Digital Entrepreneurship
Digital Entrepreneurship: Theory, Ecosystems, and the Future
When we think about a digital entrepreneur, we might imagine a single person making millions of dollars through a fully automated website or app. That seems very different from the traditional view of entrepreneurship as a process of organization-building. Where is the organization in digital entrepreneurship?
The Rise of Digital Business Models
According to a literature review by Zaheer et al. (2019), the specific focus on 'digital entrepreneurship' is relatively new, gaining traction around 2013. Before that, research focused primarily on the transformation of existing business models due to the internet and e-commerce.
It only became a distinct research stream when entrepreneurs started making waves with digital business models that possess very small human organizational footprints but massive reach.
Distinguishing Digital from Traditional Ventures
There has been a growing movement to distinguish digital entrepreneurship from traditional types of entrepreneurship. Kraus et al. (2019) argue that we need new theory to guide entrepreneurs in the 21st century. Their analysis of 35 papers identified six research themes central to this field:
- Business models
- The entrepreneurship process
- Platform strategies
- Digital ecosystems
- Entrepreneurship education
- Social digital entrepreneurship
The Digital Entrepreneurship Ecosystem
One of the most distinguishing features of digital entrepreneurs is that they operate in a digital entrepreneurship ecosystem (Elia et al., 2020). Unlike traditional geographic clusters, digital ecosystems comprise:
- Accelerators and investor networks
- Open source repositories
- Research institutes and university networks
The first two sources of information and know-how are critical for digital entrepreneurs, especially since many do not have a formal business education, but often hail from technical fields or the arts. Research institutes are key for access to the latest developments which can fuel business model innovation.
Digital Value and Theoretical Lenses
Scholars have started to apply a theoretical lens to the field. Sahut et al. (2021) propose that digital entrepreneurs generate "digital value" through digital information acquisition, processing, and distribution.
The concept of digital value is underdeveloped but essential for understanding what differentiates the digital entrepreneur. Some definitions of digital value include new ways to store and trade value, such as crypto-currencies and virtual assets inside games and apps.
The Future: AI and Autonomous Business
It will be interesting to see where this research stream takes us in this new world of Artificial Intelligence (AI). If a digital entrepreneur can reach a point where their entire business is run by software or AI, we face a unique ethical and economic scenario.
One can imagine a future nightmare where a proliferate but family-less tech entrepreneur passes away, and their rogue, fully autonomous businesses continue to maximize profits in perpetuity.
Related Theories
Digital entrepreneurship has intersections with generativity theory, which explains a source of new value creation coming from the evolution of technology.
It may also intersect with the born open startup concept, and other technological theories.
References
- Elia, G., Margherita, A., & Passiante, G. (2020). Digital entrepreneurship ecosystem: How digital technologies and collective intelligence are reshaping the entrepreneurial process. Technological Forecasting and Social Change, 150, 119791.
- Kraus, S., Palmer, C., Kailer, N., Kallinger, F. L., & Spitzer, J. (2019). Digital entrepreneurship: A research agenda on new business models for the twenty-first century. International Journal of Entrepreneurial Behavior & Research, 25(2), 353-375.
- Sahut, J. M., Iandoli, L., & Teulon, F. (2021). The age of digital entrepreneurship. Small Business Economics, 56, 1159-1169.
- Zaheer, H., Breyer, Y., & Dumay, J. (2019). Digital entrepreneurship: An interdisciplinary structured literature review and
