Innovation theater: a typology and framework for transforming and creating markets around grand challenges in Latin America

Abstract

Purpose This study aims to develop a typology and framework that can help for-profit firms address grand challenges through innovation theater. The authors reframe this construct as a potentially creative and efficient way to balance legitimacy-seeking with the generation of innovative solutions that can both weather uncertainty and transform or create markets in the grand challenges arena. This is particularly relevant to developing contexts such as Latin America, where institutional weakness is high, innovation is low, public policy to encourage innovation is largely absent and firms often lack resources to drive innovation. Design/methodology/approach The authors build their typology of innovation theater from prior literature on (a) symbolic action in corporate innovation contexts and (b) fiction in entrepreneurship. This, in turn, leads to a framework that describes how for-profit firms can leverage innovation theater to address grand challenges in developing regions such as Latin America. The framework includes three steps: (1) recognize the opportunity to lead innovation theater in response to contextual realities, (2) balance legitimacy-seeking with market opportunity and (3) unleash the potential generativity of innovation theater by moving away from legitimacy-seeking and toward connecting innovation with the firm’s core business. Findings The authors combine their theoretical grounding with anecdotal examples from Latin America to argue that firms can make strides in addressing grand challenges in this and similar regions by relying on a generative side of innovation theater. During this process, they increasingly identify market opportunities and accept greater levels of uncertainty, moving from symbolic signaling toward systemic innovation that ties grand challenges to their core business purpose. The authors outline four types of innovation theater: compliance theater, distracting theater, opportunistic theater and engaged theater. These lay the groundwork for a processual framework that can guide firms interested in addressing grand challenges through innovation. Originality/value The authors’ typology and framework challenge negative perspectives of innovation theater, showing how for-profit firms can leverage its more generative, future-making side to address grand challenges in developing regions such as Latin America. This is a useful first step that may open the door to future empirical work on innovation theater and grand challenges in developing regions.

The authors' abstract, as published at the source. European Business Review, 2026 · DOI ↗