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Outdated legislation must not hinder innovation

The current Dutch Government is focusing heavily on innovation. The Ministry of Economic Affairs, for example, has established a whole raft of subsidy schemes via which the government is pumping millions of euro per year into the Dutch economy. This, however, is not the only way in which the government can encourage innovation. Innovation should also be encouraged by constant efforts on the part of government to respond to technical developments. This in turn requires that legislation be rapidly adapted to the latest developments.

Innovative businesses are often required to operate within legal frameworks that assume outdated techniques. For a recent example take Uber and its UberPOP service. In the Netherlands, taxi legislation requires that a taxi must be equipped with a meter and an on-board computer. This is a hinder for the use of new techniques such as that used by the UberPOP service. In themselves these legal requirements serve a legitimate objective. On the other hand, innovation means that government must constantly consider whether those same objectives can perhaps be achieved in a different way.

The wind energy sector serves as an excellent example of a sector in which the government intends to offer more space for innovation. It has for years been the case in this sector that by the time a licencing procedure was concluded, the licensed technology was already out of date. As a consequence, a procedure lasting several years had to be reinitiated, with all the resultant uncertainties. The Dutch government has now acknowledged this problem, which led to the submission of the Bill for the Wind Energy at Sea Act to the Lower Chamber, last month. This Act offers far more space for innovation and new technologies, by limiting itself to restricting only the maximum environmental burden. As long as the burden on the environment remains below the maximum levels, the developer is free to employ new technologies.

We are convinced that a legislative solution can always be found for the majority of forms of innovation and new technologies. One disadvantage, however, is that implementing that solution often takes a long time, sometimes even a number of years. The Dutch Government is not insensitive to this problem. In the period of the crisis, for example, the Crisis and Recovery Act was put in place, in record time. Another increasingly common option is to introduce legislation in which the formal act itself merely provides a framework, with individual standards laid out in lower forms of regulation. The biggest advantage of this approach is that these lower forms of regulation can be more rapidly adapted to the latest developments.

In the current political climate, innovative businesses would be well advised to register legal bottlenecks as quickly as possible and to bring them to the notice of the authorities. When doing so, it is also important to include examples from other countries. The new wind energy legislation in the Netherlands, for example, is comparable to the legal system in the UK. In respect of Uber, too, the Minister recently announced that examples of legislation from abroad will be considered.

Questions, please contact: Dieperink, Marjolein | Senior Associate | +31206056578 |

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