White Paper on the Fourth Industrial Revolution – Government strategy on regulating new technologies

What are the government's plans to regulate technological innovations?

The key takeaway

Government proposals for the regulation of new technology involve substantial industry input. There's a host of initiatives aimed at making the regulatory framework more efficient and effective for innovation. 

The background

In June 2019 the Secretary of State for Business, Energy and Industrial Strategy presented the White Paper on Regulation of the Fourth Industrial Revolution. The White Paper sets out the government’s plan to ensure that the regulations are keeping up with innovation. 

In recent years the UK government has struggled to legislate at the pace at which technologies like artificial intelligence and driverless cars are now moving. The White Paper is a comprehensive plan, detailing how government will work with industry. It seeks to ensure that regulation is proportionate, targeted, fair and transparent. Through its implementation, the government aims to ensure that businesses are provided with sufficient certainty to innovate and customers are provided with the protection that they need.

The guidance

Regulatory Horizons Council 

The government plans to establish a Regulatory Horizons Council, composed of industry participants. This body will prepare periodic reports which set out recommendations on regulatory measures which should be accelerated through the legislative process. 

Its role will complement the recently formed Centre for Data Ethics, which provides detailed, specialist support on governance for issues that relate to artificial intelligence. It will also work alongside the Better Regulation Executive which looks at the design and implementation of regulations and the Regulatory Policy Committee which considers the information which goes into regulatory proposals.

Review of the Pioneer Fund

Following the success of the FCA’s “regulatory sandpit” which allowed firms to work with the regulator and trial innovative products, the Regulators’ Pioneer Fund has invested £10m in other regulator-led initiatives. The trial is being run from 2018-20 and the funding may be extended to cover local authorities dealing with regulation on a range of issues, from trading standards to taxi licences.

Innovation Test 

As part of its plan, the government intends to pilot an innovation test. This should ensure that regulatory impact is considered at every stage – from the development of policy to the evaluation of implemented laws. In particular, if an implemented law is not having the intended effect, it should not be “locked in”.

Regulation Navigator

The government plans to consult on the introduction of an online Regulation Navigator tool in order to minimise the compliance burden on businesses. This could potentially also involve mechanisms for businesses to provide feedback on how regulations are impacting their business. 

Why is this important?

Start-ups are likely to welcome the White Paper, as it provides a road map for their future relationship with regulators and a template to work from. More established players meanwhile could face greater challenges. They will have grown their businesses in a less regulated environment, and are likely to have to dedicate resources to changing their systems and processes to deal with new rules and interactions with regulators. 

The White Paper appears to emphasise the importance of the use of voluntary standards and codes where possible. This is a positive sign for the innovators. However, at this point it is essentially a high level plan, rather than something that provides substantive detail.

Any practical tips?

The government’s proposals seek to involve industry in regulation, so industry stakeholders should commit time and resources to their proposals. The more input that they provide on the challenges and realities of a new industry, the more pragmatic their legislatures’ approach to regulation is likely to be.