BOOK TIP | How regulation affects innovation

Regulations are an important part of a well-functioning economy, and they are constantly changing as technological advances enable new markets. Just think about how digitalization or DNA technology has shaken up the world. Political processes, such as regional integration or geopolitical tensions, also create new regulations to deal with. But overly regulated economies can lead to less innovation. Especially if the rules fail – which is not uncommon, according to the editors of the Handbook of Innovation and Regulation.

In this research anthology, 31 researchers from Europe and the US describe how regulations in different areas affect innovation. Several entries are Swedish. For example, Pontus Braunerhjelm and Johan Eklund co-write a chapter with American colleague Maurice Kugler on how regulation affects innovation, technological development and productivity growth. In the second part of the book, on the regulation of key sectors such as digital platforms, Martin Mandorff and Sten Nyberg write about how to prevent large companies from abusing their dominant position and thus preventing competition. Hans Lind is another Swedish researcher who focuses on the obstacles and opportunities for strengthening innovation in the construction industry. He starts from the Swedish context where different building regulations hinder innovative solutions.

The main message of the book is simple – innovation policy must take a holistic approach. Key questions politicians need to ask themselves: What regulations affect innovation? Which regulations are effective for innovation? and How do regulations in different areas interact to influence innovation?