Key messages
- The changes brought by innovation hold great potential to enhance prosperity and well-being, but they also entail significant risks and potential adverse effects. Innovation also fundamentally challenges the way governments regulate. Policy makers and regulators must strive to maintain a balance between fostering innovation, protecting consumers, and addressing the potential unintended consequences of disruption.
- Governments can take a variety of regulatory approaches to address the challenges raised by innovation. These can range from explicitly preventing the development and adoption of a technological development, to adopting a “wait and see” approach to ascertain which perceived risks materialise, to developing regulatory guidance or piloting innovative approaches such as the adoption of fixed-term regulatory exemptions (e.g. regulatory sandboxes).
- Given the dynamics of technological advances, it is likely that the appropriate regulatory approach (or mix of approaches) will require periodic adaptation to ensure regulations are fit for purpose.
- Traditional regulatory policy tools provide important opportunities to pause, consult, question and test the approaches that may help achieve general policy objectives. Yet, the disruptive changes brought by innovation create a strong need to strengthen and systematise the use of regulatory policy tools, as highlighted in the OECD Recommendation on Agile Regulatory Governance to Harness Innovation.
Related content
Contact
For more information, please contact Miguel Amaral, OECD Regulatory Policy Division.