Global opportunity and national political economy : the development of internet ventures in Germany
In the late 1990s, the internet was heralded as a global opportunity for new ventures. One aspect of this opportunity was the innovation of including small firms and consumers in seamless 'business webs.' The second aspect was the distance insensitivity and internationality of the internet. New ventures appeared in different countries responding to this seemingly global opportunity. In Germany, this response appeared especially strong against the background of years of slow development of the domestic information technology (IT) sector. This thesis examines the role of national government policy in a world being transformed by technology. 'Network thinkers,' following Schumpeter's concept of 'creative destruction,' believed the internet represented a global innovation opportunity. They emphasised the independence and self-governance of globally networked market players, arguing that the territorial basis of national government policy has eroded. The problematique guiding this research effort has emerged from this thinking. Can the concepts associated with network thinking account for the apparently strong entrepreneurial response to the internet in Germany. A detailed study of the development of internet ventures in Germany was carried out to examine this guiding question. The study was supported by quantitative data supplied through a 123-firm survey conducted in the Spring of 1998. This research revealed that the entrepreneurial response in Germany was much weaker than it appeared to contemporary observers. New ventures had to adopt a 'mixed-play' approach which placed them on a less innovative and less international, slower growth trajectory. Two key policy arenas were identified which constrained the development of German internet ventures: (I) The course of telecommunications liberalisation and (2) the initial lack of venture capital. Practitioners have long been aware of the importance of these two determinants for internet development. The main contribution of this thesis has been to add to the understanding of how these two factors have operated in a national environment conditioned by distinctive institutions.