broadband strategies handbook.pdf - Khazar University

such, the many demand-side components—including services, applications,and content—are essential to promoting a vibrant broadband ecosystem.While a distinction is generally made between services and applications, astechnology evolves, services and applications are likely to overlap. Forexample, mobile banking may be treated as a service or as an application(and maybe even as both), depending on how and what features are offered.In addition, e-government covers an entire range of services and applicationsthat transform government processes and modes of interacting withbusinesses and citizens (Hanna et al. 2009). The distinction, at least withregard to the ecosystem, may be irrelevant: what is important is that theseservices and applications drive demand.Absorptive Capacity of BroadbandSupply and demand are necessary conditions for the promotion of broadbandnetworks and services, but by themselves they are not sufficient toguarantee that broadband can reach its full potential in the economy. For thatto happen, broadband users (citizens, businesses, and government) must alsohave the capacity to understand, learn, and apply the lessons learned aboutbroadband’s benefits and capabilities across the economy and society.Absorptive capacity generally refers to the ability of an organization torecognize the value of new, external information; to assimilate that information;and then to apply it to the organization’s benefit. This ability is criticalto an organization’s innovative capabilities, as new technologies are assimilatedby organizations to create, improve, and transform business processes,products, and services (Cohen and Levinthal 1990). As users have the abilityto become co-creators of content 13 and as broadband user–led innovation isenabled, this same concept can be extended to include other users of thebroadband platform, including citizens (von Hippel 2005). Thus to fullyrealize the benefits of broadband, the various sectors of the economy andsociety must have the capacity to acquire, assimilate, transform, and exploitthe capabilities enabled by this platform. Under the ecosystem model,absorptive capacity is the mechanism by which the benefits obtained frombroadband feed into the greater economy, allowing this technology tounleash its potential as a GPT.Policy makers can facilitate the capacity to understand and incorporatethe many benefits of broadband by developing and implementing policiesthat are complementary to broadband build-out. In addition, they canencourage the private sector to adopt broadband as an input to drive productivity,growth, innovation, and welfare throughout the economy andsociety.26 Broadband Strategies Handbook