Digital entrepreneurship

The rapid proliferation of digital technologies with new functionalities has profoundly changed competitive environments, reshaping traditional business strategies and processes (Bharadwaj, Sawy, Pavlou, Mainela, Puhakka, Shepherd et al., 2014). Research in the IS field has a relatively long tradition of investigating entrepreneurial actions enabled by digital technologies within an organizational context (Bharadwaj et al., 2013; Sambamurthy, Bharadwaj, Burtch, 2014; Zheng, Li, Wu, & Xu, 2014). The objective of this special issue is to provide a forum for IS and other business scholars to engage in this important dialogue on digital entrepreneurship and to contribute to the development of cumulative knowledge in this pivotal area. The selected articles address digital entrepreneurship from quite diversified perspectives with different methodologies and shed light on the roles of technologies. In particular, these studies reveal some interesting interactions among platforms, players, institutions, and agency and offer rich insights to guide future research on digital entrepreneurship. The study on “Digital Transformation by SME Entrepreneurs: A Capability Perspective” by Li, Su, Zhang, and Mao (2018) offers a special perspective to understand the transformation of SMEs in a digital ecosystem. This paper presents case studies that describe how seven SMEs have transformed from local, incapable small firms to active and successful cross-border e-commerce (CBEC) players on the Alibaba platform. From the authors' view, these Chinese firms were “least likely to embrace IT and complex digital platforms for foreign trade.” The miracle happened through dynamic managerial capability building, organization capability building for CBEC, and strategic changes. A key perspective to appreciate the paper is its exposition on how SMEs acquire capabilities through the Alibaba digital platform. While the authors rightfully focus on SMEs' acquisition of capabilities necessary for CBEC and beyond, a reader may as well appreciate how a digital platform plays a nurturing role in this process. Almost at every step, the platform goes the extra mile in motivating SMEs, providing hands-on training on the use of the platform, providing social networking and mutual learning among SMEs, building CBEC tools to overcome trading barriers, and motivating SMEs for strategic transformation. Therefore, the moral of the story is really not only about how individual SMEs became heroically successful but also about what a platform should do to build a digital ecosystem, with CBEC being an example. The authors call it the “management-oriented service” of the platform, which could be interpreted as the “nurturing,” “coaching,” and “scaffolding” roles of the platform. The intricate relationship between the platform and SMEs is what makes this case study different. A plausible explanation of this phenomenon is the Chinese business culture on relationships or “guanxi.” If so, this study offers an interesting contrast to the typical arms-length business relationship that exists between firms and a platform in the West. The paper, “From a Marketplace of Electronics to a Digital Entrepreneurial Ecosystem (DEE): The Emergence of a Meta-Organization in Zhongguancun, China,” by Du, Pan, Zhou, and Ouyang (2018), focuses on the digital entrepreneurial ecosystem (DEE) and, particularly, the role of the external environment, using a case-based approach. The paper reports on the findings from a single case study of an emerging DEE in China, often referred to as “China's Silicon Valley.” Meta-organizational theory is used to show that the emergence of the DEE involves the development of a meta-organization or “community.” The meta-organization comprises elements of labour (institutional supporters, coworking space operators, and niche players) and integration effort, which is concerned with the construction of a common infrastructure and the cultivation of an entrepreneurial culture. The study adds to the literature by providing a rich account of the emergence of a DEE and showing the importance of taking a community perspective in examining how the actors involved organize to exploit the entrepreneurial opportunities available through digital technologies. Given that much of the research on digital entrepreneurship is at the single firm level, this study makes an important contribution by examining the ecosystem and the meta-organization formation process. This provides a richly grounded basis for guiding entrepreneurs on the dynamics of a DEE and the roles and processes involved. Sometimes, digital platforms may pose negative challenges to heterogeneous entrepreneurship. The stigma of a digital platform is one of such challenges that might affect entrepreneurs and their ventures on the platform. The study by Ingram Bogusz and Morisse (2018), entitled “How Infrastructures Anchor Open Entrepreneurship: The Case of Bitcoin and Stigma,” brings a fresh perspective to understand the relational aspects of digital platforms by using an ideological lens to examine how a digital platform (in this case bitcoin infrastructure) is described and interpreted by open entrepreneurs and how such ideologically heterogeneous entrepreneurship responds to stigma towards bitcoin communities. The authors used a case study of the bitcoin community and entrepreneurs to reveal the possible ideologies held by entrepreneurs over bitcoin communities, ranging from mainstream, pragmatist, technologist to libertarian. Entrepreneurs with different ideologies develop different interpretations of the stigma towards bitcoin communities and hence respond in different ways. Financing is a critical issue for entrepreneurship, and crowdfunding offers a novel approach. Two papers in this special issue provide interesting and supplementary insight. The paper entitled “Sponsor's Cocreation and Psychological Ownership in Reward-based Crowdfunding” by Zheng, Xu, Zhang, and Wang (2018) addresses the topic of online reward-based crowdfunding. The study draws on data from a sample of individual crowdfunding investors in China. It focuses on how the sponsor's psychological ownership of the entrepreneurial project is promoted by their value cocreation process and leads to an improvement of the sponsor-entrepreneur relationship and commitment. Sponsor's cocreation positively influences psychological ownership by generating perceptions of control and intimate knowing about the project, which the authors showed as important mediators of the relationship. The study found that the relationship between sponsor cocreation and psychological ownership was moderated by the entrepreneur's activeness, as well as by social connections, implying that active involvement of the entrepreneur and sharing of information were important factors in enhancing the relationship. The paper makes an important contribution to a so-far neglected area of reward-based crowdfunding research by focusing on the postinvestment behaviours and relationships of sponsors and entrepreneur. By considering the role of sponsor cocreation on the relationship and the sponsor's ongoing commitment to the project, the paper provides useful insights into the psychological and behavioural dimensions associated with reward-based crowdfunding. The study by Thies, Wessel, and Benlian (2018), entitled “Network Effects on Crowdfunding Platforms: Exploring the Implications of Relaxing Input Control,” sheds light on the mechanisms that drive the evolution and growth of a crowdfunding platform. Using 8-year data from one of the most popular reward-based crowdfunding platforms, Kickstarter, the authors seek to answer whether, in such digital platforms, the platform growth is mainly driven by funders, entrepreneurial projects, or their reciprocal relationship. The findings suggest asymmetric network effects, in that increasing the number of entrepreneurial projects, as compared with the number of funders, contributes more to network effects and is more critical for platform growth. Hence, should losing input control, one of the mechanisms to increase the number of entrepreneurial projects, be a reasonable choice? The results show that both same-side and cross-side network effects would be compromised. The value in this research is to offer a useful way to understand the dynamics in digital platforms resulting from network structures. The selected articles investigate quite a diversified yet related set of phenomena in digital entrepreneurship and reveal the rich interaction among digital platforms, entrepreneurs, institutions, and investors. We believe these studies add great value to enrich our understanding of digital entrepreneurship and hope the exploration effort made by the authors in this special issue will inspire future research developments. Dr Kathy Ning Shen is an Associate Professor in the Faculty of Business and Management at the University of Wollongong in Dubai. She received her Doctoral degree in Information Systems from the City University of Hong Kong and was the Chairperson of the Management Information System Department at Abu Dhabi University. Her main research areas include human-computer interaction, applications of information systems in organizations, e-marketing, virtual communities, and knowledge management. She has published more than 60 refereed journal and conference articles. Her work has appeared in top refereed journals such as Journal of the American Society for Information Science and Technology, Information & Management, Journal of Business Research, Communications of the ACM, Behaviour and Information Technology, Journal of Computer Information Systems, and Internet Research and top conferences in the field. Professor Valerie Lindsay is Professor of Entrepreneurship and Management, and Director of Graduate Programs (SBA) at the American University of Sharjah (AUS) in the UAE. She has a PhD from the University of Warwick in the UK. Prior to joining AUS, she was the Dean of the Faculty of Business at the University of Wollongong in Dubai, held academic positions at the Victoria University of Wellington, New Zealand, the University of Auckland, New Zealand, and at the University of Warwick, UK, specializing in international business and strategy. Professor Lindsay's research interests lie in the area of international strategy, specifically, internationalization and market entry, SMEs, services internationalization, and business in Asia. Her work has been published in leading journals, including Management International Review, Organizational Dynamics, Industrial Marketing Management, and International Journal of Services Industry Marketing, and she coauthored the book Knowledge at Work. Before joining academia, Valerie was the New Zealand Marketing Manager for ICI Pharmaceuticals and also worked in two New Zealand government departments in the areas of trade and tertiary education. She has consulted widely in strategy and marketing in industry and in government over many years. Professor Yunjie (Calvin) Xu is a Professor at the School of Management, Fudan University, Shanghai, China. He received his PhD in Management Information Systems from Syracuse University, New York, USA. His research interests include electronic commerce, knowledge management, and social media. His research publications appeared in various information systems journals, including Journal of Management Information Systems, Journal of Association for Information Systems, Journal of the American Society for Information Science and Technology, IEEE Transactions on Professional Communication, Communication of the ACM, International Journal of Electronic Commerce, Journal of Retailing, and Decision Support Systems.