1. Second International Seville Seminar on Future-Oriented Technology Analysis (FTA): Impacts on policy and decision making 28th- 29th September 2006 REGULATORY FORESIGHT: METHODOLOGIES AND SELECTED APPLICATIONS Author: Knut Blind Presenter: Kerstin Cuhls Chair of Innovation Economics at Berlin University of Technology Head of Department Regulation and New Markets Fraunhofer Institute for Systems and Innovation Research

2. REGULATORY FORESIGHT Content Introduction: Definition Overview of Regulatory Foresight Methodologies Implementations Indicator-based approaches Surveys Foresight Studies Comparative Assessment

3. REGULATORY FORESIGHT Types of Regulatory Foresight Ex ante regulatory impact assessment Ex post regulatory impact assessment Regulatory foresight in the wide sense Identification of future regulatory challenges = regulatory foresight in the narrow sense

4. Structure of the Assessment of the Methodologies General description: general description of the foresight and impact assessment methodology, including the operational steps for application Good practice examples: practical examples of how the methodology has been used at different levels General assessment Conditions for methodology application: indications of the costs of implementation, complexity of use, degree of methodology acceptance Data requirements/indicators: indication of the input, output, outcome/impact indicators available to measure the future needs for regulations and standards General assessment of the scope and limits of methodology REGULATORY FORESIGHT

5. Evaluation Matrix: Matching policy instruments and methodologies REGULATORY FORESIGHT Source: Fahrenkrog et al. 2002

6. Selected Methodologies adequate for Regulatory Foresight REGULATORY FORESIGHT Indicator-based approach Surveys Foresight studies (incl. Delphi methodology and scenarios)

7. Indicator-based Approach: Science and Technology Indicators REGULATORY FORESIGHT Source: Blind (2004) modifying Grupp (1998)

8. Indicator-based Approach: Examples Blind (2002, 2004) shows that developments in R&D measured by patents cause subsequent standardisation activities empirical studies, which confirm the relationship between the dynamics of technology and the adaptation of the regulatory framework based on quantitative approaches, are missing some studies investigated the influence of the regulatory framework on R&D activities (Koch et al. 2004) or product innovation (Bassanini, Ernst 2002) plenty of anecdotal evidence that the regulatory framework has been adapted to the emergence of new technologies, like in bio- or nanotechnology REGULATORY FORESIGHT

9. Indicator-based Approach: Challenges link between science and technology indicators and indicators describing the regulatory framework is not established yet -because by a significant lack of regulatory indicators and especially of respective time series and of rather differentiated sub- categories. -not all new developments in science and technology, but especially those with possible impacts on health, safety, the environment and on the functioning of markets require an adjustment of the regulatory framework -identification of those regulation-relevant new technologies or new specifications within mature technologies is only at the very beginning and requires further methodological efforts REGULATORY FORESIGHT

10. Indicator-based Approach: Assessment Conditions for methodology application: -S&T indicators available -problem of indicators related to regulations -approach rather innovative Data requirements/indicators: -simple S&T indicators not sufficient -regulation-relevant contents and stakeholders necessary to to identify challenges and areas for future regulatory action General assessment of the scope and limits of methodology: -adequate for detecting new regulatory fields -progress in indicator-based approaches required -complementing content and stakeholders analyses allow a further specification of possible fields input for other methodological approaches REGULATORY FORESIGHT

11. Surveys: Operational Steps Elaboration of questionnaire (including questions on the involvement of setting regulatory frameworks and standardisation, the relevance of regulations, the use of existing standards, future needs and possible impact dimensions); Definition / Construction of target population in terms of type of organisation, sectors, size classes, and regions; Collection of survey and preparation of data set; Definition of objectives of the organisation depending on the possible requirements for regulations; Construction of econometric models based on theoretical hypotheses; Statistical or econometric data analysis and interpretation of results. REGULATORY FORESIGHT

12. Surveys: Example: Discrepancies between preferred and current use of standards REGULATORY FORESIGHT Discrepancy indicator: formula: (  i(% of type preferred - % of type used)2 )½ (i = type of standard) Source: Blind 2006

13. Surveys: Assessment Conditions for methodology application: -rather time-intensive -asking stakeholders about future needs for standardisation and regulation activities -high acceptance as a methodology Data requirements/indicators: -very specific regulatory challenges addressable -differentiation of needs into different types of stakeholder groups possible -if surveys are representative, data can be combined with indicators General assessment of the scope and limits of methodology -assessing future needs for regulations and impacts rather difficult even for experts, -improvable to become reliable instrument REGULATORY FORESIGHT

14. Foresight Studies: Intentions -find out changes in consumer preferences and to detect new technological opportunities -identify a choice of technological opportunities, set policy, e.g. regulatory, priorities and assess potential impacts and chances -discuss desirable and undesirable futures -prospect the potential impacts of current research, technology and regulatory policy -focus selectively on economic, technological, social and ecological areas as well as to start monitoring and detailed research in these fields REGULATORY FORESIGHT

15. Foresight Studies: Example: Delphi Survey among Telecommunication Experts small-scale Delphi study among participants of an ITU (International Telecommunication Union) expert workshop assessing future technical and business developments taken from the Seventh Japanese Technology Foresight Report (2001) according to their expected time of realisation, their importance, the effectiveness of policy measures, e.g. R&D support, (de-)regulation, and standardisation examples of results -role of standardisation highest for network systems of protecting privacy and secrecy -regulation required for implementation of systems checking data content unsuitable for kids REGULATORY FORESIGHT

16. Foresight Studies: Assessment Conditions for methodology application: - costly and time-consuming involving many experts -careful performance of multi-stage methodological processes involving stakeholders -high acceptance, but tendency to overburden certain approaches, like Delphi surveys Data requirements/indicators: -development of questionnaires including relevant areas requiring new or adjusted regulation -including all parties involved in regulation including users with minimum expertise -sufficient sample sizes promoted by short surveys -scenarios on future role of regulation should include information about various regulatory options; consistency checks have to be made in order to identify different future scenarios REGULATORY FORESIGHT

17. Foresight Studies: Assessment General assessment of the scope and limits of methodology: -Delphi surveys are flexible and can be applied in all areas, require sufficient number of experts able to assess the future role and types of regulation -Delphi method cannot detect sudden science and technology breakthroughs -Delphi methodology promotes convergence process leading to a consensus, but weak signals or the minority views could be overseen -variety of visions could be better covered by scenario development -in the scenario process bias by individual experts has to be controlled for REGULATORY FORESIGHT

18. Overview and Assessment of Regulatory Foresight Methodologies REGULATORY FORESIGHT Metho- dology TypeData RequirementsStrengthsLimitations IndicatorsQuanti- tative also providing qualitative information Adequate science and technology indicators combined with qualitative data Systematic approach Comparison across technologies, countries and over time Detailed analysis allows the identification of specific regulation- relevant content and even stakeholders Only quantitative data is not sufficient to detect emerging fields of regulation Little information about possible types of regulation Influence of non- technology-related factors cannot be considered SurveysQuanti- tative Qualitative Micro data of the respondent and the organisation Assessment of future relevance of regulation, but also actual relevance of existing regulation Detect insights of specific needs for future regulation Findings from the surveyed sample can be generalised to the universe High cost and time- consuming Processing and analysis of data requires large human resources Identification of adequate samples Some types of information are difficult to obtain (answers to counterfactual questions or earlier situations) Long time series generally not available Foresight Studies Qualitative Semi- quantitativ e Qualitative and semi- quantitative data from Delphi surveys Scenarios, roadmaps Consensus building to reduce uncertainty about regulatory priorities and impacts Articulation and road mapping of the development of new technologies Impossibility to detect major technological breakthroughs and their regulatory requirements In case of conflicting interests, non-consensus about priorities Identification of experts Uncertainty increases with complexity of the context (technology, markets) and future time horizon