Heterogeneity in Digital Innovation: A Study of the e-Newspaper Case

Introduction

Digital innovation refers to the embedding of digital computer and communication technology into a traditionally non-digital product (Henfridsson et al., 2009). The notion also refers to the process of creating new combinations of digital and physical components that produce novel products or services (Yoo et al., 2010). Digital innovation aimed at consumer markets is nowadays representing a complementary line of research interest. This research focuses on understanding the development, diffusion, and adoption of digital innovation in consumer markets, for example new mobile services or new digital products (see e.g. Constantiou et al., 2007; Mallat, 2006).

Digital technology can be categorized by layers consisting of devices, networks, services and content (Yoo et al., 2010). As different layers of digital technology require different competencies, knowledge, and resources, organizations often need to either setup or join innovation networks to be able to succeed with digital innovation. As a result, digital innovation becomes more networked and complex with an increased need for heterogeneous actors and resources (Boland et al., 2007; Yoo et al., 2009; Yoo, 2010). Heterogeneity in this case primarily relates to the diverse sets of knowledge, competence, and assets that the actors have. Even if heterogeneity is also important in several other fields, in order to enable successful innovation, it is especially evident in technical and knowledge intense fields such as digital innovation (Powell & Grodal, 2005; Vanhaverbeke, 2006). As a response to digital innovation becoming more knowledge intense and networked, innovation actors are growing more dependent on each other’s knowledge, competence, and assets (Vanhaverbeke & Cloodt, 2006). Another example of heterogeneity in digital innovation relates to the users. When working with digital innovation targeted against everyday use and consumer markets, user needs and requirements are often highly heterogeneous (Henfridsson & Lindgren, 2010). This becomes evident when targeting markets for mundane digital innovations, such as smart phones and electronic books. In these markets, the notion of ‘users’ needs to be extended from organizational users to individual users with much more diverse needs (Yoo, 2010).

Based on this background, this paper will categorize heterogeneity in digital innovation based on three different perspectives. The first perspective concerns the characteristics of digital technology. The second perspective concerns aspects of heterogeneous users. Finally, the third perspective concerns aspects of heterogeneous actors involved in the networks of digital innovation. User groups can be informal or formal actors in innovation networks developing digital innovation. However, in this paper actors are defined to have business or research interests in the innovation network, and users are defined as the actual user or consumer groups intended to use a digital innovation.

One example of digital innovation, which is used in this paper, comes from the newspaper industry. In the last decade, newspapers all around the globe have faced declining subscription and advertising revenues. This is something that has forced them to seek new ways to profit, and attract a new audience (WAN, 2006; The Economist, 2006). E-paper technology captured the interest of the newspaper industry through revealing the possibility of a newspaper service via an e-paper device with high readability and low power consumption (IFRA, 2006; The Swedish Newspaper Publishers’ Association, 2007). The digitization of the newspaper presented several opportunities for the industry to reach new markets, and cut production and distribution costs. However, newspapers needed to team up with other actors to be able to explore the digital innovation at hand. The case of the e-newspaper, a newspaper service specifically designed for an e-paper device, illustrates the need for heterogeneity when working with digital innovation. Several previously unconnected actors such as newspaper organizations, network providers, software companies, hardware device manufacturers, and advertising companies, had to intertwine their perspectives, business models and technological frames to realize the e-newspaper concept.