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  • December 2022
  • Article
  • Administrative Science Quarterly

Shaping Nascent Industries: Innovation Strategy and Regulatory Uncertainty in Personal Genomics

By: Cheng Gao and Rory McDonald
  • Format:Print
  • | Pages:53
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Abstract

In nascent industries—whose new technologies are often poorly understood by regulators—contending with regulatory uncertainty can be crucial to organizational survival and growth. Prior research on nonmarket strategy has largely focused on established firms in mature industries, but such strategies are apt to differ for new ventures, which generally have limited resources and market power and operate in novel domains in which the rules of the game are underdeveloped. How do new ventures navigate regulatory uncertainty? To explore this question, we conduct an inductive, multi-case research study of five ventures that pioneered the nascent personal-genomics industry. Drawing on extensive qualitative data, we develop an emergent theoretical framework that elucidates how ventures navigate evolving regulatory uncertainty. Grounded in a power versus industry-evolution logic, this framework illuminates how ventures’ strategies for doing so vary and theorizes why certain strategies appear more effective than others. In doing so, we also introduce a novel logic of interaction—regulatory co-creation—that ventures can employ to shape emerging regulations. Taken together, our theory and findings challenge existing perspectives on strategy in nascent industries, shed light on the dynamic interplay between market and nonmarket strategy, and recast the relationship between ventures and regulators during the emergence of new technology industries.

Keywords

Technological Change; Innovation; Qualitative Methods; New Categories; Entrepreneurship; Technological Innovation; Governing Rules, Regulations, and Reforms; Risk and Uncertainty; Strategy

Citation

Gao, Cheng, and Rory McDonald. "Shaping Nascent Industries: Innovation Strategy and Regulatory Uncertainty in Personal Genomics." Administrative Science Quarterly 67, no. 4 (December 2022): 915–967.
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About The Author

Rory M. McDonald

Technology and Operations Management
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More from the Authors
  • A Spanner in the Works: Category-Spanning Entrants and Audience Valuation of Incumbents By: Rory M. McDonald and Ryan T. Allen
  • Mastering Innovation's Toughest Trade-Offs By: Christopher B. Bingham and Rory M. McDonald
  • Disrupting Defense at Anduril Industries By: Rory McDonald, Timothy Buehn, Aditi Ghai and James Heffelfinger
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