Using Regulatory Sandboxes to Support Responsible Innovation in the Humanitarian Sector

Abstract

The global regulatory community continues to explore new approaches to supervising innovation. Among these, so-called ‘regulatory sandboxes’ are proving to be particularly appealing to the financial sector as it seeks to promote technological and data-driven innovation. These ‘playgrounds’ for innovation are also spreading to other regulated sectors such as telecommunications, data protection, energy, and environmental protection, allowing participants to test new business models and technologies under the supervision of regulators while the applicable rules are temporarily relaxed. Regulators can provide targeted guidance to sandbox participants, including help with understanding how an innovation fits within the existing regulatory framework. As of July 2019, at least 50 sandboxes were either in operation or under consideration globally. Significantly, many of these are based in countries that host large numbers of displaced persons. This commentary explores the potential role for sandboxes in promoting responsible humanitarian innovation. Through a review of the literature, we discuss the stated benefits of the sandbox approach while also acknowledging notable risks and challenges to their sustained deployment. We then reflect on how the humanitarian sector might engage regulators and other stakeholders through sandboxes to develop and catalyze innovations that better serve those affected by humanitarian crises, including the displaced.