The industrial changes brought by innovation are unprecedented in their pace, scope and complexity. This “revolution” is made of parallel technological breakthroughs that have led to the development of new products, services and business models that were hardly imaginable even a few years ago – and that keep evolving, fast.

Technological innovations also have far-reaching consequences for the well-being and cohesion of society as a whole, as well as for businesses in all sectors through their impact on productivity, employment, skills, income distribution, trade and the environment. The digital transformation, in particular, shows great potential to enhance consumer choice and subjective well-being. However, it also brings risks: it may, for example, disrupt labour markets; exacerbate inequalities; raise concerns about competition, personal data protection or discrimination (e.g. algorithmic biases); or facilitate the spread of mis- and disinformation.

Regulation plays an essential role in realising the benefits of innovation while upholding protection for citizens and addressing the potential unintended consequences of disruption. Yet, it is clear that rapid and pervasive technological changes are placing an unprecedented stress on regulatory policy systems. Regulatory frameworks might not be agile enough to accommodate the fast pace of technological development and, in many cases, rules might quickly become outdated. Regulators also lack the knowledge and capacity to assess how new technologies will affect markets and society. They therefore struggle to keep pace with the realities of this new economy, promoting economic growth while also protecting citizen. The implications of technological developments for how governments regulate are wide-ranging as they blur the traditional definition of markets, complicate enforcement, and transcend domestic and international boundaries.

The COVID-19 crisis has magnified these challenges and forced governments to rethink their rule-making activities. As noted in the OECD Recommendation on Agile Regulatory Governance to Harness Innovation, governments should undertake a paradigm shift in regulatory governance towards more agile, resilient and future-proof approaches. As governments rebuild, they must strive to ensure that regulations keep up with the pace and global scale of technological advances to guarantee that populations worldwide benefit from innovation. At the same time, they must be sure to manage, in a timely way, the risks they may cause and to protect the values of individual liberty, democracy, the rule of law and the defense of human rights.

This report seeks to help policy makers navigate the domestic and international regulatory challenges and opportunities raised by innovation by documenting, through a series of case studies, the different regulatory challenges raised by emerging technologies and the diversity of regulatory responses used to address them.

The report is the result of a collaboration between the Korea Development Institute (KDI) and the OECD. It is part of the OECD joint programme of work between the Regulatory Policy Committee and the Network of Economic Regulators on regulation and emerging technologies, carried out with the support of the Regulatory Policy Division of the OECD Public Governance Directorate. The Directorate’s mission is to help government at all levels design and implement strategic, evidence-based and innovative policies that support sustainable economic and social development.

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