Innovation Economics · Scatter

The innovation Phillips curve.

On the X axis, governance overhead per AI deployment. On the Y axis, deployment velocity. Across ten jurisdictions a tradeoff is visible — but the fitted curve is not a straight line. There is a sweet spot, somewhere in the low-50s, where governance signal is strong enough to be trusted but not so heavy that it suffocates shipping. That is the curve to bend.

020406080100 020406080100 Governance overhead → Deployment velocity → sweet spot United States United States — governance 32, velocity 78 China China — governance 58, velocity 86 EU (avg) EU (avg) — governance 78, velocity 41 United Kingdom United Kingdom — governance 48, velocity 62 Singapore Singapore — governance 38, velocity 71 Australia Australia — governance 52, velocity 49 Brazil Brazil — governance 64, velocity 28 India India — governance 26, velocity 64 Japan Japan — governance 56, velocity 45 Nigeria Nigeria — governance 24, velocity 32 Kenya Kenya — governance 30, velocity 38 Egypt Egypt — governance 42, velocity 36 Morocco Morocco — governance 36, velocity 30 Rwanda Rwanda — governance 34, velocity 34 Ghana Ghana — governance 26, velocity 26 South Africa South Africa — governance 22, velocity 18 avg · Africa avg · Africa — governance 28, velocity 27 avg · Asia avg · Asia — governance 42, velocity 64 avg · North America avg · North America — governance 33, velocity 76 avg · South America avg · South America — governance 60, velocity 26
Composite scores synthesised from OECD AI Policy Observatory, Stanford AI Index 2025 and BCG Build for the Future. Sixteen country composites plus four weighted regional averages (hollow rings). The South America average is thinly observed and weighted heavily on Brazil. Direction-of-travel claims, not precise estimates.

The thesis

Read the chart in three regions. Under-governed (X < 30): velocity is real but unaccountable; trust collapses on the first incident. Sweet spot (X ≈ 45–58): clear standards, lightweight assurance, defensible deployments. Over-governed (X > 65): procedural cost compounds; velocity halves. The most important policy job in 2026 is not "more governance" or "less governance" — it is moving every jurisdiction toward the inflection.

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