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Digital innovation & entrepreneurship
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lOMoARcPSD|6510389, lOMoARcPSD|6510389
TOPIC 1
INTRODUCTION, ORGANIZING FOR INNOVATION IN THE
DIGITAL AGE, THE MEANING OF “DIGITAL” IN
ENTREPRENEURSHIP AND OPEN INNOVATION
Uncertainty constitutes a conceptual cornerstone for most theories of the entrepreneur.
Digitalization has opened 2 main assumptions when understanding entrepreneurial processes and
outcomes:
1. Entrepreneurial outcomes (structural boundaries of products) and processes (spatial and
temporal boundaries of activities) are now less bounded: now they are less stable and
more fluid boundaries. More unpredictability and nonlinearity
2. Less predefinition because they require a broader and diverse set of factors
• Digital technology perspective: it incorporates digital-technology-related theories
• Digital artifact: digital component/application or media content that is part of a new
product and offers a specific functionality to the end-user and they are not only present
in smartphones and other devices but also in toys, shoes or automobiles. They can be:
o Stand-alone components
o Form part of a broader ecosystem of offerings
• Digital platform: shared, common set of services and architecture that serves to host
complementary offerings, including digital artifacts. They tend to be ruled by a single
firm.
• Digital infrastructure: digital technology tools and systems to communicate/collaborate
and computing capabilities to support innovation and entrepreneurship. They’ve led to
the democratization of entrepreneurship. They enable product ideas and business models
to be developed and implemented quickly (large scalability).
Digital artifacts and platforms support the outcome itself, while digital
infrastructures support the process
Now, with digital technologies, firms’ offerings can evolve even after the idea has been launched.
In other words, digital artifacts and components are reprogrammable, recombinable and open.
The scale and scope of their innovations can be expanded easily.
• Generativity: the capability of digital platforms to allow for a recombination of elements
and for assembly/redistribution or extension of functionality.
, lOMoARcPSD|6510389
Entrepreneurial actions should be oriended towards facilitating a continuously evolving value
proposition.
We can distinguish between 2 different perspectives:
1. Opportunity creation perspective: Suggests that opportunities are emergent (actors
wait for a response from their actions and then adjust their beliefs to act again) and that
the creation process is evolutionary with the opportunity to co-evolve.
2. Narrative perspective: “Meaning making” associated with entrepreneurial opportunities
as an ongoing process that unfolds through continuous interactions.
However, they lack focus on concrete concepts so they lack potential to inform on the varied
issues.
Less predefinition in entrepreneurial agency
With the infusion of digital economies the entrepreneurial agency is now less predefined and more
diffused (dynamic and often unexpected collection of actors with different goals to engage in a
given initiative).
• Entrepreneurial actions would need to be oriented toward facilitating a continuously
evolving set of actors to participate in shared value creation.
Less bounded entrepreneurial initiatives and less predefined entrepreneurial agency
and the importance of entrepreneurial uncertainty in a digital word.
Digital artifacts, platforms and entrepreneurial initiatives (less bounded)
Digital artifacts can be characterized by: reprogrammability (ability to be accessible and
modifiable by other than the one governing their behavior) and re-combinability (ability to
associate with and build on other digital artifacts or components). These gives rise to new
functionalities and help generate entrepreneurial opportunities. New value creation opportunities.
Moreover, there can be changes in the definition of value in a market if we consider digital
artifacts at the same time with new regulations, like the case of drones. At first they were created
for military purposes but they were programmed to be used in other markets with different value
definitions (for real-estate videos or to monitor crops, for example).
• Second-order effects also create new opportunities to be exploited
Said in a nutshell, the ability to reprogram and modify digital artifacts expands the possible
opportunities to be developed. There is a dynamic emergence and evolution of entrepreneurial
opportunities.
, lOMoARcPSD|6510389
Digital platforms have a layered modular architecture, which means that the individual
components are not product-specific, and each platform layer may be associated with a different
functional design hierarchy. This reflects the generativity by the layered architecture of digital
platforms.
Generativity informs the ongoing debate on the discovery and creation of entrepreneurial
opportunities by focusing attention on the ways by which entrepreneurs create novel
opportunities.
Sociomaterial routines involving digital artifacts and entrepreneurial actions
Knowledge and the impact on the perceived uncertainty could explain why some entrepreneurs
form and exploit opportunities, while others don’t.
• Sociomateriality: the duality of social and material. There is no social that it is not
material and no material that it is not social. Sociomaterial routines could also explain
the creation of novel entrepreneurial opportunities. It emerges from the mutual
exploitation of means-end relationships between human and non-human actors
(including the entrepreneur and digital artifacts). It provides an understanding of how
one individual’s enactment of a digital artifact may lead to a wider and socially accepted
practice that may end up creating a market opportunity to be exploited (when user
interpret new meanings of an artifact). In other words, sociomateriality also explains
how individuals can be the ones that end up finding new market needs.
Entrepreneurial experiments and variability in entrepreneurial activities
Digital artifacts are:
• Editable • Distributed
• Open • Infinite expansibility
These characteristics allow for a greater degree of trial and experimentation in how entrepreneurs
build business models or develop opportunities. The scope of experimentation is cost-effective
and, thus flexible, thanks to those characteristics.
Digital technology infrastructure and entrepreneurial boundaries
With digitalization, dependencies between entrepreneurial processes and outcomes become more
complex and dynamic. They tend to go more hand in hand than before. Now the entrepreneurial
processes and outcomes are less predictable.
The social ties and interactions among entrepreneurs and other actors facilitated by digital
infrastructures may further enhance these effects.
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