Designing Innovation-Friendly Regulation
As Europe tries to strengthen its competitiveness in strategic technologies like artificial intelligence (AI) and cloud, the debate over whether regulation constrains innovation has intensified. Some argue that...
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Designing Innovation-Friendly Regulation
As Europe tries to strengthen its competitiveness in strategic technologies like artificial intelligence (AI) and cloud, the debate over whether regulation constrains innovation has intensified. Some argue that Europe’s regulatory framework raises costs and slows investment; others see regulation as a tool to shape markets, build trust, and support new technologies. Who is right?
This new CERRE paper, produced by Zach Meyers, CERRE Director of Research, and Alexandre de Streel, CERRE Academic Director, argues that this debate needs more nuance. Regulation can support innovation when it addresses genuine market failures, strengthens competition, or helps co-ordinate investment. But European politicians too often ignore the costs of regulation. Poorly designed rules can raise barriers to entry, favour incumbents, and divert resources towards compliance. Regulatory leadership does not automatically translate into industrial leadership: the Br
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