Comparative analysis of mobile payment sectoral systems of innovation and service innovation between the United Kingdom and India
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Date
02/07/2014Item status
Restricted AccessEmbargo end date
31/12/2100Author
Webb, Heather Christine
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Abstract
The financial services industry is one of the most rapidly growing industries
worldwide. Although mobile payment (m-payment) systems have generated a lot of
hype, not all supportive infrastructures are in place where one firm’s service can be
applied globally. Technology has provoked major changes in this industry with how
firms operate and innovate as well as how they adapt their business models.
Additionally, how services expand and understanding the ways new services are
developed in different countries are becoming increasingly relevant. This qualitative,
multidisciplinary study compares the sectoral system of innovation (SSI) and service
innovation of m-payment systems between a developed country, the United Kingdom
(UK), and a developing country, India. The dissertation draws upon 27 original
interviews in the UK and India in order to analyse and identify the drivers of
innovation.
The analytical framework is designed for a firm-level analysis where variables
affecting the resources and capabilities act as a way of integrating knowledge and
influencing the innovation process. The main research questions are: how does a
diverse SSI shape business models within the m-payment systems; why and to what
extent do the processes of service innovation differ between m-payment systems as
explained in the UK and India? The SSI approach links innovation to the interactions
of the different actors in the economy and the system. Innovation is either the process
of creating or the recombining of knowledge for some new use to become an
outcome of that process. Innovation does not sit within the boundaries of an
organization nor does it sit neatly at one level, but instead it is a multifaceted
construct.
Thirteen case studies are employed with the main industries being banking,
telecommunications and technology. A thematic analysis is applied in using an
inductive, exploratory approach from an interpretive perspective. The outcomes of
interpretism are helpful in presenting an understanding of the causal mechanisms of
innovation through a theoretical framework of resource-based view (RBV) and
knowledge-based view (KBV).
Findings from the research will show a lack of an all-encompassing and exhaustive
perspective of m-payment systems. A hindrance of innovation has caused a
fundamental problem identified in the UK showcasing a lack of strong innovative,
specific institutions; while in India, poorly managed implementation of institutions
has led to strengthening of cognitive institutions amongst firms. In particular,
innovation in emerging fields that have yet to reach their technological maturity is
just as strong in developing countries as compared to developed countries.
Furthermore, innovation happens in developing countries through processes that are
more complex than originally conceptualized.
The contribution to the theoretical understanding of innovation is two-fold. Firstly, in
researching mobile financial systems in a developed and developing country, an m-financial
SSI framework is constructed that is usable by policy-makers, analysts and
firms exploring their value chain positioning. Secondly, the research emphasises the
importance of integrating firms’ activity (including new product and service design)
into integrated service systems since the particular nature of these systems for m-payments
varies between contexts. Therefore, the research helps to show how m-payment
systems vary and in particular what are the drivers of innovation between a
developed and developing context. Thus, existing theory needs to take into
consideration the possibility that emerging market firms are perhaps more innovative
than developed countries, and as a consequence, future research should address this
with caution. For management practice, the research has shown that there is still not
a complete model in explaining the performance of firm level innovation. For
practitioners, innovation and technological development needs to get better at
interoperability with users and merchants. Furthermore, business models will need to
evolve from limited proprietary solutions towards cooperation and standardised
solutions if there are to be successful, global firms.