Meta-Level Institutions Impacting ICT Innovation

Full title: Meta-Level Institutions Impacting ICT Innovation in Developing Economies

The present economy is informational, based on Information and Communication Technologies (ICTs) (Castells 2004; Dicken 2007). It emerged in the U.S., and while developed economies are its lead participants, developing economies are gradually increasing their participation (Freeman & Perez 1988; Dicken 2007; UNCTAD 2007). Participation in the informational economy is through innovation, a ‚Äúdriving force behind regional economic growth, standards of living, and international competitiveness‚ÄĚ (Acs 2002 cited in Acs et al. 2002: 1; UNCTAD 2007). Yet, innovation is impacted by institutions, which can both increase and decrease innovation productivity (North 1990; Edquist 1997; Lundvall 1992, Nelson 1993 cited in Mytelka 2000).
Institutions which impact ICT innovation exist at a number of levels, from the micro to the meta. With the inter-linking of national economies through processes of globalisation, meta-level institutions emerge as increasing in significance (Dicken 2007). In the globalised informational economy, a notable institution influencing ICT innovation is that which governs ICT ownership, use and control as it flows across borders: intellectual property (IP). However, there has been an increasing awareness of a potential disconnect between the efforts of donor country aid agencies to support socio-economic development goals through ICTs, and potentially opposing efforts by their respective governments to push developing economies to conform to international IP regimes (Kenny 2006). IP, which encompasses copyrights and patents among other forms, is depicted as potentially restricting access to ICTs. In contrast, ICTs in the 'commons' are depicted as more accessible. The 'commons', or the digital commons (DC), works with IP to release rights granted to ICT innovators, thereby governing increasingly accessible ICTs. This demonstrates the DC as a potentially counterbalancing meta-level institution to IP.
This paper seeks to understand how an institutional perspective of globalisation impacts ICT innovation in developing economies, with both IP and the DC as two significant meta-level institutions. Montresor (2001) admits that there is agreement that globalisation has affected innovation, yet the research to date has failed to demonstrate definitive results. Additionally, conceptualisations of innovation have focussed significantly on the micro- and macro-level influencing factors (e.g. Freeman 1987, Aydalot & Keeble 1988, Lundvall 1992, Nelson 1993, Camagni & Capello 2002), which are more recently accounting for meta-level factors (e.g. Stevens 1990, Archibugi & Michie 1997, Mytelka 2000, Montresor 2001). This demonstrates the importance of additional contributions to understanding the meta-level impacts on ICT innovation in developing economies.

The study questions that:
How do the meta-level institutions of intellectual property and the digital commons impact ICT innovation in developing economies?

The research question is answered through the case study of an Indian ICT innovation, the Simputer (Simple Computer). The Simputer is a small, powerful, and low-cost handheld computer, originally designed by Indian innovators for use by the masses, in response to demand for affordable computing and Internet access points (Manohar 1998; ST 2001; Fonseca & Pal 2003).

The paper is structured in six sections including the introduction. The second section provides the economic context, conceptualises the process of innovation and institutions as those impacting innovation, and concludes with a preliminary framework for analysis. The third section shows that IP and the DC are two meta-level institutions impacting ICT innovation, derives research propositions from literature for how they do this, and concludes with the final framework for analysis. The fourth section presents the research methods and a descriptive case study of the Simputer. The fifth section analyses the case of the Simputer through the framework for analysis. The sixth section concludes the research by presenting an overview of the research's findings, outlining implications for policy and research, and offering suggestions for future research directions.

Research Methods
New Institutionalism (NI) and New Institutional Economics (NIE) provide a theoretical foundation, drawing on North's (1990) concept of transformation costs as those through which institutions enable and constrain the ICT innovation process. Specifically, the research framework posits that IP and the DC impact the ICT innovation process through enabling and constraining physical and knowledge access to innovation inputs as transformation costs.

The data for Simputer case study is triangulated from interviews with lead Simputer innovators, Simputer project documents produced by the innovators, web-based technical documentation, media accounts, project community discussion group archives and blogs of Simputer innovators.

Seen through an examination of the Simputer's innovation, IP motivates ICT innovation, by both acting as a normative institution and by offering economic rewards, decreasing transformation costs through increasing access to innovation inputs. IP and the DC together achieve open licensing and collaborative innovation processes, decreasing transformation costs through increasing access to innovation inputs. However, IP alone is seen to increase transformation costs while the DC decreases them. Lastly, the DC is shown to not provide support for a restricted access competitive strategy, increasing transformation costs through decreasing access to innovation inputs.

This work is one of the few research efforts, if not the first, which has conceptualised IP and the DC as institutions, drawing on the NI and NIE body of theory. The emergence of the DC as an institutional form in literature is new, emerging in the work of Benkler (2002, 2006). The research contributes propositions that can be a starting point for future research.

Implications for ICT policy and innovation are provided, followed by implications for research and future research directions.

Authors: Richard Boateng and Sarah Kerr

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