2.3.1. Integrating DoI Theory and TOE Framework
The theoretical model combining DoI theory and TOE framework has been widely used. Reference [19
] shows the studies regarding TOE framework combined with other theories such as DoI and institutional theory explaining IT adoption models. As we acknowledge from the research results of Reference [23
], there are currently only a few country level analyses in IT adoption and diffusion studies. Therefore, based on studies of prior integrative models and DoI theory and TOE framework discussed above, we propose a conceptual integrated model (see Figure 1
). In terms of the IT acceptance process within an organization, factors influencing the initiation of innovation, adoption-decision, and implementation phases of innovation are explored by Reference [16
] in a literature survey on the acceptance phase of innovation in the past.
While looking at the stages and phenomena of innovation at the individual and organizational levels can be described in many ways at the adoption/diffusion level. Explaining the phenomenon at the national level can be explained by looking at the initiation and impact of innovation, namely the link between the implementation and performance. Therefore, the factors affecting to innovation adoption are explained by TOE framework under the phase of innovation described by DoI theory.
Decisions to accommodate individuals or organizations can rely on the dynamics of acceptance levels based on the externalities of the network [24
] and these complex factors create operational challenges for IT acceptance [26
]. Therefore, there are few reviews that focus on the application of IT adoption diffusion theory. Based on an innovation growth effect model grounded in an integrated innovation phase through a prior study of the adoption of innovation, the following metrics—ICT accessibility, ICT use, and Value chain breadth—are considered for viewing the outcome of the adoption of innovation as digital innovation. However, while the technology side (T) and the environment side (E) remain the same as existing TOE theory describes them, the factors that describe the organizational (O) side need to be expanded to the factors of social meaning, in order to account for the phenomenon of innovation at the national level. Therefore, the characteristics of an organization are applied as sub-concepts in a socio-related manner that can explain the diffusion of innovation at the national level. In terms of economic impact, the widespread adoption of ICTs causes recent changes of economy at national level, even though the mechanisms are not fully understood. Following the advancement of ICTs—a key driver of digital innovation—the productivity closely related to the changes of public policy is considered for global comparison as impact [27
]. In summary, the next model (see Figure 2
) is suggested.
The next section discusses the factors affecting the process of innovation; adoption/diffusion/impact in national level, and posits a unique hypothesis, which have not been found in previous literature from the perspective of path analysis with a practical point of view.
2.3.2. Key Variables and Hypothesis
Based on prior research and theory, corresponding variables are extracted and used to construct each axis. A model is established to set up variables and explains the effects of innovation growth on national units by introducing the TOE framework theory that explains the determinants of innovation adoption.
• TOE framework and Innovation Adoption
Technology-related context Looking for an explanation of technological innovation capabilities and acceptance in the previous study, Reference [13
] argued for the importance of internal technical resources such as infrastructure, technical capabilities, developers and usage time to accommodate a successful information system, which lead to productivity growth as many other empirical studies [29
] demonstrated. Reference [31
] says skills in technology can be explained by three subcomponents: IT infrastructure, Internet proficiency and business know-how. First, IT infrastructure refers to Internet-related and business-related technologies. Secondly, Internet proficiency refers to the skills of employees using the Internet and Internet-related technologies. Third, business know-how also means the knowledge of executives who manage electronic business. Based on these definitions, technical skills include not only physical assets, but also resources that are out of reach: skills and know-how [32
], which could lead digital innovation adoption/diffusion.
Nations with higher level of technology capabilities will show positive impact on digital innovation.
Socio-related context As an innovation influential factor, the social structure is explained by human resources. Social structures can be recognized by people’s actions: human resources can act as a driving force in establishing ideas for society or the country and cannot play a functional role without people. In fact, digitalization should be based on human resources with physical fundamentals, hardware and accessories implemented through information and communication technology, i.e., computers, network equipment, connectivity and software, and skills to treat.
The human resource is an essential tool for economic growth in the country and plays an important role in creating jobs and improving labor technology and production [34
Nations with higher fundamental skills in human resources have a positive impact on digital innovation.
Environment related context Explanations of internal and external environmental factors can be found in relationships between individuals and society under governance systems, such as norms and political stability that come from social structures. The concept of development in a social structure that causes change in the behavior of individuals and societies, or the relationship between structure and behavior, is an area that many researchers have drawn attention to in social science [35
]. Social structures are recognized by enabling and reproducing human behavior [36
]. Reference [36
] defines in his study of the social structure’s influence on human behavior as a resource for individuals to communicate and interpret any event or action. It also says that the chosen changes in the structure of society define the general discipline and values that connect human behavior as norms and change the possibilities and accessibility of individuals and social groups change by learning new behaviors that contribute to the development of society. This change includes two forms: change in behavior to learn new behaviors and change in structure of social environment, which can be achieved by technological change or innovation, which many economists cite as a driver of socio-economic development.
Therefore, external environment plays an important role in IT acceptance [18
], especially environmental features have been described as important elements. Reference [7
] describes competitive pressures, tracking partners, trading partner support, and vertical connections, while [39
] describes factors that influence the acceptance of business and business tracking exchanges in small businesses, assessing the impact of government support and external pressures. Reference [40
] consider trading partners and vendor support as a competitive pressure, government support, and environmental aspect, while Reference [41
] shows empirical studies in the period from 1992 to 1999 of industrialized countries that find that labor-market practices that delay the acceptance of innovation, particularly information and communication technology innovation, are caused by regulation, resulting in a slowdown in productivity. This leads to the following.
Nations with stable governance system will have a positive impact on digital innovation.
Therefore, as shown in Table 2
, technical, organizational (social) and environmental factors of the national unit using the TOE system theory can be presented as indicators.
• TOE Framework and Economic Impact
Many papers measuring performance at the firm level are to be found, but studies measuring economic performance at the national level are not easy to find. Reference [42
] says digital innovation is igniting a new flow of productivity, similar to the ICT flows seen by electrification in the 1990s, but digital innovation has yet to be tangible. While the potential gains may be a bit late in areas where these new technologies play a role in boosting productivity and economic growth, they will be able to extract maximum value based on method and policy direction. However, in terms of measurement, the size and path of digital innovation can affect the consumers whose business operates or is interconnected. On the business side, digitalization through innovation adoption provides a scope for improving the production process and gives access to new markets, but digitalization itself also provides an important scope for profit beyond national boundaries by deriving new business and allowing business to be carried out in new ways, which can be connected to the growth of productivity.
National innovation factors (technology innovation capabilities, human resources and the environment) will have a significant positive impact on the nation’s economic performance.
• Innovation adoption and Economic Impact
Digitalization also affects the role of consumers, allowing households to be linked to relay services, eliminating the separation between consumption and participatory production. Therefore, the problem of measuring digitalization has become an issue, with the recent observed decline in productivity, coupled with the increasing participation of companies and countries in the global value chain and the rising level of education in the workforce at a time of rapid technological change, all of which has to do with high productivity gains. Therefore, the debate remains as to whether productivity reduction is a transition, a long-term state, or a measurement error. In addition to the measurement problem, there are many arguments between information technology and productivity, and there are limitations in explaining this with productivity alone [43
]. Many researchers have reported that information technology not only improves productivity but also affects economic growth [44
] and that the accounting framework for GDP, an indicator of economic growth, is being challenged by digitalization due to complex features such as measuring assets based on international exchanges and knowledge. Economists who see digital technology as having a positive impact on productivity gains also argue that consumers’ surplus or time differences, which are not identified by the GDP index, are still less likely to increase productivity and therefore still need more time to appear as productivity gains [45
] but still use GDP in the practical measurement of digitalization resulting from globalization because of the lingering problems in price changes.
Digital innovation will have a significant positive impact on the nation’s economic performance.
• TOE factors: Innovation Adoption and Economic Impact (the path from TOE factors to economic impact through innovation adoption)
The OECD divided the e-commerce market into stages of introduction, growth and maturity according to the growth phase of the digital economy in the measurement of the digital economy at the national level. For each stage of analysis, the required data is different with focus being on data, related to readiness at the introduction phase, indicating strength of growth at the stage of growth, and related to socio-economic impacts at the stage of maturity. Indeed, in the case of the United States, efforts have been made to analyze the economic impact through digital innovation and to predict its future, presenting five areas in the study of digital economy, including IT infrastructure, e-commerce form, changes in corporate/industrial and market structure, individual characteristics and labor-market characteristics using IT, and price behavior. Some argue that the performance of ICT investments made to date is not adequately measured and that productivity growth is underrated, and that statistics to measure the actual economic impact of computers in the information age are not appropriate to measure the results of digitalization [46
]. Therefore, from the perspective of the innovation phase, we present digital innovation: ICT access, ICT use and value chain breadth, as a result of adoption of innovation, apply it as a measurable indicator to verify the relationship with the creation of the nation’s economic performance. We also intend to present and demonstrate that measuring actual economic impact through empirical analysis of direct and indirect channels in relation to innovation capacity factors, represented by TOE.
Many examples have observed economic effects with access to IT or broadband technologies in analyzing existing economic effects [47
]. Most indicators, which mean ICT access as a measurable indicator, have focused until recently on the penetration rate of these wireless phones or access to Internet and broadband acceptance, which can explain only a fraction of the recent digitization that is happening very comprehensively.
ICT access will link the path from country’s innovation capabilities to economic performance positively.
The recent transition from accepting digital technologies requires an additional perspective in terms of usage, which is the effect of cumulative ICT, because the effects of separate technologies are complemented by each other in their acceptance and utilization, so the word ’accumulated’ is being explained. In addition, since research into communication and the use of IT infrastructure only describes the parts, the limitations are supplemented by complementing the traditional view of technology penetration. The transition to a digitally focused society is not only about technology acceptance but also about the use of these technologies in terms of new applications and services.
ICT use based on country’s innovation capabilities will lead the economic performance positively.
The creation of new value chains is also caused due to the development of digital technology. By connecting with global partners through diverse chains, the new value chains are created [51
]. Therefore, recent studies have been conducted to develop indicators that can measure the development of digitalization in countries [52
Value Chain breadth will link the path from country’s innovation capabilities to economic performance positively.