Innovation Implemented by Public-Private Co-Creation

https://www.youtube.com/watch?v=O6CjTgWoaWM&list=PL3C6eF-zu5AYohNL1ZgOBqlwwJ29x-lTO&index=8

• Cabinet Office

homata If social systems or laws are an obstacle to your new idea, you can consult the regulatory sandbox system of the Cabinet Secretariat. You can consult the possibility of doing this from the demonstration level. Different from special zones

Cabinet Secretariat's Regulatory Sandbox System Regulatory Sandbox System nishio Regulatory sandbox system, created in 2018. Regulators can't reform regulations without data, operators can't experiment and get data if there are regulations. Sandboxes allow us to "try first" and "formulate policy through demonstration and dialogue with the market" #FtCTokyo

• Q: What is the difference between a special zone and a
  • Not that the law doesn't apply in the Tsukuba Robotics Special Zone.

[The "Regulatory Sandbox System," which encourages innovation through "public-private co-creation," is a mechanism to temporarily lift regulations that prevent the social implementation of new technologies and business models, and to enable demonstration experiments. The period of implementation and participants are limited to verify the usefulness and safety of AI, blockchain, etc., and the results can be used for regulatory reform and business expansion. While the special zone system is regionally (area) based, the sandbox is unique in that it is applied to each specific business model. The Japanese government has been strengthening its support for startups, and this system encourages the development of innovative companies and their implementation in society.

Background and the "chicken and egg" relationship in 2018

1. background on the creation of the regulatory sandbox system (2018)

   • Rapid evolution of technology
     • In the 2010s, new technologies such as AI, blockchain, and IoT emerged at a rapid pace. Innovative business models were created one after another, but were hampered by "Showa-esque" laws and regulations that did not presuppose such models, making it difficult to implement them in society in an increasing number of cases.
   • Response by the Japanese Government
     • The Regulatory Sandbox System was created in 2018 to solve this "mismatch between regulations and new technologies" by providing a mechanism to "temporarily remove the application of existing regulations for a limited period of time and participants to demonstrate new technologies.
       • Conventional legal reform takes a long time and cannot keep up with the speed of innovation
       • Adopt an "experiment-oriented" approach, in which regulatory reforms are considered based on data obtained through first conducting demonstrations

2. what is the "chicken and egg problem"?

   • Challenges on the startup side
     • When trying out new technologies that we want to implement in society, we are afraid of violating the law, and we do not know which laws may be affected, so we are unable to demonstrate the technology.
     • Without data, regulatory reform and investor understanding is not possible.
   • Challenges on the Regulatory Side
     • Unable to determine whether regulations should be relaxed because the effectiveness and risks of new technologies cannot be quantified
     • The more innovative a technology is without precedent, the less likely it is to be subject to regulatory change due to a lack of empirical data and existing cases to serve as "evidence".
   • These are the chicken-and-egg relationship of "want to demonstrate but regulations get in the way" and "want to change regulations but lack empirical data," making it difficult for both parties to move.

3. elimination by sandbox system

   • Temporary and limited deregulation "sandbox"
     • Benefits for both "startups (and businesses) that want empirical data" and "authorities that can consider regulatory changes if they have data
     • We can try it out first, and based on the results and data obtained, we can proceed with system changes and full-scale commercialization.
   • results
     • Multiple cases have been successfully implemented in society over the past 5 years since 2018
     • Accelerate innovation, attract investment, and collaborate with large companies
   • Thus, the Regulatory Sandbox System, launched in 2018, is the key to solving the "chicken and egg problem" by generating empirical data and promoting social implementation of innovative business models.

Summary of LUUP case study

• background
  • Initially, LUUP's small electric mobility vehicles were classified as "motorcycles" for regulatory purposes and required a license and helmet.
• Utilize the Regulatory Sandbox
  • As a new vehicle that is different from motorcycles, it meets conventional regulations by demonstrating safety and conducting experiments.
• results
  • The use of these vehicles, which do not require helmets or licenses, has spread mainly in Tokyo, and their use is actually expanding rapidly in Minato and Shibuya wards.
• significance
  • It is a good example of how regulations that prevent new vehicles from being implemented in the real world were cleared through the sandbox system, and is a model case for the diffusion of innovative mobility.

Consultation service (regulatory sandbox system)

• Where can I get help?
  • In the Regulatory Sandbox System, the Cabinet Secretariat provides a central contact point to resolve the issue of "not knowing which laws and ministries are involved.
• way
  • First, the contact person in charge of the sandbox at the Cabinet Secretariat is contacted, and if necessary, the relevant ministries and departments are identified to proceed with the procedures and coordination for the verification process.
• Advantages
  • One-stop support if you get stuck in regulatory compliance
  • Easy to consider regulatory revision and commercialization based on data obtained from demonstration experiments

2022 Startup 5-year plan

summary

• A startup development plan formulated by the Japanese government at the end of 2022, which calls for the investment of about 1 trillion yen in public funds and measures to support startups over a five-year period.

Target

• Increase total startup investment by 10 times in 5 years
• Increase the number of unicorns (unlisted companies with an enterprise value of $1 billion or more) created
• Promote open innovation with large companies
• Strengthening the ecosystem of human, financial, and network resources

importance

• Expected to be a driving force to break out of the traditional employment and employment model and create a new industrial structure
• The government has made startups a priority, and is making serious efforts to lower the hurdles to their implementation in society.

Relationship to Regulatory Sandbox

• Newer technologies and business models are more likely to be hampered by existing regulations
• Combining startup support measures with the sandbox system is intended to accelerate innovation creation by promoting early demonstrations and regulatory reviews.

relevance - 2022-06-07 Cabinet Decision

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