Tech for good? Innovation and regulation: Striking the right balance
Regulation is one of the most important issues facing the tech sector worldwide. Lexington hosted an event to explore the UK’s response to the issue on 28th March. We asked Damian Collins MP, chair of the DCMS Select Committee, Tom Wehmeier from VC Atomico, Catherine Miller of DotEveryone and Abba Newberry from online mortgage broker Habito to share their thoughts.
Our team drew four conclusions:
#1 Desire for regulation is almost universal
Speaking days before Mark Zuckerberg called for more regulation, our panel was unanimous in support of measures to encourage responsible business activity. This reflected the strength of public opinion driving the political agenda and forthcoming Online Harms White Paper.
While there is some public scepticism about calls for action from the large platforms, several of our panellists argued regulation now a cornerstone for many businesses and investors in tech. For example, we heard how Habito sees regulation as providing reassurance for customers as it breaks into the historically opaque mortgage market.
#2 Entrepreneurs see a competitive advantage in getting it right
And taking a responsible approach to business is becoming more important. Atomico told us that regulatory permissions now feature regularly in the investment pitches it receives. Securing approvals is now seen as key to securing a competitive advantage in new markets, be that for new medicines, transport modes or beyond.
However, this is only part of the story. Discussion alighted on the change in culture required from entrepreneurs and investors. Appropriate safeguards are required ahead of technological change, but the tech sector also has to act to represents the communities it serves. This is not just for the benefit of the public, but also to avoid existential risks that growing businesses may encounter.
#3 Tech means more than Facebook
The diversity of the tech sector can be lost in the debate about the role and responsibilities of the large platforms. Good work is being done by many companies from the young and dynamic, to established players, driven by the desire to serve their customers and communities better. There was praise for Yoti, Habito and social business Second Home to name a few.
However, discussion about what needs to be done to encourage responsible approaches also needs to be more nuanced. Regulation and policy will have to reflect the diversity and scale of businesses in the tech sector, and keep evolving to meet technological advances. This includes making realistic assessment of what technology can actually do.
#4 Good regulation, like successful tech businesses, needs to be trusted
It is widely accepted that there will be some form of regulation for the large platforms. For the wider tech sector, there are increasing public and political expectations on businesses as they grow.
Our panel and audience discussed the need for regulators in the UK to be given far greater expertise, operating within a system which is kept under constant review to keep abreast of technological advances. However, there were also calls for a practical approach which accounts for what is technologically possible for different companies to deliver.
Perhaps most important from a communications and political perspective is the question of how tech companies, and any new regulation or policy, need to be trusted by the public and stakeholders. Doteveryone argued for a high profile personality leading regulation which the public can recognise. The same applies for high growth companies, which will need to carefully consider the potential interests and concerns of communities and decision makers as they plan for expansion.
By Francis Mallinson, Associate Director
To find out more about Lexington’s tech sector work, click here.