Venture Failure and the Timing of Telecommunications Reform
Chapter 2: The Global Growth of the Internet and the Role of the United States
This study seeks to understand how, in the so-called New Economy, a global innovation opportunity related to national innovation policy. Speciﬁcally, the international diﬀusion of the internet in the late 1990s is examined. Then, its reception by new ventures in particular European countries, especially Germany, is studied. The entrepreneurial response was conditioned by national innovation policy, including telecommunications liberalization. In the ﬁrst part of this book, comprised of Chapters 2 and 3, the worldwide diﬀusion of the internet and the role of the United States are examined. Then, in Part II, the European entrepreneurial response and innovation policy are addressed. Three interrelated aspects need to be reviewed when seeking to explain the internationalization of the internet. First, the internet’s infrastructure costs were shared, making its use distance-insensitive. This was due to its origins as a government-supported academic research network, but it was also dependent on the ‘unregulation’ of leased line data services. The issues associated with cost sharing and leased data lines will be explored in Chapter 3. Second, the internet was a horizontal technology which was applied to a broad set of sectors and industries. It oﬀered the potential to lower transaction and inventory costs by connecting large and small enterprises to each other and to consumers in seamless business webs.1 Due to its horizontal applicability, the internet tended to follow the interconnected international economy and connected previous company-only and country-only networks to each other. Finally, the internet was, in terms of its technology, architecture...
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