The 8 Modules, 31 Focus Points and 5 Collaboration Phases of the SEIC Methodology provide a path to success

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Our Diagnostic Tool provides a gap analysis of SEI capability to support the strategic planning process

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In-depth explorations of the approaches and techniques used by leading organizations in the field of SEI today

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Thought leadership and insightful articles on the most important issues for companies pursuing an SEI agenda

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Insight calls are available to join for all members of the SEIC and will be addressing a number of topics

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Useful downloads, from unique research to practical templates, frameworks and tools being used by SEI leaders

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The 11 modules of the SEI methodology focus on the key processes that enable the successful rollout of SEI

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Our Capabilities Assessment tools provide the means for organizations to gain insight into their own SEI approach

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In-depth explorations of the approaches and techniques used by leading organizations in the field of SEI today

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Thought leadership and insightful articles on the most important issues for companies pursuing an SEI agenda

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Useful downloads, from unique research to practical templates, frameworks and tools being used by SEI leaders

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Does regulation inhibit innovation’s potential, or enhance it?

Recent high-profile cases have drawn criticism of regulations’ negative impact on innovation, but the opposite is equally true: regulation can enhance the innovation process

Innovation regulation

 

2017 saw the impact that regulation can have on innovation thrust into the spotlight. Spurred on by several high-profile news stories, the question of how regulation affects innovation hasn’t just been confined to the business world: it’s entered public debate.

 

In the UK, at least, the most glaring example was Transport for London’s (TfL) decision to strip Uber of its operating license, with the US company’s alleged lack of corporate responsibility cited as a primary reason. The public responded quickly: a petition to reverse the move has attracted over 850,000 signatures at the time of writing.

 

Another can be found in a recent piece of EU law that, to boost energy efficiency, banned vacuum cleaners with powerful motors. The law was condemned in certain quarters, with several news agencies running stories in opposition of it. “We think that technical innovation itself would be a better way of changing consumer behaviour,” a Dyson spokesman told the BBC.

 

These issues highlight an increasingly important consideration for companies in our Supplier-Enabled Innovation Center (SEIC): how to factor regulatory compliance into innovation management.

 

When assessing whether an external innovation is turned into a project, regulatory compliance must be one of the stage gates it passes through. Similarly, organizations looking to work with, incubate or hold a stake in a disruptive business like Uber must understand how that business fits into a given regulatory environment.

 

Companies would be wrong to assume that the impact of regulation on innovation will always be negative, however. As an OECD report notes, “Government regulations can have both positive and negative effects on the innovation process,” – a conclusion that is borne out in other examples from 2017.

 

Just last month, a study from sustainability company Aldersgate Group found that the automotive sector has witnessed an uptick in innovation, jobs and skills growth as a result of new environmental regulations. Changes to China’s intellectual property regulations have also been widely welcomed as a boon to the country’s innovation capability.

 

So, the question of whether regulation curbs or enhances innovation isn’t clear-cut. In certain industries and markets, the effect has been positive; in others, it might be seen to hinder the innovation process.

 

Neither is regulation or innovation static. The rapid development of new technologies and business models means that regulation is often a step behind innovation; as was the case when Uber first entered the London market, and as is currently the case with many of the technologies that companies in the SEIC are pursuing, such as AI, automation and blockchain. Regulation will eventually catch up, and this can create unforeseen problems further down the line.

 

Organizations with an eye fixed on external innovation must bear this in mind. How an innovation fits into an existing regulatory framework is important, but so too is assessing the future implications of that innovation and being able to quickly adapt to shifting regulatory conditions.

 

A Supplier-Enabled Innovation (SEI) program that strikes this balance may spend extra time assessing an innovation before taking it to market, but will ensure that regulatory compliance doesn’t detract from SEI’s modus operandi – to deliver sustainable value to the business.

 

Samuel Wrest

 

This content is produced by the Procurement Leaders’ Supplier-Enabled Innovation Center (SEIC). To learn more about membership to the SEIC, please email us.

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