European Risk Forum Monograph, Fostering Innovation. Better Management of Risk, March 2015
Note by Lorenzo Allio
Public risk management is one of the fundamental ways in which governments solve societal problems and meet citizens’ expectations. In managing risks, scientific evidence has traditionally been the key knowledge input for decision-making. Today, the management of risks related to public health, safety and environmental protection features among the principal functions that public opinion expects from the European Union.
The Better Regulation agenda in the EU has traditionally unfolded along narratives related to excessive administrative burdens and, more generally, disproportionately high compliance costs. Emphasis has been put on simplifying administrative requirements and streamlining legislation. In risk management terms, the EU has established specialist risk assessment agencies; set up independent scientific committees supported by advanced rules of procedure; and adopted a policy for the use and collection of evidence.
Nonetheless, rigorous risk assessment has oftentimes been replaced by hazard-based approaches, and precautionary measures have not systematically been checked against the good regulatory principles of proportionality and avoidance of unintended consequences and risk-risk trade-offs. This has not only jeopardised the effectiveness and legitimacy of many EU public policy decisions, but it has over time also caused the productivity growth and competitiveness in the EU to stall compared to its main trade partners. One of the main reasons for such poor economic performances lies with an EU regulatory environment that has become increasingly characterised by risk avoidance rather than risk acceptance and a preference for social concern rather than high quality science.
The European Commission has committed to revise its Better Regulation strategy and 1st Vice-President Timmermans is expected to adopt a new package later this May. To inform the process, the European Risk Forum (ERF), the leading think tank in Brussels devoted to promoting EU risk regulation, has recently published a series of recommendations on how regulatory reform measures can foster innovation – the single most important driver of growth in a mature economy. The ERF monograph makes the case for introducing an “Innovation Principle” to be embedded in an enhanced and coherent framework of risk regulation policies, guidelines and institutional structures. A simple, straightforward idea, the Innovation Principle requires that whenever the EU institutions consider policy or regulatory proposals, the impact on innovation is fully assessed and addressed. ERF strategic and operational recommendations include:
- issuing political statements stressing the importance of ensuring the proper consideration of productivity, innovation and wider impacts, such as jobs, growth, and competitiveness, in the legislative and regulatory decision-making process;
- establishing institutional structures close to the centre of decision-making with responsibility for assuring the quality of scientific advice used, throughout the Commission, to inform risk management decisions;
- revising the policy for the use of scientific evidence when making risk management decisions. This should be based on scientific evidence that is obtained using internationally respected and validated scientific methods, taking into consideration both ‘bias’ and ‘conflicts of interest’; that uses excellence as the main criteria for selecting and using scientific evidence; and that provides a comprehensive set of key concepts and definition.
Together with other ERF policy proposals, the introduction of the Innovation Principle is likely to increase the chances of reaping the synergies between Better Regulation, industrial policy, and Europe 2020 strategies; and restore confidence and incentives to innovate whilst ensuring a high standard of protection for citizens and the environment.
Lorenzo Allio, PhD, is a Senior Policy Analyst with the European Risk Forum. He has collaborate with the Observatory since 2009.