205novel value is however created at the expense of established structures and industries that are to be displaced. The notion of creative destruction applies to a collection of factors, such as human capital, investments, and institutions. Similar arguments were advanced by Juma (2016) in Innovation and its Enemies. Through a collection of historical cases, Juma argues that the primary source of inertia related to innovation and renewal is resistance from established interest groups.

3.2

Institutions and the Role of Embedded Agency

As touched upon above, an established regime is governed by a collection of institutions, defined as formal and non-formal rules that structure the behavior of individuals and organizations (North, 1990; Scott, 1995). Institutions are crucial elements in any society since they lower transaction costs between agents, thereby by providing clarity and reducing ambiguities. At times, emerging technologies may not be compatible with existing institutions. Under such circumstances, institutions would either need to be altered or the (niche) innovation will be repelled by the regime. Resistance to institutional change is often discussed under the paradox of embedded agency, which refers to the inherent paradox of how actors can change the very institutions they are themselves guided and controlled by. One strand of literature, referred to as institutional entrepreneurship, has looked at the various properties of