How the digital environment moderates disruptive technology and digital entrepreneurship relationship in emerging markets

Abstract

Purpose

About 50% of innovations achieve commercial success in advanced countries. The number is much lower in emerging markets. Examining the impact of the digital environment on product success is crucial. The purpose of the study is to investigate the direct effects of disruptive technology (quality, efficiency and congruity) on digital entrepreneurship (new product development, cost-effectiveness and internationalization) and indirect moderating effects of the digital environment (data security, customer privacy and search engine optimization [SEO] algorithm) between disruptive technology and digital entrepreneurship.

Design/methodology/approach

This is a qualitative study by design. It uses the literature review method and the theory of disruption and competitive advantage to construct the six hypotheses linking the variables – disruptive technology, digital environment and digital entrepreneurship.

Findings

The study’s conceptual model proposes that disruptive technology leads to digital entrepreneurship; however, the digital environment moderates the relationship between disruptive technology and digital entrepreneurship in emerging markets.

Research limitations/implications

The conceptual study has research implications for scholars. It constructs a conceptual framework and develops six hypotheses contextualized in emerging markets. The framework can be empirically tested across countries to validate the hypotheses and develop a competing model to explain more variance in digital entrepreneurship. This study also presents the possibility of analytical generalization.

Practical implications

This study has practical implications for digital entrepreneurs in emerging markets or those wishing to enter emerging markets. The main implication is that disruptive technology leads to digital entrepreneurship; however, the digital environment moderates it. Thus, digital entrepreneurs need to consider digital environmental effects such as data security, customer privacy and SEO. Given that two-thirds of the world is classified as an emerging market, the impact of the study is noticeable for practitioners as well.

Social implications

Disruptive technology fosters digital entrepreneurship, which creates opportunities for innovative solutions for society worldwide. It breaks down the barriers to entry and promotes inclusivity by providing products and services that were unavailable before. Digital products are also economical and environmentally friendly, making them more suitable for people in emerging markets.

Originality/value

This study makes three new contributions. First, it proposes that disruptive technology leads to digital entrepreneurship and that the digital environment moderates the relationship between disruptive technology and digital entrepreneurship. Second, from a theoretical viewpoint, it develops a theoretical testable framework, links the variables and proposes the six hypotheses. Finally, the most significant contribution of the study is the identification of the digital environment variable and its dimensions – security, privacy and SEO algorithm – and its comparison between advanced countries and emerging markets.