What do we need to know about internationalization for ‘born digital’ firms?

This article discusses how digital firms present challenges to traditional views on how firms expand into international markets. The authors focus on ‘born digital’ firms – firms that are digital from inception – and explain how this type of business can leverage its core technologies to internationalize.

What You Need to Know

According to the authors, a ‘born digital’ firm has three characteristics: 1) it builds and leverages digital infrastructure; 2) it relies on digital infrastructure to build capabilities in communication, collaboration, and computing; and 3) it is digital from inception. Because of a digitalized business model and underlying technologies, born digitals are able to leverage: direct engagement with stakeholders; automation and network effects; technological, physical, and strategic flexibility; and scalability. Examples of ‘born digital’ firms are presented throughout the article, featuring such firms as AirBnB, Salesforce.com, Hootsuite, Quantcast, Wattpad and WeCash.

MORE DETAILS

What did the Researchers Do?

Authors Sinéad Monaghan, Esther Tippmann and Nicole Coviello ask: what are the implications for internationalization if we consider ‘born digital’ firms? Research in this area is very new and the authors draw on emerging studies and current examples to argue how the technological DNA of these firms impact how they internationalize. This includes how quickly ‘born digitals’ move and where they expand to. The researchers build a foundational agenda for research that: 1) addresses how ‘born digitals’ impact international business theory, 2) calls for insights from other disciplines; and 3) highlights the need to revisit issues related to timing and speed of decision-making for this contemporary form of organization.

What did the Researchers Find?

A born digital firm is distinct from the broader category of digital firms because it is digital from inception. Such a firm is born and built to be ‘fully digital’ and this changes the process of internationalization in terms of how markets are entered and served. It also affects the timing of international expansion, how quickly it rolls out, and the strategic decisions made by the firm’s leadership team.

HOW CAN YOU USE THIS RESEARCH?

Although intended for academics, this research provides two useful checklists for executive teams leading ‘born digital’ firms. One list pertains to the five assets that can be leveraged for internationalization. The other is a list of practical questions to ask when discussing these assets for a specific firm.

WANT TO KNOW MORE?

Contact: Nicole Coviello

Article citation: Monaghan, S., Tippmann, E. & Coviello, N. (2020). Born digitals: Thoughts on their internationalization and a research agenda. Journal of International Business Studies, 51: 11-22.