Section 3: Leveraging Disruption for Society
Current and future disruptions will have a large impact on society, possibly of a magnitude similar to internet and mobile communication technologies over the past two decades. This presents governments with significant opportunities. Low barriers to entry and growing pools of connected talent around the world could enable emerging economies to overtake more established markets. China and India already host many of today’s leading technology companies, and many of tomorrow’s leaders may be found today in Africa and Latin America.
However, a bright-eyed view of competitiveness is not the only measure for getting the right regulatory approaches to disruption. Today’s emerging technologies and disruptive business models will have a much deeper impact on all societies affected, sparking fears of growing inequality and structural shifts in the nature of work and economic activity.
Governments have their work cut out for them and, as the experts in this section make clear, they need to get comfortable with uncertainty. A trivial point perhaps, but disruptive innovation really points towards an unknown future. Though every actor can take a guess, no one has a definite answer. Entrepreneurs do not know how it will play out, nor do venture capitalists, analysts or, notably, governments. As Vinod Khosla explains in this section, expecting the future to unfold along the trajectories of the past is a sure step towards bad predictions. “The most interesting developments happen at the edge of order or the edge of chaos”, he argues. The implication is that governments increasingly need to be set up to be highly responsive to unanticipated trends in technology and emerging business models. Airbnb again serves as an example; in many municipalities, it faced regulations that were designed without envisioning their application to the type of service the company provides. The pace of refitting regulation for novel-use cases can make the difference between widespread adoption of a service or its slow (litigious) death, as was the case with the technology company Aereo.
The good news is that, as technology advances, so do governments’ technological capabilities, enabling entirely new approaches to regulation that are flexible, data-driven and outcome-based. Brad Burnham of Union Square Ventures gives the example of Regulation 2.0 as one such approach. First, however, policy-makers must see themselves as partners in applying new technologies for the good of societies. The potential is enormous, as are the adverse consequences of poorly designed regimes.