Comparative analysis of mobile payment sectoral systems of innovation and service innovation between the United Kingdom and India
Webb, Heather Christine
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The financial services industry is one of the most rapidly growing industries worldwide. Although mobile payment (m-payment) systems have generated a lot of hype, not all supportive infrastructures are in place where one firm’s service can be applied globally. Technology has provoked major changes in this industry with how firms operate and innovate as well as how they adapt their business models. Additionally, how services expand and understanding the ways new services are developed in different countries are becoming increasingly relevant. This qualitative, multidisciplinary study compares the sectoral system of innovation (SSI) and service innovation of m-payment systems between a developed country, the United Kingdom (UK), and a developing country, India. The dissertation draws upon 27 original interviews in the UK and India in order to analyse and identify the drivers of innovation. The analytical framework is designed for a firm-level analysis where variables affecting the resources and capabilities act as a way of integrating knowledge and influencing the innovation process. The main research questions are: how does a diverse SSI shape business models within the m-payment systems; why and to what extent do the processes of service innovation differ between m-payment systems as explained in the UK and India? The SSI approach links innovation to the interactions of the different actors in the economy and the system. Innovation is either the process of creating or the recombining of knowledge for some new use to become an outcome of that process. Innovation does not sit within the boundaries of an organization nor does it sit neatly at one level, but instead it is a multifaceted construct. Thirteen case studies are employed with the main industries being banking, telecommunications and technology. A thematic analysis is applied in using an inductive, exploratory approach from an interpretive perspective. The outcomes of interpretism are helpful in presenting an understanding of the causal mechanisms of innovation through a theoretical framework of resource-based view (RBV) and knowledge-based view (KBV). Findings from the research will show a lack of an all-encompassing and exhaustive perspective of m-payment systems. A hindrance of innovation has caused a fundamental problem identified in the UK showcasing a lack of strong innovative, specific institutions; while in India, poorly managed implementation of institutions has led to strengthening of cognitive institutions amongst firms. In particular, innovation in emerging fields that have yet to reach their technological maturity is just as strong in developing countries as compared to developed countries. Furthermore, innovation happens in developing countries through processes that are more complex than originally conceptualized. The contribution to the theoretical understanding of innovation is two-fold. Firstly, in researching mobile financial systems in a developed and developing country, an m-financial SSI framework is constructed that is usable by policy-makers, analysts and firms exploring their value chain positioning. Secondly, the research emphasises the importance of integrating firms’ activity (including new product and service design) into integrated service systems since the particular nature of these systems for m-payments varies between contexts. Therefore, the research helps to show how m-payment systems vary and in particular what are the drivers of innovation between a developed and developing context. Thus, existing theory needs to take into consideration the possibility that emerging market firms are perhaps more innovative than developed countries, and as a consequence, future research should address this with caution. For management practice, the research has shown that there is still not a complete model in explaining the performance of firm level innovation. For practitioners, innovation and technological development needs to get better at interoperability with users and merchants. Furthermore, business models will need to evolve from limited proprietary solutions towards cooperation and standardised solutions if there are to be successful, global firms.