“Innovations that broaden the market create new room for firms to start and ―the true importance of disruptive technology …is not that it may displace established products.
Rather, it is a powerful means for enlarging and broadening markets and providing new functionality.” 
Law is undoubtedly an effective tool for shaping a business environment that fosters innovation and environmental sustainability.Firms in international markets compete in two distinct ways:
they can innovate and develop new technologies or they can engage in cost-cutting.
From a societal perspective innovation can create much more value than cost-cutting. Firms that innovate set the example for more efficient and sustainable business practices.
Mere cost-cutting on the other hand can lead to the destruction of value when firms shed costs by disregarding environmental, safety, health and labor standards.
Just try to whisper the word innovation to an old politician holding greedily onto his/her seat. His/her face will quickly transform and reveal a wide-eyed expression of fear.
The same happens when you whisper the word innovation to the CEO of a firm that has erected insurmountable barriers to entry through lobbying.
Innovation is feared because it destroys ideas people are accustomed to. It’s a sort of creative destruction that makes those who can’t adapt unemployed. In the long-term however it opens up more opportunities.
An example for regulation that fosters innovation:
There are a number of directives in the EU attempting to push producers of electronics towards sustainable production through the polluter-pays-principle. It simple as that: if a business pollutes, it pays.
This incentivizes firms to find more sustainable business models and production processes.
One for poor regulation that stifles innovation:
The heavily regulated taxi industry in Italy has filed complaint against Uber, a San Francisco based startup that allows iphone and android users to hire private drivers.
The prices are competitive and the quality of the cars is higher than the traditional taxi you will see in Rome or Milan.
Needless to say the traditional taxi industry, which has invested little in innovation, fears this new entrant.
Uber might have to cease its activity if a judge takes the complaint seriously and orders an injunction.
Can you think of any other good examples for startups whose ideas were deemed to be “too innovative”?