Abstract
The global Information and Communications Technologies industry has experienced a rapid, radical reorganization of industry leaders and business models—most recently in mobile. New players Apple and Google abruptly redefined the industry, bringing a wave of commoditization to carriers and equipment manufacturers. Technologies, corporate strategies, and industry structures are usually the first places to look when explaining these industry disruptions, but this paper argues that it was actually a set of political bargains during initial phases of telecommunications liberalization, which differed across countries, that set the trajectories of development in motion. This paper shows how different sets of winners and losers of domestic and regional commoditization battles emerged in various ICT industries around the world. Carriers won in Japan, equipment manufacturers in Europe, and eventually, computer services industry actors rather than communications firms emerged as winners in the US. These differences in industry winner outcomes was shaped by the relative political strength of incumbent communications monopolies and their will to remain industry leaders, given the political system and political dynamics they faced during initial liberalization. The US computer services industry, which developed independently of its telecommunications sector due to antitrust and government policy, eventually commoditized all others, both domestically and abroad. This paper contends that a political economy approach, tracing how politics and regulatory processes shaped industry structures, allows for a better understanding of the underlying path dependent processes that shape rapidly changing global technological and industry outcomes, with implications beyond ICT.
Highlights
One of the most recent dramatic developments in global Information and Communications Technologies (ICT) industries has been the rapid, radical reorganization of industry leaders and business models in mobile communications.New players abruptly redefined the industry
This paper opened with the observation that the global ICT industry has been recently been disrupted dramatically by firms originating the US computer industry
In answering the question of why these dynamics of competition unfolded, this paper showed that global ICT competition was comprised essentially of multiple different domestic winners interacting on a global stage
Summary
One of the most recent dramatic developments in global Information and Communications Technologies (ICT) industries has been the rapid, radical reorganization of industry leaders and business models in mobile communications. Japan’s mobile industry had been a leader in value-added services, including mobile Internet platforms, downloadable apps, and Internet email for almost a decade before the advent of Apple’s iPhone and Google’s Android It had the world’s most sophisticated mass-market handsets, Japan’s mobile industry had not globalized effectively. Android handset manufacturers faced ever-decreasing margins, and only firms such as Samsung, which attempted to Boutrun commoditization^ continued to succeed, though under increasing pressure Since this wave of commoditization hit the mobile industry so dramatically, and is likely to spread into new domains such as energy, transportation, healthcare, medical devices, and others, it is worth understanding the origins of this trajectory of computer industry expansion more clearly. This paper contends that a political economy approach, tracing how politics and regulatory processes shaped industry structures, allows for a better understanding of the underlying path dependent processes that shape global technological and industry outcomes
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