The Regulating for Growth Bill could reshape UK innovation. What will it take to turn successful pilots into investment, adoption and lasting change?

Published: 29 October 2026
Authors: Michelle Craven-Faulkner

Innovation rarely waits for regulation.

Technology develops, new business models emerge and organisations find different ways of delivering products and services. The opportunities can be significant, but the legal and regulatory framework within which those innovations need to operate may have been designed for a very different market.

That raises an increasingly important question for government, regulators and business: how do we retain the protections that good regulation provides while creating a system agile enough to accommodate innovation, investment and growth?

The government’s proposed answer includes the Regulating for Growth Bill, which, as well as strengthening the existing Growth Duty, is expected to introduce wider regulatory sandboxing powers.

Both aspects could be significant. But their real value will depend not simply on what the legislation says, but on whether they change what happens in practice.

From regulating risk to enabling responsible growth

The Growth Duty itself is not new. The existing statutory framework has been in effect since 2017 and requires regulators within its scope to have regard to the desirability of promoting economic growth alongside the protections they are required to deliver. The statutory guidance was substantially refreshed in 2024 and the duty extended to Ofcom, Ofgem and Ofwat.

The current government's direction of travel is, however, increasingly clear. Its wider Regulation for Growth programme, reinforced by the Budget published on 28 October, includes ambitions to reduce administrative costs for business, reduce regulatory uncertainty and challenge excessive risk aversion within the regulatory system.

A strengthened Growth Duty raises an important question.

What would we expect a regulator to do differently?

There is a significant difference between requiring economic growth to be considered as part of a regulatory decision and creating a regulatory culture in which growth, innovation and investment genuinely influence how decisions are approached.

Accountability will matter.

Businesses will want to understand not simply whether a regulator considered growth, but what effect that consideration had. Did it result in a more proportionate approach? Did it enable a decision to be reached more quickly? Did it reduce unnecessary uncertainty? Did it facilitate investment or adoption of a new technology?

The economic effect of regulation is not limited to the regulatory requirement itself. Time, uncertainty and complexity all have a commercial cost.

For investors deciding where to deploy capital and businesses deciding whether to pursue an innovation, knowing when a regulatory decision will be made and understanding the likely parameters can sometimes be almost as important as the ultimate answer.

Sandboxes could be the more radical development

The second element of the proposals is as interesting.

Regulatory sandboxes already exist in some areas, most notably financial services. The broader proposition being considered by the Bill is a cross-economy mechanism capable of responding to regulatory barriers affecting innovation.

First, identify a regulatory barrier and establish what flexibility is needed to enable an innovation to be tested.

Second, undertake a controlled pilot with appropriate safeguards.

Third, where that pilot demonstrates that an alternative approach works, create a route through which the regulatory change can potentially become permanent.

That third stage is critical.

A sandbox should not simply make it easier to run more pilots. It should make it possible for successful innovation to become normal.

Otherwise, there is a danger that we create excellent environments for experimentation without addressing the more difficult question of adoption.

The real challenge is pilot to scale

That distinction between experimentation and implementation is something I see repeatedly through my work with businesses and across sectors.

Organisations can often demonstrate that an innovation works. The challenge comes afterwards, with common questions including:

• how does a successful pilot become commercially viable?
• how does it move into procurement and contracting?
• how does temporary regulatory flexibility become a sustainable regulatory position?
• how does a business obtain sufficient certainty to invest?
• how does something demonstrated on a relatively small scale become capable of widespread deployment?

There is a tendency when discussing innovation policy to concentrate heavily on creating the conditions for ideas to be developed and tested. That is important, but innovation does not generate economic growth merely because it has been successfully demonstrated. Growth occurs when good ideas are adopted, invested in, procured and scaled.

That is why the relationship between the proposed sandbox powers and the strengthened Growth Duty could prove particularly important.

The sandbox may provide the environment in which evidence can be gathered. The Growth Duty should help ensure that the regulatory system is receptive to what that evidence demonstrates.

Regulation increasingly needs to work across boundaries

There is another practical challenge: innovation does not respect organisational charts.

A new product, technology or service can potentially engage multiple regulatory regimes, government departments and areas of policy simultaneously.

A cross-economy approach therefore creates some important questions:

• who should be able to initiate a sandbox: businesses, regulators, government departments or each of them?
• where more than one regulator is involved, who takes the lead?
• what happens if regulators reach different conclusions about the same innovation?
• how are competing proposals prioritised?
• where a proposal has implications across several sectors, who takes responsibility for looking at the opportunity as a whole?

The answers will matter enormously to businesses. A sandbox that removes one regulatory obstacle while leaving two others untouched may ultimately have achieved very little.

For businesses, the regulatory experience needs to feel joined-up even where the regulatory landscape is not.

Who carries the risk of saying “yes”?

Perhaps the most interesting question is one of risk.

Regulators exist to protect important interests. Safety, consumers, markets, the environment and other public interests cannot simply be subordinated to growth.

Nor should they be.

But innovation inevitably involves some uncertainty. If the safest institutional position is always to preserve the status quo, a system can become unintentionally resistant to change.

That leads to what I think is one of the central questions for the proposed regime:

Who carries the risk of saying “yes”?

If government wants regulators to take a more proportionate approach to risk in pursuit of growth, regulators need a sufficiently clear framework within which to do that.

Simply telling regulators to become less risk-averse is unlikely, on its own, to alter behaviour.

Clear parameters, safeguards and accountability should protect the public interest. But accountability also needs to work in the other direction. The consequences of unnecessary delay, excessive caution or failing to facilitate responsible innovation deserve consideration too.

Good regulation should protect us from harm.

It should not inadvertently protect us from change.

Access cannot be limited to those with the greatest resources

There is also an important question around accessibility.

Large businesses often have sophisticated legal, regulatory and government affairs capabilities. An SME or scale-up developing a genuinely disruptive technology may have considerably fewer resources with which to navigate government and the regulatory landscape.

If sandboxing is to encourage innovation across the economy, the process needs to be accessible to those businesses too.

That becomes particularly relevant if demand exceeds the capacity to establish sandboxes. Transparent criteria for selecting proposals, clarity over the evidence required and a process which does not itself impose disproportionate costs will all be important.

Otherwise, there is a risk of creating an innovation mechanism which is theoretically available to everyone but practically accessible mainly to organisations already well equipped to navigate regulation.

Successful sandboxes will need an exit strategy

A great deal of attention will understandably be paid to how a business enters a sandbox, but I would pay equal attention to how it gets out.

At the outset, participants should understand the possible consequences of a successful pilot:

• what evidence is being gathered?
• against which criteria will success be assessed?
• who ultimately determines whether the experiment has succeeded?
• what happens if there is disagreement?
• most importantly, what is the mechanism for converting the evidence generated by a successful experiment into permanent change?

This is where the proposed legislative architecture has the potential to become particularly interesting. A model capable of facilitating appropriate regulatory change following a successful controlled experiment could offer a much more agile response than waiting for opportunities for primary legislative change.

But greater agility inevitably makes questions around scope, scrutiny, safeguards and challenge more important, not less.

The objective should not simply be faster deregulation. Instead, it should be better, evidence-led regulation capable of adapting more quickly where the evidence justifies it.

What should businesses do now?

The legislation is still developing, so it would be premature for businesses to assume what the final regime will look like. The government is actively seeking industry perspectives as the proposals develop and businesses should not wait for the final legislation before considering the opportunity. Across sectors, organisations should be asking:

• where does the current regulatory framework prevent or delay something we could otherwise safely do?
• is the barrier genuinely regulatory, or does the problem actually lie in procurement, investment, contracting or market adoption?
• what evidence could demonstrate that a different approach delivers the necessary protection?
• does the issue affect one business or an emerging market more broadly?
• which regulator or government department owns the relevant policy?
• could a controlled trial provide the evidence required to support change?
• if the trial succeeded, what would be required to turn that success into a scalable commercial proposition?

This analysis is valuable regardless of the eventual shape of the legislation.

It moves the conversation from an abstract proposition that “regulation is a barrier” to a much more constructive proposition:

“This requirement is preventing this innovation. Here is the evidence. Here is how an alternative could be tested safely. And here is the economic opportunity if it works.”

Government and regulators need clear evidence of how policy affects businesses in practice. We can help our clients make that case, connecting them with the relevant departments or regulators and facilitating constructive conversations that bring their experience directly into the debate.

A significant opportunity, if we get the implementation right

The Regulating for Growth Bill arrives at an important moment.

AI and other technologies are accelerating change. Established industries are transforming. Increasingly, innovations cross traditional distinctions between sectors, regulators and government departments.

Against that background, a regulatory framework designed around lengthy cycles of legislative change risks finding itself perpetually behind the markets it regulates.

The answer cannot be regulation without constraint. But nor should the answer be regulation which preserves the present simply because changing it is difficult.

The opportunity is something more sophisticated: a regulatory system that protects important interests while being capable of learning, testing and adapting as the world around it changes.

The ultimate test of these reforms should therefore not be how many regulators refer to growth in their decisions, nor how many sandboxes government establishes.

It should be what happens next, answering questions including:

• do good ideas get tested?
• does evidence lead to regulatory change?
• does regulatory change unlock investment and commercialisation?
• do responsible innovations move from idea, to test, to evidence, to adoption and ultimately to scale?

If the new framework can achieve that while maintaining appropriate safeguards and public confidence, the Regulating for Growth Bill could prove to be far more than a regulatory reform programme.

It could become an important part of the UK's economic infrastructure for innovation.