Digital innovation and international business

Abstract

Digitisation has opened up powerful new ways for multinational enterprises (MNEs) to connect with global markets, resources and partners and to pursue innovation in foreign markets. While the unique characteristics of digital technologies and digital assets embody an expansive and promising global landscape for innovation, MNEs’ success in pursuing such digital innovation will also be shaped by the nature and extent of localization forces prevalent in different foreign markets, an issue that has received limited attention in both digital innovation and international business literatures. In this short essay, I highlight this gap and call for the study of digital innovation in the international business context by bringing together ideas, theories and concepts from both areas. I draw on and combine two perspectives—one drawn from the innovation literature (digital innovation as recombinant innovation involving digital assets) and the other from the international business literature (the international business context as being defined by national policies and regulations, infrastructure and culture) and suggest several promising themes and questions for future research in this area, specifically relating to how globalization/localization forces facilitate/hinder MNEs’ global digital innovation efforts. I hope the call made here will be answered by scholars from both fields and lead to insights that enrich both theory and practice related to MNE innovation in today’s rapidly growing digital economy.

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