The Third Digital Divide: Digital Identity & Start-up Success

Abstract

The digital divide concept recognizes that with the rapid pace of technological advancement, actors who lack access to digital infrastructure and the necessary knowledge may not have the opportunity to benefit from the opportunity that digital entrepreneurship offers. Online-exclusive ventures now constitute a growing proportion within the gross population of new ventures started up, especially in China. Digital entrepreneurship is viewed as the new vista where aspiring entrepreneurs are able to rapidly setup and test new business ideas, significantly reducing startup costs and the costs associated with startup failure. A key question for new entrepreneurs, therefore, is: what drives “success” in digital-only entrepreneurship, and are these drivers significantly different when compared to conventional or online-offline hybrid entrepreneurship? Here it is alleged that ‘digital identity’ plays a significant role in determining online-only start-up “success”. Our aim in this paper is to identify the overlaps between ‘identity’ and ‘digital entrepreneurship’ literature to highlight how scholars in the area explain the digital identity formation process, and the manner in which it contributes to start-up success. We situate our paper in the Chinese national context; which represents a unique digital start-up ecosystem, with well-developed routes to business startup. Presented are outcomes from a systematic literature review encompassing 48 publications, including 12 pieces of indigenous Mandarin literature. We identify overarching themes, and how concepts in identity and digital entrepreneurship literature overlap, with a view to explaining the drivers of digital start-up “success”, and as to how these might be further investigated using novel methodology.