In response to fast-growing sharing economy businesses, the UAE is treading a thin line between regulation and innovation. (Image via Katie Edwards) In a 2013 article, internet industry analyst Larry Downes made a strong statement: innovation and regulation simply don’t mix.
Regulated industries, he said , operated outside market-based systems, conceding to "regulatory capture" that imposed mutually exclusive interests, price controls, pre-approvals and stringent licensing.
True to Downes’ statement, recent worldwide governments’ responses have been to contain, rather than embrace, disruption brought about by knowledge-sharing companies, and have put into question the ability of bureaucracies to innovate.
Ramzy Ismail, program manager at Flat6labs Abu Dhabi, coins the shake-up of the current regulatory status quo "regulation 2.0".
"Regulation was traditionally around bureaucracy and permission, and [regulation] 2.0 is about transparency and accountability," he told Wamda.
Rohit Mahji, senior manager at Deloitte Monitor Middle East, concurs, saying regulators “have to act second to make sure that the residents of the country are getting the best deal out of any innovation" and ensure a level playing field for industry ecosystems.
A rock and a hard place
Against a league of agile sharing and on-demand businesses, public and private sector giants around the world have been dealt a hard blow by quickly ‘Uberizing’ economies.Managed poorly or slowly, the reverberations of this hit can have equally negative implications on the MENA region. A 2015 IBM study shows that, today, 54 percent of C-level executives , including those in the MENA region, view Uberization as the dominant threat for their businesses. In driving innovation, the UAE is making sizable efforts to right the wrongs and loopholes of regulation. (Image via Miguel Montaner) The UAE, which had anchored itself as MENA’s financial, business and innovation hub, is taking on a central role in the region’s transition to a knowledge-sharing economy. But […]
