In Brief

The Problem

Transformational innovations routinely run into barriers to adoption. They are difficult to regulate, overturn existing business models, and may even challenge social norms.

Source of Insight

Entrepreneurs in emerging markets face the same institutional murkiness that tech innovators do. The most successful among them learn to create the conditions that allow them to succeed. Often that means weaving a new social and institutional fabric that benefits the entire ecosystem they work within.

Example

The drone industry illustrates how the process might work for an emergent technology. Some players are helping governments develop smart regulations, others are experimenting with new uses, and still others are building nongovernmental institutions to support the industry.

Drones, originally developed for military purposes, weren’t approved for commercial use in the United States until 2013. When that happened, it was immediately clear that they could be hugely useful to a whole host of industries—and almost as quickly, it became clear that regulation would be a problem. The new technology raised multiple safety and security issues, there was no consensus on who should write rules to mitigate those concerns, and the knowledge needed to develop the rules didn’t yet exist in many cases. In addition, the little flying robots made a lot of people nervous.

A version of this article appeared in the July–August 2018 issue (pp.86–95) of Harvard Business Review.