Is it Possible to Regulate without Stifling Innovation?

The question is not whether innovation should be regulated, but how to do so intelligently. Regulation is not merely a constraint: when well designed, it can serve as a compass. By setting a clear, credible, and stable direction, it can guide innovation toward socially beneficial outcomes.

Conversely, overly complex or costly regulation can hinder innovation, disadvantage new entrants, and favor established players—particularly in sectors such as digital technologies and AI. The regulatory burden in Europe, especially for SMEs, highlights these limitations.
The challenge, therefore, is to promote agile regulation: clear objectives, adaptability, predictability, and room for experimentation, such as regulatory sandboxes.

In this context, does regulation act as a barrier to market entry? And how can we move beyond the opposition between regulation and innovation to build a framework that is both protective and conducive to value creation?