Emerging Economies Ahead of the Internet Game

When it comes to the Internet, businesses in emerging economies might be ahead of the game compared to their counterparts in more developed countries.

This is the finding of a recent study by Nigel Melville, assistant professor at the University of Michigan's Ross School of Business in Ann Arbor; Jonathan Whitaker, assistant professor at the University of Richmond's Robins School of Business in Virginia; Robert Plice, assistant professor at San Diego State University's College of Business Administration in California; and Jason Dedrick, senior research fellow at the Center for Research on Information Technology and Organizations at the University of California, Irvine. The team studied survey data and case examples from firms in ten countries in North and South America, Europe, and Asia.

The researchers found that firms in emerging economies report a higher rate of Internet use to integrate processes with business partners. In addition, these organizations report a stronger motivation to use the Internet to achieve revenue growth and operational efficiency.

They found that companies in First World economies conduct more Internet transactions than those in emerging economies, most likely because credit card use in developing regions is still low. However, companies in emerging economies surpass their counterparts in more developed economies in their use of the Internet to achieve higher profits and manage business-to-business communication.

"These findings run counter to conventional wisdom that firms in developed countries will lead their industries in terms of technologyenabled business practices," says Melville.

The study, "Internet Business Practices Across the Globe: Lessons from Emerging Economies," is available on the Social Science Research Network (ssrn.com).