Regulation: Less is moreTen years ago, an interesting report was published in the United Kingdom, which was struggling with regulations. The title was “Regulation — Less is More.” The report argued that unnecessary regulations that interfere with development and growth of businesses should be minimized.
Around that time, the United Kingdom began to change. Last year, the Financial Conduct Authority introduced the regulatory sandbox. Just like the sandbox where children can play freely, it offers a buffer zone where fintech companies can freely test their ideas under relaxed regulations.
Businessmen say it is not easy to start a new business in Korea. From a business perspective, opportunity means timing. Even when you have a great business idea and see demands in the market, it is all useless if you miss the timing. They often complain that they miss the timing to enter a new industry because of Korea’s positive regulations, which states what’s allowed and prohibits all others, and strict prior restraints. New ideas and products are frustrated because of regulations.
In February, the Committee on New Industrial Investment was launched to address these issues. They worked for “negative regulation” that allows everything other than the prohibited and reducing regulations to minimal that meets the international standards. Among 151 regulatory cases raised in new industries, 141 cases were improved.
One of the notable accomplishments was to change the drone businesses to negative regulations, which had been limited to fertilizer distribution, photography and aerial survey. In the past, overseas clinical trial results had not been acknowledged for infants and children when developing vaccines for domestic use. But now, clinical trial results from other countries are to be recognized for the vaccines similar to the ones whose safety and effectiveness are proven.
Concerned voices on deregulation are understandable. But regulations should not be maintained and created just to protect the established interests or out of fear of the road not taken. Less is more for regulations on new industries.