The Effect of Pre-Existing Standards and Regulations on the Development and Diffusion of Radically New Innovations

Abstract

The controversy among scientists on whether standards and regulations hamper or stimulate innovation contains too little specificity and provides too few clues for innovation managers to act upon. In this article, we underscore the importance of timing and start by focusing on the effect of pre-existing standards and regulations on the subsequent development and diffusion of product innovations. The effect is assessed in terms of the time interval between the invention of a technological principle and the introduction of the first marketable product (development phase), and the successive time interval up to the start of large-scale industrial production and diffusion (adaptation phase). The authors analyse fifty heterogeneous cases studies of radically new high-tech product innovations from the year 1850 onward. The results indicate that pre-existing standards and regulations significantly shorten the adaptation phase of innovations, an effect not found for the development phase. The shortening effect on the adaptation phase is particularly evident for radically new innovations and innovations that are an integral part of larger technological systems. As the adaptation phase is often a time-and capital-intensive phase for industry, this accelerating effect on the diffusion of innovations is highly relevant for innovation managers and policy makers.