Technological Progress and the Future of Regulatory Change

Rapid technological change leads to discontinuous change in business, the evolution of new business models, and the disappearance of entire industries, just as rapid environmental change leads to the evolution of new species and the extinction of others. Rapid change in business models leads to new sources of power and new forms of abuse of power, which in turn leads to the need for new forms of regulation. While increased regulatory restriction may be necessary to deal with new forms of abuse, regulatory relaxation may be necessary to allow the pursuit of new opportunities. Some business models may require both: sharing economy platforms produce value for their users and should be encouraged, while creating harmful externalities that need to be controlled.