well-recognised. This expertise enables regulators to support the design and delivery of effective regulation. With the rapid pace of technological development, such as in areas like AI, such expertise inside government is more critical than ever but also more difficult to build and keep up-to-date. However, public sector wages for regulators in key sectors, such as e-communications, which oversees important aspects of the technological transition, are often lower compared to the regulated sector. This makes it challenging for governments to attract and retain the skilled professionals, as they often have to compete with regulated entities for the same talent.
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