Institutional elasticity as a significant driver of IT functionality development

摘要

Institutions drive innovation and stimulate broad diffusion. Not surprisingly, national systems of innovation are influenced by their institutional flexibility in response to changing market conditions. As nations move from industrial to information-based societies, a key factor governing institutional "elasticity" is how institutions integrate information technology (IT). Since IT functionality is intimately connected with institutional dynamics, unlike simple manufactured products such as refrigerators, IT's specific functionality is formed through dynamic interaction with institutional systems. Consequently, institutional elasticity is a critical factor in the functionality of IT and its subsequent self-propagating behavior. This paper analyzes the mechanism of IT functionality development, with special attention to the interaction of the technology with institutional systems.