E-BUSINESS IS A BOON FOR ENTREPRENEURS,SAY SAINT JOSEPH'S RESEARCHERS IN STUDY
Contact: Tom Durso, Director of Media Relations, 610.660.1532, [email protected]
Philadelphia, Pa. (Dec. 11, 2000) -- While the digital economy poses serious threats to established brick-and-mortar firms, e-business represents a significant opportunity for entrepreneurs, conclude two Saint Joseph's University researchers in a new study.
In one of the few academic articles to examine entrepreneurship and e-commerce, Dr. Maheshkumar P. Joshi and Dr. Ira Yermish, both of Saint Joseph's Department of Management and Information Systems, write: "As the Internet grows over the next few years, the implications of this growth are immense for both individual entrepreneurs and those firms with entrepreneurial behavior."
Their conclusions that firms embracing the Internet will have a better success rate and that entrepreneurs will thrive run counter to the common view that the future of e-business means simply greater and greater consolidation.
The study appears in the most recent issue of the New England Journal of Entrepreneurship.
Drs. Joshi and Yermish identified five new business trends emerging as a result of the growth of e-commerce and linked them to traditional entrepreneurial characteristics to draw their conclusions. The trends--which comprise a "frame-breaking" environmental change, according to Dr. Joshi--are as follows:
* Increased separation of the flow of information: By breaking the link between the flow of product-related information and the product itself, the Internet has gained vast economic power.
* Increased focus on information flows: The online explosion has rendered products more "technologically intensive," resulting in an economy whose output takes up less physical space yet has a greater dollar value.
* Reduced distance: "In the new economy," the authors write, "proximity requirements have been almost totally removed as (in theory, at least) everyone is connected with everyone else." As an example, they cite a small Indian jewelry manufacturer whose use of the Internet led to more orders from U.S. customers with no Indian connections than from Indians who live in the United States and have relatives in India.
* Rapid response: The new economy allows "faster interaction with customers and permits nimble firms to change their menus of products, services, prices, and delivery systems at a very low cost," write Drs. Joshi and Yermish. "This flexibility is further enhanced with the customization of sites to the needs of specific customers."
* Using the customer as a marketing agent: Hotmail, for example, is a free, Web-based e-mail service that includes a brief line advertising its service at the end of every e-mail sent by its customers. Hotmail--already used by millions in the United States--is now the largest provider of e-mail in India and Sweden despite not having spent a penny on marketing in those countries.
"The point of all five of these trends is that firms have to be more nimble, flexible, and adaptable," said Dr. Joshi. "That's a hallmark of entrepreneurial firms. This new environment will enable entrepreneurial firms to grow and thrive."
Drs. Joshi and Yermish also point out the "tremendous level of ambiguity about the interpretation of the future in the digital world" and suggest that entrepreneurs by their nature are much more able to handle such ambiguity and thrive in it.
Founded by the Society of Jesus in 1851, Saint Joseph's University is celebrating 150 years of academic excellence. Saint Joseph's, Philadelphia's Jesuit university, is home to 3,450 full-time undergraduates and 2,900 graduate and nontraditional students. The school's strong liberal arts tradition fosters rigorous and open-minded inquiry, maintains high academic standards, and attends to the development of the whole person.
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