the regulatory arts and crafts movement

a rare positive contribution

Long term readers will recall that I have a post-it note on my computer saying “don’t use the Stack to continue pursuing feuds from social media”, and that the note occasionally falls off. That’s not quite what happened this week, as nobody really seemed to disagree with me when I got ranty about the Chancellor’s apparent project of bringing industry regulators in to Number 11 and saying “in what ways are you pointlessly strangling growth? And could you do 10% less of it please?”.

But rather than repeat myself on “regulation is infrastructure”, I thought I’d try to set out something positive. Taken from my email outbox, this is my sketch of a way in which Chancellor Reeves’ ambition actually could be achieved, of changing the regulatory system so as to be a driver of growth.

[…] So how does the UK make a role for itself? In my view, simply by being good at regulation. (Which, in fact, we are, in a number of areas from finance to drug discovery). The ideal situation for Britain would be to establish ourselves as the "First Choice Destination For First Approvals".

The UK is a great place to introduce new technologies or products, because we're a big enough market to be economically viable, and we are generally trusted enough that an authorisation in the UK is an important data point to take to other regulators. So you launch in Britain, do your testing here, iron out your regulatory kinks, and then go to the EU and USA with a full package of test data and the imprimatur of a widely trusted partner. If we make "licensed in the UK" a global brand, then the investment will follow; people will want to develop technologies in proximity to the regulators who are approving them.

The policy that could work to achieve this would, in my opinion, have three basic principles:

1) Play nicely with others. "World leading regulation" definitely doesn't mean "a race to the bottom"; UK standards have to be on the cutting edge, but not outside the comfort zone. We ought to play a leading role and make an outsize contribution of staff and effort in all international standard-setting bodies.

2) Pick up the phone. If you can't compete by having more lenient regulations (which we shouldn't, because to do so would be inconsistent with Principle 1), then you compete by working quickly and being responsive. The best regulators work by communicating well with the industry and working in partnership, which is what allows them to maintain relationships even when they're telling an industry something they don't want to hear.

3) Know what you're talking about. Not only in technology contexts, the regulatory bodies need to have very high levels of technical competence and understanding; this is synergistic with the first two principles because it allows them to communicate quickly and efficiently with researchers who are also on the cutting edge, and to show thought leadership internationally.

I don't know how this would be done institutionally - something like telling every Russell Group university to pick a specialisation or industry, then locating a regulatory authority next door to them, with lots of back and forth in terms of secondments and sabbaticals. But the idea would be that as soon as an interesting technology (and in particular, a new application of artificial intelligence, since that’s the biggest current regulatory issue) starts making it into the cutting edge of working papers in any industry, the UK starts talking to global companies and researchers, and then is first out the door with a set of principles for regulating its use in drug discovery, media, finance, legal services, etc etc.

You might notice I have opportunistically included a few of my other hobby-horses in here - distributing the regulatory agencies around the country’s university towns rather than sticking them all in London, as part of a regional policy, and designing something that goes with the grain of the Old Rectory Mittelstand of professional services businesses that I think is the hidden strength of the economy.

(I will also confess that people who I have previously pitched this idea to might remember that in its earliest incarnations it was specifically aimed at the biotech industry, and might recall the specific phrases “Off-Label Island” and “Land of 70 Million Guinea-pigs”. That was childish and silly and I apologise for it; the new version is much better).