Policymaking has historically been a deliberate, measured process involving the creation of explicit rules that are enforced through the power of sanction and implemented through defined command structures. However, this approach is proving increasingly useless in the modern context.

The rapid pace of technological change has called into question the processes by which policy is traditionally made. Technologies are developing rapidly, constantly combining with other technologies to create powerful ecosystems that evolve faster than governance systems can be built to regulate their use. These new technologies are global in scale, driven for the most part by the private sector, with unprecedented transnational repercussions that require nation-states to synchronize their efforts in ways that existing models of inter-regulator cooperation are incapable of coping with.

This is the Fourth Industrial Revolution, a tumultuous time in the development of our planetary society in which the new technologies we are creating have raised questions of human values and cultural trade-offs. Given the pace of change, the international impact of these developments and the unprecedented involvement of the private sector in the creation of these technologies, it has become apparent that we need an entirely new way to look at the process of policymaking and governance.

In January last year, the World Economic Forum issued a white paper outlining a concept called agile governance, which was its attempt to reimagine policy-making for the Fourth Industrial Revolution. In essence, agile governance uses systems thinking to determine the parameters of the complex and dynamic ecosystems that require regulation and design thinking to develop tools that policymakers can use to pilot low-cost, low-risk versions of policies to test their impact. The combination of these techniques allows them to evaluate the intended and unintended impact of proposed policies and iteratively improve them before implementing regulations on a broader scale.

Agile governance is predicated on multi-stakeholder participation. It calls for the creation of environments within which innovators can collaborate with governments to evolve new regulatory frameworks. This could be through policy labs such as those that have been set up in Denmark and in the EU, or by crowdsourcing policy proposals along the lines of the consultation process that was pioneered by the Telecom Regulatory Authority of India (Trai) and which is increasingly being followed by other ministries in India. In its extreme manifestation, collaborative thinking could well involve the direct representation of non-governmental stakeholders in regulation in order to collect ideas, discuss values, and work out appropriate incentives for research, development and the commercialization of new technologies.

One of the tools called for to implement this new form of governance is the regulatory sandbox, which allows for careful experimentation by relaxing regulations in specific, highly controlled environments to assess the impact of the introduction of new technologies under a relaxed or altered regulatory environment. India has already started experimenting with these new methods of regulatory evaluation by announcing the creation of regulatory sandboxes across all four financial regulators. There is scope for using this tool more widely across all areas of technology regulation.

For agile governance to be successful, it is important to develop frameworks for the sharing of public and private data among relevant stakeholders. In a smart city, for example, if data from road sensors and data on planned road works could be shared by public utilities and combined with data generated by private mapping platforms and vehicle telemetry systems, we would be able to build a more efficient traffic management system. Given the imperative to keep algorithms confidential and thus preserve private competitive advantages, the IT infrastructure deployed to do this should be open and vendor-neutral. This way, the regulatory objectives can be achieved without dis-incentivizing the private sector from participating.

Over the past decade, India has been building a software stack for different layers of its public infrastructure. The primary objective of this has been to deliver government services more efficiently using core modules of identity management, cashless payment and trusted data exchange. However, given the national scale of this platform, it can also serve as the foundation for agile governance in the country.

The data generated by various elements of the stack can, if appropriately aggregated, serve as a barometer for various important governance indicators. This will allow for timely and need-based regulatory intervention on faster timescales than is currently possible. The fact that it offers an end-to-end digital environment means that the software stack would allow the government to quickly deploy regulatory sandboxes across a wide range of regulatory interventions and thereby pick up pre-emptive insights into the intended and unintended consequences of new regulatory proposals before they are rolled out more widely.

India is poised to become a global leader in agile governance. However, to do this, it will need to forgo the traditional approach to regulation and embrace a more participatory and iterative process.

Rahul Matthan is a partner at Trilegal and author of ‘Privacy 3.0: Unlocking Our Data Driven Future’

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