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 July 22, 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 July 22, 2014).

Share This




More Science & Society News

Tuesday, July 22, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

What Self-Made Women Need to Know Financially Before Getting Hitched

What Self-Made Women Need to Know Financially Before Getting Hitched

TheStreet (July 21, 2014) Halle Berry was recently ordered to pay her ex-boyfriend Gabriel Aubry $16,000 a month in child support by a California judge for their daughter Nahla. As women make strides in the workforce, they are increasingly left holding the bag when relationships end regardless of marital status. 'What Monied Women Need to Know Before Getting Married or Cohabitating' discusses information such as debt incurred during the marriage is both spouse's responsibility at divorce, whether after ten years of marriage spouses are entitled to half of everything and why property acquired within the marriage is fair game without a pre-nup. Video provided by TheStreet
Powered by NewsLook.com
$23.6 Billion Awarded To Widow In Smoking Lawsuit

$23.6 Billion Awarded To Widow In Smoking Lawsuit

Newsy (July 20, 2014) Cynthia Robinson claims R.J. Reynolds Tobacco Company hid the health and addiction risks of its products, leading to the death of her husband in 1996. Video provided by Newsy
Powered by NewsLook.com
Clock Ticks Down on Internet Speed Debate

Clock Ticks Down on Internet Speed Debate

Reuters - US Online Video (July 18, 2014) The FCC received more than 800,000 comments on whether and how internet speeds should be regulated, even crashing its system. Lily Jamali reports. Video provided by Reuters
Powered by NewsLook.com
Raw: Wildfire Tears Through Washington

Raw: Wildfire Tears Through Washington

AP (July 18, 2014) A large wildfire continued to gain steam through north-central Washington Friday. The blaze is already responsible for the destruction of at least 100 homes. (July 18) Video provided by AP
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:
from the past week

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