Regulators’ Experimentation Toolkit – A guide to running regulatory experiments

In collaboration with Nesta, Canada’s Centre for Regulatory Innovation and Science Practice, Challenge Works has developed a toolkit to provide regulators with a practical guide to identify, design, and carry out regulatory experiments.

A constant challenge for regulators is the need to make decisions in contexts of uncertainty – for example, uncertainty about what new innovations will emerge and how they should be regulated, uncertainty about what ethical issues new innovations raise and uncertainty around how regulators can adopt new ways of working. Often, these uncertainties cannot be satisfactorily resolved through traditional approaches to information-gathering such as reviewing existing research and public consultations. Experimentation provides a way for regulators to reduce uncertainty and to inform regulatory decision-making in these circumstances. 

In support of the Centre for Regulatory Innovation’s mandate to facilitate regulatory experimentation, the Regulators’ Experimentation Toolkit was developed to provide regulators with a practical guide to identify, design, and carry out regulatory experiments. This toolkit was commissioned by the Centre for Regulatory Innovation (located in the Treasury Board of Canada Secretariat) and developed by Nesta and Challenge Works in collaboration with Science Practice.

The toolkit builds on Nesta and Challenge Works’ research and practice in anticipatory regulation, a set of behaviours and tools to help regulators and government identify, build and test solutions to emerging challenges in particular in rapidly changing markets. Being experimental is one principle regulators can adopt to become more ‘anticipatory’ in their approach to innovation.

Challenge Works has also directly supported regulators to identify, develop and test innovative products and services and gather learning to inform their regulatory regimes through the:

• Open Up Challenges – working with the Open Banking Implementation Entity and the Competition Markets Authority, the Open Up Challenges supported the implementation of open banking in the UK through a data sandbox and challenge prize.
• Legal Access Challenge – working with the Solicitors Regulation Authority as part of BEIS’ Regulators’ Pioneers Fund, the Legal Access Challenge testbed supported innovative digital technology solutions that directly help individuals and SMEs to better understand and resolve their legal problems.
• Ofwat Innovation Fund – working with Ofwat, the Innovation Fund aims to help the England and Wales water sector grow its capacity to innovate and meet the needs of customers, society and the environment through a series of innovation competitions supporting ambitious water company initiatives that demonstrate bold new approaches to innovation.

The Regulator’s Experimentation Toolkit includes two sections:

• Regulatory Experiments – practical advice for identifying opportunities for experimentation, and for designing and running an experiment. The toolkit defines regulatory experiments as a test or trial of a new product, service, approach or process designed to generate evidence or information that can inform the design or administration of a regulatory regime. 

• Regulatory Sandboxes –  clarifies the concept of sandboxes and their relevance to regulators, and provides practical advice for implementation. The toolkit defines regulatory sandboxes as a facility, created and controlled by a regulator, designed to allow the conduct of testing or experiments with novel products or processes prior to their full entry into the marketplace. 

The toolkit concludes with a glossary, references, and additional resources to support regulatory experimentation. The toolkit is available in French and English.

For more information on regulatory experimentation in Canada, contact the Centre for Regulatory Innovation at [email protected]