The Innovation Principle – a new deregulatory tool?

Tuesday 31 May 2016

This week, the Council adopted their conclusions on Better Regulation and Competitiveness. In essence, the issue at stake is a renewed focus on the effects regulation has on companies’ innovation potential.

As innocent, and even sensible, as this sounds, the Council conclusions also raise a number of warning signs. Firstly, innovation is spoken of as an end-product. A thing against which the effects of regulation of any kind must be measured. This is odd. Innovation is, more than anything, a process that leads to a new product, service, outcome, regulation even, thought pattern, structure etc. It is these outcomes of the innovation process that should be the purpose of public and democratic evaluation. We must recall that not all outcomes are good, simply because they are new. By defining innovation as an end-product, without any form of evaluation, is wrong, and could even be dangerous. .

Secondly, when the Council further demands that the ‘innovation principle’ is taken into account when the EU considers, develops and/or updates EU policy or policy measures in ‘all policy fields’, it implicitly assumes that regulation would be a hindrance to innovation. This is also wrong. Regulation can hinder innovation – sometimes deliberately, and for good reasons (e.g. human cloning). It can also foster innovation (e.g. when setting ambitious environmental targets for industrial products). There is no general rule. Simply therefore, if for no other reason, the push to take into account the innovation principle in this way, begs me to wonder whether the principle is rather a catch-all mechanism for limiting or even preventing legislation. Just think about social policies – could policies aimed at creating more quality jobs, and therefore limiting precarious or atypical work, been seen as a hindrance to innovation? Not unlikely.

Thirdly, whilst the Council urges the Commission to consult with representatives of SMEs in the policy-making process, the employees in said SMEs are not mentioned with a word. Given the fact that 90% of all employment in Europe is in SMEs this is astonishing. It becomes even more astonishing when you think that it (still) is people who are the ones twisting and turning processes that lead to new innovative products or services, or indeed the ones who come up with a new, radical idea that leads to a new, radically different product or service. The positive influence good working conditions, trustful employee-management relations, fair HR policies have on innovation is well documented and well researched. The Council’s negligence of the ‘employee factor’ and of the workplace conditions that support innovation is unacceptable.

So, despite our public, united efforts to raise awareness to the dangers of the ‘innovation principle’, it is here to stay and will be used in all policy fields. It is now up to us and other progressive forces, to make sure that the principle is not misused as a deregulatory tool that will damage Social Europe even more.