Simply: Yes!

Written by Tobit Lingnau, a student in LAWCOM733: Special Topic: Shaping the Law in Tech Driven Era (2025); This blog summarises his longer academic essay.

“[L]aw was not important only to regulate or promote innovation. During some periods, law was central as innovation.” (Colombo & Dragoni 2016, p. 69)

But is this claim true? To put it simply, there are two ways in which technological innovation and legal change can be interrelated. Legal change can drive technological innovation, and technological innovation can demand legal change (Bellantuono & Lara 2016, pp. 4–5). The relationship is, of course, far more complex, and the dependency can go both ways, and for both, many more factors play a role (Bellantuono & Lara 2016, pp. 4–5).

However, taking this simplified relationship as a basis raises an interesting question: Does the adoption of specific laws for new technologies promote innovation?

This blog starts by summarising the decade-long academic discussion (Friedman 2001, p. 71) on the topic. The second part investigates the effect of technology-specific law on patent applications in New Zealand, Norway and Uruguay by conducting a comparative case study. The number of patent applications is used as a factor representing the innovation in the field of the respective technology.

The results of the case study conducted below show an initial increase in patent applications after the enactment of specific legislation, with ambiguous results towards the long-term effect. Hence, I argue that adopting a customised legal framework for new technologies initially stimulates innovation. However, long-term innovation is possibly more influenced by also other factors.

What Does History Teach Us?

Historically, law mostly evolved reactively around existing technologies and industries and was relatively intransigent in the face of development (Mandel 2014, pp. 44–45). Nowadays, law is often considered to be playing a more active role, assuming that the right or wrong regulations could foster or hinder the development of technology (Weimer & Marin 2016, p. 470)

The problem for policymakers is evident: At an early stage, they risk unnecessarily limiting researchers by enacting too strict laws (Mandel 2014, pp. 44–45; Collingridge 1980). However, if the intervention happens later on, the law might have missed its chance to help the technology develop more effectively (Mandel 2014, pp. 44–45).

The first part of this essay gives a brief overview of the current literature on regulating new technology.

Legislators can generally approach new technologies in two ways. They can either rely on the current legal framework, or they can enact specific regulations to fit the new technology.

If lawmakers decide not to enact specific legislation, this would not mean that the technology stays unregulated (Stokes 2012, p. 94). Most countries have an extensive legal framework for general areas like safety, health or environmental standards; therefore, the new technology would ‘inherit’ those pre-existing regulations (Stokes 2012, pp. 94-95). This approach is called the ‘idea-based’ approach, as only fundamental rules and ideas would be regulated (Lund-Tønnesen 2022, p. 281 et seq).

The idea-based approach has several advantages. Keeping the status quo and not enacting new rules is the simplest approach to regulating, thereby saving costs and resources. New technologies and their development are also highly uncertain. If there is just one legal framework regulating many technologies rather than different rules for every technology, one could argue that the technology and its applications can operate in a well-known legal environment (Johnson & Tournas 2023, p. 161). The technology would simply ‘inherit’ the strengths and weaknesses of the existing provisions (Stokes & Bowman 2012, p. 241). Additionally, it would mean that new technology is already regulated from the earliest stage onwards (Johnson & Tournas 2023, p. 160). Due to the uncertainty inherent in any new technology and its development, an ex-ante framework is also inevitably limited as to how precise it can be, which is why relying on a general structure to manage new technologies could be a better option (Mandel 2014, p. 52).

On the other hand, it is questionable how a ‘cookie-cutter’ approach could result in the best practice (Stokes 2012, p. 94). It is argued that the idea-based approach could have difficulties keeping up with fast-growing technologies (Moses 2007, p. 239). Therefore, special laws for new technology could be necessary to maximise its benefits (Moses 2007, p. 239; Stokes & Bowman 2012, p. 241). This approach of explicitly regulating emerging technologies is called the ‘rule-based’ approach; it involves defining strict rules for the particular technology and/or its applications (Moses 2007, p. 239; Stokes & Bowman 2012, p. 241)

Setting up rules in the early stage of a new technology means that law can develop simultaneously with technologies, maybe for the first time in history (Mandel 2014, p. 62). It may be challenging to enact regulations given the many uncertainties of innovations, but at this point, fewer stakeholders, investors and public opinion have to be considered. This means that lawmakers have the unique opportunity to actively shape the future (Mandel 2014, p. 62).

Three Case Studies

A comparative case study on this topic is conducted to identify possible effects of regulation on technology. New Zealand and Norway will be compared regarding autonomous vehicles, and New Zealand and Uruguay regarding biofuels. Patent applications dealing with the respective technology will be quantified on the basis of the official databases of the respective country.

The countries chosen for this essay lend themselves well to comparison, as they are relatively similar in terms of size, population and taxation and are all considered ‘high-income countries’ (World Bank 2025). Both technologies have been on the market for some time while still not being fully developed, meaning a relatively long period up to the present can be examined.

1. Patent applications as a proxy for innovation

Patents have been used as a proxy for innovations for decades (Basberg 1987, p. 131; Watanabe et al., 2001, p. 783) and their principal suitability to depict innovation activity is widely accepted (Burhan et al. 2017, p. 182; Hagedoorn & Cloodt 2003, p. 1368; Ratanawaraha & Polenske 2009, p. 36).

However, it is important to note the limitations of those case studies. Patents measure inventions, not innovations. Not every innovation is patented, and the degree of innovation reflected in a patent varies greatly (Makkonen 2011, p. 30). Moreover, regardless of the outcome, indications for correlation, not causation, could be identified at most. Secondly, databases do not necessarily lead to accurate outcomes because the search relies on keywords. This can mean that not all relevant patents are found or that some patents included in the statistics name the keywords without actually dealing with the technology.

On the other hand, there are also good reasons for using patents in this context. Every patent has to meet minimum standards for novelty (Bottazzi & Peri 2003, p. 692 et seq.) and patent data is widely and reliably available (Makkonen 2011, p. 28). Against this background, it is not surprising that numerous studies clearly demonstrate a causal link between patents and innovation, showing that the number of patents reflects the innovative output of the region under research (Acs et al. 2002, p. 1080; Hagedoorn & Cloodt 2003, p. 1368; Sternberg & Arndt 2001, p. 370 et seq.). Additionally, the abovementioned limitations apply similarly to the compared countries, making the outcome more comparable.

Because patent data is easily accessible and has been shown to be a good proxy for innovative output, patent data will be used for this study. Assuming that the number of patents does reflect innovation, the following research will try to show if and how legislation influenced innovation by conducting a descriptive statistical analysis. The number of patents (the proxy for innovation) before and after an event in time (the date of enactment of the legislation) will be compared between the country that enacted the legislation and the country that did not enact the legislation (control group). The graphs in Tables 1 and 2 below clearly show that the figures develop similarly for a long time and then suddenly diverge. Some statistical figures emphasise this impression below.

2. Autonomous Vehicles

Autonomous vehicles are understood as vehicles that do not need a human operator (Encyclopaedia Britannica 2025). New Zealand has not adopted any specific regulations for autonomous vehicles. The general rules apply here, especially the Vehicle Standards Compliance 2002 and the Land Transport Act 1998.

Norway, on the other hand, has an extensive legal framework for autonomous vehicles. In 2018, the Law on the Testing of Self-Driving Vehicles 2017 (LOV-2017-12-15-112) entered into force. It allowed the testing of automated vehicles in regular traffic and in adverse conditions without requiring a human to be able to intervene. Later, in 2022, EU Regulations 2018/858 and 2019/2144 were also implemented into Norwegian law, thus harmonising the Norwegian legal environment with EU law (Sever & Contissa 2024, p. 11).

To find patents regarding autonomous vehicles, the following keywords and operators were entered into the respective databases (New Zealand; Norway): (autonomous AND vehicle) NOT water. This was done to exclude patents regarding autonomous ships, etc., as the scope of the Norwegian law only covers autonomous land vehicles. The relevant date was the date of application.

 

 

 

 

 

 

The data shows an increase in patent applications in Norway following the Law on testing self-driving vehicles, which came into force in 2018. From 2010 to 2017, there was an average of 8 applications per year; from 2018 to 2024, there was an average of 11.86 applications per year, meaning a rise of 48.25%.

In New Zealand, from 2010 to 2017, there was an average of 1.63 applications per year, and from 2018 to 2024, it was 2.57, meaning an increase of 57,67%.

In Norway, patent applications rose from 8 (2017) to a maximum of 25 in 2021 / per year (212,5 % increase). In New Zealand, the applications increased from 3 (2017) to a peak of 7 in 2020 (133.33 % increase).

The above demonstrates that Norway’s comprehensive regulatory framework for autonomous vehicles had a significant positive impact on innovation activity. After implementing the Law on Testing Self-Driving Vehicles in 2018, Norway saw patent applications increase from an average of 8 per year (2010-2017) to nearly 12 per year (2018-2024), peaking at 25 applications in 2021. In contrast, New Zealand, which maintained only general vehicle regulations, saw much smaller absolute numbers – averaging just 1.63 applications per year before 2018 and 2.57 afterward, peaking at only 7 applications in 2020.

The data shows that Norway’s targeted legislation succeeded in attracting substantially more autonomous vehicle innovation and development. While both countries experienced growth in patent applications after 2018, Norway achieved far higher volumes of activity, suggesting that supportive regulatory frameworks do indeed encourage innovation in emerging technologies. The evidence supports the conclusion that specific legislation for autonomous vehicles can effectively stimulate research and development in this sector.

3. Biofuels

Biofuel is any fuel derived from biomass (Encyclopaedia Britannica 2025). New Zealand does not have specific legislation in this regard. Relevant legislation, especially provisions in the Climate Change Response Act 2002, deals with obligation fuels (Sec. 198 et seq.). Apart from that, there is no law dealing explicitly with biofuels, and there is also no special taxation for biofuels.

In Uruguay, on the other hand, there is an extensive framework for biofuels. Law No. 18.195 (2007) and Decree 523/008 (2008) are most relevant. Those set a definition of Biofuels, minimum percentages of biofuels in diesel and gasoline, tax incentives, and require licensing for the production of biofuels, ensuring the minimum quality standards set by Decree 523/008 are met. In 2017, Law No. 19.553 (Promotion of Second-Generation Biofuels) was enacted, defining a legal framework for Second-Generation (2G) Biofuels.

To find the relevant patents, the following keywords and operators were entered into the respective databases (New Zealand; Uruguay): (bio AND fuel) OR biofuel OR biodiesel for New Zealand and biodiésel O biocombustibles for Uruguay.

 

 

 

 

 

 

The data shows an increase in patent applications in Uruguay following Law No. 18.195, which came into force in 2007. From 2000 to 2006, there was an average of 3.57 applications per year; from 2007 to 2024, there was an average of 18.61 applications per year, meaning a rise of 421.29%.

In New Zealand, from 2000 to 2006, there was an average of 2.43 applications per year; from 2007 to 2024, it was 3.89, meaning an increase of 60.01%.

In Uruguay, patent applications rose from 7 (2006) to a maximum of 39 in 20 (212,5 % increase). In New Zealand, the applications increased from 8 (2017) to a peak of 13 in 2008 (62.5 % increase). An influence from Law No. 19,553 is not apparent.

In this case, the results again show a sharp rise in the number of applications following the enactment of the relevant law in Uruguay. In this case, the rise is significantly higher than in New Zealand, both in the long and short term, compared to the peak number of applications. Law No. 19.553 does not have an observable impact.

Observations and Recommendations

The results of these three case studies indicate that enacting a law specifically for an emerging technology immediately affects the number of applications for a patent related to that technology. However, the number of applications decreased rapidly soon after reaching a peak, which might be connected to decreased financing or to a focus shift among the start-ups.

While those results are too limited to allow for a sophisticated conclusion, they raise the possibility that enacting a specific law can positively influence innovation. However, this effect can only be seen at an early stage, as the laws enacted later did not affect the number of applications.

Nonetheless, the data clearly show that regulation does not negatively affect innovation, but can actually spark interest. This interest might not be long lasting, unless there are other market realities, such as funding, innovation infrastructure and others, present.

Policymakers can draw several implications from the results:

1. A thoughtful consideration of policies can principally positively influence innovation;
2. Investing the time and money into customised laws may pay off in the long term;
3. Given that there are also other factors that have to be accounted for, it is crucial for lawmakers to take a holistic approach to foster an optimal environment for innovation through funding opportunities, ecosystem support or generally pro-innovation legal ecosystem.

Naturally, these findings leave room for future research and we should look more thoroughly through data and get inspirations from various countries around the world that have been successful in promoting responsible innovation.

Annex

In the course of writing this paper, AI was used for support. The following annexe provides a critical reflection on its use.

AI was employed for both research purposes and to check grammar and spelling. As part of the research process, ChatGPT and DeepSeek were used to identify countries comparable to New Zealand based on defined criteria such as size, population, and GDP. The AI was then used to conduct an initial search for special regulations relating to emerging technologies in these countries. To do so, I first created a list of relevant emerging technologies with the help of ChatGPT and DeepSeek. From this list, I selected technologies likely to produce results via keyword searches in patent databases. I then asked both AIs to investigate whether the previously identified comparable countries had specific regulations in place for any of these technologies.

Two different AIs were used to minimise the risk of false information. Importantly, AI was just used for an initial search. Subsequently, I conducted an in-depth research myself. During this process, I could verify the results and also find new information. This way, the accuracy and completeness of my results could be ensured.

ChatGPT was also used to assist in translating the Spanish legal texts into English to verify my understanding.

Finally, Grammarly was used to avoid spelling and grammatical errors.