What RIO could mean for greater UK innovation

Test and Learn approach

Encouraging greater innovation needs a test-and-learn approach. You can't prove the value of innovation through small pilots alone – scaling and adapting innovative technologies (and the markets, regulation, services and communities that use and shape them) is a continuous, long-term process. Start small, but grow iteratively. Scaling up technological innovation is likely to require multiple iterations of regulation, and learning from the response to regulation. Once at scale, these cycles must continue to keep pace with continuous changes of technology, society, environment and geopolitical context. The regulatory sandboxing used by the Financial Conduct Authority, particularly around application of emerging technology, is a prime example of this practice.

Risk

Innovation comes with risk, and we need funding structures that acknowledge this. No amount of upfront research or analysis can create an evidence base that proves the future value of innovation before anything practical is tested in real situations. Investment needs to reflect the reality that experimentation and iteration are necessary, and not every innovation will succeed. We have to be prepared to fail, to learn from that failure and build on the learnings. The culture and processes around The Treasury’s Green Book don’t encourage this kind of risk taking. Instead, they prioritise ‘proof’ that an investment will yield a positive return – even when the unpredictable nature of delivering with innovative technology makes such proof impossible.