This is a work in progress and the theme of my working paper. I am sharing my thoughts and would love to hear yours.
Global Digital Transformation began with landlines and is an ongoing journey that traversed mobiles, the internet, and social media. Now we have highly sophisticated virtual worlds with Augmented Reality, Mixed Reality and Immersive Gaming, and the Metaverse is our future. It is remarkable that at every stage, there was a new technology waiting in the wings - beguiling to customers but a threat to incumbents who sought to acquire it, impede its progress or crush it.
Having viewed this journey from every angle as a policy maker, programme implementor, regulator, public policy professional, legal advisor and professor. I find it piquantly thought-provoking that many stakeholders and the incumbents are either oblivious or ignore the writing on the wall.
Would things be different if they genuinely acknowledged and adapted rather than resisted the onslaught of innovation, competition and regulation? Let me explain that slightly enigmatic comment.
Regulation is always playing catch up with technology. That is the way of the world. There is a good reason for this. Very recently, in a discussion with a brilliant gaming mind, I realised that much as we might want to preempt and correct every consumer harm or anti-competitive conduct, regulators cannot afford to get it wrong. I am a staunch believer in eschewing market interventions unless they are needed and carefully calibrated to rectify distortions without collateral damage. Simply put, it is safer not to regulate than to over-regulate or regulate in haste.
Thus, regulators take their time to gather information, analyse the impact of new technologies, consult stakeholders and conduct impact assessments. In the interim, the parties aggrieved by incumbents' harmful or anti-competitive conduct go to court, and a wealth of illuminating jurisprudence helps regulators bridge the information asymmetries. (The gap that incumbents strive artfully to foster and preserve).
Finally, comprehensive consumer and competition-friendly regulation emerges to curb harm and clip the wings of powerful incumbents. The new technology can now flourish.
However, the seeds of the next cycle have already been sprouting. The innovators or challengers are not all equal. While battling incumbents' tactics to suppress them, some had already grown relatively large and popular. They are the ones who were keeping courts and regulators busy fronting the resistance. They now truly take off.
Compared to their counterparts, they have the advantage of time, consumer numbers, loyalty, and better ideas, and regulators see no reason to curb their growth and monitor their conduct. In any case, so busy was the regulatory machinery tackling the present incumbents that they paid scant attention to and did not fully understand or could not entirely anticipate the more disturbing aspects of the new technology. If they try, information asymmetries and doubts nurtured by the new incumbents keep them hesitant.
When they do act, harmful behaviour has already played out, another novel innovation is struggling on the sidelines, and the cycle repeats itself. Sounds familiar?
