This report explores how regulators can adapt to secure the benefits of technological innovation while managing the risks, an approach we call anticipatory regulation.

In the past decade there have been two major global crises of regulation – the first triggered by the 2008 financial crisis, the second by attacks on the integrity of the 2016 US Presidential election. Both are also crises of innovation, posing urgent questions about how we secure the benefits of innovation in ways that command public confidence and without courting unacceptable risks. They demonstrate that innovation, in particular the commercial deployment of innovation, is – or should be – at the centre of regulators’ concerns.

This is not just an issue about finance and social media. There are a range of emerging or maturing technologies – artificial intelligence, the internet of things, drones, gene editing and digital health services – that promise both great economic and social benefits, but also entail new kinds of risk. Each could evolve on many different trajectories, the most sustainable of which are likely to be the product of an interplay between public and private actors. Unhelpfully, public and political discussion about regulation has typically pivoted between theoretical (or theological) arguments about whether we should have ‘more’ or ‘less’ of it, and whether activity x or y should be regulated. Far less attention has been paid to the actual practice of regulators, in particular as it relates to innovation.

Regulators have been caught in the crossfire of these debates, unsure when and where they should be facilitating (or even stimulating) innovation, treating it with benevolent indifference or trying to control it or its consequences. Meanwhile pressures have been building up on regulators from a range of different sources:

• New forms of technological disruption that can scale with unprecedented rapidity and cut across inherited regulatory jurisdictions;
• Growing political pressure to create the most conducive environment for innovation and entrepreneurship in the context of a slowdown in productivity growth (sharpened in the UK by the prospect of Brexit);
• A new, increasingly formalised understanding of consumer behaviour that problematises the notion of consumer sovereignty underlying much regulatory practice; and so on.