An Evolutionary Theory of Innovation and Strategic Platform Openness for Web 2.0 Businesses

Reina Arakji American University of Beirut, Lebanon

Karl Lang City University of New York, Baruch College, USA

Abstract
We examine in this study technology adoption and diffusion of innovation from an evolutionary perspective that leads to an analysis that is different from extant literature and that adds to our theoretical understanding of platform innovation. Our evolutionary theory of innovation and platform openness refines and extends the currently prevailing simple innovation paradigms and allows the theoretical analysis of innovation as a truly dynamic multi-level phenomenon that affects organizational as well as industry change. We also present a formal Markovian process model that serves as a basis for simulating specific theoretical parameter settings and enables the examination of how organizational innovation strategies affect organizational performance as well as industry trends. The results of our simulation analysis suggest that platform openness plays a key role in innovation diffusion and fixation, especially in a Web 2.0 environment where the innovation is at a selective disadvantage or if the environment fosters an unrelenting radical innovation rate. The analysis also suggests that strategies that aim at decreasing competition in the Web 2.0 industry instead of opening the service platforms will not succeed in increasing innovation diffusion.

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Reference:	Arakji, RA, Lang, KR (2010). "An Evolutionary Theory of Innovation and Strategic Platform Openness for Web 2.0 Businesses," Proceedings > Proceedings of JAIS Theory Development Workshop . Sprouts: Working Papers on Information Systems, 10(85). http://sprouts.aisnet.org/10-85
Keywords:	Business Strategy, Co-Creation, Evolutionary Theory, Innovation Diffusion, Intellectual Property Rights, Open Source, Web 2.0
Item Type:	Article - Volume 10 Article 85 (2010)
Language:	English
Email:	Reina Arakji (ra41@aub.edu.lb) Karl Lang (karl.lang@baruch.cuny.edu)

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