Unpacking the process of industry convergence: the case of telecommunications equipment and computer networking industries, 1990-2003

Purpose The purpose of this study is to reconstruct the 14-year episode of technology-induced industry convergence (IC) in the voice and data industries to create a process theory of IC illustrating how and when managers and firms interpret and respond to IC as it unfolds. Design/methodology/approach This study conducts a historical-based inductive, framework-building case study on the voice-data convergence of telecommunications equipment and computer networking industries (1990–2003). Quantitative data (archival databases) and qualitative data (trade publications, CEO annual reports and government documents) were used to examine the dynamics of interaction among the innovation ecosystem, firm attention and action and the extent of IC. Findings The findings suggest that IC is an endogenously driven process in which interindustry managers and firms both respond to and actively reshape the alignment of the innovation ecosystem that determines if IC accelerates, stabilizes or stalls, involving a sequence of three phases (early convergence, mass convergence and postconvergence adjustment). The results identify four mechanisms that explain the IC process: within-phase mechanisms (the opportunity-shaping cycle and the IC cycle) and across-phase transition mechanisms (ecosystem alignment and overexploitation). Originality/value While many industries are undergoing IC and the literature has provided antecedents for anticipating the occurrence of IC and it associated outcomes, gaps remain with respect to the IC process – “how IC unfolds.” Drawing on historical accounts, the core contribution is the linking of innovation ecosystem dynamics and IC research into a process framework that explains both how convergence advances within each phase and what causes it to shift between phases.