Digital innovation development economic system: The framework, evolution and value creation effect

Abstract

Abstract: The new wave of technological revolution and industrial transformation represented by digital technology is reconstructing the global economy and technology landscape. China is actively deploying digital transformation policies, hoping to promote the digital transformation of economy. The digitization has strengthened the connection of the innovation development elements, resulting in blurred boundary between different actors in the innovation system, making traditional innovation development theory faces a new environment. So, there is an urgent need to build a framework of digital innovation development economic system, and to characterize its evolutionary power and value-added path. Numerous literatures examined the impacts of digital transformation, revealed that digital transformation can not only affect innovation, but also create economic value. However, the existing research has not constructed a framework that combines digital innovation and digital economic development, which makes it difficult to systematically comprehend China′s digital transformation.In this study, we define the basic concepts such as data element, digitization, and innovation development economic system. Then we construct the framework of digital innovation development economic system from two aspects of "the economic system formed by innovation development of digital elements (Type I)" and "the digital transformation of the innovation development economic system (Type II)", which are deeply integrated and symbiotically evolving. Secondly, the paper analyzes the internal driving force of the digital innovation development economic system. It shows that the evolution of the digital innovation development economic system is as follows: the digital technology has become the core force of innovation development, promoted the transformation of scientific research paradigm to data-driven, strengthened the relationship among innovation elements, and expanded the scope of innovation actors.Furthermore, this paper introduces the changes of driving force caused by digital innovation development economic system into Schumpeter′s theoretical framework of innovation development. This study reveals the value creation effects of the digital innovation development economic system from five perspectives as followed: (1) Input innovation. Driving by digital technologies, data has become a new production factor and helps to optimize and reconstruct traditional production factors. (2) Product innovation. The digital transformation can enrich the variety of products, but also improve products′ quality. (3) Process innovation. Data elements can save the cost of other elements such as capital and labor, promote intelligent production. (4) Market innovation. The digital transformation can satisfy the needs of an existing market, and create new markets by precise pricing and marketing. (5) Organization innovation. Digital platform connects firm with external entities at low cost, makes the boundaries of different entities appear flexible. Finally, this study proposes that it is necessary to strengthen the theoretical framework and system monitoring research of the national digital innovation development economic system, explore the policy construction of the digital innovation development economic system that responds to the needs of development transition. This article analyzes the compositions, driving forces, and value creation paths of digital innovation development economic system, enriches the theoretical discussion of innovation development economic system and sheds light on how digital transformation shapes innovation and economic development.

Key words: digital transformation, innovation development, economic system, digital technology, value creation

Kang Jin, Chen Kaihua. Digital innovation development economic system: The framework, evolution and value creation effect[J]. Science Research Management, 2021, 42(4): 1-10.

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Digital innovation development economic system: The framework, evolution and value creation effect

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