Suggested citation:
Judge, R & Elahi, S (2021) Foresight Review on the Future of Regulatory Systems: regulating in a disruptive world. [online] Lloyd's Register Foundation. Available at: https://www.lrfoundation.org.uk/en/publications
Executive summary
This foresight review focuses on regulating a world facing increasing disruption from new technologies, the meshing of dependencies across borders and industries, agile business models and increased social awareness.
The report was written by Dr Richard Judge of Bartlett Judge Associates (formerly Chief Executive of the Health and Safety Executive) and strategic change expert, Shirin Elahi, of NormannPartners, in collaboration with nearly 100 worldwide experts. It explores how regulations, which have successfully supported the health and security of people and the economy for hundreds of years, may need to innovate in an increasingly disruptive environment.
The review 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.
Existing regulatory systems already have 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.
Key findings and recommendations
- 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
- Context is everything. There will be no ‘one size fits all’ solutions.
- 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, big questions remain. 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?
- It’s important to take a diverse approach. The review drew on 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 within the report. 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 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.
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