The ICT revolution, internationalization of technological activity, and the emerging economies: implications for global marketing

Abstract

The paper examines the impact of the information and communications technology (ICT) revolution on internationalization of technological activity with special reference to emerging economies and its implications for global marketing. The issue is examined principally around the transaction cost framework. The evidence from recent literature suggests that ICT applications such as workflow systems, groupware systems, e-mail, and data transfer through Internet and videoconferencing may have diluted the traditional market failure arguments for vertical integration of firms' technological activity and contributed to internationalization of MNE R&D and the rapid growth of technology alliances. In terms of implications for global marketing, the impact of ICT via the internationalization of MNEs' technological activity would have its strongest impact on product development decisions. The trend towards modular designs and the companion platform product strategy in which a firm designs a common core with different versions for different segments is likely to accelerate. Hybrid forms of governance (e.g., alliances) will continue to experience rapid growth in the internationalization of MNE R&D. The paper also suggests that alliances may be important for successful product differentiation in global markets. With respect to emerging economies, the ICT revolution, by making more, better, cheaper and faster exchange of information possible globally, may have the effect of reducing the country-specific risks associated with the development of new products and services. Overall, emerging countries like India and China with significant competencies and rapidly developing ICT infrastructure, appear to be well positioned to become serious players in the trend towards internationalization of technological activity.