Introduction
Technologies—applications of knowledge to convert inputs into outputs, to solve problems, and to generate new opportunities—carry the potential for both benefits and risks to individuals and society. A technology can be considered a bundle or portfolio of opportunities and risks—and an emerging technology represents a new emerging bundle. Risk regulation in response to emerging technologies also represents a bundle or portfolio of opportunities (risk reduction) and risks (countervailing harms)—one can even consider regulation as a technology, a human construct to address the risks and opportunities of our other technologies.
Ideally, the policy of risk regulation would be based upon complete information about the type, likelihood, magnitude, and distribution of both benefits and risks associated with a technology bundle. But while technologies are emerging, such information is limited. A classic pattern is that law lags technology: technologies emerge, then laws respond, and laws are always trying to keep pace with technological change.
This paper begins in Part II by identifying features that are distinctive about risk regulation of emerging technologies. It argues that emerging technologies often exhibit at least four characteristics that affect the best approach to risk regulation: (1) initially low information (high uncertainty); (2) iterative dynamic change over time; (3) the possibility of extreme tail risks and/or opportunities; and (4) the possibility of reactions to regulatory policies. Each of these distinctive features poses challenges for risk regulation and can warrant special regulatory approaches.
Part III develops recommended regulatory responses. It begins by recommending that adaptive regulation be adopted as the default approach to regulating emerging technologies. Adaptive regulatory processes offer a calibrated approach for managing emerging technologies’ initial low information and iterative dynamic change over time. These processes allow for incorporation of ongoing learning and policy updating, and thus are well-suited to adjusting to new information (e.g. via ex post or retrospective review) and integrating iterative dynamic change over time (e.g. via periodic review and ongoing sequential updating). We also make recommendations where emerging technologies present extreme tail risks and/or opportunities. In such cases, we recommend first specifying the tail(s), and then explore strategies for addressing these tails, for example through scenario-based planning as an aid for improving future imaginability before such tails become manifest. Finally, we label the category of “reactive” risks, arguing that where emerging technologies or their operators may react to regulation (such as by circumvention or backlash), optimal regulatory design should employ regulatory approaches to manage risk not only via mitigation (prevention) but also via adaptation (coping or coexistence).
Part IV concludes.
This project was made possible through the support of Grant 63641 from the John Templeton Foundation. The opinions expressed in this publication are those of the author(s) and do not necessarily reflect the views of the John Templeton Foundation. For more information, visit The Next Frontier: Rethinking Regulation in an Era of Rapid Innovation.