What do you have to fear? New Technologies!

The rate that new technology is adopted is accelerating. In America, the use of the internet was adopted six times faster than electricity had been when it became available a century earlier. But greater innovation can bring greater risks which require more control. Many aspects of our lives are very heavily regulated things like, food, medicines, cars, aviation. These are all things where if something goes wrong it could be really bad, lots of people can die. Too many rules can stifle creativity while too few can lead to tragedy. There’s a very common perception that regulation and innovation are sort of opposed to each other, if you have more of one then you’ll get less of the other. So, how can we maximize the benefits of innovation while also reducing its risk?

Technology has delivered longer, safer and more interesting lives but innovation is always a journey into the unknown. When you have a new technology, it’s going to have unexpected consequences it’s going to be used in unanticipated ways. Some of those will be good, some of them could be harmful. So, this is where regulators step in. Most key technologies are heavily regulated cars, aviation, health care, finance. The difficulty is that technology moves quickly, regulators move slowly. So, finding the right way to regulate a technology is always very difficult. It’s a sort of balancing act.

The challenge of balancing innovation and risk is seen in the progress of one particular technology, autonomous cars. It’s a very interesting technology that, you know potentially could make a big difference in the future. The trouble is, it doesn’t quite work yet. Several tech companies are racing to develop autonomous vehicles. Google’s sister company, Waymo, is one of the leaders. It runs a fleet of fully driverless cars already out on public roads.

Chang, the head of state policy and affairs says: “In October 2020, we launched our first commercial product in Arizona. So, if you were to fly into Chandler, Arizona and download the Waymo app, you can hop into a fully autonomous car. You get into the car, buckle up, hit a button of where you want to go and you’re on the road. Our Waymo driver never gets tired, never gets distracted is never grumpy.” Nearly 40,000 people die and millions are injured every year on America’s roads. So, putting driverless cars on public highways could present a huge risk. Can we build a vehicle that can drive in ordinary traffic with other road users, with cyclists with pedestrians, with other cars? There are humans that can’t do that.

The challenge is getting these vehicles to work not in a controlled environment in the everyday world which is a complex and unpredictable place. Waymo chose Chandler as its test site because Arizona state regulations gave it greater freedom to experiment. Chang: “Arizona has made an intentional decision to become the center of innovation for autonomous vehicles. They helped to pass and worked hand-in-hand with policymakers and other stakeholders to really get the legislation passed and so the current regulatory atmosphere has been one that we’ve been able to help shape and help inform.”

Uber, another company racing to develop autonomous vehicles began testing in nearby Tempe to take advantage of Arizona’s regulatory regime. But the regulations were thrust into the spotlight one Sunday night in March 2018. Seriously, hurt in a crash with a self-driving Uber vehicle. Elaine Herzberg was killed as she crossed a road in Tempe by a test car belonging to Uber. A safety driver was on board at the time but failed to prevent the collision. The vision system couldn’t figure out what was happening didn’t put on the brakes and hit her and some people have said that, you know had there been a stricter regulatory regime around these vehicles then this accident wouldn’t have happened.

Following the accident, Arizona immediately suspended any further testing of Uber’s autonomous vehicles. Waymo continue to operate in Chandler and insists that its technology is safe. Chang: “We’ve done 20m miles of testing on public roads and just recently, we released a safety paper for the public, for academics and policymakers to really look at our safety outcomes. We looked at 6m of our autonomous miles and we found that we had only very minor collisions in those 6m miles of driving. The proof is in the numbers we are a very safe autonomous vehicle service.” For self-driving cars and their regulators, the biggest hurdle may not be safety but public opinion.

The evidence so far is that autonomous cars are very safe drivers So about 40,000 people die on the roads every year in America for example, if you make an autonomous car a thousand times safer, you’re still going to have 40 people being killed by autonomous vehicles every year. Everyone is going to be a newspaper headline you know, “person killed by robot car”.

While too little regulation can be risky too much can be bad for business. And those in the know claim this is the case with another emerging technology in America, drones. Two big dangers with drones one is they’ll fall on your head and kill you the other is they’ll crash into some other flying vehicle and make that crash. And so clearly, this is not something where you can just have a free for all, let people do whatever they like. you’ve got to have rules.

Since 1958, the body that sets those rules in America has been the Federal Aviation Administration. Aviation for 100 years has involved carrying people somewhere in the air on a giant metal structure with thousands of gallons of fuel strapped underneath. Along came drones, it’s fair to say the regulators didn’t know what to do with that because their entire history and structure has been focused on protecting people on board an aircraft by creating very high standards …both for the pilot as well as for the aircraft.

The FAA’s reaction was to make flying drones commercially very hard indeed. Initially, if you wanted to fly a drone in order to take pictures of a property that was being sold or survey a building site, you couldn’t do it unless you had a pilot’s license. Many people felt that this rule was sort of silly. It was imposing the rules for the old technology on the new technology. The FAA updated its regulations in 2016 but some argue that the rules are still lagging behind and stopping drones from fulfilling their full potential.

The next frontier for drones and their regulation really is what’s called beyond visual line of sight and this would enable drones to fly unlimited distance autonomously. You can’t gain much value out of delivering a package only a couple thousand feet, you could just walk it over there or drive it. If you’re going to do package delivery with the drone, you’re going to want to fly a few miles US drone company Wing is already doing this but not at its base in California more than 7,000 miles away, in Logan, Australia.

Wing went to Australia for a number of reasons the regulator in Australia has very high safety standards and we knew that we would be able to work with them to ensure that our operations were reviewed carefully …and they would be safe and now we’re doing thousands of deliveries a week to customers. Beyond line of sight is really necessary for operations to scale over time.

Some claim the FAA has driven these innovations overseas. Behind the scenes, there’s tremendous frustration that the FAA is not moving fast enough other countries are ahead. For something as serious and obviously regulated as aviation where you just know that rules are coming. It’s very difficult to convince investors to put their money in to something when literally the government is telling you. this is not currently permitted and we don’t know when we’re going to have a set of rules.

Letting large numbers of drones loose in already crowded airspace …is definitely a safety challenge. The technology exists today to allow us and others to operate beyond line of sight and the regulatory environment will have to adapt to allow that to happen. What we have in the United States so far is basically no risk tolerance. We need to figure out ways to promote their integration into society rather than dwelling in these overly conservative traditional safety frameworks that don’t really apply to these types of risks.

If too much regulation can smother innovation and too little can be dangerous is there a middle ground? There are times when regulation and innovation go hand in hand, so they’re not always enemies. What it’s all about is having the right kind of regulation and having smart regulation and a really interesting example of that is what we’ve seen recently in financial services with so-called sandbox regulation. The British financial-technology sector was an early adopter of sandbox regulation. A sandbox is a place where kids can play with buckets and spades and sand and mud, and they can make a mess and it’s fine to make a mess in the sandbox. You wouldn’t let them do that on the living-room floor but a sandbox is a controlled, closed environment where making a mess is allowed.

Keeping innovation in a controlled environment is sensible in the fast-moving financial sector. If a bank fails or something goes wrong lots of people lose lots of money and so the sandbox lets you have the best of both worlds. It means that there’s close regulatory supervision but there’s also lots and lots of scope for innovation. The sandbox approach helped London become a world-leader in financial technology, a sector worth more than £6bn to the UK economy. And it is now being adopted for another emerging technology …that’s on the move, electric passenger flight, known as eVTOL The Civil Aviation Authority regulates Britain’s airspace.

We see significant potential for eVTOL in the near term in terms of adapting existing helicopter markets. But also in the long term, it could potentially play a role in connecting up different parts of the country eVTOL aircraft are similar to drones powered by motors that run on batteries but big enough to carry passengers. Vertical Aerospace in Bristol has already flown a prototype. We’re looking at decarbonization of aerospace which has historically been a very polluting environment and moving more towards battery power taking energy from renewable sources Vertical Aerospace is part of a consortium of companies in a regulatory sandbox working with the Civil Aviation Authority Collaboration is really important so that we can ensure that we have an ecosystem ready to accept an aircraft when it actually goes into full-scale production. We don’t have to choose between innovation and regulation.

If we engage with someone at an early design stage or a conceptual stage, then what we’re helping them to do is build a product that can actually be regulated rather than coming in at the end and effectively kicking it into touch. Autonomous vehicles, drones, eVTOL aircraft three new technologies with the potential to deliver great benefits, but also real dangers. Regulation needs to be used to manage the risks while also maximizing potential rewards. It’s tempting to see regulation and innovation as a sort of seesaw when one of them goes up, the other one goes down. But actually, the reality is more complex than that and there are ways that you can have safe, sensible regulations and still have lots of innovation.