Can adaptive regulation promote innovation?

Lens adapted to this topic: Limits, costs, and unintended effects

A skeptical reading stresses that flexibility is not automatically innovation-friendly. Adaptive systems can impose substantial monitoring and compliance demands, create instability, or privilege firms able to navigate changing rules. Regulation may sometimes stimulate alternative technologies, but effects vary by uncertainty and innovation type. In high-risk sectors, faster adaptation must still address safety, legitimacy, and distributional concerns.

• Adaptive regulation can generate data, analysis, resource, and policy-instability costs that may offset gains from learning.
• In advanced biotherapeutics, adaptive processes create new stakeholder burdens and trade-offs, while requiring substantial capacity to gather and mobilize evidence.
• Restrictive regulation can either reduce or increase innovation output depending on regulatory uncertainty and the kind of innovation involved.
• The positive effects of regulatory flexibility may be weakened by high public risk sensitivity and weak institutional autonomy.
• Comparisons of UK incrementalism and EU-wide AI regulation suggest that regulatory adaptability and proportionality remain difficult to achieve in practice.

Featured sourceAdaptive Regulation: Instrument Choice for Policy Learninghks.harvard.edu5 sourcesView sources