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Abstract: Technology firms with 'non-conventional' applications encounter extraordinary obstacles on all four dimensions of legitimacy (cognitive, moral, pragmatic, regulative). These obstacles are, compared to typical innovation challenges for emerging technologies, additionally reinforced by circumstances, requirements, and constraints arising from the dominant 'traditional' market. Previous empirical work has not examined the difficult quest for legitimacy to deal with such aggravated market conditions. Therefore, our qualitative study explores entrepreneurial firms in the non-conventional health technology sector. In order to overcome the legitimation obstacles in this contested sub-sector, the firms adopt strategies within three central themes. Each strategic theme addresses primarily one (or two) types of legitimacy, yet demonstrates legitimacy-building across the other dimensions as well. We call this positive 'spillover' effects. By highlighting three strategic themes, we guide start-ups and SMEs in nascent markets to build legitimacy on all dimensions, particularly for technology applications that lack widespread public support and acceptance.
Keywords: Legitimacy; entrepreneurial firms; emerging health technologies; non-conventional applications; legitimation strategies; nascent markets.
1 Introduction
New ventures and entrepreneurs in emerging (nascent) technology markets fundamentally lack legitimacy towards major stakeholders. In order that entrepreneurial firms successfully mobilize the resources and support needed to harness new venture opportunities, they must first be perceived as 'legitimate' to those who later use and adopt their technologies (Fisher et al., 2017; Garud et al., 2014; Tornikoski and Newbert, 2007). To better understand and explain legitimacy in emerging organizations, scholars have distinguished four dimensions of legitimacy - cognitive, moral (or sociopolitical), pragmatic, and regulative (e.g., Aldrich and Fiol, 1994; Scott, 1995; Suchman, 1995). Depending on the industry or nature of technology applications that firms offer, they may struggle on either one or a subset of legitimacy dimensions. However, to date there is only limited empirical research on firms operating in environments where legitimacybuilding is threatened by extraordinary obstacles on all four legitimacy dimensions.
Beyond the typical challenge of initial resistance to adopt innovations and the risks underlying the "liability of newness" that nascent firms usually experience (Singh et al., 1986), entrepreneurial firms in technology sectors with 'non-conventional' applications (e.g. new food processing, renewable energy sources, new mHealth application areas, etc.) additionally face much opposition from society (public or professional) or other relevant stakeholders within the established, 'traditional' technology market (e.g.,...