Pro-innovation Regulation of Technologies Review – report published

March 20, 2023

Digital technologies are the engine driving the UK’s economic growth. The UK digital sector contributed 7.4% of UK total GVA in 2022, growing three times faster than the rest of the economy. It is home to over 85,000 tech start-ups and scale ups providing over 3 million jobs and a strong innovation ecosystem. With this in mind, the government asked Sir Patrick Vallance to conduct a review of how pro-innovation regulation can support emerging digital technologies and his advice has now been published.

The advice complements recent reviews including the government’s Plan for Digital Regulation, Digital Strategy and the report of the independent Taskforce on Innovation, Growth and Regulatory Reform. Recommendations will support forthcoming policy including through the AI White Paper and the Emerging Technologies Regulation Review.

The advice says that UK should seize this opportunity to champion a pro-innovation approach that facilitates widespread commercial S&T applications. It should take a three-stage approach to the regulation of emerging technologies by allowing:

  • regulatory flexibility and divergence at an early stage for emerging technologies, thereby defining regulations and standards in global markets;
  • promoting and learning from experimentation to support the scaling of key technologies e.g., through regulatory sandboxes and testbeds; and
  • seeking international regulatory harmonisation once technologies are becoming established, ensuring market access for innovative companies.

The review sets out nine recommendations and the UK government has indicated that it will accept all of them. The recommendations are:

  • a multi-regulator sandbox;
  • amending the Computer Misuse Act 1990 to include a statutory public interest defence;
  • announcing a clear policy position on the relationship between intellectual property law and generative AI to provide confidence to innovators and investors;
  • facilitating greater industry access to public data, and prioritising wider data sharing and linkage across the public sector;
  • bringing forward the Future of Transport Bill to unlock innovation across automated transport applications;
  • working with the Civil Aviation Authority to establish operating standard for drones, moving away from relying on operators to prove they are safe;
  • the ICO should update its guidance to clarify when an organisation is a controller, joint controller or processor for processing activities relating to AI as a service;
  • in line with the Commons Science and Technology Select Committee’s recommendation in their report on the UK space strategy and UK satellite infrastructure, the UK government should implement a variable liability approach to granting licences by June 2023.

The report also said that the government should avoid regulating emerging digital technologies too early, to avoid the risk of stifling innovation.

The ICO has welcomed the report, pointing out that it has published guidance in this area, as well as practical support to innovators through our Regulatory Sandbox. It also acknowledges that ina  fast moving area like AI, there is always more that can be done, and says that it welcomes the focus this report will bring. It will continue to prioritise its work in this area – including guidance it has been working on including on personal data processing relating to AI as a service.

The government has also published its Quantum strategy, which among other things, says that the government will undertake a Regulatory Horizons Council Review of the future needs for quantum technologies regulation to enable the sector to innovate and grow. The government says that it will:

  • Ensure that future UK regulation of quantum technologies support innovation, business growth and the ethical use of quantum technologies across the UK economy.
  • Trial quantum technologies in the UK, through establishing regulatory testbeds and sandboxes.
  • Help to shape international norms and standards relating to quantum technologies including those developed by multilateral bodies.
  • Play an active role in the World Trade Organisation, the World Economic Forum, the G7, the G20, OECD, NATO, the Council of Europe, the Commonwealth and the UN, including utilising the UK seat on the International Telecommunications Union to ensure that quantum regulation supports UK business and innovation, that the UK’s wider prosperity, security and defence interests are represented and that human rights are upheld.
  • Commission the Regulatory Horizons Council to undertake a regulator review of Quantum Technology applications. This aims to lead to the development of a work programme to guide the evolution of proportionate and pro-innovation regulation for the sector.