Industries, Information, and the Internet: An Information-Oriented Perspective of Industries
62nd Annual Meeting of the Academy of Management Denver, August 9-14, 2002
31 Pages Posted: 7 Jul 2013
Date Written: January 15, 2002
This study explores how the conceptualization of an “industry” is changing with the advent of the information age, and particularly how the Internet is enabling this change. We first lay out a high-level framework that describes the critical features that any conceptualization of an industry tries to define: the source of firm value, the definition of a firm (based on its source of value), the definition of an industry, and the supporting and opposing networks of related organizations. Using this framework, we examine the way industrial organization economics views industries, based on its focus on products (physical goods or services) as the source of firm value. Drawing from the literature on the resource-based view, comparative advantage theory of the firm, knowledge and learning orientation, and information as a competitive resource, we then describe an emerging view of what constitutes an industry, focusing on information as the critical resource of value. Finally, we examine how the Internet is contributing to this emerging view. From an industrial organization perspective, the Internet is seen to primarily erode the profitability of product-based competition. However, from an information-industry perspective, the Internet is providing a new resource for competitiveness in leveraging information for competitive advantage. This information-oriented perspective is redefining the conceptualization of industry based on a firm deriving value primarily from its information resource, in contrast to the product-centered perspective from industrial organization economics.
Keywords: Industries, information resources, Internet
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