ICT and e-Business Impact in the Furniture Industry - empirica

ICT and e-business impact in the furniture industryOverview of results on ICT and outsourcingSummarising the results of the econometric testing of hypotheses on ICT andoutsourcing, the analysis pointed the following main findings:Hypothesis V.1: “ICT endowment is positively correlated with outsourcing, isconfirmed. ICT and make-or-buy decisions are related, although it is not possible toestablish the direction of this link.4.5 Summary of impact analysisThe analysis in chapter 4 follows the logic of an extended “structure – conduct –performance” concept. This concept assumes that an industry’s structure determines theconduct of the firms in the industry, and the firms’ conduct determines their performance.There are feedback effects: both firms’ conduct and their performance may impact on theindustry’s structure. Findings for chapter 4 show that ICT and e-business haveconsiderable impacts on the furniture industry, although they do not change the marketstructure.The analysis in this chapter was conducted along the following types of impacts:innovation, market structure, and value chains. The following conclusions were drawnfrom an econometric analysis, the e-Business Survey 2007, case studies conducted forthis report and literature evaluation:Innovation: In the furniture industry, ICT impact appears to be significant both forproduct innovation and, most importantly, for process innovation. Many casestudies conducted for this report confirm that ICT can be considered as an enablerof innovation and positively impact on firm performance. The ICT-driven innovativeprocess is linked to the share of employees with university degree and of ICTpractitioners. The use of applications and practices that support the electronicexchange of information between companies positively affects the likelihood ofconducting ICT-enabled innovations. As regards impacts, the analysis found thatICT software is the most important driver of organisational changes.Market structure: In the furniture industry, the effect of ICT on market structure isnot proved. The hypothesised relevance of increasing market competition for theintensity of ICT adoption was not confirmed. Similarly, there is no evidence that ICTendowment is positively correlated with a change of market share. Examples fromcase studies indicate that there might be –obviously- exception to this rule.However, the overall impact of ICT on the furniture industry structure is limited.Value chains: As regards outsourcing, the econometric analysis found that ICTintensity indeed increases the propensity to outsource business activities. ICT andmake-or-buy decisions are related, although it is not possible to establish thedirection of this link.95