Regulatory Sandboxes

Germany
The Innovation in Politics Awards (Finalist 2019)
Digitalisation
Economy
Government
Prosperity

Innovation-friendly spaces are designed to test new digital technologies in real-life conditions, without risk to the public.

SCEPTICism of NEW TECHNOLOGIES

Drones, robots, artificial intelligence: new digital technologies and business models are making their way into many areas of the economy – faster than ever before. Such innovations offer huge opportunities, but they might also have negative effects on consumers, companies, and society as a whole. These impacts are difficult to assess in the short term. Could autonomous drones fall down onto my house? How dangerous are eScooters? Is my data safe in the blockchain? Many people are sceptical when it comes to the introduction of new technologies – especially in Germany.

TESTING within a regulatory framework

The purpose of Regulatory Sandboxes, as a new policy instrument, is to learn about the opportunities and risks that innovations carry. New ideas can be developed in an effective, innovation-friendly regulatory environment which also provides an appropriate level of protection and is accepted by the general public. Regulatory Sandboxes enable innovations to be tested for a specific length of time under real-life conditions. They help to review existing regulations and test out new ones by using experimentation clauses. The Regulatory Sandbox Strategy developed by the Federal Ministry for Economic Affairs and Energy seeks to systematically create Regulatory Sandboxes in Germany. It consists of three pillars: 1. Fostering the greater use and development of experimentation clauses; 2. Providing information and networks to facilitate the creation of Regulatory Sandboxes; and 3. Launching and supporting Regulatory Sandboxes, e.g. through competitions or support for specific projects.

DIGITAL TRANSFORMATION FOR THE GENERAL PUBLIC

Regulatory Sandboxes help develop a "smart" legal framework that is innovation-friendly, and at the same time does not lose sight of consumer protection and environmental standards. Innovation can only be successful when it is accepted by the public. Regulatory sandboxes are not an instrument designed to deregulate. They seek to reduce uncertainty and raise transparency by experimenting with innovative ideas and alternative regulatory instruments, with the involvement of the general public and businesses. This will not only lead to a better understanding of the opportunities provided by the digital transformation, but also build trust in government decision-making and legislation.

Project owner
Peter Altmaier
Minister for Economic Affairs & Energy