This research investigates the interactions between innovation and (de)regulations in addressing grand challenges, focusing on ex-ante and ex-post interactions. The study draws from theoretical frameworks such as innovation economics, regulation economics, transaction cost theory, and the resource-based view to enhance our understanding of how firms can leverage their assets and capabilities to maintain competitive advantage. The research emphasizes the need for smart regulations that balance stringency and inclusiveness and calls for further theoretical development and empirical substantiation. It also highlights the importance of considering the behavioral level of firms in responding to grand challenges and the need to mitigate the effects of pressure groups opposing innovations. This research suggests eight propositions and opens avenues for future exploration in understanding the co-evolution of (de)regulations and innovation in grand challenge context.
