Regulation for innovativeness or regulation of innovation?

Pierre Larouche, A.S. Butenko

    Research output: Contribution to journalArticleScientificpeer-review

    47 Citations (Scopus)


    The legal literature concerning the interplay between innovation and law is split between two streams: law and economics (broadly defined) and law and technology. They seem to exist in parallel and largely non-intersecting inter-disciplinary silos. This paper attempts to reconcile these two streams and identify synergies. Even the definition of innovation needs to be recast in order to integrate both streams: it is best seen as a combination of three elements, namely (i) an invention, (ii) which is diffused and adopted and (iii) which has a positive social impact.
    One of the main shortcomings of law and technology lies in how it sees innovation as an essentially technological phenomenon, and one that is largely exogenous to the regulatory process. Law and economics literature pays closer attention to regulation for innovation (or innovativeness): it identifies market failures, such as market power, and externalities flowing from the public good nature of information. Yet law and economics literature assumes that innovation is good for welfare, without more. Law and technology can usefully help to make up for that flaw; it takes a more critical view of innovation and is rather concerned with the regulation of innovation.
    The vexed issue of disconnect – the difficulty for law to keep up with the pace of innovation – shows how these two streams can be combined. Within regulatory disconnect, one can distinguish a horizontal dimension (time) and a vertical dimension (level of generality). Much law and technology literature advocates early and technology-specific intervention to deal with emerging innovations. Law and economics literature would point in the other direction on both dimensions, but beyond that, it also offers insights into institutional models that allow a balancing of the concerns arising from each stream of literature, using independent and accountable regulatory authorities.
    Original languageEnglish
    Pages (from-to)52-82
    Number of pages31
    JournalLaw, Innovation and Technology
    Issue number1
    Publication statusAccepted/In press - 2015


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