chapter  5
22 Pages

IT and the creation of Schumpeterian rents

Teece and his co-authors (1997: 509) position their research ‘in a Schumpeterian world of innovation-based competition, price/ performance rivalry, increasing returns, and the “creative destruction” of existing competencies’. In Chapter 4 we showed that even in a moderately dynamic environment IT assets may not be a source of Ricardian rents because they do not meet the conditions of resource heterogeneity and immobility. However, IT can be deployed as a complementary asset and therefore may become a source of Schumpeterian rents. In this way IT works along with other strategic assets to confer a competitive advantage on the firm. Yet it is difficult to establish exactly how or why this happens. Critical path dependency makes it difficult for researchers to unravel bundles of interdependent strategic assets and to establish causality in a complex set of interrelationships.