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The digital economy enables growth and productivity, with many consumers private and public companies embracing digital technologies, which ultimately leads to better utilization of capital and labor and unlocks the possibility of participating in global value chains (Miller & Atkinson, 2014). Today, the digital economy is present in our lives through many different services we engage in for other aspects. That being a Netflix or a food delivery service.
How can we define the digital economy? Sahut et al. (2021) describe the Digital Economy as “the process of entrepreneurial creation of digital value through various socio-technical digital enablers to support the effective acquisition, processing, distribution, and consumption of digital information.”
This definition draws a relationship between the digital economy and digital entrepreneurship, which the authors then define as “the process of entrepreneurial creation of digital value through various socio-technical digital enablers to support the effective acquisition, processing, distribution, and consumption of digital information”.
Value creation is either created through incumbents or new entrants who can innovate differently (Christensen, 1997).
Professor Clayton Christensen (Christensen, 1997) positions two types of technologies that innovators may make use of to generate that value:
- 1.
Sustaining Technologies – Often well-accepted technologies that support incremental business improvements (Sandström et al., 2009).
- 2.
Disruptive Technologies: Disruptive technologies and innovation tackles the status quo and tend to address an untapped market because larger incumbents skip it (Sandström et al., 2009).
To explain the difference between sustained and disruptive technology, researchers and practitioners often refer to the work done by Christensen (Christensen, 1997; Christensen & Raynor, 2003) (illustrated in Figure 1)
Figure 1. Disruptive innovation characteristics (Adapted from Christensen, 1997; Christensen & Raynor, 2003)
In their study, Charitou & Markides (2003) defend that “Disruptive technologies produce a new value by offering a service or product that did not exist before compared to existing technologies.” On the same note, Professor Christensen (Christensen, 2003) said that “Disruptive technologies render entire industries obsolete, giving a new dimension to existing competition led by new technologies.”
In his work, Markides (2006) also states something of critical relevance in his work “Disruptive business models introduce threats to existing ways, but also opportunities for new sources of competitive advantage” as companies grow, it becomes more complex to embrace disruptive technologies. (Christensen, 1997).
A great example of this scenario is the logistics environment, where there is a clear understanding that disruptive innovation in global logistics is something that incumbents must focus on (Bharadwaj et al., 2013; Cichosz et al., 2020; Dobrovnik et al., 2018; Goldsby & Zinn, 2016; Klötzer & Pflaum, 2017), with their position being challenged by startups with disruptive technologies that offer services to customers that previously were provided by established companies (Hooper & Holtbrügge, 2020; Sandström et al. 2009; Sucky & Asdecker, 2019; Tsiulin et al., 2020; World Bank, 2016).