The Bounded Opportunities of Digital Enterprises in Global Economic Peripheries

Abstract

Digital enterprises from the US, Europe, and East Asia have been recognized for their potential to achieve global market reach, and for forming a globalized digital infrastructure. However, digital enterprises from economically peripheral countries have usually remained local. This paper seeks to understand the enterprise-level reasons for these global differences. Drawing on in-depth interviews with founders, we empirically examine the value creation and geographical market scope of 73 digital enterprises in Lagos, Nairobi, Accra, and Kigali. We develop theory that explains why enterprises in global economic peripheries are able to exploit some but not all opportunities of digital technologies. In contrast to the claim in current scholarship that digital enterprises can operate in relatively unbounded ways, we find that African enterprises cannot compete in global digital markets and are ultimately compelled to offer localized digital products. Based on these findings, we theorize that digital products with the greatest global scaling potential are the least likely to be owned and controlled by digital enterprises located in economic peripheries. We thus encourage scholars of digital enterprise to more carefully take geographical variation into account, and acknowledge technological drivers of increasing unevenness in the global digital economy.