Regulation should not stifle innovation

It is said that technology is moving faster than law and ethics can keep up. This is true for many countries. Kenya has ICT and technology laws; however the fast changes in technology have created some grey areas and legislation gaps. It is now common to find little or no legislation for a given innovation.

Taking the example of artificial intelligence, Kenya is yet to have a stand-alone law on this. In the event that artificial intelligence is used, then we may face a situation where there is no regulatory framework for the same.

It is not possible to predict the kind of technology that may come up, making it also quite difficult to legislate future technology. The law- making process in Kenya is lengthy. Many times it happens that technology may become obsolete even before a law is passed to regulate the same.

Kenya’s technology laws are quite general in nature but the Cabinet Secretaries have authority to pass regulations that may touch on their respective sectors. Furthermore, State corporations have the mandate to issue directives and undertake certain duties in line with their statutory roles. Therefore these executive powers can be resorted to in legislating technology. The Cabinet Secretary may pass regulations touching on a certain area.

There are a lot of fintech innovations in Kenya, which are innovations in the financial sector. But there is a grey area in fintech regulation in Kenya. I am aware that there have been plans to draft some fintech regulations, however lack of a clear regulatory framework or policy on them creates a grey area for the innovators.

Most fintech innovations would be regulated by the Central Bank of Kenya. As far as I know there is no fintech regulation as of now. While it is difficult to foretell the kind of law needed, it is important to have in place some sort of regulation or guidelines for the sector.

On the other hand, having strict and rigid regulations to cater for technology and innovation would be very stifling and would serve the reverse effect. The law is meant to provide a conducive environment for innovators.

Having strict and stringent regulations would stifle the sector. There ought to be a sober balance between regulating the sector as a means of providing checks and balances, and creating a conducive environment by avoiding rigid legislation.

I will use the example of intellectual property rights, particularly the Industrial Property Act. In the USA it is easier to be granted a patent than it is in Kenya. This fact creates a conducive environment for innovators to be able to invent and protect their inventions.

On the other hand however, the fact that it is so easy to receive a patent may mean that patent value is lower. It is not such a big deal to have a patent.

In Kenya, it is difficult to be granted a patent and indeed there are very few patents. For those who do qualify for the patent award then I believe its value is higher than it is in other countries.

The downside to Kenya’s strict patent law is that many innovations do not qualify for the award. This is demotivating for innovators who have taken an inventive step and spent a lot of time and money on research.

We need to balance strict legislative requirements and the need to reward innovativeness. Perhaps it is time to have a new legislation that balances the two competing needs.