One Standard Promotoes More Rapid Digital Technology Diffusion
MISRC Researchers Recognized with "Best Paper Award" for Digital Wireless Phone Technology Diffusion Research
Minneapolis -- On January 8, 2004, Professor Robert J. Kauffman, Information and Decision Sciences Department Chair and Director of the MIS Research Center, and Ms. Angsana A. Techatassanasoontorn, a 4th year student in the Carlson School's Doctoral Program in Information and Decision Sciences, received the "Best Research Paper Award" at the 2004 Hawaii International Conference on S ystems Science (HICSS). Their paper, entitled "Does One Standard Promote Faster Growth? An Econometric Analysis of the International Diffusion of Wireless Technology ," proposes a new theoretical perspective to enable business strategists and government policy makers to better understand the states of digital wireless phone diffusion and the factors that affect the rate of technological diffusion.
In this research, Professor Kauffman and Ms. Techatassanasoontorn applied two kinds of econometric estimation models to see whether one digital phone standard appears to be associated with more rapid diffusion of digital wireless phones in nearly 50 countries around the world. They obtained data from the World Bank, the International Telecommunication Union, and other public and private sources to support their study. Their comparative tests investigated the effects of country environmental factors, digital and analog wireless phone industry environmental factors, and nation-level technology policy factors on the speed of diffusion, based on a theoretical model of the underlying dynamics of technology adoption.
The authors' results show that multiple standards and high digital wireless phone service prices slow down diffusion from the "Introduction State" to the "Partial Diffusion State." They define these states in terms of Roger's well known S-curve for technology diffusion, which specifies different states based on the percentage of diffusion among potential adopters. Their findings also show that competition in both the analog and the digital wireless phone industries shape the growth of digital wireless phone diffusion. In particular, high competition in the analog wireless phone market can slow down the diffusion of digital wireless phones. In addition, different practices with respect to government technology policies appear to influence digital wireless phone diffusion speed.
Ms. Techatassanasoontorn comments: "My research employs two different models that are based on somewhat different theories of diffusion speed. The first uses an extended version of the well-known "Bass Model." It focuses on "internal influences" and "external influences" that affect how the technology diffuses. An example of an internal influence is the number of prior adopters of the technology. The fewer consumers that have previously adopted the technology, the less likely new consumers will adopt. In contrast, an example of an external influence is the standards and licensing policy undertaken by government regulators with respect to digital wireless phones. If a policy maker allows phone operators to freely choose the standard to adopt, this will be helpful to send the right message to consumers: hook up—you can count on the underlying digital telephony standard being the right one. The second model emphasizes the drivers of a transition from one state of diffusion to another, and it yields probabilistic estimates of how likely a country is to reach the next state of diffusion at a given point in time."
Professor Kauffman continues: "Our second approach to the dynamics of digital wireless phone diffusion is an innovation in this kind of research. We employed a ‘coupled-hazard duration model' from Public Health and Biostatistics. Public health statisticians use these models to test for precedence relationships and co-occurrence of the onset of two or more diseases in patients in a study population. In our research, this approach lets us test for likelihood of diffusion of digital wireless phones beyond a ‘penetration threshold,' stated in terms of the percent adopting in a potential adopting population in a country. This way, we can capture the logical process of real world technology diffusion. Representing sequences in adoption (from "Introduction" of a technology, to its "Partial Diffusion" in a country, to diffusion "Maturity" and finally market saturation) provides a level of richness in our analysis that you don't often see in technology diffusion research in the field of Information Systems. Even more important is that it enabled us to answer research questions that nobody else has even been able to ask, based on the limitations of current modeling techniques."
The international diffusion of wireless telecommunication and mobile e-commerce has increased since the height of the Internet economy. However, there are a number of different managerial, technological and interpretative issues that still require a more careful look by Marketing Science and Information Systems researchers. A strength of the authors' research is that it informs senior managers about how much two or more standards actually slow down diffusion. Their research also prompts regulators to ask whether market-mediated policy (with multiple competing wireless standards) or a regulated regime (which is more likely to be observed when just one or two standards compete in a country) is more effective in driving socially-optimal technology diffusion. A final set of issues that the research treats is licensing policy. The results suggest that regional-level licensing policy that provides operators with regional exclusivity promotes diffusion better than national or hybrid (mixed level) approaches. Thus, the research also is relevant for government policy makers who oversee the introduction and growth of digital wireless technologies in different countries.
Professor Kauffman and Ms. Techatassanasoontorn's HICSS paper is one of several in this area of research included in the MIS Research Center's Working Paper Series. An earlier paper, entitled "International Diffusion of Digital Wireless Phone Technology: A Coupled-Hazard Approach," was presented at the INFORMS Conference on Information Systems and Technology in November 2002. It develops some of the underlying conceptual and methodological aspects of the analysis that appears in the HICSS Conference paper, which expands the results and the managerial relevance of the prior paper. The earlier paper is due for publication in late 2004 in the journal, Information Technology and Management.
This research is the doctoral thesis of Ms. Techatassanasoontorn, who is originally from Thailand. She has taught and done research at Thammasat University in Bangkok. Prior to coming to the Carlson School, she also completed a Master's Degree in MIS at the University of Arizona. She initiated her research on this topic in doctoral courses on econometrics taught by Carlson School Senior Associate Dean of the Faculty and Research, Dennis Ahlburg, and on economics, information systems and electronic commerce, taught by Professor Kauffman. This work has been presented at the University of Minnesota, the College of Industrial Engineering of the University of Arizona, and the Fisher School of Business at Ohio State University. The latter presentation was made at the Big 10 Research Symposium, where Ms. Techatassanasoontorn was an invited presenter. She also recently presented her research at the International Conference on Information Systems' Doctoral Consortium in Seattle, Washington in December 2003. She expects to graduate from the Carlson School's PHD Program in May 2005.
The international recognition that this work has received in 2004 reflects the overall high quality of the research that is being done in the MIS Research Center during the past several years. Other awards for research have been won by MIS Research Center-affiliated faculty and PHD students. They include "best research papers" at:
• 2003 INFORMS Conference on Information Systems and Technology (by Professor Kauffman and Professor Hamid Mohtadi, an economist at the University of Wisconsin, Milwaukee)
• 2002 ACM Special Interest Group on Computer Personnel Research Workshop (by Professor Weidong Xia, and Professor Ruth King of the University of Illinois)
• 2000 Americas Conference on Information Systems (Professor Kauffman, and Carlson School doctoral graduate Professor Charles Wood of the Notre Dame University)
• 2000 International Conference on Information Systems (also authored by Professors Kauffman and Wood)
• 1999 Workshop on Information Technology and Systems (Professor Qizhi Dai, another doctoral graduate now at Drexel University, Professor Kauffman, and past-Carlson School faculty Professor Sal March, now at Vanderbilt University)
• 1999 International Conference on Information Systems (Professor Mani Subramani, and past doctoral graduate Professor Eric Walden, now at Texas Tech University)
To obtain a copy of the papers mentioned above, please visit the MISRC on the World Wide Web at http:www.misrc.csom.umn.edu
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