Be more hands-off in regulating new business models

To develop an innovation culture that will prepare us well to respond to the disruptive changes brought about by the likes of Uber and Airbnb, we need a regulatory environment that supports creative and novel ideas ("Revive disruptive spirit of yore"; last Wednesday, and "More space needed for people to take the initiative" by Dr Thomas Lee Hock Seng; last Friday).

What would such a regulatory regime look like?

Perhaps a good description could be "permission-less innovation". This is the notion that any new business model is permitted by default, unless a compelling case can be made that it causes danger or serious harm to society.

This would be regulation with an ultra-light touch, essentially allowing players in the market to self-regulate and achieve equilibrium without intervention as much as possible. Rules and guidelines can be put in place later, if necessary.

In an economy characterised by widespread and continuing disruption, regulators should err on the side of liberality, not caution.

It is better to push the envelope as far as possible and learn from mistakes, than to design a regime to eliminate all risks, and consequently kill potentially brilliant ideas.

Like it or not, such disruption will be increasingly pervasive in the future business landscape, and will have far-reaching and uncertain social consequences.

Singapore is exceptionally well placed to benefit in this new digital marketplace.

We have a pragmatic, well-educated and tech-savvy population, world-class infrastructure and a highly efficient administration, among many other advantages.

Our small size and lack of natural resources are not constraints; in fact, they make us nimble and resourceful.

The vibrant eco-system for start-ups that has been built up over the past few years prepares us well for a knowledge-based, innovation-driven economy.

We are in a strong position to be globally competitive in the exciting economy of the future. However, we must be willing to loosen up and take risks.

Francis Yeoh (Dr)

A version of this article appeared in the print edition of The Straits Times on September 13, 2016, with the headline 'Be more hands-off in regulating new business models'. Print Edition | Subscribe