New Economist Intelligence Unit (EIU) study finds a need for more balanced regulation to protect innovation and societal benefits

• The increased pace of
  technological change is making it difficult for regulators to keep up
• A knee-jerk regulatory
  reaction that results in an outright ban on technologies in response to
  disruptive forces can stifle innovation
• Regulators need to take a
  measured approach that balances societal concerns with stakeholder and industry
  consultation, informed debate and factual analysis

TOKYO, JAPAN�- Media
OutReach - 23 January 2020 - The speed to technological
disruption is making it difficult for regulators to keep pace but regulatory
response needs to be measured in order to protect innovation, according to a
new report from The Economist Intelligence Unit. A
fine balance: Regulations and the societal benefits of disruptive technologies
is a new research report sponsored by Philip Morris
International (PMI). The report examines how best to balance the introduction
of new regulation with the societal benefits of new technology through industry
case studies and in-depth interviews with senior executives and academics. It
includes two case studies–one on the development and impact of regulation on
electric scooters and the other on the introduction and use of blockchain
technology in rural finance.

 

The
report finds that disruption typically results from friction caused by the
introduction of a new technology that makes accepted ways of doing things
obsolete. This change can cause fear among segments of society around issues
like job security and the loss of tradition. Disruption is not a new thing, and
technology that creates more efficient ways of doing things has helped the
world progress for hundreds of years. However the pace of such change has
become much faster, and regulators have found it difficult to balance societal
concerns with societal benefits given the greater speed and the increased scale
and scope of the impact from new technology, according to the report.

 

Starting with electric scooters, the report examines
the impact and regulatory response following the introduction of the technology
in developed nations like the UK and the US. It also investigates how
regulators are approaching fears around the application of blockchain
technology in rural finance. Both case studies illustrate how realising the
full benefits of these new technologies requires regulators to listen to
stakeholder concerns, as well as the arguments for change from industry, and
carefully examine the actual impact of such a technology before making any
decisions that could have a long-term, negative impact.

 

“Disruption
is here to stay and it is important that regulators are able to keep pace, but
also balance that speed with decisions that are based on consideration of
stakeholder concerns and empirical evidence as opposed to a knee-jerk
reaction,” says Chris Clague, editor of the report and a Managing Editor in
Thought Leadership at The Economist Intelligence Unit. “Regulations that result
in an outright ban on technologies can stifle innovation, financial growth and
societal benefit. Any regulatory change in response to disruption from a new
technology should be based on a wide range of information and perspectives, as
well the experience of others, to be both constructive and effective.”

 

Download
the full report here

About The Economist Intelligence Unit

The Economist Intelligence Unit is the world leader in
global business intelligence. It is the business-to-business arm of The
Economist Group, which publishes The Economist newspaper. The Economist
Intelligence Unit helps executives make better decisions by providing timely,
reliable and impartial analysis on worldwide market trends and business
strategies. More information can be found at www.eiu.com or www.twitter.com/theeiu.

About Philip Morris International

Philip Morris International (PMI) is leading a
transformation in the tobacco industry to create a smoke-free future and
ultimately replace cigarettes with smoke-free products to the benefit of adults
who would otherwise continue to smoke, society, the company and its
shareholders. Through multidisciplinary capabilities in product development,
state-of-the-art facilities and scientific substantiation, PMI aims to ensure
that its smoke-free products, while not risk-free, meet adult consumer
preferences and rigorous regulatory requirements.

For more information, please visit www.pmi.com
and www.pmiscience.com.