Smart regulations for innovation

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In a world driven by rapid technological advancements, the relationship between regulation and innovation is crucial. Rather than being adversaries, these elements can come together to foster an environment where progress can flourish. The challenge is to develop regulatory frameworks that guide innovation without stifling it – rules that set boundaries without hindering future growth. This is not just about oversight; it’s about envisioning and enabling how industries can adapt to evolving consumer needs and serve the broader public interest in creating a better future.

Our industry is a compelling case study. Companies are investing billions into developing next-generation nicotine products – alternatives like heated tobacco, vapor and oral nicotine. These innovations have the potential to significantly reduce the risks associated with smoking, offering adult smokers safer options in line with changing societal expectations. But these efforts are only valuable if the products reach consumers and if companies are empowered to continuously refine and improve them. Excessively restrictive regulations have unintended consequences; take Brazil, where a complete ban on e-cigarettes shifted demand to the illicit market, which grew by an astounding 600% between 2019 and 2025¹. Bans like these do not eliminate the potential risks related to product use – they exacerbate them, resulting in lost tax revenue, unregulated products and diminished safety standards.

Agile regulations: an adaptable approach

The EU, for instance, has long relied on a precautionary principle to policymaking which often stifles innovation and investment. Creating a more balanced, proactionary approach entails adopting systems that evolve as science and technology progress, encouraging innovation. Such a shift would help Europe remain competitive with the US and China and maintain its position as a global leader in various industries.

Perhaps no model embodies this better than the OECD’s Agile Regulation framework. Grounded in evidence-based policymaking, transparency and adaptability, the Agile Regulation model ensures laws remain effective in fast-changing industries.

In the Philippines, for example, the regulatory system defines novel nicotine products clearly and refers to international standards, enabling updates to align with scientific advancements. Conversely, countries like Indonesia have taken a blanket approach, treating all nicotine products as equivalent to cigarettes. Such oversimplified frameworks ignore scientific nuances and fail to address the different levels of risk.

Frameworks, not barriers

The time has come to rethink fundamentally how countries and the EU approach regulation. Rather than treating rules as barriers, governments should see them as frameworks for progress – flexible guidelines that evolve alongside technological and scientific developments. Such adaptive frameworks can foster innovation while maintaining the highest safety and performance standards.

Ultimately, regulation should reflect the various risk intensities and demonstrate agility in responding to emerging evidence. This approach protects consumers, encourages industries to invest, and ensures progress serves public health goals. It’s not about lowering standards – it’s about building a regulatory environment that supports learning and growth.

JTI urges policymakers to adopt a forward-thinking approach in the forthcoming revision of the EU’s Tobacco Products Directive. Regulations must evolve to accommodate advancements in next-generation nicotine products. Success will depend on frameworks, not barriers – creating pathways where innovation can thrive while ensuring the public interest remains protected.

1. Based on data by Euromonitor.

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