Regulating innovation: the biggest challenge

Sadiq Khan, the mayor of London, has recently called for “prudent regulation and oversight” to control tech companies and ensure that innovative technology is used in our favour. He criticised the government for being too passive when it came to trying to regulate growth in innovation.

Innovative technologies are increasingly intertwined in every element of our day-to-day lives. They have altered in some way or form the way we work, the way we communicate and the way we interact with objects. According to Sadiq Khan, because of the massive transformative effects they have on us, it is becoming more important than ever to find a way to control their impact on society, and ensure it is a positive one.

 

Why is there a lack of regulation?

Regulatory bodies control many aspects of change in a given field. However, they often struggle to manage innovation because of two main reasons. Firstly, most regulation was written long before the technological advances that we see today. Secondly, nowadays technology is developing so fast that regulatory frameworks can’t keep up – and regulation ends up lagging.

With a lot of innovative technologies, they are so new that we can’t fully understand their implications on the market, or the future problems they might bring. This makes it very hard to set clear regulation around them.

Take Bitcoin. The virtual currency has created big challenges to regulators, mainly because it is hard to regulate a technology we don’t quite understand. The risk of setting rules that are not necessary, or not right, will limit its future potential.

 

What are the consequences of “passive” regulation?

However, it is thought that the lack of clear regulation puts consumers at risk and the companies that implement these innovations in full control.

Because of “passive” regulation, there are very few rules when it comes to releasing new disruptive tech products, and it is the innovator companies that decide when or how they are released to society. These decisions can, in some cases, end up having a massive transformative effect on society– and because of a lack of rules there is very little anyone else can do about it.

These companies have worked hard to make their innovations work, and they are not going to limit themselves, especially if there is no law to tell them otherwise.

One problem is that the inventors can be so product-minded that they forget to think about the bigger picture – and don’t always consider how their technology could be used in unpredictable ways, and consequently have unexpected risks.

A good example is neuromorphic chip technology. This innovation is based on a neuro-inspired computer that mimics the way human neurons and synapses communicate. With further developments robots will be able to form memories and increase intelligence – like humans do. This is a big breakthrough – but again, like much innovative technology the consequences of this could be dramatic – yet we won’t know until it is released and could be too late.

Another big problem is that a lack of rules creates monopolies in the marketplace. This is a whole topic which has created a lot of media attention in the last few years.

 

Does a lack of regulation contradict “responsible development”?

A lack of clear regulation also means no clear law when it comes to innovation and ethics. Companies are left to their own devices to make ethical decisions that will impact our society.

Science has been an area of controversy when it comes to “responsible development”. Some controversial examples include genetically modified organisms (GMOs), the control of the IVF and genetic manipulation. We are currently developing systems that enable us to replace genes with others – essentially allowing the elimination of certain diseases. Genetic manipulation should be celebrated, but without clear regulation where do we draw the line? China has already attempted to create a “designer baby” by manipulating an embryo’s genome.

Another area of interest is Artificial Intelligence.  AI software based on algorithms are now being used by insurance companies to calculate people’s quotes, or by recruitment companies to choose candidates. Yet is it right to let these decisions be made by machines? Society hasn’t had a say on this – it is the companies creating the software and the ones buying it calling all the shots.

In short, tech is innovating faster than we are forming systems of ethics to ensure “responsible development”. We are however seeing improvements in this area – for example the European Union Horizon 2020 framework program for research and innovation includes a specific work program on Responsible Research and Innovation.

 

However, could regulation limit growth?

“Regulation” is often synonymous with “limitation” – which completely contradicts the idea of innovation.

We are living in a very exciting innovative period, which has been fuelled by limited rules and unlimited opportunities. Despite the obvious issues with uncontrolled innovation, it is also thought that new technology is a very fragile thing and setting up regulatory supervision and an obstacle of rules would go against the principles of innovation, and in turn inhibit growth.

 

To conclude, regulation in innovation is needed to protect public health and safety, and to ensure fair competition in the marketplace.

The challenge is to find a happy medium, where innovation is encouraged, but only in an ethical and positive way for society.

To make this happen, companies should work with the regulatory bodies to communicate the benefits in their inventions for society, and together better understand how to establish appropriate up-to-date rules that still allow us, as a society, to reap the benefits. A collaborative approach should help both regulators and innovative companies achieve their goals.

 

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