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The Politics of Commoditization in Global ICT Industries: A Political Economy Explanation of the Rise of Apple, Google, and Industry Disruptors

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  • Kenji Kushida

Abstract

The global Information and Communications Technologies industry has experienced a rapid, radical reorganization of industry leaders and business models—most recently in mobile. New players Apple and Google abruptly redefined the industry, bringing a wave of commoditization to carriers and equipment manufacturers. Technologies, corporate strategies, and industry structures are usually the first places to look when explaining these industry disruptions, but this paper argues that it was actually a set of political bargains during initial phases of telecommunications liberalization, which differed across countries, that set the trajectories of development in motion. This paper shows how different sets of winners and losers of domestic and regional commoditization battles emerged in various ICT industries around the world. Carriers won in Japan, equipment manufacturers in Europe, and eventually, computer services industry actors rather than communications firms emerged as winners in the US. These differences in industry winner outcomes was shaped by the relative political strength of incumbent communications monopolies and their will to remain industry leaders, given the political system and political dynamics they faced during initial liberalization. The US computer services industry, which developed independently of its telecommunications sector due to antitrust and government policy, eventually commoditized all others, both domestically and abroad. This paper contends that a political economy approach, tracing how politics and regulatory processes shaped industry structures, allows for a better understanding of the underlying path dependent processes that shape rapidly changing global technological and industry outcomes, with implications beyond ICT. Copyright The Author(s) 2015

Suggested Citation

  • Kenji Kushida, 2015. "The Politics of Commoditization in Global ICT Industries: A Political Economy Explanation of the Rise of Apple, Google, and Industry Disruptors," Journal of Industry, Competition and Trade, Springer, vol. 15(1), pages 49-67, March.
  • Handle: RePEc:kap:jincot:v:15:y:2015:i:1:p:49-67
    DOI: 10.1007/s10842-014-0191-3
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    References listed on IDEAS

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    1. Bar, François & Cohen, Stephen S & Cowhey, Peter & DeLong, Bradford J & Kleeman, Michael & Zysman, John, 2000. "Access and Innovation Policy for the Third-Generation Internet," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt7pq073h7, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
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    7. Kenji Kushida, 2011. "Leading without Followers: How Politics and Market Dynamics Trapped Innovations in Japan’s Domestic “Galapagos” Telecommunications Sector," Journal of Industry, Competition and Trade, Springer, vol. 11(3), pages 279-307, September.
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    Cited by:

    1. Jean-Marc Coicaud, 2016. "Administering and Governing with Technology: The Question of Information Communication Technology and E-Governance," Global Policy, London School of Economics and Political Science, vol. 7(2), pages 296-300, May.
    2. Michael Peneder & Julia Bock-Schappelwein & Matthias Firgo & Oliver Fritz & Gerhard Streicher, 2017. "Ökonomische Effekte der Digitalisierung in Österreich," WIFO Monatsberichte (monthly reports), WIFO, vol. 90(3), pages 177-192, March.
    3. Dmitrii Trubnikov, 2017. "Analysing the Impact of Regulation on Disruptive Innovations: The Case of Wireless Technology," Journal of Industry, Competition and Trade, Springer, vol. 17(4), pages 399-420, December.

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    More about this item

    Keywords

    ICT; Commoditization; Industry structure; Economic policy; Liberalization; JEL codes; L14; L22; O25;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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