There is a tension between innovation and regulation, and it is important to strike a balance between both. It is this balance that policy tries to achieve.
On the one hand, over-regulation risks suppressing innovation. For example, a quick way of driving digital exclusion is by effecting policies which excessively tax devices and connectivity thereby driving up costs. This is counterproductive as it deters the adoption of these ICTs. We need to understand that ICTs are generally not an end in themselves. They are a means; they are enablers. It is, however, appropriate to tax the value derived from the goods and services generated from the use of the ICTs.
On the other hand, reckless innovation could be harmful to the public. Regulation, even in a free market, is an essential check against mischief and it incentivises responsibility. In the era of big data, a legislative framework that guides data-driven innovation away from misuse is key to securing a sustainable future for the industry. In this regard, Kenya’s new Data Protection Act will go a long way in helping promote the trust necessary in accelerating the adoption of ICTs. This can only be a good thing for the development and proliferation of new data-driven services. Securing the confidence of data subjects is crucial to ensuring the adoption of innovative technology. It also encourages investment in ICT-enabled projects.
Policymakers have a duty to be objective in balancing the tension between innovation and regulation. They need to be reflective and forward-thinking to anticipate the opportunities and risks involved in technology-driven innovation. Absent, inappropriate or fragmented policies across the continent make doing business relatively difficult in Africa when compared to the rest of the world. Like Africa, India has over one billion people, but it has created a policy environment that is more encouraging for ICT investors.
For the organisations that play the role of principal data holders, however, self-regulation is imperative.
Technology-driven innovation tends to be ahead of society—as it should be—and the law tends to lag behind innovation. In this context, there is the notion that industry players ought to get into the practice of self-regulation. They need to understand the risks that come with their innovations and take responsibility for managing them. It is often better to practice self-regulation as opposed to being forced to comply. Forced compliance often generates incremental operational costs to the detriment of the bottom line.
CIOs need to move away from being IT managers. They must embrace the responsibilities that come with being a more influential CxO. In an increasingly data-driven top line and a technology-influenced cost line, the CIO now has a direct bearing on the bottom line. In a highly competitive market and/or one with downward trending macroeconomic indicators, customer retention is key. KYC (knowing your customer) becomes more than just a compliance requirement as is the case in the banking sector. You must know your existing customer better beyond the demographic data. Understanding of customer preference and behaviour data is what drives growth at the top line. Customers will transact more when goods and services are of value and address their needs.
Technological innovation is undoubtedly the path we will take into the future. We need to ensure that we have the right frameworks and dispositions to make the most of our time there.