Digital Technologies as External Enablers of New Venture Creation in the IT Hardware Sector

Frederik Von Briel,Jan Recker,Per Davidsson

doi:10.1177/1042258717732779

Abstract

We develop theory about how and when digital technologies enable new venture creation processes. We identify two fundamental properties of digital technologies—specificity and relationality—and develop propositions that link these properties to six enabling mechanisms: compression, conservation, expansion, substitution, combination, and generation. We use the linked properties and mechanisms to determine how and when in the venture creation process—from prospecting to developing to exploiting—digital technologies have enabled start-ups in the IT hardware sector and develop stage-dependent propositions about their sector-level effects. We conclude our theorizing by discussing its implications beyond digital technologies and the IT hardware sector.

Highlights

We develop theory about how and when digital technologies enable new venture creation processes
Our theorizing begins with the observation that despite the IT hardware sector’s reputation for high entry barriers, such as high resource intensity, low flexibility, slow process speeds, and high external dependencies (e.g., Heirman & Clarysse, 2007; Loderer, Stulz, & Waelchli, 2016; Marion, Eddleston, Friar, & Deeds, 2015), there has been a recent surge in independent IT hardware start-ups (Billings, 2015; Diresta, 2015; The Economist, 2014)
These developments encouraged us to engage in thought experiments to explain this real-world phenomenon (Alvesson & Karreman, 2007; Byron & Thatcher, 2016; Weick, 1989), around the role of digital technologies, which arguably play a prominent role in the IT hardware sector’s current entrepreneurial activity (e.g., Billings, 2015)

Summary

Introduction

We develop theory about how and when digital technologies enable new venture creation processes. In pursuing our research question within this context, we combine and extend five conceptual tools: Davidsson’s (2015) notion of external enablers as a workable basis for theorizing the enabling role of digital technologies; Nambisan’s (2016) distinction between boundaries and agency as a perspective on digital technologies’ influence on venture creation; the analytical construct of mechanisms to add precision to digital technologies’ enabling roles; Bakker and Shepherd’s (2017) threestage process model (prospecting, developing, exploiting) to situate digital technologies and the mechanisms they provide in the venture creation process; and the literature on the attention focus of decision-makers (Ocasio, 1997; Read, 2004) to theorize the effects of enabling certain stages of that process Building on these tools, we construct new theory that describes six enabling mechanisms of digital technologies and root these mechanisms within two properties that characterize the digital technologies themselves: specificity and relationality. We use this theory to analyze the enablement of entrepreneurial activity in the IT hardware sector across the stages of the venture creation process and develop sector-level propositions that are applicable to other industry contexts

Discussion

Conclusion