Challenges in Regulating Innovation – Possible Policy Actions

May 19, 2022

 

In order for the regulatory systems to cope with the rapid technological development, an adaptive approach, continuous learning and flexibility are needed. This is highlighted in a new report from Tillväxtanalys. We have also further developed a model that illustrates basic questions and positions for regulators in the process.

The literature study is based on the English term "pacing problem" (in Swedish, taktproblem). The term refers to the problems and goal conflicts that result from the difference in speed between the often rapid pace of technology development and the often sluggish regulatory process. The purpose of the report is to overview and compile the scientific knowledge about pacing problems and possible policy measures to deal with these pacing problems.

 

Goal conflict between business and business policy
From a business and innovation policy perspective, the timing problem is central. Existing regulations can represent entry barriers to innovation because they create legal uncertainties for innovators about how their innovations will be regulated. At the same time, existing regulations fulfill an important function to protect society and citizens from negative effects and risks. Therefore, goal conflicts can arise between economic policy and substantive policy.