VALUE PROPOSITION FOR DIGITAL TECHNOLOGY INNOVATIONS OF UNCERTAIN MARKET POTENTIAL

In this paper we explore the notion of valu proposition in relation to the features of digital technology innovations of uncertain market potential. Drawing on an empirical study of ˜serious games´ development we focus on the interplay between the design features as they are being incorporated into the serious game and how these can be addressed through an emergent articulation of the valu proposition that sheds light on the establishment of a business model. We draw on ˜pragmatics of justification´ literature to develop an account of how the valus, with not only economic/finance but also non-monetary notion, manifested in digital technologies, are justified in order to arrive at a valu proposition. We argu that through mutual adjustment and reconciliation of each valu element with the emerging valu proposition, clarity and stability are brought to its constitution which are vital in the drawing-up of a business model in situations of high uncertainty. The research contributions we make are (a) theorizing how a valu proposition is constituted, (b) introducing a new analytical approach to the study of valu proposition drawing from the pragmatics of justification in the context of digital technology innovations´ development with social, economic and technical notions.

Digital innovations with inherent uncertainties : from the justification of value to the articulation of a value proposition

The establishment of business models for digital technology innovations of uncertain market potential is often seen as challenging because of the difficulties in conceptualizing the value of such ventures. There is, however, limited empirical material on how digital entrepreneurs and innovators assess the emerging value of a novel digital technology in practice in the early stages of its development. This thesis, therefore, seeks to investigate how the value of digital innovations with inherent uncertainties about the lack of clearly determined use and addressable markets is justified and how a value proposition is articulated in an emergent way during the design and development process of such innovations, and the implications this has for dealing with the challenges of establishing a business model in such a setting. In particular, I aim to answer: (a) how do the actors involved in the development of digital innovations justify the value of their innovation, (b) how is the value proposition of digital technology innovation with indeterminate use and addressable market arrived at in the development of such innovations, and (c) how does an emergent value proposition contribute to more generally on the theorization and development of business models when there is lack of clear idea of the use and an addressable market. This doctoral research explores these issues through an in-depth study of two ‘serious games’ development companies that seek to develop digital games for businesses. I argue that through mutual adjustment and reconciliation of different value elements, clarity and stability is brought to the articulation of value proposition, which is crucial to the eventual development and drawing-up of a formal business model. The contributions I make namely are: (a) providing insights into a socioeconomic justification of value for digital innovations (b) conceptualizing how a value proposition is articulated, (c) providing new insights into the relationship between value proposition and business model, and (d) introducing a new theoretical approach to the study of value proposition and business model development drawing from the pragmatics of justification

The digital transformation of business models in the creative industries: A holistic framework and emerging trends

This paper examines how digital technologies facilitate business model innovations in the creative industries. Through a systematic literature review, a holistic business model framework is developed, which is then used to analyse the empirical evidence from the creative industries. The research found that digital technologies have facilitated pervasive changes in business models, and some significant trends have emerged. However, the reconfigured business models are often not ‘new’ in the unprecedented sense. Business model innovations are primarily reflected in using digital technologies to enable the deployment of a wider range of business models than previously available to a firm. A significant emerging trend is the increasing adoption of multiple business models as a portfolio within one firm. This is happening in firms of all sizes, when one firm uses multiple business models to servedifferent markets segments, sell different products, or engage with multi-sided markets, or to use different business models over time. The holistic business model framework is refined and extended through a recursive learning process, which can serve both as a cognitive instrument for understanding business models and a planning tool for business model innovations. The paper contributes to our understanding of the theory of business models and how digital technologies facilitate business model innovations in the creative industries. Three new themes for future research are highlighted

Appropriation of value in Biomedical research outcome at Public Research Organisations

Transactions on biomedical research outcomes bring into play strategies that are determined by leveraging resources into quasi-markets and on options based on expectations. To govern such transactions, the choice of appropriate governance structures and the governance of interaction are all too often in remittance of risk and uncertainty. Organisation and communities are prompted by issues concerning intellectual property (IP) to underwrite information, which is inherently fraught with difficulties of discerning ownership and quantifying qualitative business variables. Against that backdrop, we enquire on the mechanisms underpinning value dissipation and value appropriation of biomedical research outcomes to make proposition on the organisational antecedence to innovation. It is a preamble study with the view to developing a meso-level framework to describe mechanisms of value appropriation of upstream biomedical (non-invasive) research at Public Research Organisation. Its underpinning is largely based on the availability appropriability regimes and viability of organizational governance decisions and how the choice of organizational governance form affects both the creation and appropriation of economic value

R&D incentives, compatibility and network externalities

This paper analyzes the impact of network externalities on R&D competition between an incumbent and a potential entrant. The analysis shows that the incumbent always invests more than the entrant in the development of higher quality network goods. However, the incumbent exhibits a too low level of investments, while the entrant invests too much in R&D in comparison with the social optimum. In the model entry occurs too often in equilibrium. These inefficiencies are solely due to the presence of network externalities. By choosing compatible network goods, firms do not necessarily reduce the R&D competition intensity. --Network externalities,Innovation,Imperfect Competition

Optimal regime switching under risk aversion and uncertainty

echnology adoption is key for corporate strategy, often determining the success or failure of a company as a whole. However, risk aversion often raises the reluctance to make a timely technology switch, particularly when this entails the abandonment of an existing market regime and entry in a new one. Consequently, which strategy is most suitable and the optimal timing of regime switch depends not only on market factors, such as the definition of the market regimes, as well as economic and technological uncertainty, but also on attitudes towards risk. Therefore, we develop a utility-based, regime-switching framework for evaluating different technology-adoption strategies under price and technological uncertainty. We assume that a decisionmaker may invest in each technology that becomes available (compulsive) or delay investment until a new technology arrives and then invest in either the older (laggard) or the newer technology (leapfrog). Our results indicate that, if market regimes are asymmetric, then greater risk aversion and price uncertainty in a new regime may accelerate regime switching. In addition, the feasibility of a laggard strategy decreases (increases) as price uncertainty in an existing (new) regime increases. Finally, although risk aversion typically favours a compulsive and a laggard strategy, a leapfrog strategy may be feasible under risk aversion provided that the output price and the rate of innovation are sufficiently high

Organisational Responses to Discontinuous Innovation: A Case Study Approach

Research that examines entrant-incumbent dynamics often points to the organisational limitations that constrain incumbents from successfully pursuing new technologies or fending off new entrants. Some incumbents are nevertheless able to successfully implement organisational structures and develop routines that overcome these institutional constraints. We provide a case-study analysis of how three firms - Motorola, IBM and Kodak - responded to discontinuous innovations and the associated structural and organisational limitations that are typical to incumbent organisations. Each firm was able to capture gains from new technologies and develop profitable products in emerging markets, although their abilities to sustain these gains varied due to subsequent organisational changes. Drawing from these case studies, we synthesise how firms can institute organisational strategies to continue to capture gains from disruptive innovations. A schema suggests that particular organisational strategies are comparatively optimal for corresponding points along an innovation lifecycle

Unlocking value from machines: business models and the industrial internet of things

In this article we argue that the Industrial Internet of Things (IIoT) offers new opportunities and harbors threats that companies are not able to address with existing business models. Entrepreneurship and Transaction Cost Theories are used to explore the conditions for designing nonownership business models for the emerging IIoT with its implications for sharing uncertain opportunities and downsides, and for transforming these uncertainties into business opportunities. Nonownership contracts are introduced as the basis for business model design and are proposed as an architecture for the productive sharing of uncertainties in IIoT manufacturing networks. The following three main types of IIoT-enabled business models were identified: (1) Provision of manufacturing assets, maintenance and repair, and their operation, (2) innovative information and analytical services that help manufacturing (e.g., based on artificial intelligence, big data, and analytics), and (3) new services targeted at end-users (e.g., offering efficient customization by integrating end-users into the manufacturing and supply chain ecosystem)

The Digital Technology Boomerang: New Intellectual Property Rights Threaten Global “Open Science”

There is a serious threat that ill-considered government support for expanding legal means of controlling access to information for the purpose of extracting private economic rents is resulting in the 'over- fencing of the public knowledge commons' in science and engineering. Such a new 'tragedy of the commons' would bring adverse long-run consequences for future welfare gains through technological progress, and re-distributional effects further disadvantaging the present economically less advanced countries of the world. Radical legal innovations in intellectual property protection that seriously jeopardize the effective conduct of open, collaborative science have been introduced by the little noticed European Database Directive of March 1996. This initiative forms an emblematic and substantively significant aspect of the broader set of transformations in intellectual property rights institutions that have been initiated in response to the economic ramifications of rapid progress in digital information technologies. The EC Directive poses numerous contentious issues in law and economics that will create ambiguities for business and non-profit activities in this area for years to come. The terms on which those issues are resolved will materially affect the costs and organizational feasibility of scientific projects that are of global reach and importance, especially those that depend heavily upon the collection, management and analysis of large volumes of observational data that cannot be regenerated. This paper sets out the economic case for the effectiveness of open, collaborative research, and the forces behind the recent, countervailing rush to strengthen and expand the scope of intellectual property rights protection. Focusing upon innovations in copyright law and the sui generis protection of hitherto unprotected content, it documents the genesis and analyzes the economic implications of the EC's Database Directive, and related legislative proposals (H.R. 3125, H.R. 354 and H.R. 1858) in the US. Several modest remedial proposals are advanced to mitigate the adverse impact of 'the digital technology boomerang' upon open science.intellectual property rights, copyright, sui generis protection of expressive material, economics of information-goods, open science, 'fair use,' scientific databases