How should we govern digital innovation? A venture capital perspective

Abstract

Ethical and governance issues regarding digital innovations developments like Artificial Intelligence have attracted abundant debate and research. Many perspectives – societal, engineering, research, management and policymaking – have been extensively analysed in an attempt to understand the role of the different stakeholders in minimising risks and amplifying opportunities. Interestingly, however, the investment community has been scarcely studied, despite the critical role of financing in technology innovation. This paper attempts to characterize investors' perceptions around the concept of digital innovation governance. We present insights derived from qualitative research using constructivist grounded theory, based on a series of interviews to 23 venture capital investment managers. Analysis of the data collected suggests several categories of important factors regarding how venture capital managers engage in Digital Innovation Governance (DIG): legitimacy of involvement, opportunity of conducting and capability to lead DIG initiatives in the invested startups. We offer a structured inventory of venture capital manager insights and perceptions on innovation governance. According to our research, venture capital managers, and investors in general, find themselves capable of and see opportunities and relevance in effectively fostering a digital innovation governance that takes into account the potential risks of Artificial Intelligence and identifies business and societal opportunities.