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Forbes: The Critical Role Regulation Plays In Business Success

The Critical Role Regulation Plays In Business Success

Elite CIOs, CTOs & execs offer firsthand insights on tech & business.  Opinions expressed by Forbes Contributors are their own.

POST WRITTEN BY

Ofer Garnett

CTO and Co-founder of mobile growth marketing platform YouAppi, bringing nearly 20 years of R&D experience to make mobile engaging.

Ofer Garnett 

Ofer Garnett Forbes Councils

In the age of digital disruption, regulation has taken a front seat. The latest headlines have social media companies like Facebook and Twitter in the spotlight as they continue to face questions about safeguarding customer data. As other companies scramble to get their house in order, fearing a similar fate, it’s no longer a question of if governments should step in but how. General Data Protection Regulation (GDPR) legislation may not be perfect, but even its detractors must acknowledge Europe is ahead of the curve in stepping in to regulate the use of personal information.

Go back 30-plus years to the dawn of the free and open digital age, when it seemed only fitting for the World Wide Web to essentially police itself. Times change, however, and advances in data collection and storage capability mean that highly personalized information has become a prized commodity. A system based on majority goodwill and a small-print contract that nobody bothers to read won’t cut it anymore. Should the industry expect more regulation? Can it, in fact, be welcomed?

Regulation Rewards Sound Business

Ideally, companies govern themselves based on ethically sound principles and the collective good, but this isn’t always the case. Our global economic system has demonstrated time and again that government regulations aren’t just necessary — they often yield great value for consumers and businesses alike. In fact, as technology changes business and new businesses come into the market, regulations can help manage processes and pave the way for fair competition.

Government intervention suffers from a bad rap as it’s seen as anti-business and overly restrictive. This can be true, especially when government oversight forces businesses to adapt — often with both technical and operational investments — which affects top and bottom lines. However, when regulations are tailored fairly and effectively to each industry and involve input from experts in the space, they can serve as a catalyst to better business practices.

Experience shows us how regulation helps businesses respond to societal change, particularly when technology is involved. Most businesses implement internal regulations to serve their company more directly, but these often fail to be comprehensive, and compliance wanes over time. Thus, diligent governance provides accountability and encourages good practice.

Simultaneously, companies that follow fair and effective regulations breed a sense of trust among their customers. Being able to tout compliance as a benefit usually acts as a competitive differentiator that attracts new customers.