The role of regulators in mitigating uncertainty within the Valley of Death.

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Date: Jan. 2022
From: Technovation(Vol. 109)
Publisher: Elsevier Science Publishers
Document Type: Report; Brief article
Length: 290 words

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Abstract :

Keywords Valley of death; Regulation; Uncertainty; Technology adoption; Pharmaceuticals; Aviation Highlights * Regulatory uncertainty is an important driver of investment decisions. * Regulators may act not only as gatekeepers but also as innovation enablers. * We identify three types of regulatory uncertainty. * We analyze how regulatory uncertainty affects the shape of the Valley of Death. Abstract The essential cause of the 'Valley of Death' (VoD) is the reluctance of the private sector to invest in technologies which are perceived as immature. However, uncertainty about whether a new product or technology complies with regulatory frameworks may also have an important effect on private sector investments. We use the cases of the Critical Path Initiative, in the pharmaceutical industry, and the Advanced General Aviation Transportation Experiments, in the general aviation industry, to analyze the role of regulatory agencies in decreasing three different types of regulatory uncertainty along the VoD. We find that regulatory agencies play an important role as a social glue which helps coordinate industry-wide efforts. Based on the comparison between the two cases, we create theory to explain the effect of regulatory uncertainty on the shape of the VoD. Our theoretical framework may help agencies detect the major sources of regulatory uncertainty, and adapt their policies accordingly to facilitate the traverse of emerging technologies across the VoD. Author Affiliation: (a) Eindhoven University of Technology, Department of Industrial Engineering & Innovation Sciences, P.O. Box 513, 5600, MB, Eindhoven, the Netherlands (b) Centre for Science, Technology and Innovation Policy, Institute for Manufacturing, University of Cambridge, 17 Charles Babbage Road, Cambridge CB3 0FS, United Kingdom * Corresponding author. Article History: Received 31 August 2018; Revised 25 May 2020; Accepted 24 June 2020 Byline: Jaime Bonnin Roca [j.bonnin.roca@tue.nl] (a,*), Eoin O'Sullivan [eo252@cam.ac.uk] (b)

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Gale Document Number: GALE|A684964841