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  1. Policy
July 16, 2021

Can the UK become a ‘testbed nation’ by removing barriers to emerging technology?

Relaxing regulations could see the UK become an early adopter of critical technologies, the authors of new tech manifesto argue.

By Cristina Lago

A new manifesto by two think tanks calls for the UK to “supercharge the innovation process” in science and technology by adopting their pledges, including pushing regulators to pro-actively remove barriers to new emerging technologies. Becoming a so-called “testbed nation” could help Britain become a nation of technology early adopters, and hand businesses crucial first-mover advantage, the authors argue.

The policy manifesto, which includes ten articles on themes such as digital state, cloud computing or immigration, is work of The Entrepreneurs Network, a sister think tank of the neoliberal Adam Smith Institute, and former prime minister Tony Blair’s Institute for Global Change. It has been endorsed by Blair and Patrick Collinson, founder of fintech Stripe.

Uk tech regulation

The UK has taken a “pro-innovation” approach to drone use, say the authors of a new report. They argue this could be mimicked in other areas of tech. (Photo by Flystock/Shutterstock)

In the manifesto’s preface, Blair equates the “technology revolution” of the 21st century to the 19th century’s Industrial Revolution, highlighting the transformative effects of technology alongside its potential negative impact. Blair also charges against policymakers who “often […] either ignore [technology’s] importance or focus on questions like those to do with privacy which are important but limited”. According to the former PM, the debate should be around how technology can be used to advance humankind.

Making the UK a ‘testbed nation’

One of the manifesto pledges calls for the UK to become a ‘testbed nation’ following the examples of Singapore and Sweden. It advocates for the UK “to do all it can to support domestic demand” and thus make the UK a country of early adopters and “the most attractive place for innovative investments”. This would involve allowing innovators to test the commercial viability of their products “under conditions of real competition, and with real consumers, rather than under regulators’ trial conditions”.

Sweden’s widespread adoption of digital payments started in 2006, when public transport carriers began accepting cashless payments. This, in turn, fostered an ecosystem for local entrepreneurs to develop projects, including some of today’s main fintech players such as Klarna or Zettle. In the case of Singapore, the pledge’s authors allude to the city-state’s approval of lab-grown meat for commercial purposes in addition to research.

However, Anton Howes, one of the pledge’s authors from The Entrepreneurs Network, clarifies that adopting this approach does not mean ditching UK tech regulations in favour of free competition. “It’s still very much that there are regulations, just that regulator is much more sensitive to innovation and much more appreciative of having to kind of create a framework that’s not just going to favour incumbents but is also going to fight for the newcomers and new technologies as well,” Howes tells Tech Monitor.

Howes adds that the barriers to innovation do not necessarily come from regulators themselves, who are often powerless to change the rules, but instead they are a result of “political barriers” that hamper innovation: “I think there are actual barriers where the way the law is currently set up, where regulators basically couldn’t change the rules even if they wanted to, because they don’t have the legitimacy to do so: Parliament actually needs to make some changes.”

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The report highlights the role of the UK’s Civil Aviation Authority (CAA) in regulating drone usage, which the authors say “has generally been impressively pro-innovation”. Remaining obstacles to wider use of drones, including opposition from pressure groups, should be resolved at a political level, “with ministers providing the vision for how their departments might better promote innovation, and acting immediately to remove political barriers to the early adoption of new technologies.” Despite this open-minded regulatory approach drone testing and adoption is perhaps a missed opportunity for the UK so far, despite only three other countries in the world having launched formal drone testbeds in the last eight years.

The deployment of new technologies will inevitably be faced by opposition from groups that may lobby against them, continues Howes. These protests can be justified, and the role of the government would be to satisfy both parties by creating ways of offsetting the negatives so a “pro-innovative” can then take place, he adds.

Artificial intelligence (AI) is not addressed in this report but Sam Dumitriu, also author of the ‘testbed nation’ pledge and colleague of Howes at The Entrepreneurs Network, says that there are examples, such as in financial algorithms, where “there should be some regulations” – particularly around the potential for bias and discrimination – while maintaining a pro-active approach.

Dumitriu mentions the sandbox of the Financial Conduct Authority (FCA), the UK’s financial regulatory body, as an example to follow and to imitate throughout the wider economy. A problem that regulators working in emerging technology face, he adds, is that they are unsure of what the best rules are, and therefore need a degree of experimentation to figure out those rules: “If you don't test things, you actually may end up with worse forms," he says.

The benefits of becoming a 'testbed nation'

Whether there is an appetite in the UK consumers for tech deregulation remains to be seen. The 2020 People Power and Technology report from the doteveryone think tank found 58% of people would like to see greater regulation of the tech sector. But the authors of the new study conclude that for businesses, the key advantage of turning the UK into a nation of early adopters is that having a mature market for emerging technologies contributes to the leverage of a country to set the rules internationally.

“Again, the FCA sandbox is a good example,” adds Dumitriu. “Lots of other countries have adopted similar sandboxes as a result so you can help shape the rules internationally that gives you more sovereignty and more political power. But it also is an advantage for the entrepreneurs in the country because they can pick up ideas of the very first movers, and some of those ideas they can transfer over and then build into their own businesses.”

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