The Unintended and Indirect Effects of Regulation on Productivity

1. The Unintended and Indirect Effects of Regulation on Productivity Context Essex,Exeter, Leeds, Loughborough, Nottingham Approach

2. 1. Economic background and analysis of case studies Gerben Bakker (LSE) and Stavroula Iliopoulou (Royal Holl.)

3. Presentation of 52 case studies that assess Indirect/Unintended/Unforeseen effects. Analysis of evolution across time and geographical space: Development of a conceptual framework for these hidden or side-effects METHODS

4. Empirical Material – 52 Cases

5. How about evolvement across Time?

6. 2. Relationship between regulation, performance measurement and unintended consequences Kim Tan and Rosalind Rae (Nottingham)

7. Unintended Consequences of Performance Measurement (PM) Findings • People perform to the measure not to the overall goal/output (PM) which adversely affects the output • Increase in PM’s - managers measure what’s easy rather tha useful because some factors difficult to measure • Employees feel less valued if too much focus on financial and output measures • Stretch targets demotivating - if always just out of reach

8. Unintended Consequences of Regulation and performance measurement Findings • Dysfunctional effects of PM as a result of regulation • The achievement of one PM can adversely affect the achievement of another • Improved environmental performance but productivity is negatively effected • Costs of collecting, monitoring and reporting data potentially reduces productivity increases firm’s costs • Regulatory PM’s can help to improve some firms’ performance – forces them to find new ways of improving performance

9. 3. Environmental regulation Joseph Antony and Angela Gurtoo (Leeds)

10. Impact on economy • Environmental damage: At current technology level, processing environment friendly material can increase energy use or pollution • Emerging market & new industry: Recycling industry; secondary goods markets • Global impact: Adjustment of environment standards in competitive environment leads to ‘unfair’ trade practices; and compliance complications • Regional impact: Negative economic impact on certain populations • Impact on industry • Supplementary legislative support: Need for support policies, incentives • Entry barriers and decreased competition: Discouraging entry of entrepreneurs and small firms • Emergent business models: Active participation of customers as suppliers and collaborative inter firm competition due to logistical complexity

11. Impact on organisation • Productivity: Enhanced labor productivity and reduced entrepreneurship within the firm • Systems and processes: Importance of internal and external communication networks; makes quality management a prerequisite; . Propositions eg • Emergence of new industry = first mover advantage for economic growth • Emergence of circular business chain model: consumers and competitors play interactive & collaborative role in firm survival and productivity

12. 4 End of life cycle legislation Kathryn Walsh (Loughborough) and Naomi Brookes (Aston)

13. Gap in formal engineering academic literature • To determine an engineering discipline “voice” surveyed Trade literature for cases of indirect consequences (positive and negative): then categorisation of types of issue • Performed comparison with existing processes for formal regulatory impact assessment • Framework seems derived from legal and economic academic disciplines • Key gap identified – impacts along supply chain

14. Development of potential case study • Electronics manufacturing industry in the UK • Impacted by a range of legislation at a variety of stages REACH, WEEE, EuP, RoHS • Complex interdependencies between different “tiers” • Some winners, new companies and business models, some losers, maybe exiting manufacturing due to legislative change • Initial discussions with • Better Regulation Commission • Better Regulation Team (DTI) • Range of companies from distributor to ecodesign companies • Presentation made to Electronics Regulatory Team within DTI

15. 5 Air travel re-regulation Allan Williams (London Metropolitan) Vlado Balaz (Slovak Academy of Science)

17. General effect Timing Duration Sooner Later Short Medium Long I N D I R E C T = U N I N T E N D Fore seen +Impacts on competing transport modes X X Inc. travel X X Unfore seen +Inc in labour migration X X +Inc in tacit knowledge transfer + Inc in business connectivity X X X X + Inc. in inward investment + Inc in mobile markets (tourism) + Inc in regional competitiveness and TFP X X X X X X - Higher potential for transmission of exogenous organisms between different regions (human, plant and animal diseases) X X - Overall increase in travel leads to congestion and pollution costs X X

18. FINALLY • Key themes: Temporality Spatiality (and scales) Interlocking spheres of regulation Constant adjustment • Literature review synthesis • Other publications