How IT Orientation Affects Obstacles and Facilitators of Innovation in an Emerging Economy
Abstract
Innovation is a crucial determinant in the survival and growth of firms in emerging economies. However, these firms face obstacles in the form of institutional challenges and rigidity towards change. In this study, we explore how two types of IT orientation to innovation -Internal IT Orientation to Innovation (IIOI) and External IT Orientation to Innovation (EIOI), enable firms to overcome three types of obstacles to innovation prevalent in an emerging economy-economic, political, and internal. We argue that IIOI has a mitigating role for internal obstacles, while EIOI enables firms to overcome political and economic obstacles to innovation. Furthermore, we argue that IIOI complements economic facilitators, and EIOI complements policy facilitators to innovation. Our findings using a unique dataset of firms from Mexico, provide broad support for our theory. The findings contribute to theory and practice by highlighting how specific IT orientations to innovation (internal and external) help overcome specific obstacles (internal, policy, and economic) and help complement specific facilitators (policy and economic) to enable innovation that impacts key drivers of cost and differentiation advantages.