Governmental regulation and digital infrastructure innovation: The mediating role of modular architecture

Abstract

In response to their growing societal importance, digital infrastructures (DIs) are increasingly becoming subject to direct governmental regulation with the ambition to control innovation possibilities in those DIs. While there is a general lack of literature that conceptualises control regulation in relation to DI innovation, the existing research presents seemingly contradictory observations of regulation both enabling and inhibiting innovation. This paper therefore elaborates on how different types of control regulation impact various forms of DI innovation. We draw on modular systems theory to extend our understanding and develop a conceptual model that demonstrates two paths by which two types of DI control regulation influence DI architectural modularity as a mediating factor, which then conditions DI innovation. Our model provides an in-depth explanation of the relationship between DI control regulation and DI innovation that articulates and nuances the effects of DI control regulation in a way that was not previously present in the DI literature. In terms of practical implications, our model can help regulatory stakeholders both develop DI regulation and respond to regulatory action.

The regulation of and through information technology: Towards a conceptual ontology for IS research

“…Institutional theory offers a versatile conceptual foundation to study regulatory processes and outcomes as a form of institutional work. In this regard, we were pleased to find one paper (Henningsson and Eaton, 2023) that qualified for inclusion in the special issue which applied this perspective. This section now presents and defines the core concepts relevant to research on the regulation of and through IT that constitute the ontology presented.…”

“…The paper titled ‘ Governmental Regulation and Digital Infrastructure Innovation: The Mediating Role of Modular Architecture’ by Henningsson and Eaton (2023) focuses on digital infrastructures (DI) consisting of autonomous AI machine learning models etc. They analyse how regulations may impact DI innovation in such a setting.…”

“…Several salient concepts from institutional theory can thus enrich our understanding of how regulation of and through IT can be created, maintained, or disrupted. This happens through micro-level behaviours called institutional work (Lawrence and Suddaby, 2006; Gozman and Currie 2014; Henningsson and Eaton, 2023).…”

“…Recently, as this special issue demonstrates, the growing dominance of digital platforms has given birth to novel risks which amplify the negative affordances of IT artefacts across most industries and society. Another area of concern highlighted in this special issue is the reliance on complex national and global digital infrastructures (DI) which pose novel risks to individuals, markets, and societies (Gleiss et al,2023;Henningsson and Eaton, 2023;Karanasios et al, 2023;Lindman et al, 2023;Schnurr et al, 2023).…”

How business process management culture supports digital innovation: a quantitative assessment

“…Third , there is evidence that in certain situations, even when organizations have the “right” culture, the corresponding capabilities cannot be built (Chirico and Nordqvist, 2010; Vial, 2019). For example, available IT infrastructure cannot be fully exploited if the organization lacks technical consistency (Henningsson, 2010; Parviainen et al ., 2017) or if necessary training opportunities are not provided to the employees (e.g. Kohli and Melville, 2019; Savoldelli et al ., 2014).…”