Governmental Intervention in the Diffusion of EDI

Abstract

This chapter clarifies how governments support the diffusion of EDI. EDI supports interorganizational communication, has large network externalities, requires an advanced IT infrastructure and relies on standards. In most diffusion processes of similar technologies, for example telecommunications, government involvement is regarded as imperative. It is also desirable, as EDI is expected to have a pervasive impact on manufacturing, trade, transportation and public administration. Experience also demonstrates that governments can become powerful actors in the diffusion process as Singapore’s TradeNet’s success exemplifies. This paper examines the type of government strategy which is needed to address EDI diffusion successfully. We probe the process of diffusion by demand pull and supply push forces. Moreover, governments can intervene through means, which are either influential or regulatory. We distinguish six different government intervention strategies that are placed in a 2 × 2 matrix formed by the mode of intervention (either influence or regulation) and the type of force (either supply-push or demand-pull). Six studies of EDI diffusion are analyzed by using this framework. Several observations arise from our analysis. First governments are active players in the diffusion of EDI and their role is prominent in several strategies such as knowledge building, knowledge deployment and standard setting. Furthermore, governments can and should apply a variety of interventions to achieve their ends according to policy contingencies. Especially SMEs form suitable targets for government intervention and in particular knowledge deployment is a promising mode of intervention to support SMEs. Finally, EDI has now matured to a degree that makes it relatively safe for both governments and user organizations to invest in.