Innovation Logics in the Digital Era: a Systemic Review of the Emerging Digital Innovation Regime

Abstract

This talk clarifies why and how digital innovation differs from industrial innovation. I argue that the difference is more significant than replacing analogue information with digital information (digitising) across industrial organisation. To articulate the true nature of the difference, I review the specific ontological status of digital material in industrial operations and related conditions for innovation. I recognise the unique semiotic quality of digital material and apply the idea of von Neumann architecture to demonstrate that digital innovation advances through a three pronged, largely orthogonal process of embedding - a process of interlacing elements of one innovation domain to that of another. An example of an embedding is mapping digital code to a physical computer. Only this process makes the machine to run like a computer. The three types of embedding necessary for digital innovation are defined: operational embedding (code-computer), virtual embedding (real world phenomena-code) and contextual embedding (use of code in social setting). I show that each operates relatively autonomously and its conditions for success and goals are separate. I show how each embedding constitutes a unique ‘leverage point’ for further expansion of digital innovation. During each instance of digital innovation, the three embedding processes are necessary and interact in a unique way, while industrial innovation assumes a fixed form of virtual and contextual embedding whereby the phases and processes that underlie innovation in the two regimes differ and follow differential logics. In industrial regime (1) discover synthesise and (2) manufacture-distribute activities in varying combinations form the leverage points for innovation. In digital regime 1) Discover product or behaviour (ideation); 2) abstract to digital material (virtualise); 3) Implement and replicate digital material (variations in operational/contextual embedding); and 4) Deliver product and/or behaviour (perform digital material) activities form the leverage points for innovation. This enables wider, open and faster innovation with distinct value logics.

About the speaker

Kalle Lyytinen (PhD, Computer Science, University of Jyväskylä; Dr. h.c. mult) is Distinguished University Professor at Case Western Reserve University and a distinguished visiting professor at Aalto University, Finland and a Visiting professor at Luiss department of Management in 2023. He is among the top five IS scholars in terms of his h-index (96); he has the highest network centrality among the IS scholars. He AIS Fellow (2004) and the LEO Award recipient (2013), and the former chair of IFIP WG 8.2 “Information systems and organizations”. He has published over 400 refereed articles and edited or written over 30 books or special issues. He has won several best paper awards from AoM, AIS/ICIS and other societies, and served as SE and editor to all IS journals and several leading organization theory and innovation journals. He currently conducts research on digital innovation concerning its nature, dynamics and organization, complex design work, requirements in large systems, and emergence and growth of digital infrastructures.