Many times people think of “innovation” as being out of reach or impractical, particularly in an industry with heavy regulations. But regulation often opens doors to new ideas and technologies. But regulation can certainly lead to innovation and if companies participate and then master the new regulations, they will certainly have a competitive advantage. This is critical in the area of internationally competing companies. If my country is leading the regulations on a global level, my companies will be more competitive worldwide. 

New Regulations for Businesses

In Europe businesses were expected to be compliant by 2018 with the EU General Protection Regulation (GDPR). This new law was meant to improve privacy protection across Europe and reshape the way data privacy is viewed. Many companies are still trying to modify operations to meet this requirement. The EU’s ePrivacy Regulation is also a major topic in 2019. In the United States the California Consumer Privacy Act, which is similar to GDPR, takes effect in 2020. 

How Regulations Create Demand for New Technology

We have always known the importance of defining standards that gain international recognition. One of the effects of regulation in the digital age is that tech companies develop new solutions to meet government compliance. The move of governments to protect against cybercrime has led to a wide array of new software programs and services that IT companies use in their cybersecurity packages. The growth of IoT technology has led to over 23 billion devices connected to its infrastructure. Future projections put the number over 75 billion devices by 2025.

Legislation such as HIPAA in the U.S. has led medical organizations, law firms, accountants and other professionals that deal with sensitive data to strengthen cybersecurity strategies. New companies have emerged with disruptive technology that helps companies guard against data breaches. Blockchain technology is playing a role in secure transactions. IT consultants have improved business relations by keeping up to date with the newest and most reliable cybersecurity solutions. 

Due to the continuing advancements of cybercriminals, it’s crucial for governments around the world to set strong policies on privacy protection. New laws that call for a checklist of requirements can lead to new software that simplifies the process of compliance. A company that masters these challenges certainly will have a competitive advantage. 

Returning to Tech’s Roots

A great deal of modern technology is ushered in by government or government contracts with innovative companies. The internet, for example, was developed by the U.S. Defense Department’s DARPA. It’s now up to the government and internet users to protect this online ecosystem that has become a utility for the masses. As society enters the era of smart data everywhere it’s important for tech companies to respect privacy and for government to make sure the tech industry keeps its innovation within these limits.