Case Studies on the Regulatory Challenges Raised by Innovation and the Regulatory Responses
The pace and scope of innovation are challenging the way governments regulate. Existing regulatory frameworks might not be agile enough to accommodate the fast pace of technological development and, as a consequence, rules might become outdated. Beyond this pacing problem, technological innovation also blurs the traditional definition of markets, challenges enforcement and transcends administrative boundaries domestically and internationally.
This report, which results from a joint project between the OECD and the Korea Development Institute, presents a set of case studies illustrating the different regulatory challenges raised by emerging technologies and the diversity of regulatory responses used to address them. The case studies cover data-driven business models, digital innovation in finance, smart contracts relying on distributed ledger technologies, digital technologies for smart logistics, and the sharing economy.
Case 6. The Korean experience of sharing economy and its policy implications
The benefits of the sharing economy include potentially lower transaction costs of services, leveraging of excess capacity, improved customer experiences, and potential for stimulating new types of consumption. However, the introduction of the sharing economy firms is not without potential problems; e.g. around regulatory equity, crowding out of existing transactions, potential transaction risks, and safety threats. This case study presents recommendations on the appropriate regulatory frameworks for the development of the sharing economy in Korea. These recommendations seek to provide regulatory equity and flexibility while addressing regulatory enforcement difficulties by delegating implementation to platforms, and are expected to be instrumental in fostering innovation in the country’s new growth engines.
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