INSTITUTIONAL FACTORS IN INFORMATION TECHNOLOGY INNOVATION

Innovation in information technology is well established in developed nations; newly industrializing and developing nations have been creati ng governmental interventions to accelerate IT innovation within their borders. The lack of coherent policy advice for creating government p olicy for IT innovation signals a shortfall in research understanding of the role of government institutions, and institutions more broadly, in IT innovation. This paper makes three points. First, long-establis hed intellectual perspectives on innovation from neoclassical economic s and organization theory are inadequate to explain the dynamics of ac tual innovative change in the IT domain. A broader view adopted from e conomic history and the new institutionalism in sociology provides a s tronger base for understanding the role of institutions in IT innovati on. Second, institutional intervention in IT innovation can be constru cted at the intersection of the influence and regulatory powers of ins titutions and the ideologies of supply-push and demand-pull models of innovation. Examples of such analysis are provided. Third, institution al policy formation regarding IT innovation is facilitated by an under standing of the multifaceted role of institutions in the innovative pr ocess, and on the contingencies governing any given institution/innova tion mix.