Opening the door to new technologies in Mississippi is going to take a new way of thinking about regulation. The old approach of regulating first and asking questions later is not going to work. That is why states, like Utah and Wyoming, are opening the door wide to innovation by applying a regulatory soft-touch to new business ideas, like blockchain.
One idea, passed by the Utah Legislature this year, is the concept of a regulatory sandbox. This idea has gained traction in different forms already in Mississippi. In 2017, a bill to create a regulatory-lite zone, sponsored by Rep. Greg Snowden, passed the House. Subsequently, Speaker Philip Gunn introduced bills aimed at using red-tape reduction as an economic development tool.
This session, Rep. Dan Eubanks has been blazing his own trail. Rep. Eubanks introduced two bills – HB 1454 and HB 1455 – that would create a new program to allow companies to test innovative concepts without being smothered by regulation. Borrowing from Utah, the bills create a regulatory “sandbox,” which would encourage innovators to develop technologies and business concepts.
This vision of a regulatory sandbox champions one of the Mississippi Technology Institute’s key aspirations for innovation. MTI recently had the opportunity to discuss this legislation with Rep. Eubanks. MTI’s Tech Specialist Matthew Nicaud conducted the interview.
Matthew: What is the purpose of the two sandbox bills you introduced?
Rep. Eubanks: The bills create a special program called a “regulatory sandbox”: one creates a general sandbox, the other creates a sandbox just for Farm Tech. The idea of a sandbox allows innovative businesses to be exempt from all non-essential regulations in a specific sector, such as energy or agriculture. What this does is create an environment where innovators can grow their business ideas without being burdened by unnecessary regulations. It also gives regulators a platform to understand innovation and develop appropriately informed regulations. This prevents the regulatory agencies from making vague and arbitrary rules that hinder new ideas. Really, what the sandbox does is encourage dialogue between businesses and regulators so that they can better understand how to work together.
Matthew: Why is innovation an important tool to encourage prosperity in Mississippi?
Rep. Eubanks: Innovation creates a platform for the development of new tools and business models. Mississippians can use these new ideas to generate capital, grow businesses, and provide for their families. The people of our state have the drive and the vision to unleash prosperity. By using the creative avenues that come about from innovation, Mississippi citizens have the potential to further prosper and grow.
Matthew: With technology advancing at such a rapid pace, how would these bills create a friendly environment for technological innovation?
Rep. Eubanks: Ultimately it is people, not the government, who will continue to create the innovations that drive our economy. History has shown us that the free market is the greatest engine for innovation. I believe that the best thing for the government to do is step aside. We should let the innovators put their great ideas out into the market. Innovation moves at a very fast pace, and it doesn’t wait around for regulators. So, Mississippi has a responsibility to create an environment where innovation can be explored without regulations impeding the progress. Creating a “sandbox” environment does just that. It protects innovators from heavy-handed and misinformed regulations. It is an important step in the right direction.
Matthew: Has there been innovative success in other states that implemented regulatory sandboxes?
Rep. Eubanks: The state of Utah has created regulatory sandboxes and has seen much success. The state has seen innovations in multiple industries ranging from insurance to legal service technologies. In addition, other states have created sandboxes for the testing and development of financial technologies. This has not only facilitated greater access to capital, but it also has allowed for the further application of innovative financial technologies such as mobile banking and blockchain. Mississippi has a special opportunity to be a place of innovation for several of its largest industries, such as agriculture and manufacturing. There is so much potential if we can be an early adapter in this area.
Matthew: What can be done to move the sandbox concept forward?
Rep. Eubanks: The creation of a regulatory sandbox program will need to be accomplished through legislation. For a bill to advance through the process, it will need the support of our state leaders. This is a practical way for the legislature to encourage economic development through the power of free-market innovation. The goal to encourage innovation is something I believe we can all agree on. Implementing a regulatory sandbox program is an excellent step toward this goal.
Rep. Dan Eubanks represents DeSoto County, Mississippi (District 25).