Institutional Infrastructure Supporting E-Business Adoption

Abstract

Infrastructure is fundamental to all production activities, and a network function, be it telephony or electricity, depends on massive physical and technological infrastructure, which traditionally had been supplied by public monopolies. However, the required scale of investment for a modern infrastructure is often beyond the financial capacity of private investors in developing countries. Infrastructure possesses technical and economic characteristics that affect innovation XE “innovation” systems in very profound ways. The technical attributes of infrastructure include ‘scale, indivisibility, multiple use and generic functions’ that separate it from other forms of capital.14 Indivisibility confers a systemic attribute on infrastructure that allows it to serve the entire industrial and non-industrial system, with considerable flexibility for multiple extensions. The latitude for multiple use of infrastructure by urban and non-urban consumers equally extends its scale-economic characteristics. In this chapter, we consider three categories of infrastructure: physical, technological and human capital infrastructure.