Regulation as an Instrument of Innovation Policy – Two Case Studies

This report looks into the possibilities of regulations to induce or influence the course of technological innovation. As the scope of this question is very vast (see e.g. Blind 2012 for an earlier assessment and the extensive work of OECD https://www.oecd-ilibrary.org/governance/oecd-regulatory-policy-working-papers_24140996 for a current overview), and the types of regulations (economic, social, technical) which have been demonstrated to have a discernable impact on innovation are manifold, we have chosen two specific case studies to illustrate the great potential of regulation and regulatory reform as a new an ‘agile’ form of policy making using the example of ‘regulatory sandboxes’ in the energy sector on the one hand, and the example of the European regulations on reconfigurable radio systems as pointing to the potential negative effects or limits of regulations on innovation (in this case the danger of creating ‘lock-in effects). First, we present a general characterization of the ‘regulatory sandboxes’ approach, followed by a case study from the energy sector. Then we briefly present the case of reconfigurable radio systems. Finally, we try to draw some lessons and conclusions for Innovation Policy. Especially the discussion of regulatory sandboxes may serve as a good orientation about how to implement regulatory policies in a number of areas.