Developing Virtual Communities in Transition Economies

Abstract

This article explores key sets of drivers of formation of virtual communities in transition economies with particular reference to recent developments in Lithuania. Information and communication technologies (ICT) centered on the Internet are today widely recognized as one of the driving forces in the transition toward a new economic system. This transition has been especially challenging for European transition economies that are in the midst of a historic restructuring in anticipation of entry into the European Union. These countries are confronting a historic challenge of converging to the economic, technological, and organizational practices and standards of their EU counterparts. ICT applications in the form of e-business provide a unique opportunity for companies in these economies to accelerate learning processes for the facilitation of the adoption and implementation of competitive and sustainable e-business strategies. A key challenge in this respect is how to construct sustainable virtual communities that bridge civil society and organizations of the public sector in ways that support the transition toward an ICT-enabled economic system. The central thesis of this article is that virtual communities are a central component of an emerging economic system that is powered by ICT, is knowledge driven, is organized around electronic and organizational networks that generate knowledge, which transform industries and markets, and is dependent on dynamic and flexible regulatory public institutions. For ICT to diffuse throughout the whole economy in a way that supports virtual community formation, business firms, market conditions, and the culture and institutions of society need to undergo substantial change in a coordinated manner. It is the dynamic interdependence of these conditions that is the source of innovation and value creation in the new knowledge-driven economy. The agenda of research on the dynamics of adoption of new economy practices, innovation, and economic growth, as a result, needs to be expanded beyond the level of the firm. It needs to be built around the dynamic interrelationships between technological transformations, firms’ organizational and knowledge-creating capabilities, emerging market and industry structures, and public institutions (Castells, 2000). The article situates drivers of virtual community formation and the necessity of coordinating their development on three levels: the level of ICT infrastructure, regulatory environment, and market or civic attitudes toward ICT-enabled market transactions. On each of these levels the observations made are conditioned by the definitional parameters of “virtual community.” For the purposes of this article, a virtual community is understood as a set of interwoven relationships built upon shared interests, which satisfies members’ needs otherwise unattainable individually (Rafi, Fisher, Jaworski, & Cahill, 2002). It must be stressed that a virtual community thus defined refers not only to consumers but also businesses and organizational entities of the public sector.