Digital regulation should anticipate change
Written by Geoff Mulgan, Chief Executive of Nesta
Existing models of regulation are too slow and unresponsive to cope with the fast-changing world of digital innovation. Geoff Mulgan argues that forward-thinking regulators need to change by focusing more on outcomes than process and by adopting some of the strategies used by entrepreneurs and digital innovators themselves.
Regulators have always faced an inescapable dilemma on timing. Acting to regulate a new technology or idea too early can kill off, or freeze, innovative business models with a potential for public good. Acting too late can leave consumers exposed to harm, or allow new monopolies to become entrenched.
Whilst traditional regulatory theory still works fairly well for stable industries with relatively stable technologies, it struggles to cope with more fluid, dynamic and uncertain fields, particularly ones where the boundaries between industries are constantly changing.
In response to these challenges, we are beginning to see the emergence of new regulatory practices that reshape the role of regulation in supporting innovation.
Third, they are beginning to use open innovation methods, with regulators mobilising resources to encourage entrepreneurs to come up with creative new solutions, for example to energy access or law.
Finally, they’re engaging more stakeholders, including the public rather than just relying on cosy relationships with big incumbents. Nesta has been showing how this can be done in relation to drones through the Flying High programme for drone test beds with cities. The UK government’s new Centre for Data Ethics and Innovation is well placed to ensure more public engagement with artificial intelligence, hopefully avoiding the mistakes made in other technologies like nuclear and GM that failed to address public concerns adequately.
Many of these methods shift regulation from being all about process to being more outcomes based: specifying the goals to be achieved and then allowing more decentralised experimentation to work through the best answers to early-stage opportunities and risks, or thinking about where national or global policies and standards are still to be established.
Pilots in London and Essex are using machine learning to analyse historical data on cases of housing violations and modern slavery in order to help predict future ones. Very similar examples will be useful in regulation, but so far these methods have been little used.
New approaches to data and Ai can be also a great tool for understanding how the economy is changing. Using web data (company websites and online job ads, for example) as alternative data sources, we can use state-of-the-art Ai methods and tools including machine learning, text mining, topic modeling and deep learning to extract information to enable better planning of skills, training, education and recruitment.
Geoff Mulgan is the chief executive of Nesta, and contributed to the Power & Responsibility Green Paper, released this September. Regulation will be a key theme of DigitalAgenda’s Power & Responsibility Summit, held at London’s British Library on 9 October.
Originally published at https://digitalagenda.io.
