A key debate on the value of ICT has been the effect of technology on long-term profitability and its capacity to create sustainable competitive advantage (Clemons and Row, 1991; Clemons, 1986). A long-standing theoretical claim in this literature asserts that new technology adoption will offer benefits in terms of enhanced cost efficiencies, better product quality, and increased value to customers but the economic rents and value realized from these benefits will not last long due to the high imitability of ICT.  

Thus, the ICT applications adopted by firms have the status of “strategic necessities” and advantages from their early adoption and use are lost through imitation and do not lead to profitability increases (Clemons and Kimbrough, 1986; Fuentelsaz et al., 2012; Carr, 2003). 

This hypothesis largely relies on the assumption that ICT is highly commoditized and therefore easily replicable at a low cost (Carr,2003). In other words, it is expected that technology will be diffused and adopted homogenously without ‘frictions or delays’ across competitor firms, a claim that is disputed in the technological diffusion literature where there are many factors that can prevent some firms from speedily adopting a technology (Fuentelsaz et al.,2012).  

The counter claim holds that there are alternative ways with which organizations incorporate ICT into their productive process, use complementary assets, or reconsider their business strategy in light of technological change, which can lead to persistent differences in performance that cannot be accounted for by the strategic necessity hypothesis (Battisti et al., 2009). 

 

To address these fundamental arguments around long-term performance and sustainability, this study need a longitudinal approach which enables them to go beyond the short-term effects of technology adoption to reveal the varying temporal profile and impact of innovation. A few papers have attempted to focus on the long-term effects of ICT using micro data. (e.g. Kwon and Stoneman, 1995, for five manufacturing technologies or Haynes and Thompson (2000) on Automated Teller Machine (ATM) networks). This study build upon two key insights from this prior literature both of which center on the importance of constructing long lags. Firstly, intra firm diffusion and technological adaptation often takes time (Tyre and Orlikowski, 1994; Fuentelsaz et al.,2009). Second, there is often the need for significant organizational changes and learning (Van de Ven, 1986; Brynjolfsson and Yang,1996; David, 1990). Studies using short lags are unable to capture potential benefits that may accumulate over time from the technology investment. As Fuentelsaz et al. (2012) argue, the uneven patterns of technological diffusion mean that it is possible for benefits accrued by adopters (in comparison to non-adopters) to endure for several years depending on the timing of the diffusion process. Thirdly, beyond firm heterogeneity, particular focus must be given to the specific characteristics of network innovations and their strategic importance for long-term economic performance. 

 

Network externalities can arise when usage benefits increase with network size (Katz and Shapiro, 1985; Shapiro and Varian,1999; Farrell and Saloner, 1992). For example, Saloner and Shepard’s (1995) show that as more ATMs are installed, the network size grows, making it hold higher value for cardholders and banks because the connectivity produced provides more utility.  

Although there are comparable results in other industries (Economides,1996), empirical work on financial services network effects is in short supply and very focused on ATMs. This is cause for concern in a sector whose history has been defined by network innovations and network platforms are undergoing critical development. 

 

Sumber: 

Scott, S. V., Van Reenen, J., & Zachariadis, M. (2017). The long-term effect of digital innovation on bank performance: An empirical study of SWIFT adoption in financial services. Research Policy, 46(5), 984-1004. 

 Fuentelsaz, Lucio, Gómez, Jaime, Palomas, Sergio, 2009. The effects of new technologies on productivity: an intrafirm diffusion-based assessment. Res.Policy 38 (7), 1172–1180