On 6 October 2021, the OECD Council at Ministerial level adopted the Recommendations of the council for agile regulatory governance to harness innovation.
The document provides a conceptual framework and guidance for developing and implementing agile and resilient regulatory approaches. Therefore, to facilitate co-operation realising the benefits of innovation while upholding protection for citizens and the environment.
The aim is to help policymakers design agile, resilient and fit for future regulations.
Indeed, innovation brings a lot of opportunities but also regulatory challenges for governments, to be divided in: the “pacing problem”; designing “fit-for-purpose” regulatory frameworks; regulatory enforcement challenges, and institutional and transboundary challenges.
The recommendation is organised around four main pillars: 1) the need to adopt regulatory management tools; 2) the need for coordination and co-operation within the government and across boundaries, while also fostering the whole approach to innovation; 3) developing more agile and future proof regulations; 4) addressing enforcement challenges raised by innovation. The aim is to undertake a paradigm shift and move towards more outcome-based and risk-based approaches.
All of these fragile approaches to regulation need to be implemented in a dynamic approach.
The work that led to these recommendations was charcterized by the need for a standard on agile regulatory governance to harness regulation following the 2012 Recommendation on Regulatory Policy and Governance and the 2019 concept note on "Effective rulemaking in the Fourth Industrial Revolution.
Before the recommendation, consultations were undertaken with (i) relevant stakeholders (academics, government officials and representatives from civil society and the business community) and (ii) relevant OECD bodies (including the Public Governance Committee, the Committee for Digital Economy Policy, the Committee on Scientific and Technological Policy, the Competition Committee, the Committee on SMEs and Entrepreneurship and their relevant respective subsidiary bodies).
With attention to the Practical Guidance on Agile Regulatory Governance to Harness Innovation and on the proposal of the Regulatory Policy Committee, the recommendations are as follows:
- Adherents adjust regulatory management tools to ensure regulations are fit for the future by:
1.Developing more adaptive, iterative, and flexible regulatory assessment cycles, while capitalising on technological solutions to improve the quality of evidence;
2.Putting in place mechanisms for public and stakeholder engagement in the regulatory process, including citizens and innovative small and medium-sized enterprises (SMEs) as well as start-ups, from an early stage and throughout the policy cycle to enhance transparency, build trust, and capitalise on various sources of expertise;
3.Considering the international innovation ecosystem to draw on the most relevant evidence and regulatory approaches.
- Adherents lay institutional foundations to enable co-operation and joined-up approaches within and across jurisdictions by:
1.Strengthening co-operation across policy-making departments and regulatory agencies as well as between national and sub-national levels of government;
2.Stepping up bilateral, regional, and multilateral regulatory co-operation to address the transboundary policy implications of innovation.
- Adherents develop governance frameworks to enable the development of agile and future-proof regulation by:
1.Developing or adapting governance frameworks and regulatory approaches so that they are forward-looking by developing institutional capacity and assigning clear mandates accordingly, conducting systematic and co-ordinated horizon scanning and scenario analysis, anticipating and monitoring the regulatory implications of high-impact innovations, and fostering continuous learning and adaptation;
2.Developing more outcome-focused regulatory approaches to enable innovation to thrive by harnessing the opportunities offered by digital technologies and big data;
3.Harnessing, under the condition that corresponding outcomes can be appropriately monitored, the opportunities provided by non-legally binding approaches either as an alternative or as a complement to other regulatory instruments;
4. Enabling greater experimentation, testing, and trialling to stimulate innovation under regulatory supervision.
- Adherents adapt regulatory enforcement strategies and activities to promote compliance, help innovators navigate the regulatory environment and uphold public protection, including across jurisdictions, by:
1.Adopting data-driven responsive approaches to identify, assess, and manage risks, and revising existing risk governance frameworks as appropriate;
2.Integrating enforcement-related considerations in legislative proposals and related assessments as appropriate;
3.Fostering co-operation among authorities leading investigations and enforcement of regulations related to innovation, both domestically and, where practical and feasible, across jurisdictions.
The next steps will be for the RCP to support Adherents and follow up on the Recommendation’s implementation through specific research and analysis and the development of resources such as practical guidance or practical tools.
In conclusion, it is specified as a report on the implementation, dissemination, and continued relevance of the Recommendation will reach Council five years after its adoption, and subsequently at least every ten years.
is a PhD Student at LUMSA University of Rome
and tutor of the European Master in Law and Economics - EMLE (Rome term).