State Policy Network

Create Regulatory Sandboxes

SPN Economic Recovery Toolkit to boost state jobs and economy

The Problem

In a time when entrepreneurship and innovation is greatly needed, archaic and rigid regulations are standing in the way of entrepreneurs and businesses. Businesses that want to try something new are forced to abide by rules that do not make sense for products and services that weren’t imagined when the rules were first written.

The State Solution

States can solve this problem by creating regulatory sandboxes to leverage America’s economic dynamism and to foster investment, innovation, and business growth.

A regulatory sandbox temporarily relieves businesses and entrepreneurs of restrictions that would hamper their ability to innovate. It enables innovators to experiment with new business models, products, and services without being smothered by archaic regulations that might otherwise prevent progress. In recent years, foreign countries and a few leading states have created various forms of regulatory sandboxes to encourage investment and attract businesses from other jurisdictions. Regulatory sandboxes have been created in Arizona, Florida and Utah.

Why This Matters

Innovative businesses and entrepreneurs are vital to economic recovery. American innovators can accomplish incredible feats when they are unleashed from regulatory restraints.

For instance, when regulatory restrictions were lifted on vaccine producers, drug companies created multiple forms of a coronavirus vaccine in less than a year—a startling accomplishment compared to prior vaccine timelines. Ingenuity and innovation should be unleashed to grow economic opportunities in the states. 

What States Should Do Next

Create regulatory sandboxes, whether industry-specific or industry-agnostic, by enacting Utah’s model legislation.

Model Legislation

Utah Model Regulatory Sandbox

Additional Resources