The Role of the State in the Innovation Triangle: Law and Policy Fostering the Optimal Regulatory, Business and Innovation Policy Environment

The aim of this chapter is to show the importance of the ‘Innovation Triangle’: regulation, business and innovation. Even though the three factors go hand in hand, the author’s perspective is one of a public led business environment. In the area of fintech and related technologies that stretch beyond finance, such as blockchain/distributed ledger technologies, governments must be able to develop and maintain a “good society”. In effect, it is within such a society with possibilities for all citizens to innovate that leads to a high quality environment. In general the European Union is a highly competitive environment with an innovation-friendly policy stance. In a healthy economic policy framework that takes into account the dynamic change of economy, the entrepreneur stays in the centre. Firms that know how to innovate also know how to compete. Unfortunately, short-termism, suboptimal policies and adverse financial realities had led innovation in Europe, and in the West in general, to a stagnation. Governments can play a significant and pivotal role in boosting innovation through strong government–market synergies and the adoption of an innovation encouraging policy which is reflected in a regulatory framework that is innovation-supportive.