Cathryn Ross on the Regulatory Horizons Council and Re-Imagining Regulation

Episode Summary

Executive Summary: Bob Hahn and Catherine Ross discuss the Regulatory Horizons Council’s report on regulation and innovation, arguing that regulation should not be pro-innovation for its own sake but should be innovation-friendly, adaptive, and value-driven. They emphasize sandbox-style experimentation, broader outreach beyond incumbents, explicit ethical frameworks, trust, and co-creation to help promising technologies scale responsibly while still preventing harm.

Main Topics: Why regulation matters for innovation (Priority: 5/5): Ross explains that regulation can unintentionally stop good ideas from scaling, so the key policy challenge is not deregulation but ensuring rules do not block socially valuable technologies from reaching the market. Regulatory Horizons Council and its mission (Priority: 5/5): She describes the UK council as an independent advisory body created to recommend regulatory reforms that help the UK capture more value from technological innovation, including economic, social, and environmental gains. Adaptive regulation and regulatory sandboxes (Priority: 5/5): Ross uses the FCA sandbox as a leading example of allowing small innovators to test ideas with reduced burden, while noting the need for follow-on ‘scale boxes’ to help firms transition into full regulation. Mindset, openness, and co-creation (Priority: 4/5): The discussion stresses that regulators should move beyond rear-view-mirror problem solving, engage innovators and nontraditional stakeholders, and co-create solutions rather than imposing pre-decided answers. Ethics, judgment, and predictability in regulation (Priority: 5/5): Ross argues that regulation is full of human value judgments, so ethical assumptions should be transparent and contestable; this improves fairness and gives investors clearer expectations. Responsible innovation and trust (Priority: 4/5): The conversation highlights the role of firms and investors in designing products responsibly from the start, and emphasizes trust as the foundation of regulatory relationships, especially when regulators lack perfect information. Evaluation and learning (Priority: 3/5): Both speakers suggest that sandboxes, pilots, and innovation funds should be more systematically evaluated so regulators can learn what works and spread best practices across sectors.

Key Arguments: Regulation exists to prevent harm, but if poorly designed it can also suppress beneficial innovation before it reaches scale. Good regulation is not necessarily lighter regulation; it is proportionate, clear, predictable, and adaptive. Regulators should not only consult incumbents, because established firms often reinforce the status quo through better-resourced engagement. Sandbox models can help startups test ideas, but regulators must also support companies as they grow beyond the sandbox. Regulators need a growth mindset: willingness to experiment, learn, and admit they do not always know the best solution upfront. Ethical frameworks should be explicit because regulation involves human value judgments, not neutral algorithms. Trust is essential to regulation because regulators rely on information, feedback, and cooperation from those they regulate. Responsible innovation by firms can reduce downstream regulatory burdens by embedding safeguards and social awareness into products early. Dedicated evaluation funding would help regulators learn systematically from pilots and innovation programs. Regulators should spend more time outside their usual networks and more effort learning about future problems rather than only fixing past ones.

Data Points: Podcast date: July 18, 2022 - Opening introduction by Bob Hahn Report executive summary length: about 8 pages - Ross describing the report’s short form Report main body length: about 70 pages - Ross describing the report’s main text Case studies appendix length: another 80 to nearly 100 pages - Ross describing supplemental case studies Council tenure: about two and a half years - Ross describing the Regulatory Horizons Council’s operating period since setup White paper timing: about three years ago - Ross referring to the UK white paper that helped create the council

Pivotal Quotes: "it is not the job of regulation to be pro-innovation" — Catherine Ross: Ross explains why the report shifted from “pro-innovation” language to “innovation-friendly” language "trust is a human being to human being thing. It is not an institution to institution thing." — Catherine Ross: Ross discussing why regulatory relationships depend on personal engagement and outreach "we need to carve out and dedicate some time to thinking about the future and talking to the people who are actually going to inhabit that future" — Catherine Ross: Ross on avoiding purely backward-looking regulation

Implications: The episode argues for more adaptive, participatory regulation that helps innovation scale without weakening protections. For regulators and firms, the takeaway is to build trust, test and learn, and make value judgments explicit so future rules are clearer and more legitimate.