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The double knot of technology and business-model innovation in the era of ferment of digital exchanges: The case of OM, a pioneer in electronic options exchanges

PublicationArticle (with peer review)
Disruptiva innovationer, Finanssektor, Företagandets villkor, Innovation, Institutionell ekonomi, Kreativ förstörelse, Mirko Ernkvist, Teknikskiften, Teknologi

Abstract

The discontinuous shift to an electronic exchange system has been a catalyst for extensive transformation of financial markets during the last decades. Previous research has proposed that there are prohibitive regulatory barriers for de novo entrants with limited resources to introduce discontinuous technological innovations and novel business models in finance. We challenge this notion by studying the techno-social transformative process of the first decade of OM, a Swedish de novo entrant that introduced the world’s first commercially successful electronic options exchange and the first for-profit exchange. Our analysis reveals that this entrant had a key role in both the technological and regulatory construction of the new market through a bricolage technological development process and behaved as a proactive corporate political entrepreneur (CPE). The first phase of the era of ferment in electronic exchange technology was characterized by an adaptive techno-social development context that was open for bricolage technological and business-model experimentation. In the second phase, these experimental lessons were connected to a deliberative regulatory process that enabled the entrant to influence the regulatory process. We conclude by suggesting that an entrant’s dual roles as a bricolage technological entrepreneur and as a CPE provide an alternative path for resource-constrained entrants to transform capital markets.

Ernkvist, M. (2015). The double knot of technology and business-model innovation in the era of ferment of digital exchanges: The case of OM, a pioneer in electronic options exchanges. Technological Forecasting and Social Change, 99: 285-299. DOI: 10.1016/j.techfore.2015.02.001

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The Role of Dual Institutional- and Technological Entrepreneurship in the Formation of the Japanese Social-Game Industry
Book chapterPublication
Ernkvist, M.
Publication year

2016

Abstract

Ernkvist argues that entrepreneurial agency from outside the dominating video-game industry in Japan enables the emerging social-game sector to break with established institutional structures and experiment with new, contested alternatives. The chapter explicates a dual entrepreneurship function involving both technological entrepreneurship to introduce new game platforms and institutional entrepreneurship to proactively change the institutional environment. It also identifies four contested key issues in the formation of the social-game industry, which provides the perspective of western understanding of game marketing and development, a new alternative business model in Asia.

The Role of Dual Institutional- and Technological Entrepreneurship in the Formation of the Japanese Social-Game Industry
BokkapitelPublication
Ernkvist, M.
Publication year

2016

Abstract

Ernkvist argues that entrepreneurial agency from outside the dominating video-game industry in Japan enables the emerging social-game sector to break with established institutional structures and experiment with new, contested alternatives. The chapter explicates a dual entrepreneurship function involving both technological entrepreneurship to introduce new game platforms and institutional entrepreneurship to proactively change the institutional environment. It also identifies four contested key issues in the formation of the social-game industry, which provides the perspective of western understanding of game marketing and development, a new alternative business model in Asia.

Ratio Working Paper No. 267: Velocity shifts in the creative economy
Working paperPublication
Ernkvist, M.
Publication year

2015

Published in

Ratio Working Paper

Abstract

The Japanese innovation system has been characterized as more prone to disruptive innovation by incumbent firms rather than de novo entrepreneurial entrants (H. W. Chesbrough, 1999). We draw upon the notion that creative industry competition in a high velocity environment is fundamentally different from an environment of more moderate velocity, exploring the notion that velocity shifts following disruptive innovation could be a key underlying mechanism for transformation by entrants in institutional settings that favor incumbents. A higher velocity environment provides a cognitive barrier to incumbent firms’ R&D by making established design heuristics obsolete, introducing novel market analytic methods and shifting established industry logics towards speed, constant iteration and services. The velocity shift in the transition from video games to social games required new specialized assets and new ways of accessing customer preferences though real-time data mining techniques that also challenged engrained cognitive frames of how game design should be pursued. Unlike previous disruptive innovation in the game industry, social games enabled new entrants to rapidly become market leaders. The case points towards a more nuanced view of the influence of disruptive innovation during velocity shifts in creative industries. For studies of technological entrepreneurship, this implies that the velocity shifts following disruptive innovation could provide a previously overlooked important mechanism in understanding how entrants have been able to challenge incumbent firms in Japan.

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