Featured Research

from universities, journals, and other organizations

Small income disparities lead to faster mobile growth

Date:
April 17, 2012
Source:
BI Norwegian Business School
Summary:
The combination of income level and distribution of income explains why some countries have been quicker to adopt new mobile services than others.

The combination of income level and distribution of income explains why some countries have been quicker to adopt new mobile services than others.

In recent years we have witnessed the growth of companies whose business concept is based on mediating and coordinating services and information between large numbers of individuals and organisations.

Providers of services linked to mobile communication, the online classified advertising website Finn.no, Facebook, iTunes and eBay are some examples of companies that operate as mediating service providers.

"These companies represent key building blocks in a network-based economy," says strategy researcher Ulas Burkay.

One distinctive feature of this type of service is that it is not just the quality of service that determines its value to the customer, but also how many others are using it. This phenomenon is referred to a "network effects."

In the long run, you would derive little benefit from your mobile phone unless you had someone you could call.

When the mobile phone conquered the world

In his doctoral dissertation defended at the BI Norwegian Business School, Ulas Burkay was interested in finding out how this type of mediation service is tapping into new markets.

  • What determines which countries these service providers decide to establish infrastructure in?
  • What is it that makes some countries quicker to adopt new digital services than others?

Burkay has examined the introduction of mobile communication services in 87 countries over a period of 24 years. He takes the first commercial launch of mobile communication in Finland in 1980 as his starting point and studied its international establishment through to 2003.

The strategy researcher has been particularly interested in considering the network effects, i.e. the way in which the value of a service increases in line with the number of users.

Income parity leads to faster growth

In his dissertation Ulas Burkay shows that the combination of a country's average income level and small income disparity leads to new digital and mobile services being taken into use at a faster rate.

"The high value of an average income that is equitably distributed means that more people can afford to buy the service. The value of the service increases in line with the number of users. This signals significant potential benefits for those who have not yet taken the service into use. This contributes to further spread," says Burkay.

As new mobile technology gradually wins new markets, it will become cheaper to establish infrastructure in new countries. Consequently the service providers will also enter new markets with lower income levels and less equitable distribution of income.

According to Burkay, his study shows that the greatest market potential for new digital services lies in countries where income levels are high and income distribution is equitable.

Reference: Ulas Burkay (2012): "The Rise of Mediating Firms: The Adoption of Digital Mediating Technologies and the Cosequent Re-oragnization of Industries." Series of Dissertation 4/2012. BI Norwegian Business School.


Story Source:

The above story is based on materials provided by BI Norwegian Business School. Note: Materials may be edited for content and length.


Cite This Page:

BI Norwegian Business School. "Small income disparities lead to faster mobile growth." ScienceDaily. ScienceDaily, 17 April 2012. <www.sciencedaily.com/releases/2012/04/120417080334.htm>.
BI Norwegian Business School. (2012, April 17). Small income disparities lead to faster mobile growth. ScienceDaily. Retrieved October 23, 2014 from www.sciencedaily.com/releases/2012/04/120417080334.htm
BI Norwegian Business School. "Small income disparities lead to faster mobile growth." ScienceDaily. www.sciencedaily.com/releases/2012/04/120417080334.htm (accessed October 23, 2014).

Share This



More Science & Society News

Thursday, October 23, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Ebola Fears Keep Guinea Hospitals Empty

Ebola Fears Keep Guinea Hospitals Empty

AP (Oct. 23, 2014) Fears of Ebola are keeping doctors and patients alike away from hospitals in the West African nation of Guinea. (Oct. 23) Video provided by AP
Powered by NewsLook.com
Academic Scandal Shocks UNC

Academic Scandal Shocks UNC

AP (Oct. 23, 2014) A scandal involving bogus classes and inflated grades at the University of North Carolina was bigger than previously reported, a new investigation found. (Oct. 23) Video provided by AP
Powered by NewsLook.com
Chameleon Camouflage to Give Tanks Cloaking Capabilities

Chameleon Camouflage to Give Tanks Cloaking Capabilities

Reuters - Innovations Video Online (Oct. 22, 2014) Inspired by the way a chameleon changes its colour to disguise itself; scientists in Poland want to replace traditional camouflage paint with thousands of electrochromic plates that will continuously change colour to blend with its surroundings. The first PL-01 concept tank prototype will be tested within a few years, with scientists predicting that a similar technology could even be woven into the fabric of a soldiers' clothing making them virtually invisible to the naked eye. Matthew Stock reports. Video provided by Reuters
Powered by NewsLook.com
Jet Sales Lift Boeing Profit 18 Pct.

Jet Sales Lift Boeing Profit 18 Pct.

Reuters - Business Video Online (Oct. 22, 2014) Strong jet demand has pushed Boeing to raise its profit forecast for the third time, but analysts were disappointed by its small cash flow. Fred Katayama reports. Video provided by Reuters
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins