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Foundation publishes Foresight Review of the Future of Regulatory Systems

Lloyd's Register Foundation's latest foresight review explores regulating in a disruptive world.

How do you successfully protect a world that is grappling with an accelerating pace of change and growing uncertainty as a result of technology adoption, sweeping social change and the meshing of industries and national borders?

That’s the topic explored in the latest foresight review commissioned by global safety charity, Lloyd's Register Foundation on the future of regulatory systems, the findings of which will be of significant value to those responsible for the safety and resilience of critical infrastructures on which economic and social structures are dependent.

The report, written by Dr Richard Judge of Bartlett Judge Associates and strategic change expert, Shirin Elahi of NormannPartners, is one of the most diverse of its kind with input from nearly 100 international experts. It focuses on regulatory systems - the combination of formal laws (regulations) and informal interactions between a myriad of different but inter-reliant people and organisations that combine to shape behaviours and deliver positive outcomes.

These influences all need consideration when designing and applying governance frameworks in highly complex environments, where challenges may include networks that are connected, such as energy, communications and water, where failure in one can spread to the others; emerging technologies that cross traditional regulatory boundaries or national borders, the management of valuable data that requires protecting as well as changing societal attitudes that are affecting public trust in institutions and, therefore, compliance.  

The report’s commissioning manager at Lloyd’s Register Foundation, Jan Przydatek, said: “Lloyd’s Register Foundation is a charity dedicated to making the world a safer place and we know the enormous part regulation has played in that over the last 200 years. But we are in a world facing changes that were inconceivable even 50 years ago and the technical revolution is accelerating the pace of change at rates never seen before. These technological and societal developments bring both opportunities and threats to the infrastructures that we rely on to keep us safe.

“Given this pace and complexity of change, we commissioned this, the latest of our foresight reports, to explore what works and will continue to do so, and where and how we need to innovate to continue protecting society.”

The report recognises the immense value that regulation has brought to society over many decades. However, it also highlights potential weak points such as a lack of diverse thinking, failure to heed early warning signs, unclear accountabilities and knowledge gaps. Vulnerabilities like these could present more risk where significant levels of disruption are at play because their effect could be amplified across the whole system and beyond. Consequently, the review suggests that it is critical to fully understand the issue that is being regulated and to appreciate the strengths and limitations of different regulatory tools, as the most disruptive issues may need to be approached in radically different ways.

In short - context is everything, and there will be no ‘one size fits all’ solution to how disruptive issues are managed. However, the report has found that regulatory designs that cope better are likely to combine a number of characteristics: systems thinking (considering the whole issue rather than singular elements); taking a diverse and inclusive approach to sourcing ideas (avoiding protectionism and academic siloes) and adopting an adaptive leadership style (acknowledging uncertainty, anticipating issues and flexing responses).

But, there are still big questions to answer. To what extent would society accept experimentation with how issues are handled? Is it possible to ensure fair regulatory systems, when these may depend on who is at the table and whose voices are heard?  Is it possible to differentiate between straightforward issues where established methods work well and those disruptive ones that create radically different demands, when the differences are not always self-evident and change with time?

Report author, Richard Judge, drew out the power of diversity: “Our review benefitted greatly from the knowledge and experience of global experts spanning many disciplines, industry sectors and nations. Those insights were invaluable in identifying both the challenges and opportunities for regulatory systems that we reported on. However, this knowledge is currently very fragmented and that limits its potential at a time when it is most needed. Making that diverse expertise more accessible and easier to share would add considerable value.”

The Lloyd’s Register Foundation review concludes by recommending the development of an independent, inclusive and strongly applied ‘critical knowledge hub’ that would enable the collating and sharing of currently fragmented knowledge, ideas and innovation. The hub could support the adoption of more effective regulatory methods and raise awareness of emerging issues and in doing so, protect the lives and livelihoods of people around the globe for the disruptive decades to come.

Lloyd’s Register Foundation would like to hear from organisations that are keen to be involved in taking the review recommendations forward. Please click below to register interest.

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