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Internetization as the necessary condition for internationalization in the newly emerging economy

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Abstract

The internationalization of entrepreneurship is becoming increasingly facilitated through the use of the internet. This article introduces the term “internetization” to refer to the process of increasing adoption, diffusion, and deployment of internet-based technologies and processes that increasingly serve as the back bone of internationalization, especially in the innovative entrepreneurial firms. This process may be compared to the firm’s adoption and use of the internet and the internet-based processes in transforming the firm to a hybrid network internally and externally within the firm’s home and international markets, especially when the members of its external network have already internationalized. Internationalization of the firm, which has been much studied in the international business literature may provide a parallel analogy for study of internetization. Based on these analogies and within the context of previous literature in internationalization, a brief examination of a typical rapidly-internationalizing firm through the use of the Internet, and the user-generated provisions of Web 2.0 in particular, points to the impact of internetization on internationalization. Various theoretical and research issues are highlighted and discussed, including the important interactions that exist between the processes of internetization and internationalization. Conclusion suggests that internetization may have become the necessary condition for internationalization. The paper calls upon the IE scholars to respond to the theoretical challenge of integrating internetization processes into internationalization, especially for the smaller, entrepreneurial and innovative firms.

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Notes

  1. Consider for example, that tier 4 supplier supply to tier 3 so that the tier 3 supplies to the tier 2 and eventually to the tier 1 suppliers. As a result there are more suppliers at the higher tiers and the numbers contract to one or very few as the parts move down the supply chain.

  2. Similarly, as the focal firm reaches international markets, the downstream portion of the value net expands to connect with the local firms (in inter-firms first) to serve international customers spread across markets and national boundaries. The literature of international marketing has traditionally viewed international distribution as an inter- or intra-firm network of local distributors that provide direct and indirect linkage between the focal firms and ultimate customers.

  3. The family of ITAPs are indeed the emerging family of the internet-based technologies that collective form the enterprise 2.0, which is enabling enterprises to exploit the advantages of Web 2.0. However, we will refer to them as ITAPs as opposed to Enterprise 2.0 to avoid the technical implications.

  4. The above review is a summary of a larger literature review presented in Etemad 2010.

  5. We wish to point out that a conceptual framework tailor-made for the internetization of a particular SME, based on an adaptation of Exhibit 2, may provide a road map for managers and decision makers. The analysis and implications of internationalization/internetization within the confines of such conceptual framework can support entrepreneurial internetization of SMEs in the newly emerging economy. Furthermore, it may also provide for the public policy implications to encourage the process.

  6. Naturally, the context in which a firm operates and the stage of internetization influences the choice of the entry mode (e.g., the form of deployment) utilized, which in turn impacts the relevant capabilities for further internetization.

  7. Such gains may, or may not, be viewed as gains explicitly at the beginning. However, once detected, the firm is likely to examine their full potentials and deploy more of them.

  8. Such combined influences for enhancing corporate capabilities and routines to attain higher corporate efficiencies, with direct impact on the firm’s agility may result in ITAPs becoming as integral part of corporate routines and finally further enable internationalization.

  9. For example, a faster pace of adoption by the industry is likely to accelerate the pace of adoption in the firm and thus further reduce the life of the prevailing state of technology. Consequently, such interactions increase both the speed of diffusion and adoption of the technology within a firm and the industry with a likely impact on innovativeness, competitiveness, growth, and internationalization all members.

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Authors and Affiliations

  1. McGill University, Montreal, Quebec, Canada

    Hamid Etemad

  2. University of New South Wales, Sydney, Australia

    Ian Wilkinson

  3. GSCM Montpellier, University of Canterbury, Christchurch, New Zealand

    Leo Paul Dana

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  1. Hamid Etemad
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  2. Ian Wilkinson
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  3. Leo Paul Dana
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Correspondence to Leo Paul Dana.

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Etemad, H., Wilkinson, I. & Dana, L.P. Internetization as the necessary condition for internationalization in the newly emerging economy. J Int Entrep 8, 319–342 (2010). https://doi.org/10.1007/s10843-010-0062-x

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