This is a case study of induced innovation, especially the effects of regulations on the technology and market of cosmeceuticals. Korean government enacts a‘cosmetics law’in 2000, which force pre-inspection of cosmeceuticals before market entrance since 2001. This regulation makes brisk activities of technology and product development and the entrance of many firms in the market. This law is scheduled to be amended by the protest of foreign conn-tries such as USA and Europe.