The UK Government Department for Digital, Culture, Media & Sport has released a policy paper in July 2021 to set out its overall approach to governing digital technologies. This move is intended to help drive growth and innovation in the digital space, which it’s hoped will benefit both the private and public sectors. The regulation will cover the entire digital landscape, including different providers of outsourced IT support services and other digital services. Outsourced IT services in particular are among the fastest-growing trends in businesses nowadays and have contributed significantly to the UK’s economy.
In the paper, Rt Hon Oliver Dowden, Secretary of State for Digital, Culture, Media and Sport, said that exiting the EU provides the UK with a fresh set of opportunities to pave a global path for digital regulation. The plan is pro-innovation and is intended to start new conversations around the benefits and risks of technology.
Secretary Dowden said that digital technologies are the key to the country’s future prosperity. However, innovations in technology must be developed responsibly to protect society, as well as to mitigate risks and uphold the rights of citizens. The plan looks to achieve a balance and provide practical steps for the Government to take.
The intention behind the plans for digital regulation is to govern technology in the country with a proportionate and agile approach, removing any unnecessary regulatory burdens while offering clarity and confidence to businesses and to consumers.
The regulation plan has three key objectives: to drive growth by promoting competition and innovation across different digital sectors; to ensure that development and innovation will not harm citizens or businesses; and to protect their fundamental rights and freedoms as the country is shaping a digital economy that promotes a democratic and flourishing society.
It also states its principles as to how the Government will design and implement future regulation. It will actively promote innovation to achieve forward-looking and transparent outcomes; and address international challenges and opportunities.
The paper makes it clear that this is not the final say, but rather a springboard for discussion and a platform for how Government can work with innovators to establish the proper rules to govern and support digital technologies.
The plan begins the conversation on how the Government can achieve its goals in the digital economy and put the principles of the regulation into practical steps. Legislators will explore a wide range of mechanisms, including improving the policymaking process, examining changes to legal duties, and promoting the approach through multilateral relationships.
The plan complements the Integrated Review and National Data Strategy, which will be supported by the AI Strategy, National Cyber Strategy, and Innovation Strategy. Moreover, it responds to the many themes raised in the report of the Taskforce on Innovation, Growth and Regulatory Reform.
In 2019, digital technologies, including outsourced IT support services, contributed £151 billion to the economy and accounted for around 1.6 million jobs. The number of new tech businesses listed in 2018 alone reached over 34,000. And in 2020, the UK attracted more international venture capital investment in digital technology and related fields than France and Germany combined. These figures are impressive, considering that this level of investment occurred at the height of the COVID-19 pandemic.
Despite all the positives technology has to offer, it has also introduced many risks. According to research, half of the people in the UK think it’s just a fact of life that they’ll be cheated or otherwise disadvantaged while they use the Internet. In the past year, around 39 per cent of businesses and 26 per cent of charities reported having had cybersecurity breaches, with one in five of such attacks resulting in lost or stolen money, data, or other assets.
The Government and educational institutions are also regular targets for these attacks. And it’s because of these risks that the Government has made security an imperative when considering innovation and planning for digital technologies.
Digital businesses often operate with little regulation in place because the existing rules weren’t designed with modern technology and current business models in mind.
Furthermore, digital technologies and businesses also have distinctive features such as powerful data processing; horizontal integration; and speedy start-up, scaling up, innovation and growth, for instance, which disrupts the long-established status quo in terms of rules and norms. And that’s why the Government is working with companies to put in place a regulatory system that manages the risks with suitable restrictions but is also adaptable enough to address these complexities.
“Digital regulation” refers to the range of tools that the commissioned regulators, businesses, and other agencies use to properly manage how digital technology and activities affect individuals, companies, the economy, and society.
The Government is of the opinion that well-designed regulation is vital for the fast-moving digital markets, and it will continue to test new approaches to make sure that any interventions are up to date as far as possible.
Digital technologies and activities have a high demand for regulatory approaches because they have distinct features that set them apart from other sectors. Some of these features include, but are not limited to:
By putting new regulations in place, the Government aims to provide businesses with a sense of certainty while avoiding unnecessary layers of rules so that citizens can be confident when engaging with digital technologies.
The vision and direction of the drive for innovation are expected to drive prosperity through the regulation of digital technologies and to minimise the harm it may cause to the economy, the country’s security, and society.
The Government’s plan for regulation is still at an early stage, and they recognise that there will be many challenges ahead. In order to reflect these challenges, they will provide regular updates on the plan on their website.
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