Policy Lag in the Age of Immersive Technologies: A Comparative Analysis of Metaverse Entrepreneurship Regulation in Emerging Economies

The rapid emergence of immersive technologies, such as the metaverse, has been reshaping entrepreneurial activity within digital and virtual economies, particularly in emerging markets. However, regulatory and policy frameworks in many of these economies have been observed to struggle in evolving at a pace commensurate with technological advancements, resulting in what has been conceptualized in this study as policy lag. This paper examines how policy lag influences metaverse-based entrepreneurship through a comparative analysis of selected emerging economies, including Nigeria, Kenya, India, and South Africa. The study is anchored in institutional theory, policy entrepreneurship, and innovation governance perspectives, and explores the extent to which existing digital, data protection, financial, and innovation policies are supporting or constraining entrepreneurial activity within immersive virtual environments. A qualitative comparative approach, based on policy document analysis and secondary data, was employed to identify recurring regulatory gaps, institutional misalignments, and adaptive entrepreneurial responses to governance uncertainty. It was found that while policy lag generates regulatory ambiguity and compliance challenges, it also enables regulatory arbitrage and entrepreneurial experimentation within loosely governed virtual spaces. Through this analysis, policy lag is advanced as a critical analytical lens for understanding technology–policy misalignment in emerging economies. Based on the findings, a flexible governance framework is proposed to guide the development of adaptive, innovation-friendly regulation for metaverse entrepreneurship. Recommendations include the establishment of dedicated regulatory task forces, the promotion of regional collaboration, and the adoption of agile regulatory approaches to address the dynamic nature of immersive technologies. Additionally, increased stakeholder engagement and capacity-building initiatives are suggested to bridge identified gaps and foster an enabling environment for metaverse entrepreneurship in emerging economies.