Sustainable AI and Disruptive Policy – AI Regulatory Sandboxes

Abstract

The rapid pace of digitalization and the new opportunities for value creation has raised a concern that regulation is lagging behind and becoming an obstacle. A number of tools have been proposed in order to facilitate innovation that is aligned with existing or upcoming policies. A specific case of both facilitating and regulating innovation is the EU’s proposed regulation of AI systems. The act not only poses legal requirements on providers and users of AI systems but also includes measures for facilitating innovation – the concept of regulatory sandboxes is defined with specific purposes together with legal exempts. At the time of releasing our paper, the trilogue has reached a political agreement. This means the proposed AI Act will be, even though we do not yet have the final wording. By mapping the negotiation mandates of the European Commission, the European Parliament and the Council of the European Union against Swedish experiences of facilitating innovation and regulatory compliance in relation to AI, we still suggest launching pilots for regulatory sandboxes without delay. Based on our own experiences from conducting policy labs and those reported on by others from their regulatory trials, we conclude that it takes time to grow confidence in defining a research agenda with other stakeholders and then strike the balance between facilitation and surveillance of innovation. Something that will require institutional learning and capacity building. The mandate to foster and facilitate regulatory compliance as well as innovation, given to the public sector through the AI Act’s regulatory sandboxes, is disruptive. It changes the role and responsibilities for some national authorities, requiring the acquisition of new competences and resources, as well as for the private sector. When they team up with a competent authority the mandate to act becomes larger, as does the responsibility with regards to which kinds of innovation to drive. Conducting trials in the current window of opportunity, between now and when the AI Act is in force, will create experiences that policy makers and stakeholders can draw on when creating the detailed guidelines for organising regulatory sandboxes. Adopting an incremental and iterative process enables a transition from learning the basics of selecting a case and finding relevant partners to detailing how to process data and sharing responsibilities and rewards.This publication is partly financed by the Swedish Innovation Agency, grant number 2021-03639. </p