by Donna Martinez
Former Senior Writer and Editor, John Locke Foundation
Yes, the name is sorta funny — a ‘regulatory sandbox.’ But in an age of rapid innovation, it’s the type of forward thinking that aims to support entrepreneurial efforts while keeping in place a lighter level of oversight that doesn’t hinder economic growth and hold back new technologies. Locke’s Jon Sanders described it this way earlier this year:
As described in RealClear Policy, “Regulatory sandboxes are closed testing environments where firms can experiment with innovative new products, services, and business models for a limited period of time, under some form of modified regulatory environment.”
The idea originated in the United Kingdom in 2014 specifically for financial tech (fintech) companies. By 2018 it was considered a huge success, and regulatory sandboxes started cropping up around the world (Singapore, Abu Dhabi, Denmark, Hong Kong, etc.) as well as the U.S. (Arizona, Utah, and Wyoming). South Korea built its regulatory sandbox for every industry, and Utah, whose regulatory sandbox started with finance and insurance, just did the same.
Existing regulations can be burdensome, but they can also be particular obstacles to new ideas, and (see Martec’s Law) they can become entrenched and backward-thinking. At their best, regulations protect consumers, but sometimes they can protect the old ways and resist innovation. When that happens, consumers end up worse off, and so does the economy.
This week, state lawmakers are considering House Bill 624, a bill to implement a regulatory sandbox and keep our state on a track that supports our many innovators. Locke’s Jordan Roberts expressed support as he spoke to lawmakers. WATCH:
Locke’s Jon Sanders summed it up this way:
As the band Flyleaf sang, “You can only move as fast as who’s in front of you.” Innovations happen quickly, but bureaucracies are slow. A regulatory sandbox in North Carolina would waive certain regulatory obstacles on a trial period for fast-emerging products and services, keeping consumer protections in place. It could speed innovation here in a way that helps consumers and the economy.
Let’s keep North Carolina moving.