Policy design principles are at hand for regulators to help develop an understanding of new technology paradigms and guide them towards appropriate regulation. Led by these principles, regulators can fine-tune their regulatory response, ensuring optimal impact on the market. Below are seven design principles to respond to new technology paradigms and business models stemming from collaborative regulation:
- To achieve digital transformation, policy and regulation should be more holistic. Cross-sectoral collaboration along with revisited regulatory approaches such as co-regulation and self-regulation, can lead to new forms of collaborative regulation based on common goals such as social and economic good, and innovation.
- Policy and regulation should be consultation and collaboration based. In the same way digital cuts across economic sectors, markets and geographies, regulatory decision making should include the expectations, ideas and expertise of all market stakeholders, market players, academia, civil society, consumer associations, data scientists, end-users, and relevant government agencies from different sectors.
- Policy and regulation should be evidence-based: Evidence matters for creating a sound understanding of the issues at stake and identifying the options going forward, as well as their impact. Appropriate authoritative benchmarks and metrics can guide regulators in rule-making and enforcement, enhancing the quality of regulatory decisions.
- Policy and regulation should be outcome-based: Regulators need to address the most pressing issues, for example market barriers and enabling synergies. The rationale for any regulatory response to new technologies should be grounded in the impact on consumers, societies, market players and investment flows as well as on national development as a whole.
- Policy and regulation should be incentive-based: Collaborative regulation is driven by leadership, incentive and reward. Regulators should keep a wide array of investment incentives at hand to provide impetus for markets to innovate and transform while maximizing benefits to consumers.
- Policy and regulation should be adaptive, balanced and fit for purpose: Regulation-making is about flexibility – continually improving, refining, and adjusting regulatory practices. The balance in regulatory treatment of new services is more delicate than ever. A close, continuous link to markets and consumers is important to get digital on the right glide path to achieving social and economic goals.
- Policy and regulation should focus on building trust and engagement: Collaborative regulation provides the space for co-creating win-win propositions, working towards regulatory objectives while increasing the engagement of industry. Trust becomes the foundation of the regulatory process, underpinning the growth of digital.