Eric Crampton: NZ Initiative Chief Economist on ACT's idea to introduce innovation trials to cut red tape

Restrictions on innovation are being seen as a form of self-sabotage.  

ACT wants to introduce innovation trials – letting government ministers pause existing regulations if they block tests of new technology.  

Leader David Seymour told innovators the country punches above its weight when we back ourselves, but someone needs to build the framework to make it happen.  

New Zealand Initiative Chief Economist Dr Eric Crampton told Mike Hosking it's something New Zealand should be progressing with. 

He says we are too small to be stupid in this space, and need to enable innovation in new ways. 

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Episode Transcript

Speaker 1 (00:00):
What do we make of the idea that New Zealand
become a testing ground for new tech? This is act.
They want to let the government temporarily suspend regulations and
allow what they're calling innovation trials. You know, driverles, caws II, drones,
fin take all that stuff. Eric Crampton, Doctor Eric Crampton,
New Zealand Initiative, Chief Economists with US Eric Morning, Good morning.
So on paper is an idea you and I having

(00:20):
a kap of coffee jaw bonding versus the real world.
Is it practical or not?

Speaker 2 (00:25):
Yep, there are places that do this. It's not unique,
but it is something that New Zealand should be progressing.
We are too small to be stupid in this space.
We need to enable innovation in u ways. We ought
to be going a little bit further. It'd be great
to also be recognizing products that are regulated overseas as
being good enough for here. This would let us go

(00:46):
further in as Minister Seymour said, building a runway while
you're still designing the plane. We kind of did that
when rocket Lab got started, so we had no regulatory framework.
They built it in something like eight months. We relied
on foreign authorizations. While we were building the runway and
now it's going really well. We should be able to
do that in a lot more sectors.

Speaker 1 (01:06):
Yeah, but this is proactive as opposed to reactive, which
was what we were with rocket Labe because we hadn't
even thought about it when they came along. Can we
be pro Are we the sort of country that literally
can do it? Do you think I think we need
to be?

Speaker 2 (01:20):
Otherwise we're going to fall incredibly behind as AI innovates
in the US.

Speaker 1 (01:24):
What about the II thing this week? So Elbow talks
about II. We haven't even thought about IO. We're not
talking about it at the top level. We've got no
rules around it. That's part of our problem, isn't it.
We don't think about the.

Speaker 2 (01:34):
Future well, where we should be thinking about in it
is well, part of it would be consistent with an
innovation trial. We make it too hard for people to
put in a new geothermal generation. We've got world leading
geothermal potential. We could sink a lot of pipes. There
is a huge value for immediacy and power generation. We
could have data centers from abroad building out our whole

(01:57):
power network for US if we made it real easy
for them to generate more electricity here. It'd be a
wonderful trial area. See what we can do in the
geothermal zone to enable energy abundance. I'd also love to
see trials around clinical trial abundance. There's going to be
all kinds of medtech that comes through. One of the
bottlenecks that will be in there is getting trials through

(02:20):
quickly so we can prove up new medicines as they
come in. That could be a New Zealand advantage and
one way of getting access to medicines we might not
otherwise have a chance to see.

Speaker 1 (02:29):
Right and so well, then, as you said here, listening
to this on a Friday morning, do you conclude to
yourself that that's bound to happen and we're gonna have
that because I asked Luxon about it on Monday and
he'll go, oh, yeah, geothermal, we're right onto geothermal And
we're not because you said that before. We're not. We are,
but we're not. We've got that kind of we're thinking
about it, we're chatting about it. There we get some
nuclear path you have not done even go there. So

(02:52):
you listen to it. Louise at Upstin's answer about the
II that haven't thought about that, they've got any plans.
I mean, Elbow, for God's sake is a left leaning.
He's virtually a communist, and he's drummed up something on AI.
It's not brilliant on AI, but at least he's leading
the field. And these are the things we need to
be proactive on. We're too reactive, I think as a country,
aren't we. For more from the Mic Asking Breakfast, listen

(03:13):
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