Coordinating the early commercialization of general purpose technologies: The case of mobile data communications

Abstract

SummaryThis paper argues that mobile data communications is a fairly typical case of a general purpose technology (GPT), since it (1) is used in a wide range of applications, (2) exhibits rapid and persistent performance improvements and (3) strong innovational complementarities with interrelated coordination problems. However, (4) diffusion has been slower than expected so far. The paper focuses on the early slow developments of the Swedish Mobitex system, the recent failure of WAP in Europe and contrasts it with the successful launch of Mobile Internet in Japan. As predicted by the literature, mobile data communications have (so far) fared better in Japan where a dominant player (NTT DoCoMo’s) internalized coordination. However, since applications are not known beforehand, market experimentation is also called for. If coord– ination can take place hrough standardized interfaces, then decentralized networks can have an advantage since such networks can produce a more rapid rate of experimentation. Thus, finding a balance between firm internal coordination and market mechanisms, possibly through standardization of platforms, seems to be the way forward for the industry.