Smart regulation could be an important engine for future innovation, but using regulation as a tool to strengthen innovation is not simple. There are several barriers which must be overcome.

Regulation is usually based on a delicate political balance between several important considerations and can therefore rarely be revised simply to promote private sector innovation. On the other hand, if there is a broad support and a political willingness to obtain certain societal transformation, new regulation is possible. The idea of smart regulation is to use private innovation to obtain a faster and more radical transformation in certain areas of political interest, while at the same time stimulating private innovation and wealth. Smart regulation can be used when governments collaborate with industry and non-government organisations to formulate new regulation, and when regulation is formed to encourage a certain innovative behaviour.

Smart regulation can be used in all areas.

Suggested policy actions:

Smart regulation

Government should:

• Apply smart regulation to encourage innovative solutions provided by the private sector.
• Consider how they can facilitate innovative business-led public-private partnerships bringing together businesses, universities and regulatory authorities, e.g. in the area of green tech.
• Put in place the required systems and infrastructure in order to implement innovative environmentally-friendly solutions. It is necessary that the providers of the solutions have access to appropriate systems and infrastructure.