Despite the increasing speed of digital innovation, governments should invest in education and life programmes to fully reap the benefits of the digital economy.

Extended reality (XR) has the potential to be a game‐changer for SMEs. It can enhance competitiveness while supporting sustainable development and labour safety. The outbreak of COVID‐19 has further forced businesses to reflect on how technology might spur creativity and how innovation can affect their future survival. XR can facilitate product development, training, marketing and problem‐solving. We argue that policy should focus on increasing XR awareness in SMEs. Diffusion of XR is also contingent on R&D teams’ ability to exploit cultural assets to allow SMEs to take full advantage of their potential.

Regulatory agencies care about their reputation, which helps sustain their authority. As innovation can introduce uncertainty in governance, delaying action or overlooking danger can negatively affect agencies' standing. Aware of these reputation risks, agencies rely on a set of methods to govern the unknown. These methods, we argue, are: (1) categorization, if the innovation is considered identical to known regulatory categories; (2) analogy, if the innovation is considered similar to known categories, and; (3) new categorization, when new classifications are deemed necessary to address the innovation. Each method shapes governance by triggering the application of existing regulations (categorization and analogy), calls for either technical and regulatory fixes (analogy), or calls for broader regulatory undertakings (new categorization). Agencies' choice of methods, we argue, is shaped by concerns over performative reputation (i.e., showing the ability to fulfill core tasks), which in turn is affected by agencies' ability to demonstrate technical rigor (i.e., technical reputation).