Digital Transformation Through Exploratory and Exploitative Internet of Things Innovations: The Impact of Family Management and Technological Diversification*

This study examines the impact of family management on digital transformation with specific regard to the firm’s development of Internet of Things (IoT) innovations. Drawing on the distinctive characteristics of firms with family managers, such as the focus on family‐centered noneconomic goals, long tenure, emotional ties to existing assets, and rigid mental models, it hypothesizes that increasing family involvement in the top management team is negatively related to the development of IoT innovations that are distant from a firm’s existing technology base (i.e., exploratory IoT innovations) compared to exploitative IoT innovations. Further, the study proposes that the firm’s degree of technological diversification, especially in unrelated forms, reinforces this relationship. The longitudinal analysis between 2002 and 2013 on a sample of publicly traded German firms allows us to test our hypotheses from the beginning of the emergence of the IoT concept. Our findings show that due to the particular characteristics of their managers, family‐managed firms do not welcome the risks related to exploratory IoT innovations, and the benefit of risk diversification from technological diversification is lower than the cost of abandoning family‐centered goals. As our results imply that the involvement of family managers constrains the development of exploratory IoT innovation, the top management team composition in firms that intend to be at the forefront of the digital transformation should be accurately designed by avoiding a high proportion of family members.     

Are Interactive TV-Pioneers and Surfers Different Breeds? Broadband Demand and Asymmetric Cross-Price Effects

We consider two different qualities of broadband access, one that simply means greater access speed to Internet applications and content, and a premium version that also gives access to interactive TV services. Based on a market survey we find that potential consumers of this premium broadband access do not consider basic broadband Internet access as a substitute. The price of basic broadband does not constrain the price that may be charged for the premium broadband that allows for interactive TV services.     

Multilevel governance and broadband infrastructure development: Evidence from Canada

This paper investigates the contributions of digital infrastructure policies of provincial governments in Canada to the development of broadband networks. Using measurements of broadband network speeds between 2007 and 2011, the paper analyzes potential causes for observed differences in network performance growth across the provinces, including geography, Internet use intensity, platform competition, and provincial broadband policies. The analysis suggests provincial policies that employed public sector procurement power to open access to essential facilities and channeled public investments in Internet backbone infrastructure were associated with the emergence of relatively high quality broadband networks. However, a weak essential facilities regime and regulatory barriers to entry at the national level limit the scope for decentralized policy solutions.     

Analysis of fixed broadband access and use in Thailand: Drivers and barriers

The aim of this paper is to analyze the demand for fixed broadband in Thailand. Data were obtained from a national survey in 2010 by the National Broadcasting and Telecommunications Commission (NBTC) of Thailand. The bivariate probit model was employed to examine empirically whether accessibility to fixed telephony infrastructure, socio-economic variables and the area of residence have a systematic link to fixed broadband access in the first stage, and then, specific usage, provided access exists, is estimated. Results of this study show that the variables, together with their potential impact, are as follows: fixed infrastructure, income, gender, level of education, age of consumer and residential area. The impact of these factors varies from service to service (i.e. video download, social network, searching and e-mail). The implications for the NBTC are to encourage competition through the infrastructure and to permit more competition in infrastructure development. This could stimulate the growth of fixed broadband access and use. At the same time, the government could also implement policies to encourage more access and usage, for example income subsidization and training program.     

Is broadband the future? An analysis of broadband technology potential and diffusion

This paper examines the policy issues surrounding residential broadband technology, discusses how broadband extends Internet capabilities and at what cost, and makes recommendations for future applications of broadband. It focuses on residential broadband access, and in examining the future of broadband, it identifies three areas of concern: regulatory tendencies and tensions in the US, international diffusion of broadband, and the overall consumer appeal of broadband content. Specific policy recommendations center on providing regulation that guarantees open access, enforces reasonable pricing plans, and encourages innovative content.     

Closing the rural broadband gap: Promoting adoption of the Internet in rural America

Even as geographic disparities in high speed Internet access narrow, an urban–rural broadband gap persists, pointing to the importance of individual differences in motivations to adopt broadband as the key to closing the gap. Diffusion of innovation is reconceptualized through contemporary perspectives of the digital divide and social cognitive theory and tested on a survey sample drawn from four rural communities. Path analysis was used to examine the factors that cause broadband Internet service adoption in rural communities. Prior experience with the Internet, the expected outcomes of broadband usage, direct personal experience with broadband, and self-efficacy had direct effects on broadband intentions. Age and income, but not education or ethnicity, also had direct impacts. Efforts that promote the personal benefits of broadband and advanced ICT literacy skills among Internet users are recommended.     

An analysis of the determinants of broadband access

This paper extends the analysis of the relative impacts of socioeconomic factors on households’ decision to subscribe to dialup Internet access [Chaudhuri, A., Flamm, K., & Horrigan, J. (2005). An analysis of the determinants of Internet access, presented at the Telecommunications Policy Research Conference, Washington, DC, October 1–3] to the decision to subscribe to broadband. A simple cumulative utility (ordered logit) model is rejected in favor of a partial proportional odds model, and the authors found that the decision to purchase any access at all, and the decision to upgrade to broadband, may be affected differently by various socioeconomic factors. The own-price elasticity of broadband demand is statistically significant and has a substantial coefficient value. The cross-price sensitivity of broadband demand with respect to dialup price is also statistically significant, and supports the notion of the two services being substitutes.     

Non-discrimination rules for ISPs and vertical integration: Lessons from cable television

The experience of cable television indicates that vertically integrated ISPs have plausible incentives to favor their affiliated content and to restrict entry of nascent rival content services, but these incentives are weakened in some respects, and strengthened in others, by differences in the economic architectures of cable and Internet broadband. Non-discrimination regulations designed to control such behavior are potentially more effective than in cable, but rules governing discrimination both in the upstream access and the downstream retail markets (as the FCC's no-unreasonable-discrimination rule appears to do) are likely to be necessary for effectiveness. Beneficial effects of vertical integration on financing and entry of cable programming networks should also apply to Internet video content development, but emergence since the 1970s of a robust programming supply industry with few vertical ties to cable suggests that such benefits will be less significant in the ISP case. Finally, the history of both the cable and ISP industries makes evident that the fundamental policy concern should not be vertical integration but horizontal market shares of ISPs, both at the local and national levels.     

The Market Structure of Broadband Telecommunications

The recent growth of the Internet is creating markets for broadband telecommunications networks. In the past, virtually all such 'infrastructure' networks have been subject to government regulation. Two reasons advanced for this market intervention are (i) such networks constitute a natural monopoly, and (ii) to achieve 'universal service', in which all citizens have access to services. In this paper, we develop a model and estimate it using engineering data which tests if these two hypotheses are likely to obtain for broadband networks. We find that oligopolistic competition is likely to emerge for demand levels approaching that of today's cable television.     

Fixed-to-mobile substitution in the European Union

This paper analyzes substitution between access to fixed-line and mobile telephony in the European Union using cross-section panel data on households’ choices of telecommunications technologies in years 2005–2010. We estimate a structural model of household?s demand for access to: (i) fixed-line only; (ii) mobile only; and (iii) both fixed-line and mobile. We find that growing Internet usage increases the share of ‘fixed + mobile’ households, which suggests that households keep their fixed-line connection to access Internet. However, the spread of 3G and cable broadband access decreases the share of ‘fixed + mobile’ households and increases the share of ‘mobile only’ households. Hence, fixed-to-mobile substitution was slowed down by the spread of Internet but it may continue with the spread of mobile broadband. Furthermore, bundling of telecommunications services increases the share of ‘fixed + mobile’ households and decreases the shares of ‘mobile only’ and ‘fixed only’ households. Therefore, operators which can bundle fixed-line connection with Internet or mobile services may slow down fixed-to-mobile substitution.     

The tribal digital divide: Extent and Explanations

This paper documents home Internet access, types of Internet access, connection speeds, and prices for basic home Internet in tribal areas of the United States. We find that the share of households with Internet access is 21 percentage points lower in tribal areas than in neighboring non-tribal areas. When compared to these non-tribal areas, download speeds, whether measured using fixed or mobile broadband networks, are approximately 75% slower in tribal areas, while the lowest price for basic Internet services in tribal areas is 11% higher. Regression techniques reveal that traditional cost factors such as terrain and population density fully explain the price gap but account for only a fraction of the tribal differences in Internet access and connection speeds. Income differences are strong predictors of Internet access but do not affect connection speeds. A sizable amount of the variation in the access and home connection gap between tribal and non-tribal is left unexplained. We conclude with a discussion of how federal broadband programs have penetrated Indian Country, how tribal-specific factors are related to the variation in Internet access within Indian Country, and the potential policy implications of our findings.     

User preference for an IoT healthcare application for lifestyle disease management

The current convergence between information and communications technology (ICT) and medical fields reflects a shared vision of seamlessly connected sensors and devices that can improve healthcare services, and an expectation of the emergence of Internet of Things (IoT) healthcare. This study provides a relevant guide for IoT healthcare service developers, from the perspective of the technology user. Particularly, we propose critical factors that will potentially influence users’ acceptance of an IoT lifestyle disease management service. Information on the profession of service providers, task scope, devices, expert support, and a range of shared personal medical data were suggested as important attributes. Conjoint analysis was adopted to estimate the relative importance of proposed attributes and preferences for service specifications. Data and medical history were collected from 435 respondents. The model was analyzed and compared between the groups with different medical histories, respectively. The results showed that potential users, in general, require a safe and trustworthy healthcare service, rather than greater functionality, while medical history has a considerable influence on the perceived importance of the proposed attributes.     

The impact on broadband access to the Internet of the dual ownership of telephone and cable networks

In Portugal, until recently, the telecommunications incumbent offered broadband access to the Internet, both through digital subscriber line and cable modem. We estimate the impact on broadband access to the Internet of the structural separation of these two businesses. Using a panel of consumer level data and a random effects mixed logit model, we estimate the price elasticities of demand and the marginal costs of broadband access to the Internet. Based on these estimates, we simulate the effect of structural separation on prices and social welfare. Our estimates indicate that structural separation would cause a substantial welfare increase. These results raise questions about the policy of some countries of allowing the dual ownership of telephone and cable networks.     

The growing complexity of content delivery networks: Challenges and implications for the Internet ecosystem

Since the commercialization of the Internet, content and related applications, including video streaming, news, advertisements, and social interaction have moved online. It is broadly recognized that the rise of all of these different types of content (static and dynamic, and increasingly multimedia) has been one of the main forces behind the phenomenal growth of the Internet, and its emergence as essential infrastructure for how individuals across the globe gain access to the content sources they want. To accelerate the delivery of diverse content in the Internet and to provide commercial-grade performance for video delivery and the Web, Content Delivery Networks (CDNs) were introduced. This paper describes the current CDN ecosystem and the forces that have driven its evolution. We outline the different CDN architectures and consider their relative strengths and weaknesses. Our analysis highlights the role of location, the growing complexity of the CDN ecosystem, and their relationship to and implications for interconnection markets.     

The evolution of the Internet of Things (IoT): A computational text analysis

There is increasing interest in the IoT, in both academia and industry. Extant studies have surveyed the topic of IoT using different approaches. This study takes a digital innovation view of IoT as a complex ecosystem of technologies, industry applications, concepts, methodologies, and social institutions, which is temporally dynamic and evolves over time. The study focuses on three research questions: (1) What are the important elements of the IoT ecosystem? (2) How are such IoT elements connected in the ecosystem? And (3) How have such IoT elements been evolving over time? This study adopts a topic modeling approach and extracts hidden trends from social media data. The popular elements in the IoT ecosystem are cloud computing, big data, and cybersecurity, among others. The analysis provides detailed information about popular categories or topics in the IoT ecosystem, the associations among those topics, and their evolution since 2014. Based on the findings, the study offers implications for practice and suggestions for future research.     

Estimating broadband diffusion in the EU using NUTS 1 regional data

In this paper we use panel data on NUTS 1 regional data for 27 EU countries in the years 2006–2010 to analyze determinants of broadband diffusion. We estimate both linear demand specification and the logistic diffusion function. We find that, after controlling for regional differences due to socioeconomic factors, inter-platform competition approximated by an inter-platform Herfindahl index has a significant positive impact on broadband diffusion. Broadband deployment is lower in countries in which DSL has a greater share in Internet access and it is higher in countries in which cable modem has a greater share in Internet access. Moreover, we find that competition between DSL providers has a significant and positive impact on broadband penetration. First, higher prices for a fully unbundled local loop connection, which represent the cost of providing copper-based Internet services, have a significant and negative impact on broadband penetration. Second, a greater incumbent share in DSL connections has a significant and negative impact on broadband penetration.     

“Open access:” the ideal and the real

“Open access” would allow ISPs to use a cable operator's broadband connection under regulated terms and conditions. Advocates stress the desirability of an “end-to-end” architecture for the Internet and the danger that cable operators will use their control over the last mile to limit consumer choice and stifle innovation. Opponents contend that wholesale price controls and other regulatory burdens under what they term “forced access” would in fact slow down the deployment of broadband, stifle innovation and harm consumers. The fears of “open access” advocates seem largely speculative at this point. Evidence from related policies also favors the opponents. “Closed” cable systems are beating their “open” DSL competitors in the market place; analogous regulation of cable TV did not serve consumers well; and forced “unbundling” of local service has been controversial and largely ineffective. In addition, relevant technology stocks declined in price with political and legal victories for “open access” and increased when it suffered setbacks.     

Behind the scenes of digital servitization: Actualising IoT-enabled affordances

Manufacturers are increasingly transforming through servitization, and the Internet of Things (IoT) is a crucial enabler of this transformation. Current literature describes the diverse outcomes from IoT that enable servitization but fails to explain the reasons behind the diversity and the processes manufacturers go through to create these outcomes. This study aims to identify these processes by drawing on affordance theory and its core principles of affordance perception (understanding an opportunity provided by technology) and affordance actualisation (taking advantage of an opportunity provided by technology). By using affordance theory to analyse the case scenarios of six manufacturing firms, the study develops a framework to explain the realisation of the opportunities the IoT provides to manufacturers' servitization efforts. The analysis identifies three types of affordances and actualisation processes that help manufacturers realise the opportunities of the IoT. This framework enables manufacturers to systematically manage the contributions from the IoT and the associated actualisation efforts required to advance servitization. The study adds to the understanding of the IoT's role in a manufacturing servitization context.     

Population grid-based assessment of the impact of broadband expansion on population development in rural areas

This paper estimates the effect of the expansion of broadband infrastructure, which enables high-speed Internet, on population development in panel of Finnish areas in the period 2010–2018. The study differs from previous studies in that it uses accurate statistics on the availability of broadband in 1 km * 1 km population grids. Therefore, the impact of broadband availability on rural development is evaluated more accurately than previously. The results of the Difference-in-difference (DiD) regression analysis show that the availability of broadband reduces depopulation of remote and sparsely populated rural areas. In this respect, the telecommunication policy in Finland has been successful, and the findings encourage the expansion of broadband infrastructure in rural areas.