Recombination in digital innovation: Challenges,opportunities, and the importance of a theoretical framework

In this article I argue that the quest to establish digital innovation as a research domain is hindered by three challenges. As digital innovation research we are too often: a) reifying the agency of digital innovation actors; b) developing explanations of digital innovation detached from the specifics of digital technology, and c) developing overly specific explanations of digital innovation. I begin by providing a brief overview of the recombination perspective and considering why this perspective holds great appeal in the digital age. I then engage with Henfridsson et al.'s (2018) value spaces framework as a platform for framing value creation and value capture in relation to recombination in digital innovation. Next, I push Henfridsson et al.'s arguments one step further to discuss them in relation to what I consider to be the key challenges for digital innovation research. Illustrating with some of my own recent projects, I suggest that in order to fully address these challenges we need to (1) develop explanations of digital innovation acknowledging the complexity of sociomaterial interaction in digital innovation; (2) develop explanations of digital innovation building on the specifics of digital technology, and (3) develop explanations of digital innovation based on an oscillation between the specific and the general. The article concludes by pointing to future challenges and developments for digital innovation research.     

Exploring preconditions for open innovation: Value networks in industrial firms

The open innovation model embraces the purposive flow of internal and external ideas as a foundation for innovation and network formation. While the open innovation paradigm has been successfully applied in high-tech settings, there is a lack of research on adopters of open innovation in other settings. We describe a case study conducted in a process industry setting, focusing on the LKAB mineral group as it makes a transition from a closed to a more open innovation context by adopting remote diagnostics technology. This process has resulted in the creation of new value networks. By tracing the reasoning behind the organizational transformation and studying the technology used to carry it through, we seek to explore the preconditions for open innovation and provide insight into the role of IT in the process. Our findings show that adoption of the open innovation model is grounded in developing organizational environments that are conducive to innovation, including expertise in creating a culture for knowledge sharing, building a trustful environment, and a resourceful use of IT.     

Turn to the material: Remote diagnostics systems and new forms of boundary-spanning

To learn and adapt, organizations engage widely in Information Technology (IT)-mediated boundary-spanning. This involves making sense of a swath of peripheral information made available by digital means so as to expand local knowledge. Prior research on boundary-spanning has paid scant attention to material differences between IT systems in enabling or constraining such activity. In this article, we argue that material features do matter: features afforded by IT systems have a significant impact on the form and content of boundary-spanning. We analyze material features and related affordances provided by remote diagnostics systems – a family of ubiquitous IT systems. These features allow remote diagnostics systems to collect, store, and continuously analyze data about the state of machinery and related production processes across space, time and organizational boundaries. Organizations use these systems to determine when maintenance intervention is needed, or to improve their production processes. Often, these systems are run by external service providers at remote sites, which become the new ears and the eyes of a focal organization’s production processes. Building on a longitudinal multi-site case study of two organizations, we explore the impacts of remote diagnostics systems on boundary-spanning. We observe that material features afforded by the remote diagnostics led the organizations to change their boundary-spanning in contradictory ways. On one hand, they reinforced existing boundaries. On the other hand, they crossed or cut down others, or created new ones. This suggests that the material features of these systems, when combined with new knowledge creation and sharing practices, within and between the local and the remote sites generate richer, multi-faceted inter-organizational knowledge flows. We surmise that IT’s new material features will continue to significantly shape organizing logics that determine where and when organizational boundaries are drawn and crossed. Future boundary-spanning will increasingly be shaped by socio-technical assemblages brought together by increasingly pervasive IT capabilities.     

Mapping and analysing virtual outcrops

Laser scanning is a very efficient way to generate realistic, high-resolution digital models of 3-D geological outcrops. This paper discusses the methodologies involved in the creation and analysis of virtual outcrops, based on laser scanner data. The visualisation of the laser scanner data as a photorealistic 3-D object is described. Geological features picked out on the virtual outcrop (e.g. fractures, faults or bedding planes) can be extrapolated outward, into space, and inward, into the subsurface, using tension surfaces.     

Numeric or weighted distribution? The effect of different channel performance metrics on market share

Abstract

Previous studies have found a convex relation between weighted measures of distribution and market share for consumer products in developed economies, while companies in emerging markets often use a non-weighted (numeric) distribution measure to manage their channel strategy. In contrast to the markets with high retail concentration, the numeric distribution could be best suited to a more fragmented retail market in which the percentage of physical distribution is important. We investigate the effects of expanding numeric versus expanding weighted distribution by studying stores in channels and regions characterized by structural differences in an emerging market. Our data come from retail audits in Brazil and include 91 soft drink manufacturers, 195 brands and 1,110 stock-keeping units. Our study highlights the importance of numeric distribution as a performance measure in this market. Additionally, we show that the effects of numeric and weighted distribution on market share vary by region and channel format.     

Internet service provision and content services: paid peering and competition between internet providers

We consider the relationship of Internet service providers (ISP) and content service providers (CP) in the Internet ecosystem. Currently, the position of ISPs is challenged by the emergence of powerful content service providers, especially with the spreading of bandwidth-demanding video services. The further investment in the network capacity may be hindered by prevailing business models that largely exclude the ISPs from sharing in the major cash flows resulting from content provision. We develop modeling tools for evaluation of business models of ISPs and present results of an analysis of two models with the potential for the generation of additional cash flows for ISP: paid content peering and service differentiation. Firstly, we show that under certain conditions on the cost structure and the level of demand elasticity and uncertainty, it can be profitable for a powerful content provider to resort to paid content peering, thus transferring to the ISP a part of his content provision revenue. The resulting business model may provide substantial benefits to all major participants in this ecosystem: network providers, content and service providers and end users. After this we consider competition in the Internet provision sector and show that - also in this case - the paid content peering can help ISPs to expand the network capacity and at the same time increase profits of content providers. The end users benefit from the lower prices for content services. Finally, we consider the situation when an ISP differentiates the service offer by engaging in content provision, thus entering in direct competition with content providers.     

Identifying and Acting on Early Warning Signs in Complex Projects

We consider identification of early warning signs (EWS) in projects. Project professionals are not good at detecting or acting on EWS. Barriers that lead to this are identified. The nature of EWS and their detection change with the evolving situation. Project assessments, typically part of gateways, are useful in identifying EWS connected to the formalities of the project. As complexity increases, assessments have more limited use, and the project is increasingly dependent on detecting EWS by informal “gut feeling.” Thus, knowledge, experience, and communication skills are increasingly important in complex situations. We conclude with a list of early warning signs.     

Real Exchange Rates and Fundamentals: Evidence from 15 OECD Countries

In an extended Balassa–Samuelson model, long-run real exchange rates are determined by relative productivity and terms of trade. We present evidence of systematic long-run relationships between these fundamental variables and real exchange rates in a data set covering 15 OECD countries from 1960 to 1996. High relative productivity is associated with real exchange rate appreciations in most cases. There is less support for the hypothesis that the terms of trade affect equilibrium real exchange rates.