<aside> 📨 Founders, investors, and policy folk scaling tech in regulated markets: get in touch!

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💡 Executive summary

Creaking regulatory capacity is constraining economic and startup growth, slowing innovation in the sectors that matter most to people’s lives, and becoming a rate limiter on UK startup and tech progress.

Startups and investors have long campaigned for better capital and talent policy to support the tech ecosystem. But a further category has been neglected: regulatory agility. Regulators stand between an ever-growing number of UK startups and their customers, and for many this is now their biggest barrier to growth and commercialisation.

Now, we need to massively reset our ambition. The UK should aim for new products to be licensed more quickly than anywhere in the world, with agile permissions that pivot in line with the product. We can massively reduce friction for founders, without lowering standards for customers.

Fixing this does not require major investment or legislation, but would have an enormous impact on crowding in private investment, helping companies to scale, and underpinning economic growth. It is time to take that opportunity seriously.

<aside> ✅ Manifesto

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<aside> ⚡ Why this matters

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<aside> 3️⃣ The three big issues

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<aside> 🏗️ Building innovative capacity

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<aside> ⬇️ Download pdf version:

Fix The Regulators - Form Ventures - Feb 2024.pdf

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<aside> 📨 Get in touch

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✅ Manifesto

1. The UK should set an ambition to have the fastest regulatory approval timelines in the world.

1. Introduce a ‘pay for speed’ option, including for regulators that are not usually funded by industry and where application fees are usually free, to secure a speedy decision with guaranteed fee refunds where an ambitious timeline is not met. (This is risk-free: either it improves speed and allows for investment in capacity, or applicants revert to standard pricing, but it should not lead to higher prices for the same or worse outcomes.)
2. Expand international recognition procedures where novel and frontier technologies have already been internationally authorised in other trusted jurisdictions (such as the US, Europe, and Singapore), reducing domestic regulatory burden and expediting approvals for domestic products, devices and services

2. Put innovation at the heart of regulatory policy in government by creating a new Regulatory Innovation Unit and reinforcing other existing institutions

1. Establish a joint No 10-Cabinet Office-DSIT unit to drive regulatory innovation across government by:
   1. Surfacing, triaging and prioritising legislative change requests from regulators.
   2. Keeping a public register of strategic steers requested by regulators
   3. Requiring departments to explain why pro-innovation changes have not been taken forward
   4. Monitoring regulatory performance, with the NAO and ONS, to explicitly encourage regulatory innovation by tracking approval backlogs and regulatory budgets over time, building comparable performance indicators, and estimating the cost of delayed and foregone innovation
   5. Exploring how this unit could become a radically new, cross-sectoral innovation regulator, as a long-term solution for frontier, disruptive innovations test the limits of legacy, sectoral regulator structures
2. Beef up the Regulatory Horizons Council, by:
   1. requiring that government responds to RHC reports within 1 month
   2. aligning funding decisions from the Regulatory Pioneers Fund with RHC advice, to accelerate implementation of its recommendations
   3. creating an RHC-investor panel, as recommended in the RHC’s own Closing the Gap report, to ensure RHC activity is continually based on insight and feedback from the technology frontier
3. Expand the Digital Regulation Cooperation Forum (DRCF), which only includes 4 regulators, into a wider, Technology Regulation Cooperation Forum (TRCF). This should incorporate other regulators at the frontier of AI and technology, such as the MHRA, CAA and VCA, and report into the new Regulatory Innovation Unit.

3. Fund sectoral regulators to upgrade capability

1. For regulators financed at least in-part by the government, the Treasury should permanently uplift funding to restore their 2021 budgets in real terms to recoup core, ‘business as usual’ capacity, and also commit to annual, inflation-linked budget increases to accelerate new efforts. Both could be funded via the government’s £15bn R&D budget.
2. Expand the Regulatory Pioneers Fund to £50m initially, in time rising to £100m+, to provide dedicated surge capacity for regulatory innovation projects on top of core funding increases.

4. Reset regulatory risk appetite in favour of innovation

1. Departmental Ministers should issue a strategic steer to their sponsored regulators, committing to the view that short-term conservatism ultimately leaves consumers worse off. This should provide the political cover necessary to improve competition and unlock the innovation necessary for improved outcomes in the long run.
2. The government should consider a new, permanent, cross-sectoral innovation regulator with an explicit mandate to support innovation.