This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.
Rapid advancements in digital technology are redefining society. The plummeting cost of advanced technologies (a top-of-the-range smartphone in 2007 cost $499; a model with similar specifications cost $10 in 2015) is revolutionising business and society. In addition, the 'combinatorial effects' of these technologies - mobile, cloud, artificial intelligence, sensors and analytics, etc. - are accelerating progress exponentially. This revolution could significantly improve the quality of life of billions around the world, and technology is the multiplier.
However, with the advent of digital technologies, a number of accelerated and new market dynamics are dramatically transforming the environment in which regulatory bodies govern. While this has the potential to dramatically change their role, it also provides access to new instruments and rulemaking opportunities for regulators. Here are some of these changing dynamics, as well as rulemaking opportunities:
The speed of innovation of digital technologies stands in stark contrast to the pace of regulation. Jack Ma, CEO of Alibaba rightly pointed out that "seven- to twelve-year regulatory policy timelines do not reflect the speed of the internet." New technologies that used to have two-year cycle times now can become obsolete in six months, and the pace of change is not slowing. These technologies can be developed, deployed, and iterated faster than ever. The challenges of the digital world require the ability to answer faster than classical instruments of regulation allow.
One key area affected by the speed of innovation is the protection of consumer interests. As innovation takes place at a far greater speed than regulation can keep up with, regulatory frameworks originally put in place to protect consumers are no longer always appropriate. For example, the logistics industry alone contributes 13 percent to global emissions, but stakeholders need to act quickly to develop safe and trustworthy approaches to unlocking benefits from digital technologies such as drones. With the promise of reducing emissions by up to 90 percent and costs by 25 percent in last-mile deliveries, drone technology is 'ready', but regulation is not.
2. Emergence of Business (Eco)Systems
Business (eco)systems have been described as "dynamic and co-evolving communities of diverse actors who create and capture new value through both collaboration and competition." These networks of organisations operating across industries are enabled primarily by digital technologies, and constitute a stark departure from the siloed and self-contained organisations of the past. The emergence of these business systems gives rise to new requirements for regulation and policy; they can no longer narrowly target individual industries, but need to take into account developments of common trends and patterns across sectors.
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