RIETI Report November 2019

What Sapiens Suggests on Rulemaking and Innovation

Yuval Harari's best-selling novels Sapiens and Homo Deus have recently gained significant international interest, and in this column, RIETI consulting fellow Yoko IKEDA explores what Sapiens: A Brief History of Human Kind says about our future as human-driven regulatory systems try to compete with machine-driven innovation that are representative of the fourth industrial revolution. IKEDA uses case examples to determine how best to proceed with the challenge of developing regulatory frameworks that will attract the most innovative international companies to Japan's shores.

This month's featured article

What Sapiens Suggests on Rulemaking and Innovation

IKEDA YokoConsulting Fellow, RIETI

Human progress began with the use of fire and progressed to the invention of civilizations using writing and other critical technologies. The first Industrial Revolution happened in the 18th century, and now humankind is in the middle of the fourth Industrial Revolution, where new products and services are continually produced using emerging technologies such as artificial intelligence, robotics, the internet of things (IoT), 3D printers, and nanotechnology.

The diffusion of these products and services can help improve conventional industrial processes and quality of life. But the more they emerge, the more likely they are to involve new risks and uncertainties regarding safety, raising questions about their relationships with existing institutions and institutional frameworks, especially regulations, when they are implemented in society. In other words, those new products and services may be prevented from being smoothly introduced into markets because it is difficult to determine how existing regulations are applicable or because applicable regulations do not exist in the first place. Furthermore, global markets make the situation more complex since different countries have different regulations. Meanwhile, the rapid spread of new products and services can be seen in some emerging countries as they leapfrog stages of technological development that were experienced by developed countries and move directly to advanced technologies, actually facilitated by the fact that they never possessed the urban infrastructure or related institutions or regulations in the first place.

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