Patterns of IT-enabled innovation adoption in developed and developing countries: A comparative case study of Australian and Indian banking industries

Abstract

ABSTRACT The literature on Information Technology (IT) enabled innovation, like innovation literature more generally, has focused predominantly on work conducted in developed countries. Historically this has been due to a lack of empirical evidence collected in developing countries and access to comparable examples of innovation. This situation results in the application of developed world ideas to innovation in the developing world. Whether and how the adoption of IT-enabled innovation in developing countries differs from developed countries therefore remains an unexplored question (World Bank 2008). This thesis therefore addresses two research questions: What are the patterns of IT-enabled innovation adoption in developed and developing countries? and How do they differ and why? To explore these questions, the thesis focuses on the IT-enabled innovation of services in the banking sector, specifically internet and mobile banking (IMB). The adoption of IMB occurred during the late 1990s and early 2000s and is well documented for both contexts. The aforementioned questions are explored through a comparative interpretive study of IMB adoption in Australian and Indian banking industries as examples of developed and developing contexts. The key findings of this study demonstrate that the dynamics of IMB adoption in both the Australian and the Indian banks follow the pattern of habitualisation, objectification and sedimentation phases (Tolbert & Zucker 1996). However, the motivations for adoption at each phase differ. Furthermore, the adoption of IMB in Australian banks is indicative of a sustaining innovation, while the same innovation in Indian banks suggests a disruptive innovation. The adoption of IMB in India satisfied an unmet customer need that had not previously existed in the form of banking (Christensen & Raynor 2003) and in the process disrupted traditional and informal finance methods. On the other hand, the adoption of IMB in Australia improved and sustained existing banking methods, providing greater efficiency. IT-enabled innovation appears to follow an opposite path in developed nations to that in developing nations driven by differences in consumer needs. These findings bring into question the direct application in developing countries of innovation models and frameworks created through the study of innovations in developed countries.