Emerging technologies are leading to new business models and services and with the new pressures on regulators to balance competing demands: protecting citizens and ensuring fair markets while enabling innovation and business to thrive. By asking critical questions and embracing five principles – adaptive regulation, regulatory sandbox, results-based regulation, risk-weighted regulation, and regulatory collaboration – regulators and policymakers can address the competing demands of technological advances such as artificial intelligence (AI), machine learning, -Big data analytics, distributed book technology and the Internet of Things.
Here are some ways we can regulate destructive technology:
“The blockchain does one thing: It replaces third-party trust with mathematical proof that something happened,” said Adam Draper, CEO and Founder of Boost, a startup accelerator. He has invested in companies, started companies, and more.
Far from “set and forget” towards a reactive and iterative approach. Rapid change, rotating business models, and experimentation are traits of technology-driven companies, but they are rarely the norm in regulation. Traditionally, regulators have drafted new rules and regulations in response to market developments or new laws.
The adaptive regulatory approach, on the other hand, relies more on trial and error and the joint design of rules and standards; they also have faster feedback loops. Faster feedback chains allow regulators to compare policies against specific standards by importing data for regulatory revisions.
Focus on results and performance, not form. Traditionally, regulations have tended to be prescriptive and focused on data input. As the focus of regulation shifts from inputs to outputs, the way governments intervene in markets changes. These changes can create operational efficiencies for regulators and more freedom for innovators. Results-based regulation defines required outcomes or goals rather than defining how to achieve them, giving businesses and individuals more freedom to choose how they comply with the law.
The transition from universal regulation to a data-driven and segmented approach. Market speed is very important for companies, especially startups with new technology-based business models. Market speed can also make digital services and products more efficient. When used, they usually collect data about their users. Using advanced analytics and in many cases AI, data can be analyzed to identify new patterns and trends, information that can make products more accurate, safer, more efficient, and more personalized. Due to these repetitive factors, the sooner a safe and effective product is marketed, the better.
As the digital economy evolves with new business models, technologies, products, and services, regulators around the world can benefit from common approaches such as co-regulation, self-regulation, and international coordination. Regulators and other organizations and stakeholders can engage in the process through multi-stakeholder meetings that produce specific guidelines and voluntary standards.
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