Technology, innovation, barriers and risks: When innovation conflicts (or creates) markets and regulation

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vectorbloc
Vectorblock describes itself as "a Standardized, Structural, Scaleable, Modular Building System" -- The biggest challenge, getting building approvals and sign-offs.
Uber receipt
One of my Uber receipts. Obviously this is clearer documentation than the traditional hand-written taxi chit.

Earlier this week, I tested Uber for the first time, and enjoyed the experience. Push a button on your cellphone and your driver will arrive within minutes — and you’ll know who will be coming (in what car) and can actually see the car arriving on a digital map, with the ETA. No fuss, no muss, no mandatory (or expected) tip; and the transaction, when completed, is automatically billed to your credit card at — under normal conditions — a fare about two-thirds less than a conventional taxi.

Great. But tell that story to a taxi owner who paid tens or hundreds of thousands of dollars for his now nearly worthless plate. Or the regulators who set up the rules and systems to protect consumers from gypsy cabs way back when. Now the regulations are supposed to protect the conventional taxi industry, but ultimately they are decided by politicians and the public will,  I believe, increasingly support Uber.

Let’s transfer the topic somewhat abruptly to the construction industry. Julian Bowron and colleagues were on hand in the booth next to us at Construct Canada to introduce Vectorbloc, a new technology designed to expedite the fastening and assembly of modular steel-structure buildings.

vectorbloc
Vectorblock describes itself as “a Standardized, Structural, Scaleable, Modular Building System” — The biggest challenge, getting building approvals and sign-offs.

“We’re one of the few exhibitors here with something truly new,” he said.  And I agreed. I’ve been at many shows, and while some larger businesses will introduce new ideas or enhancements of existing concepts, it is rare to find a start-up with a new building technology, especially one which could radically simplify and accelerate the construction process.

However, I know there will be one big challenge in introducing the technology — regulation. The building codes have provisions for innovation; if you can demonstrate that the new technology meets the code’s intents and achieve appropriate sign offs from qualified engineers. But this is a time-consuming process, and there is a lot of uncertainty as individual municipal building code officials may interpret things differently, or make additional requirements or requests. Here, regulation stands in the way of innovation, especially since the new technology’s biggest advantage is to speed up the construction process, reducing costs in the process. This may be difficult to do, however, if the building permit approval process is delayed.

We can see in both cases how regulation acts as a barrier to innovation; and there can be justifications for these rules. (The retiring Chief Building Official for Ottawa told me about her challenges with requests to introduce new products, technologies and building systems — in many cases they are designed for climates and conditions that don’t match Ottawa’s cold winters — have they been tested and will they work when it can get to 30 below celsius. (This isn’t a problem for Canadian-designed Vectorbloc, however.)

In Uber’s situation, clearly the taxi industry regulations were built on abuses and chaos when gypsy cabs roamed without control — and I can empathize with cabbies who invested small fortunes in taxi plates without expecting them to be devalued by a mobile phone technology.

On a personal level, there were downsides in the change. As I fiddled with my cell phone to set up the Uber application, I put my camera down, only realizing I had left it behind after I was dropped off at my destination. A plus for Uber — I had the contact phone number of the driver, who could quickly check to see if the camera had been left in his car. It hadn’t. So a $500 digital camera went into the ether.

Not a big problem, though. The camera was about five years old, and I can find a replacement quickly enough and order one through Amazon to be delivered within days. The world is changing.

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