How Design Plays Strategic Roles in Internet Service Innovation: Lessons from Korean Companies

In order to survive in the highly competitive internet business, companies have to provide differentiated services that can satisfy the rapidly changing users’ tastes and needs. Designers have been increasingly committed to achieving user satisfaction by generating and visualizing innovative solutions in new internet service development. The roles of internet service design have expanded from a narrow focus on aesthetics into a more strategic aspect. This paper investigates the methods of managing design in order to enhance companies’ competitiveness in internet business. The main research processes are to: (1) explore the current state of internet service design in Korea through in-depth interviews with professional designers and survey questionnaires to 30 digital design agencies and 60 clients; (2) compare how design is managed between in-house design groups and digital design agencies though the case studies of five Korean companies; and (3) develop a taxonomy characterizing four roles of designers in conjunction with the levels of their strategic contributions to internet service innovation: visualist, solution provider, concept generator, and service initiator. In addition, we demonstrate the growing contributions of the strategic use of design for innovating internet services, building robust brand equity, and increasing business performance. Keywords: Design Management; Internet Business; Internet Service Design; Digital Design; Digital Design Agency; In-House Design Group, Case Study</p

Identifying the Predictors for Financial Crisis Using Gibbs Sampler

The Asian financial crisis broke out in Thailand in July 1997, and rapidly spread throughout the neighboring countries. An important question then arises? Is it possible to predict next financial crisis? If yes, then what are the predictors? The answer lies in combined usage of economic theory and econometric methods. By using the economic theory, one can locate possible potential crisis predictors whereas appropriate econometric models can pinpoint effective ones. In this paper we suggest using the Stochastic Search Variable Selection (SSVS) developed by George and McCulloch (1993) to identify the crisis predictors. As is suggested by the name, SSVS stochastically searches for practically significant variables. Each variable coefficient is assumed to come from a mixture of two normal variates with respectively large and small variances. For the former case, this variable is considered as insignificant and should be excluded from the model whereas for the latter, this variable is significant and should be included in the model. SSVS is not affected by the ordering of the candidate variables and is particularly effective when the sample size is much smaller than the number of all possible models. By employing SSVS method, we conclude that annual growth rate of money supply, $M_2$, and the ratio of government debt to GDP are promising predictors for financial crisis. It is worth mentioning that the frequently mentioned factors, such as ratio of total foreign reserve to GDP and the ratio of current deficit to GDP are not selected by our analysis. Our empirical analysis implies that monetary and fiscal policy play a crucial role in exploring the Asian financial crisis.early warning

Identifying the Predictors for Financial Crisis Using Gibbs Sampler

The Asian financial crisis broke out in Thailand in July 1997, and rapidly spread throughout the neighboring countries. An important question then arises? Is it possible to predict next financial crisis? If yes, then what are the predictors? The answer lies in combined usage of economic theory and econometric methods. By using the economic theory, one can locate possible potential crisis predictors whereas appropriate econometric models can pinpoint effective ones. In this paper we suggest using the Stochastic Search Variable Selection (SSVS) developed by George and McCulloch (1993) to identify the crisis predictors. As is suggested by the name, SSVS stochastically searches for practically significant variables. Each variable coefficient is assumed to come from a mixture of two normal variates with respectively large and small variances. For the former case, this variable is considered as insignificant and should be excluded from the model whereas for the latter, this variable is significant and should be included in the model. SSVS is not affected by the ordering of the candidate variables and is particularly effective when the sample size is much smaller than the number of all possible models. By employing SSVS method, we conclude that annual growth rate of money supply, $M_2$, and the ratio of government debt to GDP are promising predictors for financial crisis. It is worth mentioning that the frequently mentioned factors, such as ratio of total foreign reserve to GDP and the ratio of current deficit to GDP are not selected by our analysis. Our empirical analysis implies that monetary and fiscal policy play a crucial role in exploring the Asian financial crisis.Financial crisis, early warning