Pro-innovation approach: The UK regulatory system is considered to be innovative and creative across several sectors. It was agreed that the UK regulatory system is highly innovative and creative across several sectors. The example of regulatory sandboxes was highlighted as a particular example of this. The Financial Conduct Authority and Information Commissioner’s Office have led the way with this with examples of successful sandboxes. In the health and life sciences sectors these are referred to as ‘airlocks’ and they have played a role in plugging a gap, including around the horizon scanning abilities of regulators. It was suggested that there is scope to extend this tool to other sectors, such as AI.

Leading internationally: The UK is well placed to lead the way internationally on regulatory approaches across multiple sectors. Participants agreed that the UK has a strong regulatory legacy and is pushing regulatory horizons across multiple sectors. It was felt that the UK can add real value in many sectors and in emerging frontiers of regulatory development. It was suggested that this is particularly the case in AI regulation, in which the UK is at the forefront in pioneering a mixed set of sectoral and horizontal regulatory approaches and is well placed to lead a conversation internationally.

Regulatory capacity: Lack of resourcing is hampering effective regulation. Participants agreed that an area that requires urgent attention is how regulators are resourced to carry out their functions. Investment in regulatory capacity was one of the recommendations of the Regulatory Horizons Council report on medical devices. A particular issue that was raised is the additional workflow faced by regulators across multiple sectors as a result of the UK leaving the EU. An example was given from the food sector, in which the Food Standards Agency has had to take on work that was previously carried out by the European Food and Safety Authority and are not sufficiently resourced to deal with all the regulated products. The lack of adequate resourcing for regulators in turn can lead to costly delays for businesses, which are a particular issue for small and medium sized enterprises (SMEs). It was stressed that this issue requires significant investment rather than redeployment of small amounts of funding.

In the field of AI, the lack of common resourcing among regulators is leading to a two-tiered system of regulators, with some that are well resourced and others with less funding and technical expertise. It was suggested that better knowledge of and access to common capacity across UK regulators could help to support regulatory capability and capacity, although this will require detail on what a common function could look like. It was warned that a challenge here will be to determine who should finance a common capacity.

Regulatory uncertainty: New and emerging technologies do not always meet existing regulatory requirements. Regulatory uncertainty around new and emerging technologies can be challenging for investors. This is because difficulties in meeting the requirements of the regulatory system and the pace of regulatory reform can lead to regulatory gaps and uncertainty. For example, AI systems often fall within the remit of multiple regulators. In addition, the intersection of technologies, for example AI with life sciences, makes it particularly difficult to meet the requirements of the regulatory system. Another example was cited whereby financial firms are typically sitting on high value data that is being processed via legacy systems and require guidance from the regulator around acceptable uses of the data. These challenges require greater clarity as well as harmonisation.

However, the challenge to regulators also depends on the level of regulation. From an investor perspective, whether a sector is lightly or heavily regulated can be an advantage or a disadvantage, respectively. In heavily regulated sectors, if the regulatory system is unnecessarily restrictive, an investor may perceive this as a disadvantage to investment, leading to a first mover disadvantage. The life sciences sector was cited as an example of a heavily regulated sector. In contrast, sectors with less regulation may provide a first mover advantage. For example, this is the case with AI technologies, which have been virtually unregulated until now, and have gone straight through to market relatively fast.

Regulatory divergence: Interactions between the regulatory and political context can lead to regulatory divergence. In the agri-food sector, businesses are concerned about divergence between the UK and the EU following the UK’s exit from the EU. This is also an issue within the UK as some aspects of agri-food are devolved. The amount of divergence will depend on the political context and could cause issues if England, Wales, Scotland have different regulatory environments.

Implementation and delivery: The Government should focus on delivering and implementing the recommendations of existing reviews. It was suggested that there is general agreement across reviews and reports on what is needed to improve the regulatory landscape. In particular, the Regulatory Horizon Council’s Closing the Gap series of reports was an attempt to distil learning across sector-specific reports and provide cross-sector lessons. Delivery and implementation will require central coordination across multiple organisations, particularly when recommendations cut across sectors. It was suggested that external experts could provide the support needed to drive this forward. However, a challenge that was raised is sourcing people that can provide the relevant cross-sector expertise.

Leverage external expertise: The Government should leverage the expertise of external organisations to support regulatory resourcing. External organisations or domain experts can support the lack of capacity within regulatory teams. Business schools in the university sector or cross-sector groups made up of academics or industry experts are well placed to diagnose the health of their own sectors, propose solutions and provide domain expertise to complement regulatory teams. The Centre for Regulatory Science and Innovation (CRSI) network at Birmingham University was given as an example of a network that is thinking about innovating safely and responsibly. This would support the challenge related to lack of regulatory capacity and could also benefit scenarios in which the innovation or technology cuts across sectors/regulators.

Standards: Standards can play a role in providing guidance and a framework for new and emerging technologies. Standards could provide a mechanism for the governance of emerging technologies and sectors, by providing the framework and guidance which can then lead to more proportionate regulation further down the line. For example, the Standards Challenge Fund, a collaboration between the BSI and Innovate UK, are calling SMEs to submit ideas for new standards to support innovation in net zero, digital and healthy living. It can be hard for a start-up business to know how a new or emerging technology will evolve. In addition, regulators themselves often do not know how it would fit within existing regulatory requirements, since by definition a new and emerging technology is ahead of what a regulator has seen before.

Support SMEs: Establish more flexible and adaptable regulatory pathways to support smaller businesses. This could help to address the issue of resourcing leading to costly delays in particular for start-ups. This could be achieved through disaggregating risk profiles of different products. For example, it was suggested that a more flexible process could be adopted for low-risk medical devices on the UK market that have not generated any adverse effects.