Here are eight fundamentals to building sound, future-proof regulatory frameworks that respond to the challenges of digital transformation in the aftermath of global crises and beyond:
- Regulatory strategies for digital: Regulators should articulate a clear rationale for how and why decisions are made, their goals, time-bound targets and monitoring mechanisms for effective implementation. Strategic priorities should address short-to-medium term outlooks of national and global markets, with long-term strategies which takes account of appropriate government policy and a coordinated approach among all stakeholders while advancing regional development strategies where appropriate.
- Integrating sustainability into regulatory frameworks: The policy approach to technology needs to be revisited and its scope expanded to cover the full cycle of digital technologies and services, from ideation to dissemination to recycling of digital products. Environmental aspects should be taken into account at every stage of an integrated, consistent regulatory framework covering issues from the carbon footprint of cloud to e-waste management to digitization of economic sectors’ operations. Regulatory collaboration with regulators of other economic sectors should therefore become the norm.
- Maximizing benefits while minimizing harms of digital technologies: Policy-makers and regulators should design regulatory frameworks to enable innovation while controlling harms, use data and digital technologies to improve the efficiency and effectiveness of government services, work together to develop and promote regional and global standards that enable greater use of technologies.
- Open, inclusive and transparent regulatory process: Digital regulation needs to be oriented towards enhancing transparency, ethics and trust throughout the regulatory process. Regulatory decision-making processes should encourage broad participation of stakeholders, including those from industry, civil society and local governments, through formal and informal channels. Throughout the process, the regulated entities and the regulator should share responsibility for the development, monitoring and implementation of rules and guidelines.
- Multiple formats and modes of regulation: Formal regulation should leave sufficient space for self-regulation, hybrid and collaborative regulatory models and oversight mechanisms for law enforcement. New issues call for novel approaches and the regulatory canvas has expanded to cover regulatory sandboxes, ethical frameworks, technology roadmaps, regulatory impact assessment, multi-varied research and big data simulation in exploring the most balanced, proportionate and fair regulatory response. Artificial intelligence, Internet of Things, and online disinformation are some of the complex issues waiting to be addressed.
- Good governance and effective institutions with appropriate mechanisms in place for collaborative regulatory approaches: Institutional design is key and regulatory authorities should hold appropriate powers and strong independence from market players as well as from national decision-makers and political influences. They should act with integrity and be able to make objective, future-proof decisions and to collaborate across sectors to foster digital transformation. This will pave the way for principled engagement of all market stakeholders and for collaboration across the sectors. Effective institutions need to have appropriate mandates, be adequately funded and well capacitated in terms of staff. Staff competences should be continuously upgraded while being in adherence with good governance principles including accountability and transparency.
- Evidence-based approach: Evidence and data inform regulatory decisions and help identify emerging regulatory issues. Data and analysis also allow regulators to determine if specific regulatory interventions and decisions are justified by market failures and guide them in defining the desired regulatory outcomes as well as the public policy options to achieve them. Strengthening the monitoring and evaluation function of regulators and integrating in collaboration with other competent agencies can facilitate effort towards improving regulation and ensuring that the regulation achieves its objectives in the most effective and efficient manner.
- No rule is set in stone: Regulatory frameworks should be regularly reviewed to ensure they remain fit for purpose. Regulatory frameworks may need to adapt to ensure they are continuing to meet public policy objectives in an evolving digital environment. Revoking the rules that are no longer justified is just as important as adopting forward-looking ones.