SNS #4
Innovation in Regulation
Substandard
- 2024
- 2023
Regulation and the associated bureaucracy are often identified as obstacles to innovation. The excessive weight of regulation and compliance can be burdensome for small companies such as startups that are unable to match the demands for larger companies considering the time and human resources involved. However, regulation constitutes an essential part of the policy frameworks that can bolster more competitive startups and scaleups in Europe.
Substandard 4.1 — Think Small First
The “Think Small First” principle advocates for considering startups and SMEs’ interests when framing policies, applying the idea that "one size does not fit all". It also implies that measures impacting businesses should be created from an SME’s point of view (European Commission, 2009).
Substandard 4.2 — Compliance Exemption
Startups have unique identities and characteristics that sets them apart from other companies, such as their innovative nature and scale. These specificities may make it difficult to meet usual compliance standards. It is therefore recommended to develop exceptions and special regimes to address startups’ specific needs, thereby enhancing their competitiveness.
Substandard 4.3 — Regulatory Sandboxes
Regulatory sandboxes are designated physical or digital spaces with special legal frameworks for testing innovative solutions. They are a convergence point for regulatory and technological innovation. Within this Substandard, regulatory sandboxes are acknowledged as a valuable innovative tool for which startups must be key players.