The Role of Regulation in the Business/Disability Space

Tension as a creative force can be powerful. Opposing methodologies, when based in fact, cause parties to critically analyze their and other points of view as well as alternative avenues of innovation. Governments around the globe have struggled mightily to unlock the potential in the 1.1 billion person market of people with disabilities. Almost $480B of government funds go into disability annually in the US. Regardless of the results seen, that financial stake makes government a player in the business/disability space.

Business is used to regulation. Whether you are producing nuclear power, or towing trucks to generate revenue, society’s proxy is telling you, to some degree, where, when and how. On a global scale, the same is true in business/disability. While we will avoid debating the merits (or the lack thereof) surrounding various pieces of legislation, we will take a high-level look at how regulation impacts the business/disability space and the potential for innovation.

It is useful to acknowledge the difference in government involvement in various western economies when assessing disability regulation. Staying within the developed world, we see nations in Scandinavia (Sweden at 69%) with the highest levels of government involvement in national accounts moving along the spectrum to the United States (20%). Putting aside value judgments for a moment, large government involvement in an economy theoretically gives society a bigger ax to cause change. Put strong emphasis on the theoretical.

Given the above, it is no surprise that there is greater regulation surrounding disability in Europe, South America and Canada. In these regions, there are long established laws surrounding employment, access, and supports. These laws put in place hiring quotas, physical plant requirements and ‘incentives’ for education and training. The results of this are spurious at best, with the only meaningful difference being that measurement systems seem more pervasive as firms are required by law to keep records around statutory compliance.

One interesting offshoot to higher regulation is a greater public awareness of disability. Government funded groups channel those public monies into public awareness campaigns, giving these issues a taxpayer-funded voice. Objectively, the added ‘benefits’ of higher regulations are marginal, and far from the stated goals of their authors. The added benefits of awareness are barely marginal, but worth mentioning. The upside result for profit-seeking firms is a customer base that is more open to disability. The down-side result is a more challenging environment from a legal perspective, as lawyers may warn against potentially profitable ventures given the added regulatory risk. We won’t even begin to address how tax dollars are spent.

In the United States, there is practically zero regulation surrounding disability. The much vaunted Americans with Disabilities Act (ADA) is only real to some in Washington D.C, and a few niche lawyers outside the Beltway. It is very difficult to assign any weight to this law, as very few know it even exists outside disability, unless a) they’ve been sued under its auspices, b) they have an uncanny knack at remembering the third story on the nightly news once a year. Given the government’s relatively small role in the US economy, the impact of this law is congruent.

One should be aware of efforts in the US to strengthen regulation of the ADA. While not having the structure of foreign regulatory regimes that set quotas, there have, and will be rulings that make regulation marginally material for firms in the business/disability space. Brands are often a firm’s most valuable asset. While a negative ruling in this space may not be financially material, the potential fall-out of a Supreme Court ruling can have unwelcome impact on reaching out to the globe’s third largest market segment in people with disabilities.

This author has made one revealing observation surrounding both heavy and light regulation. The constituents of both regulatory regimes each think that the other has a better regime. This is curious, as convention says that both constituencies would prefer more ‘protection’, yet each says the other does a better job. That denotes one of three things, a) both regimes miss the mark, b) there is a lack of empirical global knowledge around disability regulation, or c) both a) and b).

What regulation does do is flag disability as important on society’s agenda. Looking back at the civil-rights laws of the sixty’s, we did not see an immediate shift away from discrimination, but a slow realization that the norm was no longer acceptable to the customer. Innovative marketers began to identify and consolidate previously ignored markets. Only then did material change occur.

What started with laws was finished by markets in the experience of women’s and multi-cultural markets in developed economies. Whether one is a Kennedy or a free-marketeer, regulation is a reality to accept. Understanding its impact on one’s business, and marketplace, is critical to success. With business/disability, regulation is not a tier 1(or tier 2) issue, but it is worth addressing for just that fact. To begin your foray into business/disability with a legal/compliance focus will lead to wasted time and give your competition an edge you cannot afford.