How do regulations impact the technology industry?

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Rules and regulations are as old as time, but what place do they have in a constantly innovating environment? That is the conundrum facing the technology industry right now. On one hand, regulations protect the safety of citizens. From environmental to social, regulations of just about everything and anything are in place to boost and maintain the well-being of the general public. On the other hand, however, many businesses consider regulations to be shackles on technological breakthroughs.

In a world as fast-paced as technology, it can feel as though innovations outgrow regulations all the time. In particular, many businesses perceive regulations as a hindrance, quashing progress more than a company would like. However, how fair is it to say that regulations stunt innovation?

Regulations becoming all the rage

As of late, regulations have been popping up all over the place. In 2016, the EU introduced the GDPR to protect the personal data of EU citizens. Not long after, the California Consumer Privacy Act later came into place to boost privacy and consumer protection in the region. Many are expecting other regions to follow suit – and data protection is only one of many regulated paths in technology.

The GDPR came as no surprise. Now, we produce more data then ever per person, and our digital footprints reveal more than we would like to know. In turn, the GDPR was totally necessary to keep the general public in control. The same will continue to happen with every technology trend, and businesses must meet the requirements or face consequences.

While businesses must keep up with new rules, they may also face a problem on the other side of the spectrum. Technology is innovating much faster than the law. Regulators are simply unable to keep up, leaving businesses hitting a brick wall of outdated regulations that they cannot get around.For example, in arenas such as artificial intelligence (AI), by the time a set of regulations are proposed, they may end up redundant upon implementation.

Of course, it wouldn't be fair to ask businesses to slow down on their innovations, but equally, it would be unreasonable to ask regulatory bodies to quit it too. However, this leaves the technology industry at somewhat of an impasse.

Protection and innovation are not antonyms

Innovations in technology are necessary. I'm not just talking about convenience, such as teleportation to cut out the hassle of a commute to work (though I wouldn't complain about it either). I'm talking healthcare, AI-driven diagnoses, improved transport efficiency and safety, better quality of life, better quality of air, and so much more.

So, in rather a surprising twist: rather than discouraging businesses from breaking the regulation mould, should regulators be the ones to make the change?

Although the purpose of regulations is to simplify consumer safety, many businesses would beg to differ. Thus, there's no better time for a change of approach.

Firstly, regulators must recognise that protection and innovation are not mutually exclusive. However, the quantitative approach that regulators often take do make it seem so. Instead, requirements from any set of rules should be more open-ended. Rather than necessitating binary evidence, regulators should take a human value-driven approach. This includes asking the following questions: How does this technology contribute to society? Is it harmful in any way?

Regulators could also consider reviewing businesses and their technologies on a case-by-case basis. Yes, of course, there are probably too many businesses than there are regulators; however, not all businesses will have outgrown the regulations in place, which leaves some room for movement.

Anticipatory regulation is also bubbling on the horizon. Curated out of the need for flexible regulations in innovative areas such as AI, anticipatory regulation brings us closer to a permanent solution. Horizon scanning and foresight are key to its success, as well as proactivity. Regulators will need to be more 'on the ball', in turn, enabling quicker decision-making surrounding newer technologies.

Next, check out the lessons learned in the wake of the Travelex attack.