nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2023‒08‒28
five papers chosen by
Marek Giebel, Universität Dortmund

  1. The Pursuit of Shareholder Value: Cisco's Transformation from Innovation to Financialization By Marie Carpenter; William Lazonick
  2. Building an Inclusive Digital Society for Rural India By Mansi Kedia; Rajat Kathuria; Abhishek Raj; Richa Sekhani; Srishti Sinha
  3. Digitalization and Gender Equality in Political Leadership in Sub-Saharan Africa By Diego B. P. Gomes; Carine Meyimdjui
  4. 5G and Beyond: Formulating a Regulatory Response By Rohit Prasad; V Sridhar
  5. Aggregation of Information and Communications Industry and Self-organization Simulation Using an Agent-based Model (Japanese) By NAKAMURA Ryohei; NAGAMUNE Takeshi; HAYASHI Syuusei

  1. By: Marie Carpenter (Institut Mines-Telecom Business School); William Lazonick (The Academic-Industry Research Network)
    Abstract: Once the global leader in telecommunication systems and the Internet, over the past two decades the United States has fallen behind global competitors, and in particular China, in mobile communication infrastructure specifically 5G and Internet of Things (IoT). This national failure, with the socioeconomic and geopolitical tensions that it creates, is not due to a lack of US government investment in the knowledge required for the mobility revolution. Nor is it because of a dearth of domestic demand for the equipment, devices, and applications that can make use of this infrastructure. Rather, the problem is the dereliction of key US-based business corporations to take the lead in making the investments in organizational learning required to generate cutting-edge communication-infrastructure products. No company in the United States exemplifies this deficiency more than Cisco Systems, the business corporation founded in Silicon Valley in 1984 that had explosive growth in the 1990s to become the foremost global enterprise-networking equipment producer in the Internet revolution. This paper provides in-depth analysis of Cisco's organizational failure, attributing it ultimately to the company's turn from innovation in the last decades of 20th century to financialization in the early decades of the 21st century. Since 2001, Cisco's top management has chosen to allocate corporate cash to open-market share repurchases aka stock buybacks for the purpose of giving manipulative boosts to the company stock price rather than make the investments in organizational learning required to become a world leader in communication-infrastructure equipment for the era of 5G and IoT. From October 2001 through October 2022, Cisco spent $152.3 billion - 95 percent of its net income over the period - on stock buybacks for the purpose of propping up its stock price. These funds wasted in pursuit of "maximizing shareholder value" were on top of the $55.5 billion that Cisco paid out to shareholders in dividends, representing an additional 35 percent of net income. In this paper, we trace how Cisco grew from a Silicon Valley startup in 1984 to become, through its innovative products, the world leader in enterprise-networking equipment over the next decade and a half. As the company entered the 21st century, building on its dominance of enterprise-networking, Cisco was positioned to upgrade its technological capabilities to become a major infrastructure-equipment vendor to service providers. We analyze how and why, when the Internet boom turned to bust in 2001, the organizational structure that enabled Cisco to dominate enterprise networking posed constraints related to manufacturing and marketing on the company's growth in the more sophisticated infrastructure-equipment segment. We then document how from 2002 Cisco turned from innovation to financialization, as it used its ample profits to do stock buybacks to prop up its stock price. Finally, we ponder the larger policy implications of Cisco's turn from innovation to financialization for the competitive position of the US information-and-communication-technology (ICT) industry in the global economy.
    Keywords: Cisco Systems, communication technology, enterprise networking, strategic control, organizational integration, financial commitment, acquisitions, stock-based compensation, share repurchasers, dividends, shareholder value, global competition, innovation, financialization.
    JEL: D20 E22 E23 E24 G34 G35 L21 L22 L63 M10 N81 O16 O32
    Date: 2023–02–21
  2. By: Mansi Kedia (Indian Council for Research on International Economic Relations (ICRIER)); Rajat Kathuria (Indian Council for Research on International Economic Relations (ICRIER)); Abhishek Raj; Richa Sekhani; Srishti Sinha
    Abstract: Digital inclusion implies that individuals and communities can access and adopt technology to improve their socio-economic status. India, like most emerging markets, has benefitted immensely from the diffusion of Information and Communication Technology (ICT) diffusion. In rural areas, communication services can often compensate for other infrastructural deficits, catalysing growth. However, market failures in rural areas, magnified by poor connectivity and lack of digitalization, demand policy intervention. Following customary global practice, the Indian government, has made universal broadband a priority objective.
    Keywords: Digital Inclusion, Rural ICT Skills, Digital Literacy, Case Studues, icrier, BIF
    Date: 2021–11
  3. By: Diego B. P. Gomes; Carine Meyimdjui
    Abstract: We examine the impact of digitalization on people’s perceptions of women as political leaders in 34 Sub-Saharan African countries. We find that being a social media or internet user is linked to a higher likelihood of people supporting gender equality in political leadership. However, the intensive margin of usage does not appear to be significant. Furthermore, women’s perceptions of gender equality in political leadership are more sensitive to internet and social media use than men’s. The paper recommends policies for improving ICT infrastructure and investing in technological education.
    Keywords: gender; political leadership; digitalization; internet; social media; internet user; data detail; social media usage; IMF working paper 23/122; usage indicator; Social networks; Women; Gender inequality; Gender diversity; Sub-Saharan Africa; Africa
    Date: 2023–06–09
  4. By: Rohit Prasad (Management Development Institute, Gurgaon); V Sridhar (International Institute of Information Technology Bangalore)
    Abstract: Benefits of 5G networks and services will accrue to industry by providing massive machine type communication (mMTC) and realizing the vision of Industry 4.0. On the consumer side, 5G users are expected to provide a fillip to video/ music streaming, consumer IoT applications such as smart homes, gaming and other entertainment services, all enabled by enhanced Mobile Broadband (eMBB). Other changes in applications include deployment of Captive Non-Public Networks (CNPNs) for enterprise use. Along with new use cases, new business models are also being forged between network equipment manufacturers (NEMs), MNOs and cloud service providers. Spectrum management techniques are also adapting to these changes with the introduction of tiered spectrum access, spectrum sensing, etc. It is in this context that our report provides a review of various regulatory issues impacting the telecom sector, including licensing, spectrum management, interconnection, universal service and data governance, to recommend guidelines most suited to this evolving industry scenario.
    Keywords: 5G, digital services, net neutrality, OTT, value chain, icrier, Vodafone Idea Centre for Telecom, InViCT
    Date: 2023–07
  5. By: NAKAMURA Ryohei; NAGAMUNE Takeshi; HAYASHI Syuusei
    Abstract: As a preliminary step to conducting a self-organization simulation of the concentration and dispersion of the information and communications industry, we will quantify the spatial concentration of the information and communications industry in large cities in Japan. Spatial analysis of the information and communications industry in Sapporo, Sendai, Hiroshima, and Fukuoka, which are regional core cities, in addition to the 23 wards of Tokyo, was conducted using Chocho data from the "Economic Census." As a result of detecting spatial autocorrelation in small area units in each city, hotspots indicating concentration of information and communications business establishments were detected in the city center of each city. At the same time, we were able to confirm the influence of the economy of agglomeration, which is the premise of the self-organization model, and also recognized that the information and communications industry is an industry that is suitable candidate for simulation of the self-organization phenomenon. Krugman (1996) first formulated the self-organization phenomenon in the city and clarified the emergence principle of the peripheral city, but it was limited to numerical simulation. After that, Kumar et al. (2007) used actual data to show the possibility of applying Krugman's self-organization model to predict the concentration and dispersion of firms. In this paper, we examined whether the self-organization model is effective for reproducing and predicting the accumulation and dispersion of the information and communications industry in Japanese cities by using the agent-based model.
    Date: 2023–08

This nep-ict issue is ©2023 by Marek Giebel. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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