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Social Inclusion and
THE FUTURE
OF WORK
JOSÉ SÁNCHEZ-GUTIÉRREZ
TANIA-ELENA GONZÁLEZ-ALVARADO
COORDINATORS
First edition, 2020
Sánchez-Gutiérrez, José; González-Alvarado, Tania Elena (coordinators).
Social Inclusion and the Future of Work. Mexico: Universidad de
Guadalajara.
This book is a product of the members of RIICO (Red Internacional de
Investigadores en Competitividad) with external contributions. The
findings, interpretations, and conclusions expressed in this work do not
necessarily reflect the views of Universidad de Guadalajara and RIICO.
All the photos on this book were taken from Unsplash. Unsplash is a
photo discovery platform for free to use, high-definition photos. Unsplash,
Inc., a Canadian corporation) operates the Unsplash website at
unsplash.com (the “Site”) and all related websites, software, mobile apps,
and other services that they provide (together, the “Service”) with the goal
of celebrating and enabling contributors and fostering creativity in their
community.
This work is licensed under aCreative Commons Attribution-NonCommercial-
ShareAlike 4.0 International License.
Cover photo byDaniele FranchionUnsplash
Cover design: González Alvarado Tania Elena
© 2020, Universidad de Guadalajara
Centro Universitario de Ciencias Económico Administrativas
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Printed and made in Mexico
© 2020, Fondo Editorial Universitario
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Portmany Ibiza, España
CONTENTS
Prologue……………………………………………………………….. 5
Sánchez-Gutiérrez, José
Employment is more than a Job. It Is the Essential Pedestal
Underpinning Social Inclusion and Democracy Itself…………… 7
Argyriades, Demetrios
Innovation for the Future of National Well Being.………….……. 25
Galicia-Haro, Emma-Frida; Coria-Páez, Ana-Lilia and Ortega-Moreno,
Irma-Cecilia
Socioeconomic Development: The Steel like a Crucial Key…….. 39
Espinoza-Parada, Lourdes-Fabiola; Cavazos-Salazar, Rosario-Lucero
and Cruz-Álvarez, Jesús-Gerardo
Generation of Employment and Digital Age in the Hotel
Sector of Peru………………………………………………………… 57
Espinoza-Vilca, Sofía; Blanco-Jiménez, Mónica and Terán-Cázares,
María Mayela
Digitization of Economic Activities for Job Creation and Social
Stability and Competitiveness.…………………..………………….. 71
Morales-Alquicira, Andrés; Rendón-Trejo, Araceli and
Guillen-Mondragón, Irene-Juana
Film Industry International for the Future of Work and Social
Inclusion………………………………………………………………. 89
González-Alvarado, Tania-Elena; Kubus, Renata and
Sánchez-Gutiérrez, José!
Contents
3
Impact of Open Data on the Creativity for Innovation……………… 107
Estrada-Zamora, Carlos
The Trust on Social Networks and the Increased Social
Commerce………………………………………………………….….…. 121
Robles-Estrada, Celestino; de la Torre-Enríquez, Diana-Isabel and
Suástegui-Ochoa, Alberto-Alejandro
Adaptability of Small and Medium-Sized Businesses and E-
Commerce……………………………………………………………… 149
Bellon-Álvarez, Luis Alberto
Social Inclusion and the Future of Work
4
Sánchez-Gutiérrez, J. & González-Alvarado, T.
Prologue
ocial Inclusion and the Future of Work is of interest to those who expect a critical
but positive vision of the times we live. Experts explain the situation of the
organizations, institutions and regions according to resilience, creativity and
digital innovation for the future of work, social inclusion and the Sustainable
Development Goals (SDGs). SDGs are considered as the essential guidelines that facili-
tate the strategic consideration of the future of work and social inclusion, even more in
times of pandemic.
Eachpartofthisbookwasbasedon empirical real-lifeevidencefromen-
terprises, universities, governments and institutions. All of these studied organizations
are part of the competitive environment. Thewritersbelieveineconomicprogressin
line with innovation,resilience, entrepreneurship and international cooperationbet-
weenregions,countriesand corporations.
The authors are from the United States of América, Greece, Spain, Poland, Peru,
and Mexico. All of them are experts in Economic andBusinessSciences.Theuniversi-
tiesthat participateinthisprojectare the John Jay College, City University of New
York, Universidad Andina del Cusco, Universidad Nacional de Educación a Distancia,
Universidad Autónoma Metropolitana-X, Instituto Politécnico Nacional, Universidad
Autónoma de Nuevo León and UniversidaddeGuadalajara.
This publication was created following the best practices of scientific
edition.Turnitin was applied to favor the originality. Theeditorial teamcarefully
analyzed the quality and originality of the contents. Every chapter was
selected,evaluated,andmodifiedwiththesupportof international peers.
Editors and authors hope is that this book will contribute to theadvancementoftheo-
reticalandpractical knowledge
Dr. José Sánchez-Gutiérrez
S
Prologue
Sánchez-Gutiérrez, J.
5
Social Inclusion and the Future of Work
6
Sánchez-Gutiérrez, J. & González-Alvarado, T.
Employment is more than a Job
It is the Essential Pedestal
Underpinning Social inclusion
and Democracy itself
Demetrios Argyriades
John Jay College, CUNY, USA
“SDG16: Promote Just, Peaceful and Inclusive Societies”
“Peace, stability, human rights and effective governance based on the
rule of law are important conduits for sustainable development. The Sustainable
Development Goals aim to … reduce all forms of violence, and work with governments
and communities to find lasting solutions to conflict and insecurity. Strengthening the
rule of law and promoting human rights are key to this process.”
“Everyone has the right to work, to the free choice of employment, to just and
favourable conditions of work and to protection against unemployment”.
Universal Declaration of Human Rights
[Gen. Assembly Res. 217 (iii), 10 December 1948]
INTRODUCTION
here is always a silver lining! After four decades of Reaganism, which
told us that “Big Government” was the source of all our problems, the
effects of the pandemic have been to demonstrate the very polar
opposite. We are slowly rediscovering the value of the “public” in
Public Administration including a propensity to public-private partnerships,
where “public” is in charge (Nabatchi, 2010:S309). Suddenly resurrected, the
Administrative State became not only a banker or paymaster, but also
epidemiologist, employer, engineer, social administrator, and therapist of first
and last resort. Regulation, castigated as “bureaucracy” inimical to progress by
laissez-faire economists, was now restored to prominence, when deadly
T
Employment is more than a job. It is the essential pedestal underpinning social inclusion and democracy itself
Argyriades, D.
7
repercussions of its regrettable absence and the effects of lax controls over
“assisted-living” and related nursing homes came into sharp relief. In just a
matter of days, going to work had been subject to restrictions and the right to
work itself made conditional on Government’s own definition of what now
represented essential as opposed to non-essential forms of occupation and
labour.
To be sure, health, information, transportation, food supplies and security
were placed in the “essential” category. Holders of other jobs, including shop
assistants, workers in nail salons, barbers and hairdressers, as well as professors
and teachers at schools and universities were asked to stay away. Many people
were furloughed or “fired”. After years of full employment, with unemployment
rates at a historic low around, in fact, the level of 3 per cent, society had to adjust
to a crisis brought about, not by paucity of demand or a liquidity shortage but an
invisible virus, whose nature and mutations, as well as targets and symptoms are
still imperfectly grasped, making its treatment difficult, or the hoped-for “Great
Re-opening” a difficult policy option (Barron’s, 2020:A1). Having proved highly
contagious, the challenge it presented has been countered, almost throughout the
world, by enforcing “social distancing” and even “lockdowns” in places. In
services and trade, there are not many tasks that can be carried out, to the client’s
satisfaction, at a distance of six feet - or of two meters. Though digital technology
has tried to bridge the gap and, currently, shopping online has spread from
books to groceries and far beyond, some services, by contrast were not so fast to
follow. Distant learning made some progress and the onslaught of the crisis,
caused by the virus pandemic, created a necessity for the growth of telemedicine.
Still, in health and education, as well as public management and the
administration of justice, most people would agree that physical proximity
remains a potent factor, as well as desideratum. Enabling and engaging the patient
or the student, the citizen or plaintiff remain constructive patterns, for which
there is no substitute – no satisfactory substitute; at any rate.
WHAT “JOB” WILL BE A “NEW NORM”? SYSTEMIC FACTORS WILL TELL
Will there be a new norm? What norm? Will the ongoing pandemic produce new
ways in which we live, relate to one another and work? Some people seem to
think so. For those of us, conditioned to equate all “change” with “progress” and
this, in turn, with “good”, such cataclysmic crises as the COVID-19 pandemic may
be seen as the precursors of momentous transformations. They are often viewed
as destined to become irreversible. (MPM-GEPS, 2018: 160) “Forever” is the
expression that the corona virus certainly brought into prominence. It had been
used extensively by the media and beyond on the morrow of two previous earth-
shaking events, which deeply marked our era and ways in which most people
Social Inclusion and the Future of Work
8
Sánchez-Gutiérrez, J. & González-Alvarado, T.
interpret global trends. The first was the collapse of the Berlin Wall, which
presaged the implosion of the USSR and end of the Cold War. The second was
the attack on the Twin Towers, better known as 9/11. The last one served to warn
us of the immanence of “Evil” and, therefore, the need to combat it. The first was
said to herald a New International World Order, seen by many as irreversible: the
Western Liberal Order (Allison, 2020: 30-40; Allison, 2018:124-133; Wertheim,
2020:19-29; MPM-GEPS, 2018: 160).
Dichotomy of the world in two opposing camps, the East and the West,
was curiously now given a new lease of life. This cleavage has a history of ten
centuries or more. It arguably goes back to the Schism (1054) and the Crusades,
which split the Christian Church, as well as the Roman Empire sharply into East
and West. Soon this historic cleavage was vested with a meaning which
manifestly transcended both history and geography -- even religion itself. In
time, it also acquired political, socio-cultural and even moral significance.
Gradually, over the centuries, “East” became synonymous with “Evil”,
“Autocratic” and “Retrograde”, while “West”, by comparison, suggested
freedom, virtue, civility, order, progress and “civilization”. Equated with the
“West”, the “free world” has been treated as virtually synonymous with
“civilization”, which some contrast to barbarism, “totalitarian rule” by “oriental
despots”, and chaos in the East (Ascherson, 1996: 49-51). Conveniently until
recently, Asians were lumped together as “orientals”. “Bon pour l’Orient” was a
common French expression indicating “second-rate”. This totally arbitrary and
ill-founded view of the world has served to legitimate the conquest of new lands,
the subjugation of peoples and the conversion of “pagans” into the “one true
faith”. Furthermore, it lent support and validation to a massive imperial
expansion, well into the XXth century, in tandem with the exclusion of the bulk of
the world’s population; those consigned to be the “wards”-- for their own good
of course -- of the “superior” nations, whom Providence had chosen to “take up
and to shoulder the White Man’s Burden” (Immerwahr, 2019:64-94). During the
1930s and early 1940s, the West and the rest of the world bore witness to the
outcomes of this twisted line of reasoning and hubris.
In the early twentieth century, after the “White Man’s Burden”, Europe
and North America heard of the “Yellow Peril”. It was invoked by Kaiser Wilhelm
II, the German Emperor (1888-1918), on the morrow of Japanese victory over the
Russian Empire, in 1905. Resurrected in the years of the Cold War, it accounted
for expressions, like that of the “Evil Empire”, which certain parts of the “West”
equated with the USSR. Under President G.W. Bush, it morphed into the
expression “Axis-of-Evil”, which included other countries of Central and East
Asia (Newland & Argyriades, 2019:1-30). The Corona Virus pandemic has given
it a new lease of life. Will it serve to extend the life and hegemony of this East-
Employment is more than a job. It is the essential pedestal underpinning social inclusion and democracy itself
Argyriades, D.
9
West dichotomy? A recent surge of polemics, targeting China especially, would
seem to argue as much (The Economist, April 16, 2020). Characteristically titled
“Pandemic geopolitics: is China winning?”, an article appearing in this prestigious
journal suggested that invectives have travelled in both directions. On this side
of the Atlantic, some people took to referring to COVID-19 as the “Wuhan” or
“China” virus, much in the way that the flu, which followed WWI, had become
known as “Spanish flu”. It was quickly seized upon as a pretext for disclaiming a
massive debt to China or to recoup the losses occasioned by the “lockdown”.
“China ought to know its place” were words proffered in London, at the NATO
Council meeting, held in this past November. (Haass 2020)
The dangers of upending a multilateral system set in place by the U.N. on
the morrow of WWII (1945), to foster peace and prosperity, may still appear
remote. A burgeoning arms race, on the other hand, suggests otherwise. Sabre-
rattling goes in hand with diversion of resources from much-needed
development programmes outlined in the SDGs of the United Nations. These
ought to have priority. There is still no end in sight to wars in both West Asia and
North Africa, which devastate, dismantle or serve to perpetuate failed and fragile
States. Even the verbal attacks on the WHO, coupled with the threat of
withholding funds from that organization in the midst of a global pandemic,
bespeak a lack of appetite for constructive cooperation in tackling global issues.
At a time of rampant populism, xenophobia and demagoguery reign supreme.
“My country right or wrong” or “my country best and foremost”, become the
rationale for escapes to ethnocentrism and unbounded unilateralism but also for
resisting progressive policy initiatives on the domestic front. Furthermore, as
demonstrated in ongoing public narratives and debates, they point to the
marginalization or exclusion of “out-groups” to better shelter “in-groups”. There
can be little doubt that the ongoing pandemic will unleash a trove of trends,
some clashing, contradictory or pulling in directions that cannot be foreseen, at
this very early stage. There will be a tug-of-war between competing forces and
ideas. Which will prevail, may well depend on power; clout vested in some
groups, rather than in the intrinsic worth of ideas and the real needs of people.
What this crisis demonstrated, on the other hand, is the primacy of
community and the ethics of solidarity over the rival claims of unfettered
individualism, which prevailed for four decades. The words of Mrs. Thatcher
“Society does not exist” would not have gone down well in the City of New York,
in the days of the pandemic, when doctors, paramedics and nurses juggled the
rival claims of patients in their care, as they struggled to make do with
inadequate equipment and supplies, through more than twelve-hour shifts. The
sight and sounds of people’s spontaneous loud applause of such self-sacrifice
spoke volumes on survival of values, deeply buried in our conscience and our
Social Inclusion and the Future of Work
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
collective mind, after four decades of “Thatcherism” and the neo-liberal ethic.
(Interlandi, 2020: SR6-7; Krugman, 2020: SR16; Reich, 2020: SR9; The New York
Times 2020: SR1-3)
A BROKEN SYSTEM AND MODEL
Like sudden massive earthquakes, the global virus pandemic shook the
economic system and socio-political structures to their foundation. But will they
stage a comeback? Only time can tell. The system came complete with values and
a mindset, in which “instrumental logic”, utilitarian values and pragmatism or
opportunism reigned supreme. A hegemonic model, it sought to exclude all
others (“One size fits all”). It is axioms permeated our language and our policies,
exerting a mighty hold on our collective conscience and individual minds. They
guided our research and train of thought, but all too often also gave credence to
both myths and misinformation, which have weighed on decisions and policy
guidelines shaping our collective lives.
The corona virus pandemic is unique in the annals of history. In
suddenness of onslaught, in sweep and range of outreach, in magnitude of
impact, it may have no known parallel, in modern times. At this stage, it is hard
to predict when and how it will come to an end. In the United States -- and in
New York -- it shuttered an economy, which was on the up and up. The crisis
propelled unemployment nationwide, to more than 30 million, in little more than
a month (The New York Times, 2020, A1 & B1; Chaney & Guilford, 2020; Morath &
Chaney, 2020). It reached 40 million by the end of May 2020. Also by the end of
May, the totality of deaths from the pandemic stood at c. 102,000. Still, in relative
terms, it was not very high compared to western Europe but disproportionately
borne by the elderly, the poor and minorities of color. Already, more jobs have
been lost nationwide than the US economy was able to create since the onslaught
of the Recession, which begun in September 2008, or indeed the Great
Depression of 1929. To be sure, civil society rallied instantly and admirably in
support of the numerous victims of this unprecedented debacle. On the personal
level, however, the gravity of the crisis brought into sharp relief the most
egregious facets of the system and model in place.
Specifically, one case that caught the public eye, concerned a middle-aged
staff member of the Metropolitan Transportation Authority (MTA), who died
suddenly after contracting the virus. Overnight, his bereaved family had lost not
only a father and breadwinner but also health insurance, a cover and protection
that no one can afford to live without. Yet, on the macro-level, as Mr. Sanders
noted announcing the suspension of his campaign for the democratic ticket to the
2020 election, this was the common fate of close to a hundred million of people in
Employment is more than a job. It is the essential pedestal underpinning social inclusion and democracy itself
Argyriades, D.
11
the U.S. We need to be reminded that this one hundred million hardly represents
a cross section of the U.S. population. In the vast majority of cases, the members
of this cohort belong both to the poor and to the black or brown minorities, better
known as Afro-Americans and Hispanics. The bulk of “first responders” also came
from these communities. Not surprisingly, though amounting to only thirty per
cent of the New York population, they have so far sustained fully seventy per
cent of the casualties of the pandemic. This is a startling figure, which starkly
gives the measure of the inequity, the exclusion and marginalization to which a
broken system condemns a significant segment of its adult population. How
could we go so wrong (Krugman, 2020:16-30; 123-152; 259-288; Newland &
Argyriades, 2019:1-30)?
It hardly befits a professor of Public Administration, who studied
Economics at the undergraduate level, some sixty years ago, to venture into a
discipline he only knows vicariously. However, as a resident, as well as a teacher
of public servants in New York, he needs to express alarm at the outcomes of a
model, widely believed to be “rational”, which “habitually overreaches,” often with
disastrous outcomes (Sternberg, 2020: A15; Kay & King, 2020). The magnitude of
this pandemic and the shock waves it produced, compounded by the inequities it
brought to glaring light, may help explain the scale, as well as relative speed of
the response of Congress, of the Executive Branch and civil society at large with a
view to mitigating the rigours of a system deeply flawed, as it plays out,
especially at times of mega-crises. There can be little doubt that proximity of the
elections, due on this 3rd November, may have added to the alacrity of the
response. But how will it unfold when the worst of the crisis is over? Will it be
back to “normalcy”, back to “business as usual”, when the economy rebounds or
begins to point to recovery? It needs to be remembered that this system has been
in place for more than three decades. It underpinned six presidencies, from both
political parties, survived two major crises and fostered endless wars in parts of
Western Asia, the Middle East and Africa.
Disparities, in fact, and endless senseless wars may be the tell-tale signs
and trademarks of this system, in place since the mid-eighties. Not surprisingly,
this note might sound somewhat uncharitable and, arguably, even biased to
some people. The system did produce – at least facilitate – a huge technological
progress, as well as spectacular wealth. Where the system failed demonstrably is
in “distributive justice” i.e. the distribution of wealth and dispensation of
benefits in health, social protection, housing, food security and education, as well
as in the advancement of human rights, protection of minorities and of the poor.
It is a system marked not just by grave inequity but also a starkly visible ethical
and democratic deficit. The Nobelist Paul Krugman described this broken system,
Social Inclusion and the Future of Work
12
Sánchez-Gutiérrez, J. & González-Alvarado, T.
as well as mega-trend and the outcomes it produces, in the following searing
terms:
“The skewing of America – the shift of a growing share of income to a small elite – was
already clearly visible by the late 1980s. This seemed to many people … to be a bad thing.
Not only did it mean that ordinary families were failing to share in economic progress; it
meant a loss of [the] sense of living in a shared society. So, one might have expected a
serious discussion of the forces behind rising inequality, and what if anything might be
done to reverse this trend” (Krugman, 2020:259).
To be sure, there has been some discussion. However, as the primaries have
shown, the distance separating so-called “moderates” from those whom they
dismiss as “radicals” and “socialists” – both deemed derogatory terms– leaves
little room for dialogue, complacency or consensus. Extremes of wealth and
poverty compounded by inequality in every sphere of life take on a special
salience in light of the pandemic, particularly on account of the known past
passivity of government in this regard. This is beginning to change.
Nevertheless, the chasm that separates the highest from the lowest income levels
remains starkly forbidding. It stood at 1 to 20 during the 1970s; it tops 1 to 300 in
our days (Krugman, 2020:259). Worse, it self-perpetuates as it becomes a part of
daily life and sights in major cities, where every night the homeless must be
removed from subways to which they look for shelter (Appelbaum, 2020: SR10).
The homeless have no voice, except for the NGOs, who take up their defence. As
for the very poor, they are struggling to be heard. Political elites, who dominate
the narratives, would wish them away, invoking the “American dream” but also
the “Axis of Evil”, which seeks to explain away the trillions spent on wars and
massive weapon systems. American exceptionalism and the “indispensable
nation” are also widely invoked. (Marchese, 2020:13)
Must this be the new norm; one in which government sits idly by,
intervening only in pandemics or other “acts of God”? Must we allow the present
inequities and disparities to escalate, which endless wars and violence absorb the
scarce resources that would be better spent on SDG16? The study of recent
history may suggest otherwise. Perhaps we needed a crisis to bring to light the
legacy of John Maynard Keynes (Carter, 2020). We needed a pandemic to
demonstrate that markets are really social phenomena, inextricably meshed with
other social phenomena; not an autonomous system but rather a sub-system with
wide ramifications reaching out and deeply affecting every single part of Society
and the Polity. Perhaps, this pandemic has shown that government can do, at
times of plenty what, in our days, it has been forced to accomplish in extremis.
Contrary to the gospel, which offered us downsizing, outsourcing and deregulation
as the one way to progress and efficiency, we need the hand of government and
the Administrative State to steer the markets clear of rocky reefs and to re-
introduce a better sense of balance, a better “sense of living in a shared [i.e.
Employment is more than a job. It is the essential pedestal underpinning social inclusion and democracy itself
Argyriades, D.
13
inclusive, democratic] society” than has been our experience in fully four
decades (Krugman, 2020: 259). One of the many risks to which we’ve been
exposed, during the past decades, is the perpetuation of myths and misinformation
which warn against the perils of any change of course.
Language is weaponized, mostly for domestic purposes, in part to “export
discontent” but partly also to shield the status quo against incipient perils from
“creeping, alien socialism”. With an eye to the coming elections, moreover, some
of the opinion leaders engage in the-all-too-familiar “blame-game”. It seems as if
all ills can readily be assigned to one main source: one individual person, one
country or one group. According to this logic, remove that individual, push that
“rogue country” back to where it should belong and all will automatically fall
back into place (Osgood, 2017:A19).
A “SKEWED”, ONE-SIDED SYSTEM AND ONE-DIMENSIONAL MAN: THE
HOMO ECONOMICUS
What people unwilling to look beyond mere symptoms cannot discern is
the effect of models and systems in perpetuating beliefs, as well as political
narratives and shaping behavioural patterns in ways that deeply influence the
course of events in society at large. Since the mid-1980s, vast swaths of the world
and humanity including, in particular, Western countries and the US have lived
under the constellation of a skewed model; one which prizes material success
and primes one set of values above all else. The embodiment or archetype of this
overarching model points to Homo Economicus. (Kim & Argyriades, 2015:424-425)
With Homo Economicus, the Market Model of Governance signalled the rapid
advance of economists, accountants and management consultants, where
previously psychologists, sociologists, lawyers and administrators had been
manifestly in charge. With the 3Es ascendant, all other values rapidly receded to
the background. The “pragmatists” prevailed, claiming that they knew better and
were mindful, in particular, of the “bottom line”.
With galloping disparities and maladministration, which trailed the
Market Model, important shifts of power vouchsafed to a small minority
decision-making influence out of all proportion to the numbers it represented. It
was “the economy, stupid!”, as Bill Clinton liked to say. This carried in its wake or
definitely favoured some of the salient features of the New Public Management
(NPM): support of those in power, intolerance of dissent (“let the Managers
manage!”), a “pragmatist” dislike for “theoretical” issues bereft of “practical”
value, coupled with a penchant for measurable outputs. A slogan said it all.
“What I cannot measure, I cannot manage”. There was also “results over process”,
which posits that success at any price trumps decency and due process. That
such results were skewed to favour very few, the pragmatists dismissed as
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
“value-laden”, as overly “theoretical”; arguably, open to “moral” inquiry but not
to quantification and, for this very reason, to corrective action accordingly.
Indeed, it must be admitted that “ethics”, in the form of probity and integrity, has
loomed large in the narratives of NPM and related policy initiatives; but this has
mainly occurred in the fighting of corruption, which has grown exponentially
around the world. Ethics has been interpreted as mostly a drive to enforce
transparency with accountability in the workplace and as compliance with
orders.
With this new set of values, came a new Model of Man. It is conspicuously
at variance with models which prevailed from the 18th century onwards, through
to the 1970s. As pointed out, already the new “neo-liberal” model features Homo
Economicus, an “independent contractor” and “entrepreneur of self ” (Kim &
Argyriades, 2015: 425). Averse to all forms of “collectivism”, the Homo Economicus
prefers to be “own his own”. Hostile to social welfare provided by the
government, he is also mostly averse to public personnel policies, which take a
long-term view of people and their needs. The entrepreneurial model rejects
career development “as pampering pen-pushers”, and as not cost-effective.
Equating civil servants with “bureaucrats” cast aspersion on the “civil” as
contrasted to the “military” in the public sphere. It certainly took umbrage at
public sector unions. The antics of some unions have certainly exacerbated such
negative reactions to public sector unions from segments of society (MPM-GEPS,
2018:176-182). Still, viewing men and women as “resources” has meant that the
employers’ duty to the employee was strictly co-extensive with the latter’s offer
of services. “At will” employment practices and automatic severance upon
retirement, dismissal or layoff were logical corollaries of “lean and mean”,
minding the “bottom line” and “protecting the taxpayer”; this notwithstanding
the fact that taxpayers include a sizeable number of public employees, as well as
“first responders” in their ranks (MPM-GEPS, 2018).
There can be little doubt that Homo Economicus, in one of many versions,
elicited support from NPM, with narratives and literature contributing
substantially to a new, minimalistic approach to public personnel management.
“Reductionism” was in: from reduction of the notion of the common good, to
concepts like morale and motivation (Dwivedi et al., 2007: 121). Reduced to mere
“resources” meant that humans were disposable; ephemeral and viewed in
instrumental terms (Argyriades, 2010: 73-104; Argyriades, 2005: 86-102). Though,
to be sure, their skills, morale and motivation are what would matter most when
they are hired, they are employed “at will”. They can be “fired” at will, when
circumstances change or a pandemic strikes and their utility falters. Priming the
“bottom line”; reluctance to commit to long-term contracts and take
responsibility for people and their families over the long-haul become the signal
Employment is more than a job. It is the essential pedestal underpinning social inclusion and democracy itself
Argyriades, D.
15
features of this newer trend and pattern in Human Resource Management. It claims
to be “pragmatic” but really takes no cognizance or very little note of either
human needs or human career development, in all their rich diversity. “Work and
the Nature of Man” (Herzberg, 1966): employment as empowerment; as active
participation in the productive process; work as form of inclusion, as well as job
security and needed structure receded to the background, as the twentieth
century drew to its close.
For more than three decades, Homo Economicus has reigned supreme. He
carried in his trail “outsourcing” and privatization: policies and practices, which
spread like wildfire world-wide, both to the public and the non-profit sectors.
Even sensitive areas of government like Defence and Foreign Affairs have not
been spared, in spite of sub-optimal outcomes (Stanger, 2009). That we persist
with such minimalistic notions of human resource management is consonant, in
fact, with neoliberal views not merely of Society but also of Human Nature and
Human Rights (Sen, 2009:361-364). “Humans” are viewed essentially as
incidental to the process of production and economic activity; “as factors of
production”. This means that what they are worth may also come and go.
Though, to be sure, their skills, input and “needs” are noted and rewarded, they
must be subordinated to economic criteria and a cost-benefit calculus. A far cry
from the days of Mayo, Rothlisberger, Maslow, McGregor and Herzberg, as well
as Herbert Simon and Mary Parker Follett (Mosher, 1981:207-287), Human
Resource Management appears to cling to theories more in tune with private
sector practice than with traditional concepts of public service, national or
international. The litmus test remains: how consonant these practices may be
considered to be with widely accepted values and democratic principles.
Increasingly, moreover, we come to recognize that findings of research on “Work
and the Nature of Man” have been both contradictory and inconclusive. So far,
they have mostly proved unable to sway deeply ingrained assumptions,
stereotypes and belief systems propounded and upheld by powerful vested
interests (Tingle, 2018; Herzberg, 1966).
Models and systems change. They emerge, they rise and fall – all for a
reason; we need to fathom why. This paper tries to argue that, in exploring
causes, a systems approach is needed; in-depth historical studies, as well as
“numbers-crunching”. In one-and-a-half centuries, since Woodrow Wilson’s
study of Public Administration and close to a hundred years after Max Weber’s
analysis of Bureaucracy in Wirtschaft und Gesellschaft, we have seen shift before us
three very dissimilar Models of Public Administration and Public Service
Management but, also and most importantly, different Models of Government,
Society and Man (Weber, 1947). We started from the Enlightenment and from the
18th century. During the 19th century, this rationalist model received renewed
Social Inclusion and the Future of Work
16
Sánchez-Gutiérrez, J. & González-Alvarado, T.
attention from lawyers and engineers, notably at the height of the Industrial
Revolution. After the First World War, it was reshaped perceptibly. It morphed
into a new model now fashioned by psychologists, sociologists and social
anthropologists. It primed human behaviour, interpersonal relations and a range
of human needs, as most important factors in enhancing motivation and
performance in the workplace.
Quite suddenly in the 1980’s and 1990s’, this model came under attack. It
was declared obsolete. With Homo Economicus in the ascendant, economists,
accountants and management consultants took charge of the debate. Because we
must admit that human nature changes but not so fast, we must conclude that
other major factors have been at play. During the 1930’s, this in fact had been the
outcome of the famous Hawthorne Studies (1927-1932), which paved the way for
the rise and triumph of the Human Relations Movement. HRM, as it was known,
focused on the Human Factor. It shifted the focus of management, away from
techniques and equipment to the social dimensions of work. Away from
command and compliance, away from hierarchy and discipline, it focused on
morale and motivation, as keys to good performance. It primed participation,
inclusion in the workplace, interpersonal relations, development and growth.
Predicated on the assumptions of the Homo Economicus, the model that
prevailed with the New Public Management also primes the human factor, but
only instrumentally, as a “resource” contingent upon need, for a limited period of
time. The employee’s development is not a prime concern, especially in the case
of “independent contractors”, who come and go “at will”. We have seen how “at
will” plays out at times of crisis or in pandemics, like now. Critically, however,
the focus of attention has recently shifted away from the employee to principal
stakeholders: the CEOs, of course, top management, shareholders, important
sponsors, donors and other VIPs, whose influence and support are eagerly
solicited. Their names are featured prominently in the titles of institutions like
universities, hospitals, colleges and concert halls. In the West, they are called
“philanthropists”. In parts of the East, by contrast, they morph into “oligarchs”,
whenever their pronouncements or actions are seen as being at variance with
“Western” national interests (Kantchev & Simmons, 2020: A9).
It is a pattern of governance – and management – which is increasingly
challenged in our own days. It has been criticized on grounds of distributive
justice and democratic principle but also of its reliance on instrumental reason,
utilitarian ethics and reductionist approaches to both work and the complex
nature of Man. Likewise, it is taken to task for failures to consider a range of
societal and human needs. Its merits are disputed by those who value equity and
the community most. They search for a model of governance and public
administration that pays more than lip service to their foundation principles of
Employment is more than a job. It is the essential pedestal underpinning social inclusion and democracy itself
Argyriades, D.
17
liberty, equality and fraternity or solidarity. In light of growing disparities within
and between nations, as well as the numerous flaws and maladministration these
carry in their trail, many are calling for change, which should be more than
decorative and more than scratch the surface. They call for a paradigm shift. They
call for a new model; one that fully takes account of the systemic properties in
governance, society and the economy, as well as a new model of public service
management; a model that respects human nature, in all its rich diversity and
“leaves no one behind”.
CONCLUSIONS: WHAT LESSONS CAN WE DRAW?
“Too good a crisis to waste”, or words to this effect has been a current
expression among some party activists in the United States. Truly an oxymoron, it
points to the expectation of short-term political gain that may flow from the
crisis, if it is “used” judiciously, from a party-political standpoint. The author of
this paper will use it, nonetheless, to articulate the hope that some good may
come out of this challenging experience of a pandemic unique both in its
virulence and spread of its effects. Unevenly, the crisis brought into sharp relief
the inequities and flaws of the model and system of governance that have been in
place since the mid-nineteen eighties. Both have been calculated to optimize the
prospects and conditions for wealth creation and advance in a number of areas
like science, technology and war. They represent a system which vouchsafes to a
very few what it denies to many: access to wealth and clout with potential to
secure, for one’s descendants mostly, enormous assets and influence. Not only, in
other words, is this particular system geared to concentrating wealth in the
hands of very few but also, making sure that the system and its outcomes will
tend to be irreversible. The system offers freedom to an elite but is manifestly
deficient when it comes to securing equality and the necessary measure of
protection and predictability to all citizens and residents. Equality with justice
have, since the Age of Lights, been viewed as cardinal virtues of democracy and
good governance; moreover seen as such since the golden age of Athens and the
writing of the Proverbs (31-9). That such values are not obsolete but embedded in
our culture, the remarkable response of New York civil society demonstrated in
many ways, when the pandemic struck.
What the crisis also showed is how unevenly the costs of responding to
the pandemic -- or to any crisis in fact – turn out to be distributed when to a
democracy deficit is added a lack of capacity to shield and to provide for the
weakest and the most vulnerable (Dror, 2001). That barely 30 per cent of the total
population bore the brunt of the burden of coping with the pandemic; indeed,
that 80 per cent of all police arrests related to the enforcement of social distancing
in New York, targeted blacks and Hispanics can hardly be an accident. It points
Social Inclusion and the Future of Work
18
Sánchez-Gutiérrez, J. & González-Alvarado, T.
to a system failure with deep historical roots. (Krugman, 2020:103-169;
Frederickson & Ghere, 2013)
The paper tried to show that, though the very nature of the pandemic was
such that no one government agency might have it in its power to swiftly stop
from spreading and to contain, emergency preparedness and sound contingency
planning left much to be desired. Both represent critical responsibilities that
government, on any level, cannot afford to abjure, neglect or outsource. We are
talking of the Public Space (Timsit, 2013:23-33; Ktistaki, 2013:35-69).
Governments, by their very nature, are both the first responders and help of
last resort. Often used by Harry Truman, the words “The Buck Stops Here” take
on a special salience, when it comes to the functions of government, at times of
crisis especially. We live, it has been argued, in an “age of
discontinuity” (Drucker, 1968). Uncertainty, in our days, is greatly exacerbated by
climate change which, lack of cooperation among the world’s Great Powers, is
turning into a menace to our Planet and humanity. Other than the obvious need
for international governance and inter-governmental collaboration in all spheres
of activity, the merits of long-term strategic planning, pluri-disciplinary studies
and holistic approaches to issues in critical current affairs stand out as of the
essence. They marked the Marshall Plan and Development Decades of an Age of
Reconstruction after WWII; they were abandoned later in the 1980s and 1990s.
(World Bank, 1994:xvi)
Notoriously, the challenges, to which the world at large must now focus
attention, require such all-encompassing strategic planning. They straddle many
disciplines and touch on diverse needs. The COVID-19 crisis may be a good
example. Not only Health Commissioners and epidemiologists, but also urban
planners, lawyers, public managers, economists and educators were asked to
lend a hand. To bring all these together demands more than good leadership,
important though this is. It calls for systems-thinking and corresponding
structures; capacity to govern, which in short supply, because what it requires is
coping with complexity and problem-solving skills. It calls for keen awareness of
the present task environment; of constraints and opportunities it offers, with both
the past and future always in mind. (Dror, 2017, 2014, 2001, 1986)
One may hope that, in due course, multi-disciplinary studies and cross-
sectoral research will explore the many facets of this unique experience, which
shook us to the core. It brought out strengths and weaknesses; the bright and
darker sides of governance and public administration. On the upside, the way in
which society, across the board, has rallied to the challenge, easing the
government’s tasks, represents a hopeful message. Yet even during this crisis,
dark shadows from the past were not slow to re-emerge. Ostensibly, in
“Philanthropy, Race is Still a Factor in Who Gets What” (The New York Times,
Employment is more than a job. It is the essential pedestal underpinning social inclusion and democracy itself
Argyriades, D.
19
2020). It cannot be denied that also the government rallied although, given the
novelty and complexity of the challenge, the marks of some confusion and lack
of advance planning became visible throughout. In an election year, the tendency
and temptation to weaponize the virus gave vent to the “blame game”, which
still goes strong.
How all this plays out and what the virus pandemic eventually brings in
its trail, it may still be too soon to tell. Whether, to be specific, it leads to more
strategic, more science-based and democratic governance, to a more progressive
society and more inclusive communities remain to be seen. For now, it may be
argued that the country and the world stand at a watershed. The virus and the
crisis exposed for all the see a broken model of governance and, underpinning this
model, a one-dimensional vision of the economy and society, world-wide (Kim,
2019: xi-xxv; Newland & Argyriades, 2019:1-30; Pichardo & Argyriades,
2010:15-19, 47-104, 329-341).
Politically articulated by Reagan, Thatcher and others, in the 1980’s and
1990’s, the Market Model of Governance represented an attack on the
Administrative State and the Progressive Movement, which gave us Social
Protection and the Public Service Profession, the way we have come to know
them in our days. The former it attempted to privatize, proclaiming its intention
to “get the government off the backs of the people” and to promote a
“Government that Worked Better and Cost Less” (Hood & Dixon, 2015).
With close to forty years of this Market Model at work, it cannot be
sustained that these goals have been attained. Not even size and cost have been
reduced appreciably. Simply, priorities changed and the narratives have been
revised to explain and justify a pivot from welfare to warfare. In fostering the
objective of “a government that cost less and worked better”, the Market Model
primed “deregulation” in tandem with downsizing and outsourcing. Ostensibly
in pursuit of efficiency and effectiveness, these strategies were carried to great
lengths. It is hardly accidental that, when the virus struck, the only part of
government with needed strategic reserves were the Armed Forces.
What will the “new norm” be? Will our collective experience of the
pandemic lead us to revisit and revalue our institutions and the ways our
governance works? Will it force us to revisit and revalue the Administrative State
and government priorities, as these evolved from the early 1980’s until to date?
The Gospel of Efficiency, as Waldo has described it (Mosher, 1981: 61-63), gained
momentum in the trail of the expanding tasks of government with the New Deal,
during the 1930s. It came with “faith in Science” (ibid) but also faith in government
and the virtue of public service. (DeVries & Kim, 2014)
Paradoxically, in the eighties and at the turn of the century, a new ideology
surged that looked at the State as the enemy and at state regulation as, in von
Social Inclusion and the Future of Work
20
Sánchez-Gutiérrez, J. & González-Alvarado, T.
Hayek’s words, “The Road to Serfdom”. Efficiency and effectiveness became
goods in themselves. They trumped all other values (Harlow, 2001). With
“instrumental reason”, claims of intrinsic value were discounted or dismissed.
Even respect for truth and “speaking truth to power” were now questioned and
subjected to criteria of expediency, utility and effectiveness. Highly
particularistic, predicated on utility, such values and such logic have not availed
the public space where, historically, other standards and criteria had prevailed
(Sen, 2009: 361-364). Hallowed over the centuries, values in Education (Paedeia)
and public service have seemed to fade away, discounted or dismissed by Homo
Economicus, if they could not contribute to gain in money terms (Hitz 2020). This
reductionist approach inter alia entailed erosion not only of public service, but
also public trust (Newland, 2015:39-68; Kim & Argyriades, 2015:422-426; Caiden &
Caiden, 2002).
It underpinned, moreover, the surge of Social Darwinism, which may have
been a factor, as well as well as possible outcome in both the huge disparities,
that have not ceased to grow, and endless foreign wars. In the eyes of the elites,
unfettered gain and power represent god-given rights; entitlements for self that
must be perpetuated. The Neo-conservative Project for the New American
Century (https://en.wikipedia.org) represented an expression of this mindset
and approach. Upended by the virus, utilitarian values and instrumental reason
may yet attempt a comeback. Social Darwinism, encapsulated in Mrs. Thatcher’s
adage that “society does not exist,” may likewise reappear when the crisis has
receded. For all who prize Community, the Administrative State, and democratic
values with SDG16, it is time to stay alert and work towards return to more
inclusive governance, nationally and internationally. (Mazower, 2012)
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Innovation for the Future of
National Well-Being
Emma-Frida Galicia-Haro
Instituto Politécnico Nacional, Mexico
Ana-Lilia Coria-Páez
Instituto Politécnico Nacional, Mexico
Irma-Cecilia Ortega-Moreno
Instituto Politécnico Nacional, Mexico
INTRODUCTION
he existence of a social phenomenon that impacts the security of
nations, represented by violence and the difficulty of facing it efficiently
by countries, joins the current context of low growth and widening of
the inequalities experienced by the world economy. The role of
innovation, therefore, presents increasing importance in the present and future of
national well-being.
The economic impact of this situation worldwide was US $ 14.76 billion in
2017, measured at constant prices of purchasing power parity (PPP), equivalent
to 12.4% of world GDP or US $ 1,988 per person and annual growth of 2.1%, and
which maintains a growing trend since 2012 (Institute for Economics & Peace,
2019) as can be seen in Figure 1.
The largest expenditure incurred as a result of this was the global military
expenditure, which amounted to the US $ 5.5 billion measured with the PPP,
which represents 37% of the total in 2017.
The second refers to internal security expenditure, which includes
expenditures on the police and judicial systems, as well as the indirect costs
associated with imprisonment, which covers 27.4% with the US $ 3.8 billion and
homicides the third component of violence with 16.6%.
T
Innovation for the Future of National Well Being
Galicia-Haro, E.; Coria-Páez, A. & Ortega-Moreno, I.
25
Figure 1. Global trend of the economic impact of violence
Source: Institute for Economics & Peace, 2018.
By regions (See Figure 2), the economic costs of violence are concentrated
in violent crime and homicide, which represent 71% of the economic cost in
South America, 65% in Central America, and the Caribbean, and only 15 % in the
Asia-Pacific region. In contrast, military spending is more than 45% in Asia-
Pacific and North America, compared to 5% in Central America and the
Caribbean.
The proportions of internal security spending also vary significantly
between the region with the highest spending (Europe) and the region with the
lowest spending (South America) (Institute for Economics & Peace, 2018).
Technological innovation has been in most studies conceived as the
application of science and technology to a new or improved product, process,
marketing, or organizational method used in the company or that is introduced
in the market (Schumpeter, 1944; OECD, 2005).
Social Inclusion and the Future of Work
26
Sánchez-Gutiérrez, J. & González-Alvarado, T.
Figure 2. Cost of violence by region
Source: Institute for Economics & Peace, 2018.
And knowledge or learning is an essential element in innovation (Arrow,
1962; Jaffe, 1989) since every new creation comes from what "people do" (Romer,
1994, page 12). There is a large scientific production that addresses the
questioning of the existence of regions with different levels of innovation that
inquire about the behavior of these two fundamental elements.
Multiple studies prove the great association between technology and
knowledge as drivers of innovation in both advanced countries, as well as the
numerous references to the European Union (Buesa, Heijs, & Baumert, 2010;
Charlot, Crescenzi, & Musolesi, 2015; Guastella & van Oort, 2015; Miguélez &
Moreno, 2015; Rodriguez-Pose & di Cataldo, 2015; and Sanso-Navarro & Vera-
Cabello, 2018), and cases such as Russia (Crescenzi & Jaax, 2017), and the United
States (Kang & Dall'erba, 2016a, 2016b), as in others of less development
(Samandar Ali Eshtehardi, Bagheri, & Di Minin, 2017).
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27
They have shown that it is exceptional that both variables present similar
behaviors as in the case of the European Union (Charlot et al., 2015; Sanso-
Navarro & Vera-Cabello, 2018).
There is evidence that one of the two presents better performance either in
R&D (Guastella & van Oort, 2015; Rodriguez-Pose & di Cataldo, 2015) and
specifically the action of business R&D (Samandar, Eshtehardi, Kamran, & Di,
2017), or human capital (Buesa et al., 2010; Miguélez & Moreno, 2015).
There are others where it is shown that one of the two does not present
significance in the creation of innovation as in the case of universities in Russia
(Crescenzi & Jaax, 2017).
More recently, the approach has incorporated into these models that both
technological advancement and knowledge require the existence of a favorable
environment for its development (Jaffe, 1989; Porter, Furman, & Stern, 2000).
Those models incorporate a third composite element for the coincidence of
governmental, business, social and cultural actors that together create a climate
conducive to the development not only of innovation but of competitiveness and
economic growth in specific places.
There is evidence that violence or fear of abuse may result in some
economic activities not occurring at all (Brauer and Tepper-Marlin, 2009 cited by
Institute for Economics & Peace, 2018). That may fundamentally alter business
incentives, as in Colombia that between 1997 and 2001 faced with the highest
levels of violence, new companies were less likely to survive and make a profit
(Institute for Economics & Peace, 2018), which consequently affects long-term
growth and therefore to the welfare of societies.
The origin of the study of differences in growth from the local goes back to
the definition of Marshall (1931) of industrial districts as the "concentrations of
specialized sectors in a specific locality" that favor appropriate labor markets,
suppliers, and even a favorable environment.
For Porter, Furman, & Stern (2000), innovation plays a central role in
national and regional competitiveness, which implies identifying how a
government provides an environment in which its companies can improve and
innovate more quickly than their foreign rivals, in a specific sector.
The importance of innovation at the regional level arises with the study of
the participation of a variety of actors and internal and external factors to
companies that interact with each other (Dosi, 1988), such as the development of
collaborations within a geographical area where there are organizations that
build and disseminate knowledge, agencies that transfer technology, and a
culture of innovation that involves companies and the system as a whole
(Doloreux, & Parto, 2004).
Social Inclusion and the Future of Work
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Thus, Rodríguez-Pose & Wilkie, (2016) study the importance of making
local institutions and society supporters of innovation; Meanwhile, Valdéz
Lafarga & Balderrama (2015) and Hudec & Prochádzková (2015), highlight
having a government quality concerned with preventing corruption, maintaining
the rule of law and improving its efficiency.
Academic interest in the subject is also in the condition of the
competitiveness of achieving better standards of living for its population,
introducing the importance of the favorable role of the institutions that come
from Dosi studies, (1988); Stern, Porter & Furman, (2000); and Doloreux and
Parto, (2004) who highlight the relevant role of the government as a guarantor of
market protection, the stimulation of interactions that promote learning and the
exchange of knowledge and the existence of policies, social and business groups
favorable to Competitiveness and innovation improvements.
The difficulty of measuring the environment is addressed by Stern, Porter
& Furman (2000) who recognize that the common innovation infrastructure is
quite susceptible to measurement but that capturing the aggregate environment
for innovation in a nation's industrial groups is difficult because of both the
subtlety of the concepts involved and the lack of systematic international data.
In studies carried out in Mexico, one of the factors that appear most in the
investigation of the determinants of innovation is the importance of the
environment and with it the governmental efficiency and the socioeconomic
conditions, (Rodríguez-Pose & Villarreal, 2015; Rodríguez-Pose & Wilkie, 2016;
Pérez, Lara, & Gómez, 2017; Ríos & Ocegueda, 2018)
Given the theoretical importance that in various studies maintain the
favorable conditions of the environment in which innovation is developed and
the uncertainty about the effects that adverse conditions may have on it, the
relevance of having approximations to this issue are framed in the strategic
intervention of Companies, which may be affected. Taking into account that in
1990, for example, companies financed between 40 and 60 percent of R&D in
most of the most developed countries and that in Japan and Switzerland
companies financed more than 70 percent of the R&D expenditure (Porter, 2003).
OBJECTIVE
Identify the adverse effects of violence and crime on innovation in developed
and emerging countries. The 5 most competitive countries in the world,
Switzerland, Singapore, United States, Finland, and Germany were included; in
front of 5 nations in Latin America, Panama, Costa Rica, Mexico, Brazil, and
Peru. The information source of the 8 variables was the Global Competitiveness
Index (ICG) of the WEF for the period 2011-2016, the method applied was the
Innovation for the Future of National Well Being
Galicia-Haro, E.; Coria-Páez, A. & Ortega-Moreno, I.
29
econometric panel data and as a theoretical reference the endogenous growth
theory.
The selected variables were:
As dependent variable patents.
As regressors, those corresponding to 2 essential indicators in the
theoretical bases of the new theory of growth, business expenditure on R&D and
availability of scientists and engineers, and two variables grouped determinants
of the institutional environment and determinants of government performance.
The institutional environment constituted by commercial costs of
terrorism, commercial costs of crime and violence, organized crime, and ethical
behavior of companies. Government performance by waste of public spending
and burden of government regulation.
The general hypothesis is that the variables corresponding to the
technological advancement components (business expenditure on R&D) and
knowledge (availability of scientists and engineers) have a positive and
significant influence on innovation, while the variables grouped institutional
environment and Government performance determinants have a negative and
significant influence when there are conditions of violence or inefficiency on
innovation measured as the increase in the creation of patents.
METHOD
The application of this proposal is done through a quantitative methodology that
allows us to provide an objective approximation of the differentiated effect that
two representative variables of the endogenous growth theory have: R&D and
knowledge, and four representatives of the environment characterized by
violence, corruption, and Government efficiency.
The first corresponds to pillar 12 called innovation, which according to its
methodology focuses on technological innovation and knowledge construction,
while the rest are in pillar 1: Institutions (World Economic Forum, 2011-2017).
The approach is based on the method of econometric research that allows
integrating the proposals of economic theory and the empirical measurement of
economic phenomena, using as a link to statistical inference as one of the
definitions of econometrics points out “the quantitative analysis of economic
phenomena real, based on the simultaneous development of theory and
observation, related by appropriate methods of inference”(Gujarati & Porter,
2010).
A multiple panel data regression model represented by a data set that
integrates a time dimension and a cross-sectional dimension of individuals has
been used. Considered adequate since it takes into account these indicators that
provide information on the degree of effectiveness that the explanatory have on
Social Inclusion and the Future of Work
30
Sánchez-Gutiérrez, J. & González-Alvarado, T.
the creation of knowledge, by overcoming the problems presented by simple
linear regressions that prevent the study of individual effects, and the
overcoming of the inconsistency and the possibility of unbiased estimators
(Labra, & Torrecillas, 2014).
That is, there are repeated observations over time of a selected group of
individual units. The regression analysis obtained describes the change of the
mean in the different subgroups of the population specified by the values of the
regressors, which allows estimating multiple regression coefficients that would
not be possible with only cross-sectional data or series data only. temporary
(Arellano, 1992).
Baltagi (mentioned by Gujarati, 2010) points out among the advantages of
these models the presence of heterogeneity given the existence of specific
variables per subject; and due to its transversality, a greater amount of
informative data is obtained, more variability, less collinearity between variables,
more degrees of freedom, and greater efficiency; allowing to study more complex
behaviors.
In this type of econometric approximation, several types of panel data
models located, the ones considered most common, are the so-called fixed effects
and the so-called random effects.
Fixed effects should be used when the existence of unobservable
heterogeneity between each of the units of analysis is assumed, and they do not
change over time (they remain fixed). That is, a fixed-effects model examines
group differences in interceptions, assuming the same slopes and constant
variation between entities or subjects.
Random effects are appropriate when the observed effect can be
characterized as randomly drawn from a given population if the unobserved
effect is distributed independently of the variables xi (Dougherty, 2016).
From this longitudinal cross-section database, it is possible to identify the
behavior of the 5 nations with the best performance in competitiveness,
compared to the behavior registered by 5 Latin American economies studied
throughout the period from 2011 to 2017. The development of the model used
STATA 12.0 software.
The model used was as follows:
p𝒂𝒕𝒆𝒏𝒊𝒕 = 𝜶𝟎 + 𝜷𝟏 spendRD 𝒊𝒕 + 𝜷𝟐 AvailCEi𝒕 + 𝜷𝟑 EntInstvio𝒊𝒕+
𝜷𝟒 Entinstgub𝒊𝒕 + 𝒖𝒊𝒕
Where it means:
patent value registered by the patents of each country
spendRD business spending on R&D
Innovation for the Future of National Well Being
Galicia-Haro, E.; Coria-Páez, A. & Ortega-Moreno, I.
31
AvailCE availability of scientists and engineers
EntInstvio Institutional Entity
Entinstgub government performance
RESULTS
The general characteristics of the model correspond to a strongly balanced panel
based on the fact that there is no loss of information on the seven variables
included in each group of 5 nations for the period 2011-2017.
Being competitive nations with different levels of development, with very
diverse social and cultural profiles, it is possible to assume the existence of
heterogeneity not observable in Latin American countries, not derived from the
model variables between each of the countries.
While given the characteristics of uncertainty and wide lapses in the
generation of innovation, it is assumed that unobservable effects do not change
over time, which gives the pattern to assume that fixed effects (FE) will be the
model that best suits adapt to this group.
When carrying out the autocorrelation and heteroscedasticity tests, the
existence of both was verified, so to correct them, the estimators with Standard
Corrected Errors for Panel (PCSE) were considered, correcting the model. The
results are presented in Table No. 1
In the present study it is observed that in the case of the two groups of
countries, the expenditure of companies in research and development has a
positive influence and is the most significant variable in both models, with a
direct relationship towards the creation of patents.
In the group of more developed the concentration of pertinent quantities
of human resources, materials and efficient suppliers maintains the results
obtained in recent empirical studies in particular of the European Union as
detailed above.
In the case of the variable taken as a reference of knowledge, the
availability of scientists and engineers is positive and significant at 10%
confidence in the most competitive countries, which is also consistent with
previous studies. On the contrary, in Latin Americans, the influence is positive
but not significant.
These two variables have a behavior similar to that indicated in the
empirical studies that state that it is unlikely to find similar behaviors in both
variables.
Social Inclusion and the Future of Work
32
Sánchez-Gutiérrez, J. & González-Alvarado, T.
Table 1. Panel data estimates with corrected standard errors
Source: Own elaboration using Stata 12.
The result obtained in the pooled indicator related to the institutional
environment regarding violence in the most competitive countries has a positive
influence since its measurement is carried out based on an assessment that is
high to the extent that the violent environment is poorly perceived.
Moreover, it positively influences the performance of the country and falls
if it influences adversely, its expected result confirmed as significant. In Latin
American countries, the influence is harmful for a reason stated above on the
valuation of this environment, which reinforces the empirical evidence that
points to nations with high quality in the operation of policies that strengthen the
peace and state environments of law as those that best create adequate conditions
for the development of innovation.
In the case of the grouped variable that assesses government efficiency in
both groups, it is negative. What implies that respondents observe a lack of
efficiency and waste in government action with the fundamental difference that
those developed do not present significance as long as in Latin Americans.
Variables
PCSE
PCSE
patent
More competitive
Latin American
spendRD
130.4067
1.5259
0.0000
0.0000
AvailCE
25.4921
0.1186
0.0910
0.6580
EntInstvio
41.6942
-0.1654
0.0260
0.4070
Entinsgub
-16.5233
-1.0790
0.2260
0.0000
_cons
-801.0281
-0.1995
0.0000
0.8420
R2
0.6050
0.6155
Number of
countries
5
5
Number of
observations
35
35
Innovation for the Future of National Well Being
Galicia-Haro, E.; Coria-Páez, A. & Ortega-Moreno, I.
33
In the case of the grouped variable government efficiency in both groups,
it is negative, implies that respondents observe a lack of efficiency and waste in
government action. The difference is that those developed do not present
significance as long as in Latin Americans, yes, it is.
On the other hand, the variable that has the greatest positive impact on
innovation is the private expenditure on R&D that is consistent with the
empirical evidence both in countries with higher performance and in those with
lower economic progress as indicated by Schumpeter, (1992); Solow, (1957);
Arrow, (1962); Freeman, Chris & Soete, (1997) and Dosi, (1988) and empirically
the studies of Kang & Dall’erba, (2016) and Samandar Ali Eshtehardi, Bagheri, &
Di Minin, (2017)
Likewise, in the case of high-specialty human capital, what is indicated by
Arrow, (1962); Pavitt, (2016); Freeman, (1997); Romer, (1994); Nelson & Winter,
(1982) on the great influence that this driver of innovation has in particular in the
more developed countries compared to the smaller and conditioned ones, to
have high-quality institutions, in the countries of lesser development.
The statistical results of the model show a slightly higher adjustment
(61%) in both cases. What allows us to identify some behaviors that reiterate the
need for policies that attend, not only to the important human aspect but also, to
the adverse effect it has when curbing innovation.
From the general hypothesis that the innovation measured by the
coefficient registered in patents in the WEF report, was positively and
significantly influenced by the expenditure of business in R&D is valid for both
groups of countries. While the availability of scientists and engineers is only
accepted at 10% confidence in the group of the most competitive, in Latin
Americans it cannot be verified as it is not significant.
The results of the institutional environment characterized by violence
show that, in effect, the countries with the lowest records of terrorist acts, crimes,
and acts of violence, as well as the existence of organized crime and good ethical
behavior of companies, correspond to nations with greater competitive
performances and that its result is significant for the increase in the creation of
patents.
The opposite happens in Latin American countries where the result is an
opposite impulse in which the greater increase causes less growth in the creation
of patents without significance for the explanation of their creation.
In the case of the grouped variable of government performance, the results
are similar in the two groups, the inefficient adverse performance of the
government is perceived that plays against the creation of patents, however, in
the developed ones the impact is of greater weight but It is not significant, in
Latin Americans, on the contrary, the weight is less and very significant.
Social Inclusion and the Future of Work
34
Sánchez-Gutiérrez, J. & González-Alvarado, T.
It is interesting, in this variable, to observe that in the most competitive
countries the greatest impact, being positive and significant, is in the institutional
environment and even when inefficient government performance is reflected, the
impact is less. While in Latin Americans the greatest negative effect on
innovation comes from the inefficiencies of the government rather than the
effects of the violent institutional environment.
CONCLUSIONS
The drivers of innovation, technological advancement, and knowledge even in
adverse environmental conditions maintain their positive momentum in favor of
the growth of innovation.
The element with the best performance is the technological progress,
observed in both blocks of countries with the particularity of concentrating on
the expenditure made by the businesses. Knowledge is driving only in advanced
nations; in Latin American countries it seems to have the obstacle indicated in
previous research of the lack of high-quality research centers linked to the
productive sector.
Although the results point to the verification that the existence of adverse
conditions both in the social environment and in the operation of governments
negatively affects the progress of innovation, it is necessary to deepen the issue
of the effects that violence and corruption has one of the most important
components of competitiveness.
To be able to analyze with more detailed information the components of
the commercial costs of terrorism, organized crime, and the ethical behavior of
companies, it may give greater elements not only to combat existing phenomena
but to curb their expansion and prevent their onset.
To the low government performance due to waste of public spending, the
economic valuations of corruption should be added to provide objective
elements to the current debate that faces the proposals of whether this is the
biggest and most significant problem that slows the growth of smaller nations
development.
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Socioeconomic Development:
The Steel like a Crucial Key
Lourdes-Fabiola Espinoza-Parada
Universidad Autónoma de Nuevo León, Mexico
Rosario-Lucero Cavazos-Salazar
Universidad Autónoma de Nuevo León, Mexico
Jesús-Gerardo Cruz-Álvarez
Universidad Autónoma de Nuevo León, Mexico
INTRODUCTION
o measure socioeconomic development and standard of living in any
country, the level of per capita steel consumption is treated as one of the
most important rates (Pervej & Anjum, 2017).
According to Mitra & Dilip (2010), the steel industry is crucial for
the development of any economy and is considered to be fundamental support
for human civilization.
Steel is a product that has a large technologically complex industry with
processes that represent great challenges forward and backward links in terms of
material flows and income generation. It has been the key material with which
the world is in continuous development. It is also essential for a world with a
strong need for transportation, construction, housing, and power generation.
Worldwide, according to the World Steel Association (2018), the steel
industry ranks second, after oil and gas, with a gross steel production volume of
1.689 billion tons.
In Figure 1. The evolution of international raw steel production from 1950
to 2017 can be observed, where we can find a gradual increase over the years,
which raises the relevance of this industry in both international and national in
any country.
T
Socioeconomic Development: The Steel like a Crucial Key
Espinoza-Parada, L.; Cavazos-Salazar, R. & Cruz-Álvarez, J.
39
Figure 1. Raw steel production 1950 to 2017 (Millions of tons)
Source: Own elaboration in support with World Steel Association (2018).
According to the sustainability indicators data of the World Steel
Association on 2016, based on 125 steel companies and 6 associations, the steel
industry is essential in every sector of the economy because the new products of
steel are lighter and stronger than before, contributing other industries to
decrease their environmental footprint.
Likewise, this industry adopted responsibility measures because of the
environmental regulations are a requirement for acceptance by society to
continuously reduce the environmental impact. In 2016, it contributed around
1.029 billion dollars, 98.8% of its income, to society, directly and indirectly.
Human capital is a key asset worldwide, 6 million people work for the
steel industry. In 2016, steel companies provided each employee with 7.0 days of
training on average. This has also worked to achieve zero incidents with a
frequency rate of 1.0 an improvement of 78% since 2006.
Likewise, as Romanian-German (2016) mentions, the steel sector currently
has an important place throughout society, since its demand is very wide and the
momentum of the global economy favors its imports and exports, but its
maintenance It depends on the identification of new production and alloy
techniques, to guarantee the reduction of production costs in the midst of
improving the properties and utility of steel.
Ocheri and others (2017) in its studies indicate that the steel industry will
continue to serve as a stimulus for the national development of a country since
the benefits of having a functional steel industry will translate into a country
Social Inclusion and the Future of Work
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
with a greater economic contribution. It should also be noted that the steel sector
will contribute to all facets of the economy.
In 2017, according to the World Steel Association, the production of raw
steel in the world growth 6% compared to 2016. Most of the countries reported
positive growth, highlighting Vietnam that went from 5 million to 10, Turkey
with a growth of 13%, Argentina and Brazil with 12% and 10% respectively, and
finally China, India, and Mexico, which grows at the same level as the world
average.
Table 1. Principal steel producers across the world
Source: Own elaboration (World Steel Association, 2017).
China leads the production list with more than 50% of production, as
shown in Table 1. Main steel producers worldwide, followed by Japan, India, the
USA, Russia, and South Korea, who together represent 80% of steel production.
The study of the strategies that China implements in the steel industry is
relevant because according to the data of the World Steel Association (2017) its
production is incomparable with any other country.
POSITION
COUNTRY
PRODUCTION (Millions Ton.)
1
China
831.7
2
Japan
104.7
3
India
101.4
4
USA
81.6
5
Russia
71.3
6
South Korea
71.0
7
Germany
43.4
8
Turkey
37.5
9
Brazil
34.4
10
Italy
24.1
11
Taiwan, China
22.4
12
Ukraine
21.3
13
Iran
21.2
14
Mexico
19.9
15
France
15.5
16
Spain
14.5
17
Canada
13.6
18
Vietnam
11.5
19
Poland
10.3
20
Austria
8.1
Socioeconomic Development: The Steel like a Crucial Key
Espinoza-Parada, L.; Cavazos-Salazar, R. & Cruz-Álvarez, J.
41
CHINA IN THE STEEL INDUSTRY
According to IberChina (2017), the steel industry is one of the pillars of the
Chinese economy, and it is also one of the sectors with the greatest excess
capacity.
In 2015, the country produced a total of 803 million metric tons of steel.
50% of world production. The Chinese steel industry exported 13.7% of the steel
produced in 2015. China, with 110 million tons of steel produced in 2015, was the
world´s leading steel exporter.
Figure 2. Chinese steel production (Millions of tons)
Source: Own elaboration (World Steel Association, 2019).
China´s raw steel production constantly increased between 2016 and 2018.
In 2018, production increased 12% to 928.3 million metric tons of 831.7 million
tons in 2017. The gap between production and apparent consumption (a steel
demand measure) was reduced to 52.7 million metric tons in 2018.
Between 2009 and 2016 China´s steel export as a proportion of production
more than triple from 4% to 13.2% before declining in 2017 in 2018, the export
share of production was further reduced by 1.6 percentage points to 7.2%.
China is the world´s largest steel exporter. In 2018, China exported 66.9
million metric tons of steel, a 9% decrease from 73.3 million metric tons in 2017.
China´s exports accounted for about 16% of all steel exported worldwide in 2017.
China´s volume 2017 steel export was almost double that of the world´s
second-largest exporter, Japan, and more than double that of the third largest and
fourth-largest exporters, Russia and South Korea. In terms of value, steel
accounted for only 2.2% of the total amount of assets China exported in 2017.
Social Inclusion and the Future of Work
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Figure 3. Gross steel export (millions of tons)
Source: Own elaboration (World Steel Association, 2019).
As seen in Figure 4. Around 90% of the production of Chinese plants has
been absorbed in the country, but domestic consumption peaked in 2013. As the
economic growth in China's growth slows, construction infrastructure and
properties reach a saturation point, it seems that more steel is about to flow to
world markets.
Figure 4. Consumptions and exportation of Chinese steel (Millions of tons)
Source: Own elaboration with data of the World Steel Organization, National
Bureau of Statistics, China Custom Administration, Financial Times World Steel
Association (2016).
Socioeconomic Development: The Steel like a Crucial Key
Espinoza-Parada, L.; Cavazos-Salazar, R. & Cruz-Álvarez, J.
43
Likewise, it is observed in Figure 5. That of the domestic consumption in
the country 42% is destined for the realization of assets, 25% for infrastructure.
15% for machinery, 7% for other industries, 6% for car production, 3% for
shipbuilding, and 2% for home appliance production.
Figure 5. Steel consuming sectors in China
Source: Own elaboration (CEIC, 2015).
China Baowu Group (the results of a merger between the Baosteel Group
and Wuhan Steel Group) is China´s steel production company. China´s steel
production extends through many companies, with the top 10 producers in the
country representing only 310.5 million metric tons, or 37%, of total production
in 2017, based on available data.
The corrective trade measures in the steelmaking sector have been anti-
dumping (AD), countervailing (CVD), associated suspension agreements and
safeguards are often collectively referred to as trade remedies.
These mechanisms are internationally agreed to deal with the effects that
distort the market for unfair trade or serious damage or the threat of serious
damage caused by an increase in imports. Unlike anti-dumping and
countervailing measures, safeguards do not require verification of these rights or
measures, countries investigate accusations and can remedy or alleviate the
damage caused to national production.
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
MEXICO IN THE STEEL INDUSTRY
This section describes the statistical information of the Mexican steel industry;
the data described below were taken from infographics of the National Chamber
of the Iron and Steel Industry (2004).
Figure 6. Participation of the steel sector for GDP
Source: Own elaboration (CANACERO, 2017).
The national steel production from 2007 to 2016 was 18.8 million tons with
an installed capacity of 29.6 million tons. The production of steel in monetary
terms was 369 thousand 182 million pesos in 2016, which represents 10.6% of
manufacturing GDP, 6.2% of industrial GDP, and 1.9% of National GDP as shown
in Figure 6.
For investments, until 2006 the sector maintained and investment program
aimed at the replacement, rehabilitation updating, maintenance, and expansion
of production plants. In Figure 7. Investment of the steel industry according to
CANACERO (2018) It is observed that from 2007 to 2009, an investment plan for
3 thousand 363 million dollars was applied.
The growth in investment remained from 2010 to 2013 at 1,110 million
dollars. The investments made in the 2007-2016 period total of 14 thousand 83
million dollars.
Socioeconomic Development: The Steel like a Crucial Key
Espinoza-Parada, L.; Cavazos-Salazar, R. & Cruz-Álvarez, J.
45
Figure 7. Investment of the steel industry
Source: Own elaboration (CANACERO, 2018).
Likewise, the number of people employed, the total jobs in the Mexican
steel industry are observed (Figure 8). From 2015 to 2016 the industry has made
enormous efforts to avoid mass layoffs, however, it has a significant decline over
the years.
Figure 8. Number of people employed
Source: Own elaboration (CANACERO, 2017).
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Figure 9. Steel production by state
Source: Own elaboration (CANACERO, 2017).
The steel industry in Mexico is of vital importance since its production is
closely linked to the dynamics of the economy as a whole; steel products are
indispensable in the production chain for the generation of consumer durables.
Also, steel companies constitute a fundamental part of the fixed capital
available to the country due to the high investment requirements involved in its
operation and production.
Likewise, it has devices distributed in 11 municipalities of the country in
which 3 federative entities (Coahuila, Michoacán, and Nuevo León) contribute
more than 60% of the production, as can be seen in Figure 9. Steel production by
state.
Steel consuming sectors in Mexico, mostly 61.5% correspond to the
construction sector, followed by metal products and the automotive industry
(Figure 10).
Socioeconomic Development: The Steel like a Crucial Key
Espinoza-Parada, L.; Cavazos-Salazar, R. & Cruz-Álvarez, J.
47
Figure 10. Steel consuming sectors in Mexico
Source: Own elaboration (CANACERO, 2018).
Due to the relevance of the sectors that use this raw material, there is no
doubt that the production of this input contributes significantly to both national
and international competitiveness.
Mexico experiences a different commercial scenario in comparison with
China. The export of Mexican raw materials to that country is small compared to
other Latin American countries. Chinese industrial exports grew 441% from 2003
to 2014, which represented a greater boost than total exports. Which grew 435%
during the same period. Mexican manufacturer is a strong competitor for its
domestic market and the North American Free Trade Agreement (NAFTA)
market.
The second is much more important than the first. The enactment of
NAFTA in 1994-1995 represented the formalization of a commercial trend already
underway between Mexico and the US. China's entry into the WTO marked a
slowdown in Mexican exports to the US. As is the case with other Latin American
economies, Chinese imports show a two-figure growth, while the corresponding
local sectors do not grow so rapidly
THEORETICAL FRAMEWORK
For an industry to become competitive, it is necessary to go through a series of
factors and strategies that provide stability in the market from the beginning of
its operations to the present.
For the World Economic Fund (2018), competitiveness is defined as “the
set of institutions, policies, and factors that determine the level of productivity of
a country. The productivity levels determine the rates of return on investments,
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
which in turn play a fundamental role in the growth of the economy”. In this
way, an economy is more competitive when it manages to grow at higher
average growth rates than the rest of the economies in the long term.
According to Ivancevich and Lorenzi (1997), competitiveness is the
measure that a nation, under free and fair market conditions, is capable of
producing goods and services that can successfully pass the test of international
markets, maintaining and even increasing the real income of its citizens.
Although it can be affirmed that the idea of the competitiveness concept is
similar among the students of the subject, a generalized agreement regarding its
definition has not been found, but what is a fact, is that the author of constant
reference in the field of competitiveness is Porter (1999), who indicates that
competitiveness arises from the productivity in which companies employ in one
location the factors (labor or capital) to produce valuable goods and services.
Although the different definitions regarding competitiveness have a
microeconomic reference framework, today they include macroeconomic, socio-
economic, political and cultural elements that also influence the performance of
companies and the standard of living of the population, because they recognize
the correlation between the competitiveness of countries and the living standards
of their population (WEF, 2004).
One of the first studies on international competitiveness and today's most
widespread is the Global Competitiveness Report dating back to 1979 from the
World Economic Forum (WEF), hosted in Geneva. As of 2004, the Global
Competitiveness Index (GCI) is introduced, which takes into account
microeconomic and macroeconomic bases to measure the competitiveness of a
nation.
For the WEF, competitiveness is defined as the set of institutions, policies,
and factors that determine the level of productivity of a country. Productivity
levels determine the rates of return on investments, which in turn play a
fundamental role in the growth of the economy.
In this way, an economy is more competitive when it manages to grow at
higher average growth rates than the rest of the economies in the long term. The
indicator is constructed from 12 factors that explain the competitiveness and
positioning of countries and which are grouped into three stages: the first is
economies driven by increases in productive factors; the second is economies
driven by efficiency improvements, and the third is economies driven by
innovation. All are quantified according to the degree of development of the
countries through the gross domestic product (GDP) per capita.
Socioeconomic Development: The Steel like a Crucial Key
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49
Table 2. The global competitiveness model
Source: Own elaboration based on the model published by Schwab (2018).
The WEF study contains 114 indicators where it groups the key factors
that lead a country to be competitive. Figure 11 shows the global competitiveness
model integrating the subscripts and competitive pillars. These indicators are
grouped into 12 pillars, which are divided into 3 subscripts according to BR
(Basic Requirements), ED (Efficiency Dynamizers), and IS (Innovation and
sophistication).
Under this scheme proposed and developed by the World Economic
Forum, aspects such as the macroeconomic environment, the efficiency of
financial markets, technological development, and innovation are taken into
account, leaving a total of 12 measurable elements or factors for each of the
nations.
The WEF study is annual and the information comes from surveys and
hard data that are summarized in statistical variables from international sources.
According to Huber-Bernal (2017) for the past five years, the GCI has maintained
91.6 percent of its indicators by holding 99, eliminating three, and incorporating
12 new ones. This gives some stability to those who take it as a reference for
monitoring public actions undertaken by national governments to raise their
levels of competitiveness in the medium and long term.
METHOD
This chapter compiles relevant research from databases such as EBSCO,
Scopus, Proquest, Science Direct in the years 2015 - 2019, which were used to
develop a theoretical framework of reference in which the research variables are
supported, to identify the industrial policies that the countries with the greatest
competitiveness studies use.
Additionally, a quantitative analysis work of comparative contrast
between the leader of the steel industry and Mexico is carried out according to
BASIC REQUIREMENTS:
SUBSCRIPTS - (BR)
EFFICIENCY DYNAMIZER:
SUBSCRIPTS - (ED)
INNOVATION AND
SOPHISTICATION:
SUBSCRIPTS - (IS)
Pillar 1. Institutions
Pillar 5. Middle education and
training
Pillar 11. Sophistication of
business
Pillar 2. Infrastructure
Pillar 6. Labor market efficiency
Pillar 12. Innovation
Pillar 3. Macroeconomic
environment
Pillar 8. Development of the
financial market
Pillar 4. Health and
elementary education
Pillar 9. Technological capacity
Pillar 10. Domestic market
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
the global competitiveness index of 2018, of the development subscripts BR
(Basic Requirements), ED (Efficiency Dynamizers), and IS (Innovation and
Sophistication) and the productive capacity of these countries measured in
millions of tons of steel produced; To find statistical significance, the multivariate
linear regression model and the ANOVA model were used in a comparative
analysis of China concerning Mexico to have a reference control group.
In Figure 11 the sequence of analysis activities developed for the field
study is established. It was possible to identify China as the leading country in
the world industry, and based on this the country competitiveness indicators and
the incidence was analyzed with its productive capacity to statistically contrast
using linear regression and analysis of variance for the indicators of Mexico,
achieving the identification of the key elements of competitiveness of both
countries as input for the contrast analysis.
Figure 11. Methodology for comparative analysis of steel competitiveness
Source: Own elaboration.
When analyzing the data from China and Mexico, contrasting the vectors
of the global competitiveness index concerning the productive capacity in
millions of tons, as can be seen in Table 2.
Research results, the statistical data indicate that, for China pillar 1 of the
WEF, the competitiveness model is the health and elementary education, and in
pillar 11 the sophistication of business factors that influence its competitiveness
in the steel industry, however, when specifically reviewing the subscripts there is
no coherence in the information since child immortality does not influence the
steel industry, which is why this pillar is discarded.
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Espinoza-Parada, L.; Cavazos-Salazar, R. & Cruz-Álvarez, J.
51
Regarding the competitiveness of Mexico in the steel industry is pillar 8,
Development of the financial market in specific regulation of stock exchanges
and pillar 11, Sophistication of businesses in specific quality of local suppliers.
Table 3. Results of the investigation
Source: Own elaboration using the statistical program Minitab.
Statistical Test
Pillar Level Result
Result at Level Index
Implication
China
multivariate
linear
regression
analysis
Significant factor P4 with
a value of p-0.000, and
FIV 1.28 minor effect not
significant in
multicollinearity.
Significant factor 4.07
with a value of
p-0.009, and FIV 2.32
minor effect not
significant in
multicollinearity.
The analysis indicates
that pillar 4, Health and
Elementary Education
specifically the infant
mortality rate and pillar
11, Business
sophistication
specifically the index of
the number of local
suppliers and value
chain amplitude are
significant for the ability
to Chinese production
Significant factor P11
with a value of p-0.006,
and FIV 1.28 minor effect
not significant in
multicollinearity.
Significant factor
11.01 with a value of
p-0.006, and FIV 4.10
minor effect not
significant in
multicollinearity.
Significant factor
11.05 with a value of
p-0.002, and FIV 3.29
minor effect not
significant in
multicollinearity.
Multivariate
linear
regression
analysis of
Mexico
Significant factor P8 with
a value of p-0.009, and
FIV 1.07 minor effect not
significant in
multicollinearity.
Significant factor 8.07
with a value of
p-0.000, and FIV 1.05
minor effect not
significant in
multicollinearity.
The analysis indicates
that pillar 8,
Development of the
financial market in
specific regulation of
stock exchanges and
pillar 11, Sophistication
of businesses in specific
quality of local
suppliers are significant
for Mexican production
capacity.
Significant factor P11
with a value of p-0.003,
and FIV 1.07 minor effect
not significant in
multicollinearity.
Significant factor
11.02 with a value of
p-0.000, and FIV 1.05
minor effect not
significant in
multicollinearity.
ANOVA
comparison
China vs
Mexico
The value of p-0.0000 for
pillar 11.
The value of P-0.0001 for
pillar 8.
Pillar 11.
Sophistication of
business
Pillar 8.
Development of the
financial market
When comparing pillars
8 and 11, there are no
significant differences
between the leading
country and Mexico,
however it is observed
that China has much
more scope and focus
than Mexico.
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
When carrying out the comparative analysis of both countries, similarities
are found between Mexico and China in pillar 11, business sophistication for
local supplier index, however, the difference between nations is not significant as
can be seen in Figure 12.
Figure 12. Pillar 11 Business sophistication
Source: Own elaboration using the statistical program Minitab.
On the contrary, as shown in Figure 13. Another of the pillars found in
Mexico market development has a difference with China, this factor being above
China.
Socioeconomic Development: The Steel like a Crucial Key
Espinoza-Parada, L.; Cavazos-Salazar, R. & Cruz-Álvarez, J.
53
Figure 13. Pillar 8 Development of the financial market
Source: Own elaboration using the statistical program Minitab.
CONCLUSIONS
Competitiveness is a position that has great relevance in the economy of
any country, the objective of the present investigation was to analyze the
competitiveness of the steel industry of China and Mexico to find what were the
competitive advantages of the leading country, to give development guidelines
in the Mexican steel industry. Therefore, according to the quantitative review of
the information, there is no significant advantage of China towards Mexico in the
steel industry.
Although no significant differences are found, China has a greater focus
on its business sophistication policies, which refers to two elements that are
closely linked: the quality of a country's general business networks and the
quality of operations and Individual business strategies. According to OCEC
(2019) when companies and suppliers in a particular sector are interconnected in
geographically close groups, efficiency is reinforced, greater opportunities for
innovation in processes and products are created, and barriers to entry are
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
reduced of new companies, so after analyzing the information it was observed
that Mexico is on the right track, but it needs more momentum in this pillar.
Given the above, this information encourages further research on how
other leading countries such as Japan, India, USA, Russia, and South Korea boost
the competitiveness of the steel industry so that Mexico has the opportunity to
climb one more step in global competitiveness and thereby contribute to the
country's economy.
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Generation of Employment
and Digital Age in the Hotel
Sector of Peru
Sofía Espinoza-Vilca
Universidad Andina del Cusco, Peru
Mónica Blanco-Jiménez
Universidad Autónoma de Nuevo León, Mexico
María Mayela Terán-Cázares
Universidad Autónoma de Nuevo León, Mexico
INTRODUCTION
his research study was aimed at exploring the actual situation of small-
and medium-sized enterprises (SMEs) in the hotel sector in the
emblematic city of Cusco, Peru.
The city was chosen because it has a highly significant hotel sector
that is geared toward national tourism but mainly toward international tourism
and also because it contributes significantly to the economic growth of Peru, with
this being a developing country.
As in all these countries, SMEs play a fundamental role in market
dynamics: producing and offering goods, creating added value, and contributing
to the generation of employment.
At present, SMEs represent a highly significant stratum in the productive
and economic structures of the country in terms of both, the number of
establishments and the generation of employment, in that in recent years, this
sector has acquired a majority presence, and in some areas in the interior of the
country, it constitutes the only form of existing business organization on which
economic activity revolves.
T
Generation of Employment and Digital Age in the Hotel Sector of Peru
Espinoza-Vilca, S.; Blanco-Jiménez, M. & Terán-Cázares, M.
57
Peru has a marked cultural and gastronomic diversity that has made it one
of the most visited countries in the world. Hence, the hotel sector has been
strongly developed to be an important productive business for the country.
Cusco is a very emblematic city, which is considered to be a cultural
heritage of humanity. In particular, one can find in this municipality one of the
wonders of the world, that of Machu Picchu, which receives more than 1.1
million tourist visits annually.
This area, called the tourist circuit of the south, has enabled, according to
the PROMPERU statistics of 2014, the reception of 85% of the country's inbound
tourism, with an average growth of 10% per year.
Hence, by 2021, tourist growth is expected to be of the order of 10 million
tourists, demonstrating strong demand in terms of the receptive tourism that
hotel services will avail of. Furthermore, according to the statistics obtained from
a study of hotel vacancies in Cusco since 2014, the number of rooms in 2021 is
expected to be more than double the existing offer in 2014 (see figure 1).
Also, hotel demand was projected to reach 7,000 occupied rooms by 2021,
higher growth in the midscale category of which was expected. (MINCETUR,
Tourism Leisure & Sports, 2013; PROMPERU, 2014; MINCETUR, 2014).
Figure 1. Importance of tourism in Cusco, Peru, in 2014
Source: Own elaboration (PROMPERU, 2014; MINCETUR, 2014).
PROBLEM STATEMENT
Today, we live in a world submerged in the digital age, where we are connected,
and where technology moves us, locates us, informs us, and even determines the
way we communicate and behave.
services will avail of. Furthermore, according to the statistics obtained from a study of hotel
vacancies in Cusco since 2014, the number of rooms in 2021 is expected to be more than
double the existing offer in 2014 (see figure 1).
In addition, hotel demand was projected to reach 7,000 occupied rooms by 2021, a higher
growth in the midscale category of which was expected. (MINCETUR and Tourism
Leisure & Sports 2013), (PROMPERU, 2014), (MINCETUR, 2014)
Figure 1. Importance of tourism in Cusco, Peru, in 2014
• tourist visits
annually
1.1 million
Cusco Circuit
• 85% of these
visits prefer
the south
• 10% growth
per year
• 2021 there will be
10 million
tourists
Source: Compilation based on data from PROMPERU (2014), MINCETUR (2014)
PROBLEM STATEMENT
Today, we live in a world submerged in the digital age, where we are connected to each
other, and where technology moves us, locates us, informs us, and even determines the way
we communicate and behave. This causes economic, social, political, and particularly
technological changes that happen quickly and makes it imperative for companies or
organizations to adapt to them and even more so, consider their client trends. This is
particularly because nowadays, they are increasingly connected to using digital technology,
and one of these trends is interconnection by the Internet—a new form of interaction
between the client and the company—either by the Web or by means of cell phone devices
(Salamanca, 2011) because the Internet has changed our lives and the way we buy goods
and services.
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
This causes economic, social, political, and particularly technological
changes that happen quickly and makes it imperative for companies or
organizations to adapt to them and even more so, consider their client trends.
This is particularly because nowadays, they are increasingly connected to
using digital technology, and one of these trends is interconnection by the
Internet—a new form of interaction between the client and the company—either
by the Web or employing cell phone devices (Salamanca, 2011) because the
Internet has changed our lives and the way we buy goods and services.
It should be noted that these changes in the environment, technological
advances, and new social trends have affected client performance by bringing in
new business practices.
Therefore, it is of vital importance to consider the evolutionary and
innovative technological advancement and appropriately apply digital
marketing strategies to improve the electronic service quality in the hotel sector
—above all, those of SMEs, the basis of world economies, many of which have
not developed or even survived over time, with others experiencing great
difficulties and excruciatingly slow development.
For SMEs, improving electronic service quality in the hotel sector helps to
prevent future errors and to design innovative strategies that are essential for
success because it increases their productivity and directs the organization
toward competitiveness, which is vital for survival in this highly globalized and
competitive world.
Therefore, digital marketing factors allow the organization to improve its
electronic service quality through technological advances in addition to
transmitting the desired image to the consumer public to establish itself as a
quality SME and to position itself in a sustained manner in the minds of
consumers and/or users.
Therefore, the importance of investigating the incidence of digital
marketing as an electronic service in the hotel sector of SMEs is of paramount
importance, particularly since no previous studies of this nature are to be found.
Therefore, this study will benefit SMEs in the country by showing them that the
use of digital marketing can help them grow.
Besides, it should be noted that SMEs are a vital factor for Peru's economy
as they are in most developing countries. However, numerous studies show that
SMEs have high mortality rates, which, regardless of economy or country, show
that approximately 80% of small- and medium-sized enterprises fail before their
5th year and that 90% fail to survive 10 years (Serrano, 2016).
Therefore, the following research question was raised in this study. What
are the digital marketing factors that have the greatest impact on improving
electronic service quality among SMEs in the hotel sector in Peru?
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The overall objective of the investigation: Analyze the digital marketing
factors that improve the electronic service quality offered by SMEs in the hotel
sector in Cusco, Peru, for the SMEs to use them and be able to: survive, develop,
and act successfully in a changing, volatile, and fragile environment; that will
help to strengthen this essential sector of the country's economy.
Achieving this objective will create not only new proposals but also
guidelines on how SMEs should be developed in a digital era. It will also benefit
managers, administrators, and owners of small- and medium-sized businesses in
this sector as they can use this methodology to measure factors in their sector,
and based on their results, they may execute action plans that influence their
commercial management. This could be done to improve electronic service
quality, thus maintain a successful competitive environment.
Based on the literature reviewed, it is proposed as a hypothesis and
solution to the research question that the digital marketing factors that enable
improvements in electronic service quality are as follows: the management of
digital social networks (X1), the cell phone application interaction (X2), the
quality of the information on the interface (X3), and the handling of client
relationships (X4).
THEORETICAL FRAMEWORK
Y=Electronic Service Quality
According to Cervantes and others (2016), quality of service is a key to success
because offering services to online customers is increasingly important to obtain
competitive advantages in the electronic market and consequently create value.
In this sense, all types of companies, whether they are banks, travel
agencies, airlines, employment agencies, real estate agencies, insurance
companies, or online publishers of digital information, increasingly choose to
offer all kinds of electronic service to be able to meet new customer needs
(Castaño & Jurado, 2016).
Earlier, to have good prices and advertising presence was thought to be
enough for commercial success; however, today, because of strong competition,
prices and presence are necessary factors for survival but are not enough.
Nowadays a key tool to improve client interaction and influence their
behavior is the sale of products by electronic means, so much so that one of the
main business objectives is to improve the quality of electronic service that
companies offer in the sale of their products or services (Garcia, 2017).
Establishing a better relationship between the levels of electronic service
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
quality and customer relationships leads to greater skill in attracting potential
customers, greater enterprise competitiveness, and higher levels of profitability
in the long term (Ruiz & Fandiño, 2017).
Electronic service quality has been defined as the extent to which a
webpage can facilitate purchases and the supply of products and services
efficiently. From the marketing and Internet environment and the traditional
literature on service quality, electronic commerce quality is defined as a global
assessment of consumers and their judgment on the excellence and quality of
electronic services offered in virtual markets (Barzola et al., 2019). This global
judgment refers to the total result of visiting a website.
For purpose of the investigation, electronic service quality was defined
based on the definitions put forth by the authors mentioned above as consumers'
global assessment and/or evaluation of the quality resulting from electronic
service interaction offered in virtual markets across an electronic channel.
About the digital marketing concept, authors as Kotler and Armstrong
(2017) define marketing as a process by which companies create added value for
clients and establish close relationships with them, to receive client value in
return.
To discuss technical marketing or marketing, it must be understood, not in
the old sense of "talking and selling" but in meeting the needs of the customer. If
the marketing management perceives the needs of the consumer well; if products
or services are developed that offer superior value; if prices are fixed properly;
and if the distribution and promotion system is improved, then products will be
sold very easily.
Gutiérrez-Leefmans and Nava-Rogel (2016) highlight the new conception
of marketing, wherein the client becomes the focus of the whole business, and
how the client wants to interact with the company is the priority. Currently, they
interact through digital media, having moved from "acting for the client" to
"acting with the client." Marketing has advanced and transformed itself because
it has been socialized.
It has extended to all socioeconomic sectors, has become established in all
sizes of organizations, and has adapted to changes in the environment, evolving
to make other aspects of marketing adapt to the strong global competition, where
competitiveness becomes stronger every day (Vicuña, 2016).
Therefore, digital marketing was born, which is considered by several
authors as a strategic process that helps to create and distribute products and
services at a competitive price for a target market that is continuously harvested
on the Internet or through digital tools.
Cuamea and others (2019), Velazco, (2016), Improma, (2017) and Alcaide
(2013) and others. Likewise, these authors make some clarifications that should
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61
be considered regarding the factors of digital marketing because of their
importance; they are as follows:
X1- The Management of Digital Social Networks
Virtual social networks or social network sites are a service based on a
Web platform through communication, interaction, collaboration, and self-
organization ecosystems that enable people to build a public or semipublic
profile within a confined system.
However, above all, you can coordinate a list of other users with whom
you want to share a connection as well as see and traverse your contact list and
those made by others within the system (Boyd & Ellison, 2007; Campos-Freire &
Rúas-Araújo, 2016).
All of this means that the main feature of these networks is that they are
made in virtual communities that enable continuous interaction between
network members and that there are formal and informal conventions, but above
all, it means that there is a will of the people to interact at a faster speed that
helps to develop close relationships between people, facilitates communication
between clients and suppliers, and is amenable to be extended to a global
dimension (Fuchs, 2008; López et al., 2018).
X2- Cell Phone Application Interaction:
As technology advances rapidly, so do new forms of user interaction.
Hence, several authors highlight the interaction of cell phone applications as a
set of practices that help companies communicate and collaborate with their
audiences in an interactive and relevant way through any cell phone device, e.g.,
smartphones, as well as commercial transactions of products or services through
cell phone technology, thus facilitating consumer purchases with no restrictions
of time and place (Selzer et al., 2017; The Mobile Marketing Association, 2009).
A former vice president of e-commerce giant “Alibaba” says that the
approach to making local online purchases should change to selling products
worldwide as many of these will be one click away from users who previously
did not have access to them.
Hence, cell phone presence is essential in current times because although
having a website on the computer was enough before, how people in emerging
countries are increasingly entering and using only their cell phone devices
(Velázquez, 2016).
The advantage of this trend is that impulse sales can be created. When
traveling with a cell phone in hand, the user can see an ad, look for the product
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
presented in it, and buy it at that time. This means that companies must adapt to
advertise on smaller screens, in this case, those of cell phones, and thus attract
attention quickly, which, in turn, entails being able to tell a story in a few
seconds.
X3- Quality of Information on the Interface
These are graphic elements that enable the user to access the contents,
navigate, and interact (Aguado, 2018). For Pinto and others (2017), every time we
access some of the many sources of information, from simple books to
computers, we find that the information they contain is organized in a way such
that the contents can be easily accessed.
Following the example of books, the order in which the contents appear is
described in the index, which is usually found at the beginning or end of it. Also,
the physical form of the book itself and how the pages are organized makes the
interface very simple and intuitive. The same goes for the information on cell
phone devices: the more orderly it is the better the quality of the interface.
The quality of the information on the website interface serves the purpose
of enabling consumers to easily access the contents, interact effectively with all
the components, and have constant ease of use. Thus, this is where the company
provides appropriate, simple, and consistent information about the products or
services offered on its web pages (Fernández, 2017).
X4- Customer Relationship Management
Ruiz and Fandiño (2017). This concept refers to a set of practices, business
strategies, and technologies focused on clients, ranging from small to large
companies, who use them to: manage and analyze interactions with their clients,
anticipate their needs and desires, optimize profitability, increase sales, and have
greater objectivity in their campaigns to attract new customers.
Salesforce (2017) and Valenzuela (2009), points out that the management of
client relationships is directed or focused on understanding, anticipating, and
responding to the needs of current and potential clients from an enterprise, to
make the value of the relationship between both parties grow. It gives the
company a valuable opportunity to know clients and therefore to learn how best
to serve them.
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Espinoza-Vilca, S.; Blanco-Jiménez, M. & Terán-Cázares, M.
63
METHODOLOGY
This research work is quantitative because a survey was used to collect data that
allowed us to test the hypothesis. This is because the results were subjected to
statistical rigor.
Regarding the types of research, this study began as exploratory because it
began with the analysis of the growth of tourism and the position of SMEs in the
hotel industry. It is descriptive because the reality of the problem is described as
shown in current conditions and circumstances.
It is of a correlational type because the degree of association between the
digital marketing factors and electronic service quality in the hotel sector was
measured. Finally, it is explanatory because it seeks to explain the causes of the
situation analyzed (Hernández et al., 2014).
This research is nonexperimental because there is no manipulation of the
study factors; it is limited to the observation of the facts as they occur. The main
techniques used for data collection are documentary, bibliographic, and field.
For the field study, a survey was prepared based on the theoretical
framework of the proposed variables. Therefore, several items of other research
that measured the proposed variables were integrated and adapted, resulting in a
survey of 50 items.
A pilot test was carried out using this tool with 71 guests from different
hotels. The results helped to data cleanse items and “tropicalize” them so that
they were clear and understandable, and thus, 47 items remained. A Likert scale
was used in the tool where 1 is not in agreement, 2 agrees somewhat, 3 does not
agree or disagree, 4 agrees, and 5 agrees. The data obtained from the data
collection sheet was transferred to Excel and sent to the SPSS program for
statistical development.
As for the selected population, a search was performed for the main SME
hotels in Cusco, Peru, that had a rating of three (03) stars and above all else that
were registered in the DIRCETUR of Peru; hence, a total of 82 formal hotels were
found (Ministry of Production, 2014).
The survey was directed toward guests because they are the ones who
perceive the service provided, who acquire and reserve, and above all else who
have contact with the digital part. To determine the total number of guests to be
surveyed, we did the following:
1. First, the daily average of guests was taken as indicated by the
PROMPERU (2016) statistics: 12 guests per day.
2. Second, this number was multiplied by the total number of formal hotels
registered in the DIRCETUR organization, which was 82, giving a total
result of 984 guests.
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
3. Third, the optimal “n” formula was applied, where the sample size was
200 guests from 3-star hotels in the city of Cusco, Peru.
4. So, finally, on average 2–4 guests were surveyed in each of the selected
SME hotels.
It is consequential to mention that the condition of objectivity was met
through the standardization of the survey application as everyone was
administered the same survey, printed in single ink color, in physical form, the
participants were accorded the same personal attention in resolving any queries,
and the percentage of participation of the respondents was considered to be
equitable and applied at the appropriate times and places.
RESULTS
The final results obtained from Cronbach's alpha indicate that the tool developed
and applied has acceptable internal reliability for the variables under study (see
Table 1) because the results are in the range 0.07–0.09, which is highly acceptable
for validity, which, in turn, means that in overall terms, the tool measures the
variable that it intends to measure (Hernández et al., 2014).
Table 1. Cronbach's alpha values of the tool used
Source: Own elaboration based on the collected field data.
Once the Cronbach’s alpha was carried out with the support of the SPSS
system, linear regression was carried out in an attempt to explore and quantify
the relationship between the variable called dependent or criterion (Y), which, in
this investigation, is the variable Electronic Service Quality, and the variables
called independent or predictors, which are: X1: The management of digital
social networks; X2: Cell phone application interaction; X3: Quality of
information in the interface; and X4: Client relationship management, as well as
developing a linear equation for predictive purposes.
Variable
Cronbach’s Alpha
X1: Management of digital social networks
0.806
X2: Cell phone application interaction
0.824
X3: Quality of information in the interface
0.876
X4: Client relationship management
0.852
Y: Electronic Service Quality
0.926
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65
Multiple Linear Regression Study
Once the variables with weighted averages were generated and the linear
regression of the independent constructs was carried out, the following results
were produced.
The independence of residuals through Durbin–Watson shows the
presence of first-order self-correlation in residuals in a regression. Because the
Durbin–Watson value generated in the models is 1.620, it ensures that there is no
self-correlation in the models, which helps to show a valid linear regression
(allowed range 1.5–2.5), with accepted correlation coefficients (r) ranging from
0.959 to 0.962 as well as the coefficient of determination (r²) in the range 0.920–
0.925 (see Table 2).
Table 2. Lineal regression results.
a. Predictors: (Constant), X1: The Management of Digital Social Networks
b Predictors: (Constant), X1: The Management of Digital Social Networks;
X2: Cell Phone Application Interaction.
c. Criterion (Dependent variable), Y: Electronic Service Quality
Source: Own elaboration (SPSS-V18).
The resulting model should not reflect multicollinearity among
independent constructs. We can see that the results do not show multicollinearity
among independent constructs. Thus the results utilizing the variance inflation
factor index (VIF) show acceptable collinearity because they are less than 10 (see
Table 3).
Model summaryc
Model
R
R squared
R squared
adjusted
Standard
estimation
error
Durbin–
Watson
1
0.959a
0.920
0.919
0.50163
2
0.962b
0.925
0.922
0.48992
1.620
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Table 3. VIF Index
Source: Own elaboration (SPSS).
T-Student Study
Regarding the results of the T-student test, an estimated error of less than
5% was considered (see Table 3), which shows that Model 2 is acceptable because
the independent constructs that impact significantly on the electronic commerce
dependent construct are as follows: X1: Management of digital social networks
and X2: Cell phone application interaction with a significance value below 5%.
Hence, we can design the linear equation that represents the results of this
research:
Ŷ1 = 0.362 + (0.727) Management of digital social networks + (0.213) Cell phone
application interaction + ε
CONCLUSIONS
It is important to highlight the fact that the digital era in SMEs has arrived,
particularly in hotels, as the electronic service is increasingly used to make
reservations.
Therefore, when the digital era was discussed in the theoretical
framework, a series of digital marketing factors were presented, such as social
networks, the interaction of cell phone applications, the effectiveness of interface
information, and the relationship with clients, which, in turn, are indispensable
for SMEs.
!
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67
This is because digital marketing has grown and spread to all
socioeconomic sectors, getting established in all sizes of organizations,
particularly SMEs in the hotel sector, to improve the quality of electronic service,
which has adapted to changes within the digital era.
Having obtained results, we can conclude that the main objective of the
pilot survey was achieved, which was to analyze digital marketing factors that
improve the quality of electronic service offered by SMEs in the hotel sector of
Cusco, Peru.
The reliability obtained from the factors of digital marketing through
Cronbach’s alpha shows that the pilot tool used is reliable, which is why armed
with the results, we can conclude that of all the independent constructs involved,
X1: Social networks and X2: Interaction of cell phone applications are the most
important factors for the quality of electronic service.
The social networks proposed to achieve the significance shown for
electronic service quality may be given by encouraging the hotel to have a
presence on social networks, in addition to making use of promotional
publications 24 hours a day, and influencing the reservation of rooms, by using
social networks efficiently, such as Facebook, Twitter, and Instagram, and
effectively posting campaigns, offers, and advertising as a means for guests to
increasingly acquire new rooms and thus increase the quality of electronic
service.
Cell phone application interactions proposed to achieve the significance
shown for electronic service quality can be given through the hotel's website or
blog as it is adaptable to all types of cell phones, such as smartphones, tablets,
iPads, and laptops, in addition to the fact that it uses the experience within the
website to continue to use these cell phone devices because they are the future in
terms of online sales.
Thereby, a large consumer base can be tapped by sending frequent offers
through online messages such as those on WhatsApp, among others, so that the
client feels safe to make online payments from the hotel.
It is important to continue to study the independent constructs X3:
Effectivity of information on the interface, and X4: Client relationships as future
lines of research to continue increasing practical contributions in electronic
service quality.
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Digitization of Economic
Activities for Job Creation and
Social Stability and
Competitiveness
Andrés Morales-Alquicira
Universidad Autónoma Metropolitana-X, Mexico
Araceli Rendón-Trejo
Universidad Autónoma Metropolitana-X, Mexico
Irene-Juana Guillen-Mondragón
Universidad Autónoma Metropolitana-I, Mexico
INTRODUCTION
he crisis of 2008 had devastating effects on the world economy;
however, there was a positive outcome: It allowed to distinguish that
the economies with a strong industrial sector were the ones that came
out of the crisis the fastest.
The crisis also showed that a source of strength in this sector was the vital
presence of companies that incorporated advanced technological innovations in
their value chains.
In addition to incorporating technologies from the Third Industrial
Revolution, such as information technologies, automation, or new sources of
energy, companies progressively added technologies from the Fourth Industrial
Revolution, such as advanced digitization, interconnectivity, or cyber-physical
systems.
From there, the governments of developed countries strengthened their
initiatives to reconvert their industrial sectors: The United States, France,
England, and Germany were examples of this process.
T
Digitization of Economic Activities for Job Creation and Social Stability and Competitiveness
Morales-Alquicira, A.; Rendón-Trejo, A. & Guillen-Mondragón, I.
71
In addition to fiscal and financially stimulating the reconversion of
companies, the governments promoted technological support platforms and
services.
The German government has been developing and participating in the
creation of the Platform Industrie 4.0, a model for the digital conversion of the
industry since 2011. In the United States, the government promotes advanced
manufacturing programs, best known as the process of digitizing the sector in
that country.
While in developed countries, governments encourage digital conversion,
in Mexico, the actions implemented by the government in the last ten years show
a modest interest in digitally converting the industry.
Although there are programs to encourage innovation, these are generally
based on technologies before the Fourth Industrial Revolution. Based on the
German experience, actions implemented by the Mexican government are
presented in this paper to promote the digitization of its industry characterized
by a globally competitive environment and the scientific and technological
development of the Fourth Industrial Revolution. Possible effects in the country’s
industrial sector are also presented.
The paper is structured in four sections. The first part points out some
elements of the Fourth Industrial Revolution, particularly the characteristics
adopted by innovation and competitiveness. The second one points out the
importance of digitization to economies, some initiatives by developed countries
to promote are quoted as well.
In the third section, based on the German experience, the central
government actions to support the digitization of the industry in Mexico are also
presented. In the fourth and final section, results and reflections about this paper
are shown. Finally, some conclusions are explained.
Objectives and methodology
The methodology of this chapter is qualitative. The resulting article comes
from research based on the documentary analysis. It is based on an exhaustive
review of information from international organizations (the European
Commission, the Economic Commission for Latin America and the World
Economic Forum) as well as national institutions (Ministry of Finance and Public
Credit, Ministry of the Economy, National Council for Science and Technology,
National Institute of Statistics and Geography).
The primary sources include the Federation’s Expenditure Budgets; the
programs, calls for incentives and lists of Beneficiaries of Technological
Development and Innovation from 2009 to 2018, statistics and official
publications, as well as printed and electronic publications on the subject.
Social Inclusion and the Future of Work
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Developed countries have a significant technological advance. Its culture,
educational system, productive organization, and government action benefit the
incorporation of technologies and digitization processes in its various economic
activities. One of the most relevant examples is Germany, where the government
promotes and encourages innovation.
Is it the same thing happening in Mexico? What is the Mexican
government doing to incorporate the productive apparatus into the fourth
industrial revolution? Is the Mexican government promoting the digitization of
its economy? The Mexican government stimulates and rewards innovation?
This paper seeks to answer those questions. It aims to identify and
compare the actions implemented by the German and Mexican governments to
promote the digitization of their industries and economies in an environment
characterized by global competition and the scientific and technological
development of the Fourth Industrial Revolution.
THE FOURTH INDUSTRIAL REVOLUTION (4IR)
Industrial revolutions result from disruptive innovations in production processes
leading to changes in the whole chain of production-distribution of products and
generates modifications in the needs and behavior of consumers.
The whole of society is influenced by these changes. An industrial
revolution is a turning point in the way it has traditionally occurred.
Technological advances are the base of industrial revolutions, which change
countries’ growth, employment, and competitiveness.
In the first industrial revolution, the invention of the steam engine — used
in the locomotive and industrial processes — and the extensive use of other raw
materials (cotton, iron, coal, among others) led to the mechanization of tasks.
In the second revolution, new sources of energy (gas, oil, electricity),
advances in communication systems (radio, telephone), and transport systems
(cars and the appearance of the first aircraft) made mass production and greater
specialization of tasks in production processes possible.
The third industrial revolution was influenced by the development of new
energy sources (nuclear, wind, solar, water) and the increasing use of information
and communication technologies (computers, electronics and
telecommunications, Internet, and social networks). Information technology and
automation were the main characteristics of the third industrial revolution.
(Castresana, 2016).
The economic interest turned into the search for greater efficiency in the
productive processes, which acted as an incentive for technological change, from
improvement to disruptive innovation, where the development and promotion
of science and technology in different areas has been essential.
Digitization of Economic Activities for Job Creation and Social Stability and Competitiveness
Morales-Alquicira, A.; Rendón-Trejo, A. & Guillen-Mondragón, I.
73
This interest has led to changes in the lifestyles of society, culture,
economy, and social organization. As a result, trade and cities have grown, and
the quality of life of the population has improved. (Castresana, 2016).
The industry has a multiplier effect because its growth has an impact on
other sectors of the economy as well as in the locations, regions, and countries in
which it is inserted . Given the importance of industry for economic growth and
1
recovery in times of crisis, it is essential to strengthening its technological
competitiveness. (Del Val, 2016).
INNOVATION, DIGITIZATION AND CHANGING CONSUMER NEEDS IN
THE 4IR
As in all industrial revolutions, in the 4IR, there are technological advances, new
materials, software, inventions, and innovations, which lead to radical changes in
the economy . This paper adopts the definition of innovation from the Oslo
2
Manual:
“The introduction of a new, or significantly improved, product (good or
service), process, marketing or organizational method into internal business
practices, workplace organization, or external relations” (OECD, 2006, p. 56).
In the 4IR, digital technologies are increasingly applied to virtually all
productive and organizational processes and activities in society. This is known
as the digitization process, which consists of the implementation of a
technological production network where machines, devices, systems, and
workers collaborate.
The operation is based on physical systems controlled by computer
algorithms connected by a high-speed Internet that allows integrating the
machines, Information storage systems, and production equipment capable of
exchanging information automatically and autonomously, launching actions, and
controlling each other.
Digitization is applied in all phases of the value chain of a company or
organization, making it more efficient. By creating new and better products and
services available at competitive prices, participants and consumers benefit from
the value chain. As a result, consumers tend to change their tastes and
preferences.
When an industry grows, so do other economic sectors “. . . for every euro produced by
1
industry in the European Union, 34 cents come from other sectors. Therefore, the European
Union has set itself the goal of increasing the weight of industry in the European GDP from 15.
3% to 20% in 2020” (Del Val, 2016, p. 4).
Innovations can be radical, “what Schumpeter calls destructive creation, where a new product
2
or a new technology makes existing products or technologies obsolete.” (Heijs & Buesa, 2016,
p. 27).
Social Inclusion and the Future of Work
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
“New markets are based on customization and the creation of new innovative
products and services. Customers demand quality from their products but are
more willing to pay for the experience or service rather than for the product itself.
Therefore, it is necessary to add new services, individualized experience, update
capacity, which means adding IT (software and connectivity) to any product” (Del
Val, 2016, p. 4).
INNOVATION AND COMPETITIVENESS IN THE 4IR
Innovation has been a fundamental part of all industrial revolutions. It
contributes to the productivity and competitiveness of organizations and
economies; it helps to the growth, efficiency, and competitiveness of companies.
Innovation comes from the need to solve problems and challenges in the
market or society, the search for improvements in products or services, the
decrease in costs, and the increase of profits, among other things. The
environmental aspect also plays an important role today. The technology
3
enablers in the 4IR are the following:
• Smart solutions. Smart products and services capture information from
4
the environment and consumers to use it for different purposes in the
value chain.
• Smart innovation. It comes from the use of the information obtained
through 4IR technologies in the different phases of the chain, which is
processed and generates knowledge leading to the obtaining of
innovations. Some are spread throughout the company while others are
applied during the life cycle of the smart product connected.
• Smart supply chains. Rapid collaborative networks and connected
supply chains.
• Smart factories. They are characterized by the control of decentralized
production that is made up of intelligent production units connected to
the manufacturing ecosystem. Resulting in a network of agents that make
optimized decisions at a local level (Del Val, 2016). Smart factories have
machines with machine-to-machine communication capabilities, which
can be operated and configured in self-management mode. The machines
5
themselves can also indicate maintenance.
The technological basis for the operation of these technology enablers are mobile
3
communication, the cloud, Big Data, machine-to-machine communication, social platforms, 3D
printing (additive manufacturing), collaborative robotics and augmented reality.
Products and services that have electronic systems, software and connectivity that allow them
4
to operate, reprogram and update different functions. Intelligent services are found in new
business models, with Big Data models you can automate the decision-making process.
In recent car models, there are automated digital component check indicators.
5
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Morales-Alquicira, A.; Rendón-Trejo, A. & Guillen-Mondragón, I.
75
The disruptive changes of the 4IR modify the needs of society and,
consequently, job profiles. Different skills, competencies, and knowledge are
required to handle new technologies; qualified and specialized personnel are
needed to operate them. Given the “self-sufficient" operation of intelligent
machines, fewer workers are required for their operation, which has a negative
impact on the level of employment.
GOVERNMENT IMPULSE TOWARDS DIGITIZATION
With the crisis of 2008, economies with a strong industrial sector were seen to
emerge from it faster. There were also positive effects on the other areas in
economies where governments had supported their industrial sector, — leading
to a review and rethinking of growth-oriented economic policies in the countries
affected by the crisis.
With the evidence of the economic importance of the industry, developed
countries started to implement different programs aiming at economic impulse.
New technology industrial projects were activated. All this helped the
development of digitization as a distinctive feature of the 4IR.
The United States was among the first countries to promote the digital
conversion of the industry. In 2011 the “Advanced Manufacturing Partnership
2.0” was created for planning and coordinating federal advanced manufacturing
research and development programs (US Government, 2011).
In 2016 the “Manufacturing USA” program was designed to ensure
technological leadership (US Government, 2017). With these initiatives, advanced
manufacturing (best known as the digitization process in the United States) has
been strengthened.
The 4RI is taking place in a global context, which, due to globalization, has
different effects on economies. Each country faces diverse problems looking to
solve them with their resources and capacities. For example, The European
Union (EU), launched the Europe 2020 growth strategy in 2010, which has
addressed short and medium-term challenges.
For the first countries, structural reforms to stimulate fast growth were
implemented in the face of the 2008 crisis; for the second countries involved, they
prepared their products and service sectors for the future.
The European Union has tried to address several challenges, including
climate change, unemployment, health, an aging population, inefficient use of
resources, energy security, and polluting transport (European Commission,
2013).
To do so, it relies on the participation of the most advanced technological
segments (nanotechnology, nanoelectronics, photonics, biotechnology, superior
materials, among others) with positive results.
Social Inclusion and the Future of Work
76
Sánchez-Gutiérrez, J. & González-Alvarado, T.
Ever since the launch of that strategy, the EU acknowledged that it was
necessary to promote the integration of these segments into a technological
ecosystem that enhances benefits. This strategy has demanded more significant
government intervention, both at the EU level and in individual countries as
well.
Operationally, technological integration is built through an in-depth
process of digitizing the value chains of all industrial branches. Thus, in 2013,
France implemented the “Novelle France Industrielle”, an initiative to modernize
and lead the industry towards digitization (Raffour, 2016) England implemented
“See Inside Manufacturing” in 2013, which aimed to create jobs and contribute to
economic growth by transforming industry (UK Government, 2014). In 2012, one
of the most critical initiatives in industrial digitization, the “Plattform Industrie 4.
0,” also known as Industry 4.0, was launched in Germany.
The purpose was to identify trends and develop joint recommendations
for different areas of advanced manufacturing in a scenario of digital
reindustrialization (Kagermann, Wolfgang & Helbig, 2013).
This process is not only taking place in EU countries, with different levels
of intensity; it is also promoted in other developed and developing countries.
Digitization will undoubtedly contribute to solving countries’ economic and
social problems.
PROMOTING DIGITIZATION IN MEXICO
The essential reference for industrial digitization is the German case. Industrie
4.0 is seen as a model to follow in the efforts to join the new technological
streams of 4IR. Therefore, it is essential to know what it consists of,
implementation structure, and how the government has promoted it, to identify
the actions implemented in Mexico subsequently.
In 2012, the “Plattform Industrie 4.0” or Industry 4.0 (I4.0) initiative was
launched by German associations of engineers from the electrical, electronic and
digital industries to identify trends and develop joint recommendations for
different areas of advanced manufacturing, in a context of digital
reindustrialization.
Design-wise and implementation of I4.0, five working groups were
created to supervise: reference architecture, standards, and norms; research and
innovation; network systems security; legal framework; work, education, and
training (Kagermann, Wolfgang & Helbig, 2013). In 2013, the business
associations BITKOM, VDMA, and ZVEI, which together comprised more than
6,000 companies, launched a joint project to implement the I4.0 as part of the
German government’s high-tech strategy.
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Morales-Alquicira, A.; Rendón-Trejo, A. & Guillen-Mondragón, I.
77
In 2015, sectoral associations, companies, trade unions, scientific centers,
and the Ministries of Economy and Energy, as well as Education and Research
were added. By 2018, 140 companies and institutions were represented.
The I4.0 marks Germany’s vision of industrial development in the new
century. It is based on the concept of the Smart Factory, which, according to
Kagermann, Wahlster, and Helbing: “It is an ecosystem where end-to-end
digitization, intelligent processes, and products and enabling technologies
coexist.” (Kagermann, Wolfgang & Helbig, 2013).
The initiative consists of the implementation of an intelligent production
technology network for machines, devices, systems, and workers to collaborate.
The operation is based on physical systems controlled by computer algorithms
connected to the Internet called Cyber-Physical Systems (SPS) that allow the
integration of intelligent machines, information storage systems and production
equipment capable of exchanging information automatically and autonomously,
launching actions, and controlling each other.
The implementation of I4 in Germany is based on three organizations:
Platform 4.0 (P4.0), the Laboratory Network 4.0 (RL4.0), and the Standardization
Council 4.0 (CE4.0). P4.0 consists of the implementation of an intelligent
production technology network for machines, devices, and systems to
collaborate.
It combines the real world along with the virtual world in factories, so
they control and optimize work procedures in the value chain of a global
company. The RL4.0, allows the members of the P4.0 to know the new
technologies, innovations, and business models in which they work.
Test the technical and economic viability of the new products or services
before they are launched onto the market. Since the development of Industry 4.0
is gradual, and specific technical solutions differ between industries and even
between companies, the CE4.0 defines common digital standards and technology
platforms that facilitate communication between them. This activity benefits the
linkage between different links in the productive chain, reduces costs, and
increases the competitiveness of the companies.
The German government encourages technological innovation and
research projects with public funding. In this sense, the Ministry of Economy and
Energy mainly targets small and medium-sized enterprises (SMEs), and the
Ministry of Education and Research aims to public-private research and
development programs. Public support is primarily directed to software
development since it concentrates the added value.
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
The disruptive technological changes that occur in different economic
activities have effects and influence on the daily activities of people in all
countries. Governments implement actions to improve the insertion of their
economies into the changing international division of labor.
A fundamental aspect of achieving this objective is to identify the main
problems they face. At the World Economic Forum 2019, it was stated that the
main problems for Mexico are: low productivity, limited infrastructure,
systematized corruption, persistent inequality, violence and insecurity, organized
crime, limited trade diversification, and limited energy reform, among others
(World Economic Forum, 2019).
The crisis of 2008 generated adverse effects on the Mexican economy that
persisted in 2019, including a decrease in the country's growth rate, an increase in
unemployment and poverty, and a decrease in the purchasing power of most of
the population. In other words, some problems have not been solved, and that
needs to be addressed because of the changes that the 4IR implies.
Despite the country's macroeconomic achievements, inequality is an issue
in the Mexican economy that is evident in many aspects, including income
distribution, in the country's regions, in the cities, among companies, whether
industrial, service or linked to agriculture.
There are great disparities in many ways in the country. Although there
has been progressing in terms of infrastructure (roads, industrial parks, and
inland ports aimed at supporting productive activity), it is still insufficient for
what is required by a country the size of Mexico. It is necessary that production
for export is diversified and that new markets are open to not depend, as has
been the case up to now, on what has been the main destination of sales abroad,
the EU.
Corruption, insecurity and organized crime affect economic activity
because they imply extra “costs" to companies and the population in general and
discourage investment for fear of facing extortion problems or difficulties in
undertaking projects.
Another important problem is the productivity of companies. Here is the
disparity once again. Very different companies coexist in Mexico, from micro to
large companies with more than 250 workers, all with different characteristics.
6
The gap is very large between companies in the same economic activity and
7
those located in different regions of the country. The larger ones have economic,
human, and technological resources that allow them to face the challenges of
There are national private capital companies and foreign capital companies.
6
They are available with modern and mature technology.
7
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Morales-Alquicira, A.; Rendón-Trejo, A. & Guillen-Mondragón, I.
79
competition in an open and globalized economy, while others are very limited in
resources of all kinds; there are even subsistence ones.
A study by the Economic Commission for Latin America and the
Caribbean (ECLAC) shows that in 2012 in Mexico, the difference in productivity
between large companies and MSMEs is very large. In the case of Germany, the
difference is small (ECLAC, 2013, p. 21), see Table 1.
Table 1. Relative productivity of companies in Germany and Mexico, by size in
2012 (Percentages)
Source: Own elaboration (ECLAC, 2013).
The size of enterprises in Germany doesn´t correspond to the same
number of employees or sales amount of Mexico. In 2012 in Mexico, the
productivity of the micro-enterprise represented 16% percent of the large
enterprises, meanwhile, in Germany, it was 67 percent.
The ample productivity gap in Mexico is explained, among other causes,
for unequal, sectoral and regional economic growth, insufficient development
poles, and limited corporate growth.
Regarding the connectivity issue, the number of internet users in Mexico,
as a total percentage of the population shows growth: in 2015 was 52.1 percent
and in 2016 of 53.6 (INEGI, 2019), see Table 2. This data places the country below
the values of the Organization for Economic Co-operation and Development
(OECD) from which Mexico is part of.
Table 2. Penetration and gaps of internet users in the OECD and Mexico in 2015
and 2016
(Percentage of people who uses the internet regarding the total population)
Source: Own elaboration (INEGI, 2019; ECLAC-UN, 2018).
Company size*
Country
Micro
Small
Medium
Big
Germany
67
70
83
100
Mexico
16
35
60
100
Region and Country
2015
2016
OECD
78.8
80.9
Mexico
52.1
53.6
Gaps (Percentage points)
Mexico-OECD
-26.7
-27.3
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
In Mexico, e-commerce is increasing. The Gross Added Value of Electronic
Commerce (VABCOEL) grew in real terms between 2014 and 2017 (see Table 3).
Its most significant variation occurred between 2015 and 2016.
Table 3. Mexico. GDP and Gross Value Added of Electronic Commerce
(VABCOEL), 2014-2017
(Actual values for 2013 in millions of pesos)
Notes: R Revised figures, P Preliminary figures.
Source: Own elaboration (INEGI, 2019a; INEGI, 2019b).
In this context, in 2018, the Ministry of Economy stated that the challenges
faced by Mexico to implement the I4.0 were (Villareal, 2018):
• Encourage greater investment in science and technology.
• Improve the training of young people to acquire the necessary skills and
abilities in the face of rapid technological change .
8
• To bring the academy and research centers closer to the productive sector.
• Allocate resources to projects with greater growth potential.
•To promote research and innovation centers.
•Facilitate technology transfer.
"These aspects are important because in Mexico the generation of
innovations is insufficient and, despite the adoption of technologies from the
third industrial revolution, few micro, and small enterprises have made
substantial changes in their organizational, productive and service systems.
There are still a few companies that allocate resources to research,
technological development, and innovation. It is the big companies, mainly
multinationals, that are doing this; they are the ones that are reconverting
technologically.
It will be important to have a dual training in which, in addition to the academy, they are linked
8
to the productive activities of the companies.
Concept
2014
2015
2016R
2017P
PIB
16,733,655
17,283,856
17,786,911
18,163,490
VABCOEL Total
574,581
597,120
686,317
801,827
VABCOEL/PIB (%)
3.4
3.5
3.9
4.4
Variation of VABCOEL (%)
---
3.9
14.9
16.8
Digitization of Economic Activities for Job Creation and Social Stability and Competitiveness
Morales-Alquicira, A.; Rendón-Trejo, A. & Guillen-Mondragón, I.
81
Some already have digital platforms and resources that allow them to
optimize their processes and reduce costs, better understand the characteristics,
needs, and desires of their clients and, at the same time, influence their tastes and
modify their preferences (Ponce, 2016, p. 11). This is the case of companies such
as Bosch, Honeywell, Nissan, Intel, or KIA .
9
The issue of labor and the capitalization of its knowledge are key factors
for the company. The processing of information and the generation of new
insights into the production process leads to better results, favors the conditions
that allow innovation. In this dynamic, training, recognition of work,
entrepreneurial culture, and the economic capacity of the company, among other
factors, are fundamental for the adoption of new technologies.
GOVERNMENT ACTIONS TO PROMOTE DIGITIZATION IN MEXICO
In Mexico, the strategy to convert the industry to digitization is being
implemented through the Intersectoral Committee for Innovation (CII) headed
by the Ministry of Economy (SE) and the National Council for Science and
Technology (CONACYT).
It has the participation of other federal government agencies, state
governments, and the country's business, scientific and academic sectors. In 2011,
the CII implemented the National Innovation Program (PNI) to promote and
strengthen the productivity and competitiveness of the national productive
apparatus through innovation (Secretaría de Economía-Comité Intersectorial
para la Innovación, 2011).
The PNI integrated several programs of previous administrations and
developed the Program for Stimulation of Research, Technological Development
and Innovation (PEI) (CONACYT, 2019a).
Through this program, CONACYT allocates resources to companies to
promote technological innovation projects, which are complementary to the
amounts that companies allocate for this purpose.
The number of projects benefiting from the EIP in 2017 was lower than in
2009. The total amount of support also fell, even less than in 2009, in 2018 it fell,
even more, see Graph 1.
KIA Motors arrived in Mexico in 2016, it has a production plant in Pesqueria, Nuevo Leon,
9
which includes M2M processes and robotic processes. With its flexible production line it can
produce one unit every 53 seconds “The most modern plant of the global KIA Motors system,
has an installed capacity of 400,000 units per year, its plan is to supply the compact cars for the
American continent"; (González, 2018, p. 26).
Social Inclusion and the Future of Work
82
Sánchez-Gutiérrez, J. & González-Alvarado, T.
Graph 1. PEI. Number of projects benefited and total amount of support for
2009-2018
(Millions of real pesos, base 2013)
Source: Own elaboration (CONACYT, 2019b).
In the same way, the fiscal resources granted to Branch 38 National
Council of Science and Technology (R38 CONACYT), referred to as the support
of technology and innovation activities, as well as postgraduate scholarships and
quality support, also decreased. In 2015 they were 31,404 million pesos (DOF,
10
2014) and by 2018 they were reduced to 21,683 million pesos, (DOF, 2017) which
translates into a decrease of 30.95 percent.
The Federation's Expenditure Budgets are prepared at current prices. To compare the figures
10
of various years, in this work the figures of 2009 to 2019 were converted to real prices of 2013.
Each figure at current prices was divided by the corresponding implicit price index of the Gross
Domestic Product (GDP), base year 2013. The formula used was:#
#
Where:
!
!
The source of IPIi2013 is (INEGI, 2019).
!
!
In the same way, the fiscal resources granted to Branch 38 National Council of Science and
Technology (R38 CONACYT), referred to the support of technological and innovation activities, as
well as postgraduate scholarships and quality support, also decreased. In 2015 they were 31,40414
million pesos (Official Journal of the Federation, 2014) and by 2018 they were reduced to 21,683
million pesos, (Official Journal of the Federation, 2017) which translates into a decrease of 30.95
percent.
With the arrival of Andres Manuel Lopez Obrador to the presidency of Mexico, it was thought
that the trend would change and that support for innovation would increase, however, this was not
the case, the fiscal resources allocated in 2019 to the above-mentioned sector were reduced even
further, remaining at 18,862 million pesos (Official Journal of the Federation, 2018), see Graph 2,
which meant a reduction of 13.01 percent compared to the last year of Enrique Peña Nieto's
administration. With that budget reduction, it was anticipated that the stimulus to innovation would
also decrease, but the result was more serious. The 2019 call of the PEI was cancelled due to
insufficient budget 15 , which means the abandonment of a policy of stimulating innovation, so
important for the development of new products and processes needed in a competitive global world
with great technological changes.
Graph 2
Fiscal resources granted to Branch 38 CONACYT and PEI, period 2013-2019
(Millions of real pesos, base 2013)
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
14!The Federation's Expenditure Budgets are prepared at current prices. To compare the figures of various years,
in this work the figures of 2009 to 2019 were converted to real prices of 201. Each figure at current prices was
divided by the corresponding implicit price index of the Gross Domestic Product (GDP), base year 2013. The
formula used was:
!"#$%&' (!)#
*!*#$%&'
+,,
Where: !"#$%&' (-./01234235146375#8193:;3<1453#= >4913<1453?,+@
!)# (-./01234238.551A2375#8193:;3<1453#3
*!*#$%&' 3 ( *B76#8#2375#813#A/1C3:;3DE!3:;3<1453#= >4913<1453?,+@
The source of IPIi2013 is (INEGI, 2019).!
15!On December 18, 2019, the CONACYT informed the companies with proposals entered to participate in
the 2019 PEI call that “…the 2019 Call was cancelled, as there was not enough budget for its operation…”
(CONACYT, 2019c).!
!
!
In the same way, the fiscal resources granted to Branch 38 National Council of Science and
Technology (R38 CONACYT), referred to the support of technological and innovation activities, as
well as postgraduate scholarships and quality support, also decreased. In 2015 they were 31,40414
million pesos (Official Journal of the Federation, 2014) and by 2018 they were reduced to 21,683
million pesos, (Official Journal of the Federation, 2017) which translates into a decrease of 30.95
percent.
With the arrival of Andres Manuel Lopez Obrador to the presidency of Mexico, it was thought
that the trend would change and that support for innovation would increase, however, this was not
the case, the fiscal resources allocated in 2019 to the above-mentioned sector were reduced even
further, remaining at 18,862 million pesos (Official Journal of the Federation, 2018), see Graph 2,
which meant a reduction of 13.01 percent compared to the last year of Enrique Peña Nieto's
administration. With that budget reduction, it was anticipated that the stimulus to innovation would
also decrease, but the result was more serious. The 2019 call of the PEI was cancelled due to
insufficient budget 15 , which means the abandonment of a policy of stimulating innovation, so
important for the development of new products and processes needed in a competitive global world
with great technological changes.
Graph 2
Fiscal resources granted to Branch 38 CONACYT and PEI, period 2013-2019
(Millions of real pesos, base 2013)
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
14!The Federation's Expenditure Budgets are prepared at current prices. To compare the figures of various years,
in this work the figures of 2009 to 2019 were converted to real prices of 201. Each figure at current prices was
divided by the corresponding implicit price index of the Gross Domestic Product (GDP), base year 2013. The
formula used was:
!"#$%&' (!)#
*!*#$%&'
+,,
Where: !"#$%&' (-./01234235146375#8193:;3<1453#= >4913<1453?,+@
!)# (-./01234238.551A2375#8193:;3<1453#3
*!*#$%&' 3 ( *B76#8#2375#813#A/1C3:;3DE!3:;3<1453#= >4913<1453?,+@
The source of IPIi2013 is (INEGI, 2019).!
15!On December 18, 2019, the CONACYT informed the companies with proposals entered to participate in
the 2019 PEI call that “…the 2019 Call was cancelled, as there was not enough budget for its operation…”
(CONACYT, 2019c).!
!
!
In the same way, the fiscal resources granted to Branch 38 National Council of Science and
Technology (R38 CONACYT), referred to the support of technological and innovation activities, as
well as postgraduate scholarships and quality support, also decreased. In 2015 they were 31,40414
million pesos (Official Journal of the Federation, 2014) and by 2018 they were reduced to 21,683
million pesos, (Official Journal of the Federation, 2017) which translates into a decrease of 30.95
percent.
With the arrival of Andres Manuel Lopez Obrador to the presidency of Mexico, it was thought
that the trend would change and that support for innovation would increase, however, this was not
the case, the fiscal resources allocated in 2019 to the above-mentioned sector were reduced even
further, remaining at 18,862 million pesos (Official Journal of the Federation, 2018), see Graph 2,
which meant a reduction of 13.01 percent compared to the last year of Enrique Peña Nieto's
administration. With that budget reduction, it was anticipated that the stimulus to innovation would
also decrease, but the result was more serious. The 2019 call of the PEI was cancelled due to
insufficient budget 15 , which means the abandonment of a policy of stimulating innovation, so
important for the development of new products and processes needed in a competitive global world
with great technological changes.
Graph 2
Fiscal resources granted to Branch 38 CONACYT and PEI, period 2013-2019
(Millions of real pesos, base 2013)
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
14!The Federation's Expenditure Budgets are prepared at current prices. To compare the figures of various years,
in this work the figures of 2009 to 2019 were converted to real prices of 201. Each figure at current prices was
divided by the corresponding implicit price index of the Gross Domestic Product (GDP), base year 2013. The
formula used was:
!"#$%&' (!)#
*!*#$%&'
+,,
Where: !"#$%&' (-./01234235146375#8193:;3<1453#= >4913<1453?,+@
!)# (-./01234238.551A2375#8193:;3<1453#3
*!*#$%&' 3 ( *B76#8#2375#813#A/1C3:;3DE!3:;3<1453#= >4913<1453?,+@
The source of IPIi2013 is (INEGI, 2019).!
15!On December 18, 2019, the CONACYT informed the companies with proposals entered to participate in
the 2019 PEI call that “…the 2019 Call was cancelled, as there was not enough budget for its operation…”
(CONACYT, 2019c).!
Digitization of Economic Activities for Job Creation and Social Stability and Competitiveness
Morales-Alquicira, A.; Rendón-Trejo, A. & Guillen-Mondragón, I.
83
With the arrival of Andres Manuel Lopez Obrador to the presidency of
Mexico, it was thought that the trend would change and that support for
innovation would increase, however, this was not the case, the fiscal resources
allocated in 2019 to the above-mentioned sector were reduced even further,
remaining at 18,862 million pesos (DOF, 2018), see Graph 2, which meant a
reduction of 13.01 percent compared to the last year of Enrique Peña Nieto's
administration. With that budget reduction, it was anticipated that the stimulus
to innovation would also decrease, but the result was more serious.
The 2019 call of the PEI was canceled due to insufficient budget , which
11
means the abandonment of a policy of stimulating innovation, so important for
the development of new products and processes needed in a competitive global
world with great technological changes.
Graph 2
Fiscal resources granted to Branch 38 CONACYT and PEI, period 2013-2019
(Millions of real pesos, base 2013)
Source: Own elaboration (DOF, 2012, 2013, 2014, 2015, 2016, 2017, 2018;
CONACYT, 2019b; INEGI, 2019).
On December 18, 2019, the CONACYT informed the companies with proposals entered to
11
participate in the 2019 PEI call that “…the 2019 Call was cancelled, as there was not enough
budget for its operation…” (CONACYT, 2019c).
Social Inclusion and the Future of Work
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
RESULTS
The study on the actions implemented by the Mexican government over the last
ten years shows the modest interest in converting the productive apparatus
towards digitization that characterizes the 4RI. In Mexico, we have sought to
support innovation with pre-4RI technologies.
One of the characteristics that differentiate the processes of technological
innovation in Germany and Mexico is that in the European country the actions
are directed to reconvert its industry towards digitization, a fundamental
characteristic of the 4RI.
On the other hand, in Mexico, more than digitizing the economy, it has
sought to adopt or adapt technological improvements to make processes more
efficient, reduce costs, increase productivity, and improve competitiveness.
This is the case, for example, with improvements in mechanical processes,
energy savings, or the inclusion of information and communication technologies
in production processes.
Nevertheless, the importance of industry and the economy to make
changes in line with the technological advances that are quickly incorporated
into a large number of productive activities and services in various areas of the
economy in the world, in Mexico the resources allocated to research and
innovation activities have been decreasing. The situation is further aggravated in
the case of the PEI, as in 2019 it was reported that that year's Call was canceled.
Industrie 4.0 is a successful model of digitization. In order for Mexico to
implement it, it would require coordination of efforts so that, in addition to
technological reconversion and financial support for innovation activities, it
would promote the development of platforms for its implementation, a network
of testing laboratories and definition of standards, which would facilitate
intercommunication between companies.
Doing so would promote the correlation between different links in
different production chains, reduce costs, and increase the competitiveness of
enterprises. This, however, is far from happening in Mexico.
CONCLUSIONS
Industrial revolutions have led to profound transformations in economic systems
and social structures. The life of societies has changed with the irruption of new
productive paradigms.
The 4RI constitutes a paradigm change from conventional forms of
production. There are new technological advances, materials, software, and
Digitization of Economic Activities for Job Creation and Social Stability and Competitiveness
Morales-Alquicira, A.; Rendón-Trejo, A. & Guillen-Mondragón, I.
85
innovations in the value chains. Manufacturing operates with cyber-physical
systems.
Robotics and nanotechnology are becoming everyday occurrences, the
same thing happens with the functioning of intelligent machines, which self-
regulate, self-diagnose, and communicate with each other. Machines move
human work; activities, open and interconnected, are performed by machines in
shorter times.
Governments of developed countries have implemented digital
conversion programs. The I4.0 platform is a successful example of digitization
driven by the German government. In the case of Mexico, one might ask: how the
current government intends to promote the digitization of the industry as a
distinctive feature of the 4IR? In the country, programs and funds have focused
on technological innovation regardless of whether or not it is from the 4IR.
The country faces challenges in the 4IR: low productivity, limited
infrastructure, poor human resource training and education, low-paying jobs,
corruption, poverty, and inequality. Important conditions for this technological
revolution are certainty and security, a climate of social peace, free of crime and
corruption, as well as information security.
The current government is responsible for several activities. One of the
first is that it formulates an operational program for science, technology, and
innovation policy that gives certainty and coherence to its actions.
It should improve the institutional regulatory environment for the
development of all activities involved in the digitization of industry and the
economy in general, with clear, transparent rules, without discrimination, that
gives legal certainty and confidence to investors so that, in principle, the
connectivity infrastructure is expanded and standards for interoperability and
cybersecurity are developed.
Stimulating scientific and technological innovation requires stimulating
technical cooperation in the use of shared services, cloud computing, hardware,
and software security, electronic signatures, among others; the government
should make progress in stimulating and regulating this.
There is also a need to attend to and equip educational and research
institutions to create skills and knowledge in students for their insertion in the
4IR scenario. For now, this seems distant, since in 2019 the current government
has reduced the fiscal budget granted to the 38th National Council of Science and
Technology and canceled the 2019 Call of the PEI. This implies a precarious
interest in industrial digitization and the competitiveness of the country.
The new government needs to build a real stimulus strategy for the
digitization of economic activities. The efforts that have been made so far are
limited. In addition to improving the digital infrastructure, educational and
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
research institutions at all levels must be provided with the necessary equipment
to build students' skills and knowledge for their insertion into the 4RI.
Progress is also needed in establishing clear laws and operating rules that
give certainty and confidence to investors. Failure to make progress in the above-
mentioned areas will have serious consequences for business competitiveness,
job creation, and social stability.
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Film Industry International for
the Future of Work and Social
Inclusion
Tania-Elena González-Alvarado
Universidad de Guadalajara, Mexico
Renata Kubus
Universidad Nacional de Educación a Distancia, Spain
José Sánchez-Gutiérrez
Universidad de Guadalajara, Mexico
INTRODUCTION
he global economic environment is progressively making us rise the
question of the importance of value creation to adapt to the new reality.
It also shows that the future of work is increasingly determined by the
climate change and not only by the technological advances. (Burch,
2010).
Meanwhile, the covid19 pandemics teaches us that the transcendental
changes in human history do not necessarily lie nor in economy, neither in
technology. In this sense, the future of work is addressed as a great challenge.
While there is huge uncertainty regarding the future that humanity, it is a great
challenge to envisage employment or other meaningful living and fulfilment
ways for people.
This places greater emphasis on learning from more complex and less
competitive economic sectors, as their cases have shown ways in which economic
agents develop their ability to adapt (Amin, & Cohendet, 1999; Berkhout, Hertin,
& Gann, 2006; Dervitsiotis, 2006; Pike, Dawley, & Tomaney, 2010).
Nowadays, it is impossible to address social inclusion and the future of
work (Pearce & Randel, 2004) while ignoring this adaptive capacity. What is
T
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more, there are sectors which can be considered native of future of work, as the
ways they are operating since their very beginning are subject to the current
conditions assigned to the future of work.
This is very true for artistic and cultural sectors, as well as care or house
services. Furthermore, especially the cinematographic industry, represents an art
which itself was made possible due to the technological advancements of last
centuries. Furthermore, it is deeply affected by recent technological innovations
and the growing globalization.
Cinematography, like all elements of art and culture, has been subjected to
transformation processes, just to mention the evolution from the product towards
the service (e.g. in the sense of transition from DVDs to streaming services
acquisition). Processes that have involved the destruction of considerable part of
jobs and gains for artists and the emergence of new activities (Nichols, 1988;
Benjamin & Jennings, 2010).
The present analysis should convince the reader that cooperation —
creation of value to and through sharing it (Sáez & Cabanelas, 1997)— is a
fundamental principle in economic activities in the face of the world crisis, both
due to the great depression and the global pandemic. (Grigoryev, 2020).
Covid-19 has the potential to destroy individual livelihoods, businesses,
industries and entire economies (Grigoryev, 2020; Laing, 2020). The primary
impact on the sector has been a dramatic contraction in demand as industrial
production, and construction (Laing, 2020).
Creating value to share is a strategic principle that companies in difficult
environments have used to maintain their position in the markets, benefiting
local development (González & Martin, 2013; González, Cabanelas & Cabanelas,
2016).
Creating value in order to share it, is a strategic principle that companies
in difficult environments have used to maintain their position in the markets,
benefiting also local development (González & Martin, 2013; González,
Cabanelas & Cabanelas, 2016).
In this way, the authors of this chapter consider that the creation of value
to share it (Sáez & Cabanelas, 1997; Vives, 2012), is fundamental for a future of
work that guarantees greater well-being and inclusion for those who have
remained marginalized by the system. The analysis of the film industry and the
results achieved in terms of cooperation are developed and studied through the
lens of this idea.
“People who have the knowledge and skill needed to perform the job well and
who value opportunities for growth and learning will be internally motivated to
perform such jobs, which over time should result in greater overall job satisfaction
and higher quality work outcomes.” (Oldham & Hackman, 2010, p. 465)
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Starting from the international trade liberalization, the film industry
struggles between liberalization and protection of culture. On the one hand, the
film industry in the free international trade environment is an industry that sells
and allows profits generation.
On another hand, the film industry as a cultural expression requires
protection against free-of-charge trade or piracy (Fuentes, 2011). Two
contradictory situations. Despite this debate, the internationalization of this
industry has not been hindered.
Formal use of the term Creative Industries is quite recent (1994), marking
the digital era of cultural industries and creativity (Moore, 2014). The film
industry is part of the cultural and creative industries (Beck, 2005; Moore, 2014).
It contributes massively to the world economy. The cinematographic
industry is a key factor in the digital economy. This industry creates millions of
jobs, enhances the attractiveness of cities, and improves the quality of life, both in
high- and low-income countries (Unesco, 2015). For these reasons, there are
several questions that arise. What is the future of work in the film industry?
What about social inclusion in the international business cooperation in the
movie industry?
FUTURE OF WORK AND SOCIAL INCLUSION IN THE INTERNATIONAL
BUSINESS COOPERATION NETWORK
The subject matter of future of work concerns above all, but not exclusively, the
reconfiguration of socio-ecological dynamics of the labor market (figure 1) that
emerges from current trends such as (Kubus, 2020):
• Globalization, understood as the acceleration of exchanges, in terms of
time, but also space. It implies a greater number of interconnections, but
not but not necessarily their higher quality.
• Demographic change, i.e. the reversed age pyramid of population, with
a large part of it in advanced age, especially in developed countries. This
demography changes both the vision of the individual's working life, as
well as the demand for jobs and care. It also affects the availability of
pensions, hardly sustainable with the reversed age pyramid and current
tax regimes, especially when related to matters of tax evasion of large
capitals or transnational companies.
• Technology is the revolution that has been considered the most, in two
terms. First, because of the employee's own ability to adjust to the new
reality of the labor market. Second, through the automation a large part
of jobs, which implies (supposedly) creative destruction of an important
part of jobs.
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91
• Climate change, which affects the different countries and social strata
unevenly, accelerating migration flows.
• Inequality or peripheralization, in terms of means of production with
the predominant role of capital, as compared to labor and land. Lately,
some include data with a relational disposition towards capital because
they provide the energy/learning for artificial intelligence.
Figure 1. Future of Work - Impact Factors
Source: Own elaboration (CID-N).
The conditions of the labor market in the global scenario have the
following characteristics: a structural scarcity of decent work, robotization and
automation, atomization, and many times expected free provision of value, for
instance when contributed collectively, as is the case with open source platforms
(Figure 2).
The world scenario in terms of future of work presents challenges that
require economic agents to have a long-term vision, focused on creating value.
This vision could allow turning threats into opportunities and weaknesses into
strengths.!
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Figure 2. Future of Work – Work Conditions
Source: Own elaboration (CID-N).
It is a scenario that fosters international collaboration between companies.
The long-term collaboration between companies from different regions is
conceived as an international business link (Lafer, 1973; Abdenur & de Souza,
2013; Bueno & Saraví, 1997; Tabares et al., 2014; Yoguel & Bercovich, 1994;
González, 2007; Quiñones et al., 2019).
Companies establish international cooperation links in search of greater
competitiveness through market expansion and cost reduction (Liendo and
Martínez, 2001; Donovan et al., 2004; Tkachuk, 2004; Kulfas, 2009; Velásquez,
2004; Galdeano-Gómez, 2016; Yoon et al., 2018; Prashantham, & Birkinshaw,
2019).
Cultural, geographic, and legal barriers become almost nil when agents
from different regions interact under the cooperation mechanism (Asia, Europe,
Eastern Europe or Latin America).
This does not mean that these barriers disappear. It rather implies that the
agents who have decided to cooperate strive to overcome them in an attempt to
link up and achieve synergies. So that, these synergies can translate into new
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93
resources, improved capacities, and, finally, competitive advantages in constant
transformation.
Synergies that translate into new resources, better capacities, and, finally,
competitive advantages in constant transformation. The cooperation is essential
for the new reality, when would require radical change of widely shared
managerial values. We summarized those constraining values as follows:
“The increasing popularity of self-managing teams, re-engineering, and sundry other
organizational innovations, coupled with the increased flexibility in work
arrangements made possible by advances in information technology, has expanded
considerably the scope, challenge, and autonomy of front-line work. Professional
jobs, on the other hand, appear to be shrinking, which is perverse because
professionals are the people we rely on to make wise decisions in uncertain
circumstances.” (Oldham & Hackman, 2010, p. 467)
The creation of cooperative links fosters the creation of value. Regarding
future of work, remuneration and benefits must be associated with the creation
of value in society. Unfortunately, and when it comes to capital, many times it is
not focused on the contribution to the real economy.
Originally paid work does not have to be linked to value creation. Thus,
work by itself does not guarantee social inclusion. On the other hand, the work
that results from cooperation strategies, creating value to share it, fosters social
inclusion.
Paid work does not have to be necessarily linked to value creation, there
are so called absurd jobs (Kubus, 2020). What is more, work by itself does not
guarantee social inclusion for workers. From another perspective, the work that
results from cooperation strategies, creating value to share it, is more prone to
fosters social inclusion and thereby contributes to building a more humane
future of work.
The logic of the network cooperation system is characterized by the
following points:
1. The cooperation mechanism tends to be the binding factor.
2. Agents have learned to see failure and opportunism as part of learning;
and thus, it does not stop them in the search for new collaborators.
3. The economic agents involved are convinced that cooperation further
increases benefits and offers them new competences.
4. They have in place a permanent negotiation process.
5. They consider the counterparty as partners that help them achieve their
objectives and generate synergies.
These are the characteristics of the international business cooperation
network, the object of this analysis. Together with the international business
cooperation network, social cohesion is articulated around the work that
establishes the network of connections and interrelations. This is an important
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
question that allows for determination of the status of people in society, in
addition satisfying their basic needs.
It brings along a sense of identity, belonging and purpose, but workplace
can also be a trap, causing exclusion (also due to lack of work), and trap the
person, both physically and emotionally. The work in the context of the business
cooperation network encourages inclusion rather than labor exclusion.
Additionally, international support programs such as Al-Invest, free trade,
and global value chains were factors that triggered these international networks
led by smaller (Liendo & Martínez, 2001; García & Moreno, 2007; Perego &
Marteau, 2007; Luna, 2009; Capó-Vicedo et al., 2009; Ferraro & Stumpo, 2010; Pla-
Barber & Escribá, 2010; Moncayo, 2010; Fernández % Revilla, 2010; Albizu et al.,
2011 ; Fernández-Jardón, 2012).
Companies operating in the film industry have exhibited very specific
behavior in the face of the existence of international business cooperation
networks. Their strategies are different from those of other sectors
(environmental, agro-industrial, automotive, artisanal, and textile). These
strategies focus on a minimum number of opportunities that have had to be
reinforced with public policies and regional agreements.
This leads to questioning. What strategies have been followed by
companies located in the film industry in the face of international business
cooperation ties? What they are looking for in view of the possibility of becoming
a part of an international business cooperation network?
The answers to these questions make it easier to respond the inquiry
stated at the beginning of the document. What is the future of work in the film
industry? Is there social inclusion in the international business cooperation
corresponding to the cinematographic industry?
INTERNATIONAL COOPERATION IN THE FILM INDUSTRY AND
FUTURE OF WORK. DISCUSSION OF RESULTS
The film industry emerged in the United States. It started as an industry when
cinema is considered from a business and a product perspective. Production,
distribution, and exhibition are essential for the film industry. What started as
art, soon also became a digital age business (Cousins, 2005; Sadoul, 1977).
Furthermore, it continues to embrace the complex articulation of various forms
of work - artisan, technical, artistic-creative (Bulloni & Del Bono, 2019).
The film industry has a different characteristic for each region. The United
States is the first consumer market of digital content. Europe is number one in
advertising. Latin America and the Caribbean are characterized by their
television consumption. Africa and the Middle East represent fast-growing
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95
markets. In Asia, the cinema occupies a second place because in the first position
are video games. (UNESCO, 2015).
Table 1 shows the main European states that are co-producers of feature
films for the years 2012 and 2013, along with the United States. France, the
United States and the United Kingdom maintain the highest participation in this
type of business relationship in absolute numbers.
Table 1. Main countries co-producers of feature films, 2012 and 2013
Source: UNESCO (2016).
Graph 1. Percentage of co-production by country with respect to the total
production of feature films in 2013
Source: Own elaboration (UNESCO, 2016).
Countries
Nº co-productions
Nº feature films
2012
2013
2012
2013
France
129
116
279
270
USA
115
94
738*
738*
United Kingdom
84
88
326
223
Germany
82
74
220
241
Spain
56
57
182
231
Belgium
48**
53**
55**
70**
Netherlands
39
42
79
103
Switzerland
39
34
93
68
Italy
37
29
166
167
Ireland
26
21
38
34
43
13
40
31
25
76
41
50
17
62
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
However, when comparing the number of co-productions with the total
number of feature films produced, significant changes can be noticed (Graph 1).
The United States produces more than seven hundred feature films a year. Thus,
compared to the total, the percentage of US co-productions is low, barely over 10
percent. On the other hand, the European States such as Belgium, Ireland, and
the Netherlands, which in absolute numbers have few productions, maintain a
high level in what respects to the percentage of their co-productions. There are
states in which the film industry depends more on this type of business ties.
The statistical data presented in 2017 by the European Audiovisual
Observatory refers exclusively to the European States. These data present very
similar results to those of UNESCO in 2016, although they include Spain. In
absolute terms, the States of the European Union with the highest number of co-
productions in the 2007-2016 period are France (556), Spain (460), Germany (411),
and Switzerland (221). (European Audiovisual Observatory, 2017)..
Asian co-productions show strong regionalism, converging in
collaboration between Hong Kong and China (68.5%). This intersection is also
observed between Great Britain and the United States, as well as between Spain
and Argentina. However, in the Asian case, the result is more evident. Regarding
the European States, only Germany registers co-productions with China. In the
same way, in the film industry there are no Latin American companies that have
been linked with China. (Table 2).
Table 2. Co-production of China with other regions (2002-2012)
Source: MPA (2016).
Country
Nº co-productions
%*
Hong Kong, China
293
68.5%
Taiwan, China
50
11.7%
USA
37
8.6%
Japan
21
4.9%
United Kingdom
18
4.2%
Korea
11
2.6%
Germany
7
1.63%
Singapore
6
1.4%
Australia
5
1.2%
Canada
5
1.2%
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97
Technological advancement and the internationalization of the media have
led to the globalised film industry. This industry has become fragmented, it is
becoming increasingly more plural and multiculturalist (Lipovetsky, & Serroy,
2009).
An inherent characteristic of this industry is diversity, seen from three
perspectives: sources, supply, and the exposure of audiences (UNESCO, 2016).
• Sources: diversity of producers and distributors of content, and in the
workforce hired by the acting companies (UNESCO, 2016).
• In the featured films: diversity of film genres; demographic diversity - racial,
ethnic and gender characteristics of the people involved in the full-length
movies - and diversity of ideas - points of view of different social, political
and cultural perspectives - presented in the feature films exhibited (UNESCO,
2016).
• Audience exposure: diversity of horizontal exposure - related to the
distribution of audiences through the available films at any given time - and
diversity of vertical exposure - related to the diversity of content consumed
by a particular individual or social group over time (UNESCO, 2016).
The diversity of this industry hinders its internationalization, even when
there are regional agreements with policies that encourage distribution between
different countries. Such is the case of Mercosur, as well as of the agreement
between the European Union and Mercosur. (Fuentes, 2011; Moguillansky, 2010).
Due to the obstacle of diversity, co-production is the key form of cooperation for
internationalization in the film industry.
While in other sectors the most favorable form of cooperation is
representation/presence and sales abroad, for the film industry these two forms
are unfavorable.
Co-production is how companies in the film industry cooperate for
internationalization. It has spread since the commercial opening of the last
century. It is almost always carried out between companies that share a historical,
cultural, or linguistic background (UNESCO, 2016). For example, the circulation
of Ibero-American cinema both within the region and in the EU is not very
significant, with the exception of the co-production feature film (García, 2010).
Unfortunately, co-production is not one of the decisive links in the value
chain in the film industry. The decisive links in the value chain are both
distribution and exhibition (González, 2019). Hence the importance of subsidy
and financing mechanisms throughout regional or national policies (Amiot-
Guillouet, 2019).
Some governments have promoted co-production with other countries
through international programs. One of them is the Ibermedia Programme, created
in 1996, for the Ibero-American space (UNESCO, 2016). Among the Ibero-
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
American countries, the three that grant the most funds to the film sector are
Mexico, Brazil and Argentina, with subsidies, tax incentives, promotion plans
and screen quotas being the most widely used mechanisms (García, 2010).
The co-productions are transnational, with narratives aimed at a global
audience. Co-production implies the hiring of workers from different countries,
thus obtaining multinational recognition. Co-production promotes social
inclusion because it encourages job creation for people with different
backgrounds. It also promotes and make available the access to and
understanding of different, in many cases marginalized cultures and subcultures.
In this way, benefits are obtained in all the countries that intervene in
production, increasing fundraising, while ensuring marketing and screen quota
for each of the countries involved in the co-production (González, 2019).
Brazil and Argentina are an example of this. Both countries have decades
of experience in regulating and promoting cinema. These two countries have a
series of co-production and cooperation agreements. The agreements between
Brazil and Argentina multiplied ties and strengthened film integration for both
countries, despite language differences (González, 2019). These agreements
fostered multicultural and inclusive work. Multiculturalism and inclusion are
correct responses to the challenges of the future of the job and collective
intelligence development.
Information was obtained on the events organized by the Nafin
Eurocenter in the period 2002-2009 (16 meetings with a total of 2,724
1
participating companies). One of these events was for the Film Industry (172
companies from different countries). Companies that had disappeared by 2019
were eliminated. Only companies that maintain links with companies from other
regions were investigated.
When the objective is to obtain as much information as possible about a
certain problem or phenomenon, a representative case or a random sample may
not be the most appropriate strategy (Flyvbjerg, 2006). Studying 172 cases
facilitates the identification of atypical or extreme cases. These types of cases
reveal more information because they activate more actors and more basic
mechanisms in the situation under study.
From an understanding- as well as an action-oriented perspective, it is
often more important to clarify the root causes of a given problem and its
consequences than to describe the symptoms of the problem and how often they
occur.
Random samples that emphasize representativeness rarely produce this
kind of knowledge. It is more appropriate to select some cases due to their
Nacional Financiera and European Union Trust created on June 1st, 1995
1
Film Industry International for the Future of Work and Social Inclusion
González-Alvarado, T.; Kubus, R. & Sánchez-Gutiérrez, J.
99
validity (Flyvbjerg, 2006: 45). In this study, these are 172 cases. Although it
should be mentioned that this type of research is usually slower and more
expensive.
Regarding 172 companies that are the object of this study, these
correspond to Spain, France, Germany, Mexico, Argentina, Brazil, and Uruguay.
The strategies of these companies have been oriented mostly towards co-
production (83%), with special emphasis on financing (Table 3).
Table 3. Cooperation in the film industry within the framework of Al-Invest
Source: Own elaboration based on the result achieved in the project.
22.67 percent link co-production with the distribution. The rest associate
co-production with financing, omitting the benefit of co-production brought by
the presence in various consumer markets. There are nine percent of companies
that overlook the possibility of establishing cooperation links through co-
production and focus on very different forms of linkage which are shown in the
table below (Table 4).
Table 4. Other interests to link
Source: Own elaboration based on the result achieved in the project.
Author / screenwriter looking to sell original feature film script
Sale or exchange of material is offered. As well as files for use.
Offered the artistic and technical realization of the NANO series of microprograms in
3D animation of 12 chapters, lasting 3 to 5 minutes.
It offers comprehensive soundtrack recording services (music, effects, dubbing, etc.).
Technology transfer.
Marketing.
Co-production
Distribution
Others
Co-production linked
to distribution
143
56
16
39
83.13%
32.55%
9.3%
22.67%
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
An important element to deepen the analysis of the future of work and
social inclusion in co-productions is the intermediate demand. Careers in project
networks of the film industry, local networks with international networks (Scott,
1984; Jones, 1996).
“Career patterns are changing. As fewer people attach their long-term fortunes to
the fates of a single organization, more and more people follow a free agent
route. The free agent scrambles, bee-like, from opportunity to opportunity
without regard to boundaries. While this career scramble is new to most
industries, it has been common to the film industry.” (Jones & DeFillippi, 1996).
The film industry operates with subcontracting. The production model
was changed to the flexible independent system with cross-border co-production
(Szeto & Chen, 2013). This subcontracting is defined as intermediate demand.
Intermediate demand is the link for a better understanding of business
cooperation and the future of work (Graph 2).
In many case, there is an asymmetry of decision-making powers between
the buyer (s) and the subcontractors (De Propris & Hypponen, 2008). In other
cases, the situation shows more details. The social networks of the industry in
Hong Kong and relationships at multiple scales – across national boundaries,
within local settings, and on production sets – were examined, revealing their
critical role in contributing to the health of the film industry (Kong, 2005).
Graph 2. Intermediate demand for services in the film industry
Source: Own elaboration.
Film Industry International for the Future of Work and Social Inclusion
González-Alvarado, T.; Kubus, R. & Sánchez-Gutiérrez, J.
101
The risks faced at various steps of the production, marketing, and
distribution process are ameliorated by trust relations, built up through time
between social actors in spontaneous ways (Kong, 2005).
CONCLUSIONS
What strategies have companies in the film industry followed in face of
international business cooperation links? Co-production. What are they looking
for in view of taking part in an international business cooperation network?
Based on the 172 cases presented, they search for financing and distribution.
Companies in the film industry show a very specific behaviour facing the
existence of international business cooperation networks. Their strategies focus
on a minimum of opportunities that have had to be reinforced with public
policies and regional agreements. Since co-production is not part of the decisive
links in the value chain, a high percentage of participating companies directly
associate the need for financing with co-production.
The Intellectual Property Rights require an adjustment due to the new
conditions brought by technology and globalization, thus we should welcome
the recent enforcement of the World Intellectual Property Organization (WIPO)
Beijing Treaty on Protection of Audiovisual Performances, however a lot of work
is still pending for their implementation by different geographical areas and
countries.
Business cooperation as a strategic principle for value creation can
contribute to greater social inclusion and diversity. Concerning the future of
work, it is envisaged that greater cooperation, leads to creation of jobs, better
adaptation of work to new realities, and greater well-being at work. This last
statement is open to new lines of research that facilitate and deepen the study of
the future of work and business cooperation in sectors negatively impacted by
changes in the environment and new scenarios.
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Impact of Open Data on the
Creativity for Innovation
Carlos Estrada-Zamora
Universidad de Guadalajara, Mexico
INTRODUCTION
he advent of new information and communication technologies (ICTs)
has led to the emergence of the so-called large database economy (BGE)
(Cuquet & Fensel, 2018; Fosso et al., 2018), in which organizations can
collect large amounts of information on the behavior of ICT users from
their online operations.
This chapter focuses on the study of the impact of open data on the
creativity of individuals and organizations, as a scientific study approach in the
process of consolidation in the field of social sciences.
This means that the open data generated by governments is a relatively
new tool for individuals and organizations, due to the opening made in 2009 by
the US government - during the administration of Barack Obama - to make
available to the public the information held by the government in an exercise of
transparency and access to public information in the framework of the
"Memorandum on Transparency and Open Government" (Lee, Almirall, &
Wareham, 2015).
Beginning with the U.S. government initiative in 2009, many governments
around the world set to work on developing legal frameworks to operationalize
open data initiatives according to the information and technological possibilities
then available to them, to make public the information that the different
operational areas of governments had at their disposal and that could be used by
the public for new uses (Kassen, 2018; Lee et al., 2015).
Creativity is another variable that is intertwined for the understanding of
the innovations produced by the openness of data produced by governments,
T
Impact of Open Data on the Creativity for Innovation
Estrada-Zamora, C.
107
starting from the fact that innovations may have different patterns to a point of
reference, but not mean something creatively stimulating or interesting.
Creativity is conceived as an inherent function of man; it is coined from
the history of the Bible, in Genesis (creation of the world), to the contemporary
approaches that theoreticians such as Joseph A. Schumpeter have given to the
management of innovation (Hammershøj, 2017; Schumpeter, 1961). What is
certain is that creativity can be approached from different perspectives in reality,
especially because it is part of the so-called "Creative Economy" (CE), where
value creation arises from the intellectual contribution that people can give to
things within organizations (Bolisani & Brătianu, 2018).
For this work, creativity is the whole process of generating new original
ideas (which links the concept, as many types of researches point out, to the term
innovation) for the solution of problems. Therefore, creativity must possess three
key factors (or components) to be considered as such: originality, usefulness, and
surprise (Simonton, 2018).
Making use of one of the advantages of the BGE, this work carries out
bibliometric analysis using the free access software VOSviewer (Van Eck, &
Waltman, 2020), which, by downloading indicators from the scientific database of
great prestige in this context, Scopus (Elsevier, 2019), carries out the analysis of
semantic variables that make it possible to identify clusters of topics that are
mostly dealt with in said repository according to the search patterns of the topics
that are described in the methodology of this article.
PURPOSE
This chapter seeks to perform a bibliometric analysis of the good practices
documented by the scientific community in the development of applications
based on open data between 2008 and 2018, to identify the most solid semantic
relationships and their temporal evolution in organizations.
It seeks to contribute by giving a first look at the first period (five years) of
scientific documentation of the phenomenon of open data and how individuals
and organizations have developed creative concepts to make use of these open
repositories of governments around the world, to provide solutions to the
absence of information for decision making or the inability to interpret them.
CREATIVITY AND INNOVATION
The raw material of this work is creativity, which has been understood as a series
of mental processes that allow the generation of totally new ideas, which in turn,
give rise to the creation of value for organizations (George, 2007; Jauk, 2019;
Wang, 2019).
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
However, this term in many of the dissertations of scientists is linked to
innovation, by the simple and obvious connotation of the generation of the new,
also, as a term linked to the knowledge economy (KE), in which the know-how
(knowledge of the matter) is fundamental to generate value in the organization
(Hammershøj, 2017).
The economics of creativity (or orange economy) (EC) is a recently
emerged technical framework in which "ideas are transformed into cultural and
creative goods and services whose value is or could be protected by intellectual
property rights" (Benavente & Grazzi, 2017). This framework is very important
for today's economy, due to the preponderance of the generation of value from
people's ideas and the proliferation of ICTs.
Innovation is, then, all those processes that contribute to the addition of
value to products, services or ideas, which can range from the primordial in
functionality to the aesthetic and represents a great contribution to economic
activity, due to the impact that improvements have on the economic performance
of the portfolio of organizations that, for example, in Latin America constitutes
the 5.20% contribution that the region makes to the world Gross Domestic
Product (GDP) (Benavente & Grazzi, 2017).
According to Keeley and others (2013), innovation can be done in three
dimensions: configuration, offer, and experience. The configuration is made up of
the business model, the network of contacts to generate value, the operational
structure and the composition of internal processes; on the other hand, the offer
is what refers to the performance of the product and the system that makes up
the product (such as complimentary products) and; experience is everything
related to the service around the product, the distribution channel, the brand,
and its loyalty.
The scientific community debates the co-occurrence of creativity and
innovation as phenomena that influence or are necessary for the competitiveness
of organizations today (Derdowski et al. 2018; Echeverri, Lozada, & Arias, 2018;
Moreno & Munuera, 2014). The nature of these variables leads us to the
reasoning about how two phenomena with particular characteristics between
them cannot be understood without the interrelation they imply. The dissertation
is very necessary to understand the phenomena that imply these variables.
CREATIVITY AND OPEN DATA
This section seeks to compile scientific evidence documenting the use/
development of mobile or web applications on the use that has been given to
open data for solving problems of information gaps for decision making of
people and / or organizations.
Impact of Open Data on the Creativity for Innovation
Estrada-Zamora, C.
109
Based on the search made in Scopus and according to the display based on
the order of appearance of the results according to the most recent publication
date in the first place, was found an interesting application of open data for the
solution of the serious problem with the public transport infrastructure in the
Italian city of L'Aquila, which was severely affected by an earthquake in 2009
and which, with the help of an application using a georeferenced algorithm
made information on local public transportation infrastructure ("infostructure")
more accessible to the population and visitors (Falco et al., 2018).
The search also yielded another case of digital inclusion of elderly people
in the district of Bremen-Hemelingen (Germany) by generating a map that acts as
a mobile digital guide co-created with the information that elderly people shared
in their social networks, which allowed the creation of a sensitive app with the
capabilities of this population group carried out by the European Project Mobile-
Age (Berker, Reins, & Heck, 2018).
Another example of scientific research on co-creation through the use of
open data is presented to us by Emaldi and others (2017) through the WeLive
platform, which is formed as a quadruple helix (companies, government, citizens
and universities) that generates a collaborative ecosystem for innovation through
the use of open data.
Lyu and Zheng (2017), conducted an interesting review of the open data
policy of the government of Shanghai (China) since its launch in 2014 and how
the applications arising from it contributed to the creation of value in society.
The main benefits of the open data in this case and other examples found
focused on solving urban problems by attracting talent and investments in the
subject (Martínez, López, & Pastor, 2014; Sandoval, Gil, Luna, Luna, & Rojas,
2012).
Creative activity has no limit and can come from different sources, for
example, "hackathons", events in which software developers come together to
collaborate in the generation of applications that empower discriminated groups
by opening access to information that is generally in the hands of a few, for
exploitation for the common good. Although its nature has barely been
empirically explained at the scientific level, it is now being increasingly
researched to inform knowledge of these events (ICEIS, 2017).
In educational terms, the review of scientific literature on Scopus showed
a case of creative app development whereby students can learn about economics,
society and the environment in a globalized world with data updated in real-
time, making Globe-Town.org an application that contributes knowledge on the
above topics with very close references to reality (Townsend et al., 2013).
Open data has also had an impact on the creativity with which new forms
of business are formulated, since nowadays, multiple business applications for
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
marketing products and services using platforms based on open information,
such as Uber , Rappi , or Netflix (Alt & Smits, 2014; Wijnhoven, 2014; Vasa &
1 2 3
Tamilselvam, 2014).
The search found at a glance a large number of scientific documents
whose themes showed a growing application of open data studies in the
development of applications for urban development. This is quite likely due to
the importance of ICT in urban areas and the ease of accessing and sharing data
that exists.
MEXICO: CASES OF DEVELOPMENT OF APPLICATIONS BASED ON
OPEN DATA
After reviewing some of the cases of development of applications based on open
data, the present work is given to the task of documenting as an interesting
contribution, the cases of use of open data for the generation of useful
applications for various purposes, for people and organizations.
The first example that is particularly interesting to present in this review
of the literature, comes from one of the experimental applications that the
National Institute of Statistics and Geography of Mexico (INEGI, 2018)
developed to know the mood in —practically— the real-time of a part of the
Mexican population, who use the social network Twitter, called: "mood of the
twitters in the United Mexican States”.
This application of "data science", according to the technical
documentation that the institute makes available to visitors to its microsite,
consists of the use of non-traditional data sources (such as social networks), of
which pre-classified information is collected (according to geolocation patterns),
stored, re-labeled (with the help of a semantic relationship algorithm) and re-
processed, to be disseminated in an interactive application hosted on the INEGI
website (INEGI, 2018; Picazo et al., 2017).
This application allows you to know the mood of Twitter users in Mexico
in real-time from the INEGI website, which is represented by a point on a
graphical plane that expresses the average value between positive and negative
twits. Also, the graphical application allows information to be disaggregated by
states or in the national conglomerate (INEGI, 2018).
Besides, INEGI has developed other applications with the help of other
institutions of the Mexican government (51 at the time of this study), including
Private transport service based on geolocation
1
Home distribution application for multiple products and services such as food or money
2
Online multimedia content distribution platform
3
Impact of Open Data on the Creativity for Innovation
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the climate change microsite , and the application for mobile devices for
4
calculating electricity consumption , RadarCiSalud for the identification of the
5
closest places to the location of individuals where free medical attention can be
received , the microsite and applications for mobile devices for the consultation
6
of statistical information in the country,"México en Cifras” .
7
METHODOLOGY
To analyze the objective data of this work, a bibliometric analysis was carried
out, which has been used since 1969 since its use was documented by the British
scientist Allen Richard, who sought to statistically analyze the bibliography,
which implies the identification of patterns of variables through the keywords,
words contained in the summaries that keep the scientific repositories, names of
authors and the references of the consulted bibliography (Liang & Liu, 2018; Liao
et al., 2018).
For this research use is made of the scientific database Scopus, particularly
with the results of the search between titles of articles, the abstract of them and
their keywords based on the combination of terms: "Open Data", "Applications"
and "Apps" (contraction widely used the word "Applications"), which yields 47
scientific documents that have been published on the subject in the last five years
(from 2012 to present 2018).
Once the database was obtained from the results export function provided
by Scopus in CSV format (database format that supports the software used for
the analysis), the base information obtained by the bibliometric data analysis
software was analyzed using graphic representations: VOSviewer (Van Eck, &
Waltman, 2020; Van Eck & Waltman, 2014).
RESULTS AND FINDINGS
Under the methodological approach for analyzing the bibliography using the
graphic method of semantic relations using VOSviewer, the database obtained
from the search described in the Scopus repository was executed, obtaining the
following conglomerates and interpretations, Diagram 1.
https://cambioclimatico.datos.gob.mx/tab1.html), the application for mobile devices for
4
calculating electricity consumption (https://datos.gob.mx/herramientas/calculo-consumo-hogar?
https://datos.gob.mx/herramientas/calculo-consumo-hogar?).category=web&tag=salud
5
https://datos.gob.mx/herramientas/radarcisalud?category=movil&tag=salud
6
https://datos.gob.mx/herramientas/mexico-en-cifras?category=movil&tag=geoespacial),
7
among many other applications
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Diagram 1. Network visualization of variable sets in bibliographic records of the
terms "Open Data", "Applications" and "Apps" in Scopus between 2012 and 2018.
Source: Own elaboration.
The network of relationships found from the graphical output offered by
VOSviewer shows interesting correlations in terms that —can be inferred— relate
open data to the social aspect related to government, mainly to the variables of
open government, public administration, public data processing, intelligent
cities, and innovation. This last term, inherent to creativity, was not included
within the bibliometric exploration variables in order not to alter the richness of
the search results (see Diagram 1).
From the findings, the terms directly related to creativity from open data
(observed as less important variables) are mobile and desktop application
development, crowdsourcing, innovation, and software development (see
Diagram 1).
Another interesting function of the VOSviewer is the possibility of
observing the data from its temporal evolution, which adds to our dissertation
the variable time, then, can be observed as the semantic terms of greater
persistence in the history of scientific research to the term "Open Data", in a
middle term to the "development of applications" and as terms of recent use or
Impact of Open Data on the Creativity for Innovation
Estrada-Zamora, C.
113
appearance to the "intelligent cities", the "crowdsourcing" and the mobile
applications. Innovation remains a present term since the beginning of the
scientific documentation of the subject (see Diagram 2).
Diagram 2. Visualization of the temporal evolution of the network of variable
sets in bibliographic records of the terms "Open Data", "Applications" and "Apps"
in Scopus between 2012 and 2018.
Source: Own elaboration.
Finally, Diagram 3 shows the density of each of the variables in terms of
the appearance in scientific research work within Scopus, which leaves the main
search term —Open Data— as the majority present, followed by the terms
discussed above and which appear with relatively lower weights —which does
not mean less important— on the map.
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Diagram 3. Density display of variable sets in bibliographic records of the terms
"Open Data", "Applications" and "Apps" in Scopus between 2012 and 2018.
Source: Own elaboration.
CONCLUSIONS
The importance of this study lies in the realization of a first approach to the early
history of open data from the vision of creativity in the development of
applications for decision making and problem-solving.
The history can be qualified as early, due to the lack and recently
documented appearance of scientific studies in the matter (with only six years of
having mentioned the first term with the search variables explained in the
methodology).
The undeniable relationship between creativity and innovation is present
in the analysis of bibliometric data, this, by the appearance of this last variable
within the clusters of topics that were most used in the scientific work on the
subject collected.
As noted in the direct review of each of the search results, the 47
documents submitted for analysis by the VOSviewer software as a whole confirm
Impact of Open Data on the Creativity for Innovation
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115
the prevalence of the term "Smart Cities", due to the boom in open data as a
window for solving urban problems.
However, the uses for crowdsourcing, the development of software and
mobile applications as variables temporarily considered in the most recent
scientific work, could be a consistent indicator of the interest they are taking for
the community, although not entirely accurate, due to the short history of the
subject in the work of researchers.
The nature of the topic obliges the governmental linkage and its
responsibility in the generation of mechanisms that improve the appropriation of
open data by the community, for example, with the call made by the government
of Mexico through INEGI to promote tools such as the one that allows knowing
the mood of the country's Tweeters.
The maturity that open data policies must have in countries in the
medium term will be of great importance for the development of the same, due
to the opportunities for creative innovation that this will bring to all social
sectors, especially the less economically favored and, above all, in a global
context that prepares for the Internet of things and a flood of data to understand
and exploit strategically.
RECOMMENDATIONS
The study of Open Data is recommended before other variables that may be of
interest to the scientific community in terms of semantic analysis, mainly as an
element of a retrospective on the direction this phenomenon is taking in its short
life of study by scientists.
Issues such as the formats that open government data should adopt as a
homogenization measure for the exploitation of these repositories, as well as the
social, ethical, and environmental implications that the use of Open Data is
having for the societies of the countries, were left out of this study.
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The Trust on Social Networks
and the Increased Social
Commerce
Celestino Robles-Estrada
Universidad de Guadalajara, Mexico
Diana-Isabel de la Torre-Enríquez
Universidad de Guadalajara, Mexico
Alberto-Alejandro Suástegui-Ochoa
Universidad de Guadalajara, Mexico
INTRODUCTION
he use of social media has seen a tremendous increase in the last few
years. Social media platforms have played a major role in content
marketing by sharing information and opinions about products and
services (Cha, 2009), users are motivated by fulfilling emotional, social,
functional, self-oriented, and relational needs (Davis, Lang & San Diego, 2014).
These social media platforms are based on openness, cooperation, co-creation,
trust, and commitment between users (Constantinides, 2014).
Recently, social commerce (s-commerce) gained major attention from both
academics and practitioners. Numerous studies have been conducted to
understand s-commerce and examine their impact. Since 2010 the published
studies on s-commerce increased.
Busalim and Hussin (2016) conducted a systematic review of s-commerce
research and identified 110 studies that address s-commerce published from 2010
to 2015. The results from their study show that the studies addressing s-
commerce increased during the last 6 years.
They observed that the current studies covered numerous research themes
under s-commerce, such as user behavior, business models, s-commerce website
T
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121
design, adoption strategy, social process network analysis, and firm performance.
Social media usage may be a good strategy for businesses to increase sales by
retaining current customers and developing new customers (Hajlia et al., 2015;
Eikelmann, Hajj, & Peterson, 2008).
In today’s challenging business environment, social media tools have been
actively used for firms to present their business online and achieve marketing
values (Stephen & Toubia, 2010; Gefen, 2000). For example, firms may have a fan
page on Facebook that allows management to interact directly with customers to
improve and manage customer relationships.
As such, social commerce has facilitated new channels that enhance
communications between business enterprises and customers, thus, providing an
innovative approach for changing business practice (Kera & Kaynak, 1997; Lin,
Le & Wang, 2017).
SOCIAL MEDIA
The emergence of Web 2.0 applications transferred the human approach to the
web and interconnectivity among users (Mueller et al., 2011; Drury, 2008).
Nevertheless, the terms Web 2.0 and Social Media are new terms in the
Internet and Marketing lexicon and there is no consensus as to their exact
meaning (Constantides, 2014). O’Reilly (2005) popularized the term Web 2.0 as
the next stage in the Internet evolution by referring to it as a wide collection of
online applications sharing several common interactive characteristics.
According to Constantides (2014) “Web 2.0 is a collection of interactive,
open-source and user-controlled Internet applications enhancing the experiences,
collaboration, knowledge and market power of the users as participants in
business and social processes.
Web 2.0 applications support the creation of informal users’ networks
facilitating the flow of ideas, information, knowledge, and promote innovation
and creativity by allowing the efficient generation, dissemination, sharing, and
editing of content”.
The meaning of the term Social Media is different from the meaning of
Web 2.0 although the terms are often used interchangeably (Kim & Bae, 2008;
Constantides, 2014).
Social media can be defined as any form of online publication or presence
that allows interactive communication, including, but not limited to, social
networks, blogs, Internet websites, internet forums, and wikis (Akman & Mishra,
2017).
The use of social media sites is gradually increasing and, over the past few
years, social networking has attracted people in such a way that it has become a
daily part of their daily lives (Gayathri, Thomas & Jayasudha, 2012).
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Progressively, the use of social media evolved and many social media-
based businesses have emerged, giving rise to social commerce. Social Commerce
refers to “the delivery of e-commerce activities and transactions via the social
media environment, mostly in social networks and by using Web 2.0 software.
Thus, social commerce “is a subset of e-commerce that involves using
social media to assist in e-commerce transactions and activities” (Liang &
Turban, 2011, p. 6). It enables businesses to reach global and distant customers
and to build a good relationship with them (Cho et al., 2014).
Social media represents one of the most important platforms for electronic
e-commerce and amplifies the ability for communication with large numbers of
consumers – be it organization to consumers or consumer to consumers
(Mangold & Faulds, 2009; Sago, 2010; Evans, Bridson. & Rentschler, 2012).
It has one of the most metamorphic impacts on business (Aral, Dellarocas,
& Godes, 2013) and remarkably revolutionizes the way the consumers and
organizations interact (Todri & Adamopoulos, 2014).
Social media tools provide improved communication and collaboration
between firms and their stakeholders (e.g. customers, suppliers, business
partners) (Culnan, McHugh, & Zubillaga, 2010), an innovative way for firms to
identify products with high selling potentials (Liang & Turban, 2011), and a
better channel for attracting and retaining online customers (IBM, 2018).
The rapid growth of social media has made it also challenging to follow
the trend and understand the operating of the different social media platforms to
perform business tactics.
For instance, there is a lack of information on how the perception of the
platform usage, influences the purchase behavior, whereas there are endless
social media platforms for different usages and unique characteristics (Hajli et al.
2017; Peters et al., 2013). Thus, there is an urgent need to understand social
commerce shoppers’ shopping behavior while considering the specificity of the
social media platform.
Social media represents an important platform for e-commerce and has
one of the most metamorphic impacts on business. Therefore, investigating the
usage of s-commerce concerning important behavioral factors could provide
valuable information for companies in establishing policies and strategies.
It could also be useful for management studies and researchers in
understanding the consumers’ attitude towards the usage of social media for
commercial purposes. S-commerce creates opportunities for firms. Based on
findings this research provides insights with major implications for marketers,
who would like to generate direct sales on social network platforms.
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123
SOCIAL COMMERCE
The social interactions of people on the Internet, especially in social networking
sites (SNSs), have created a new stream in e-commerce. This new stream is social
commerce (Mahmood, 2013).
The concept of social commerce emerged through Web 2.0 in 2005 amid
the growing commercial use of social networking sites and many other social
media websites (Curty & Zhang, 2011; Liang et al., 2011). It ushers a new form of
e-commerce (Wang & Zhang, 2012).
Social commerce is often considered as a subset of e-commerce (Curty &
Zhang, 2013; Liang et al., 2012), however, unlike traditional e-commerce where
consumers usually interact with online shopping sites separately, social
commerce involves online communities that support user interactions and user-
generated content (Kim & Srivastava, 2007).
Prior research has broadly characterized s-commerce with two essential
elements: social media and commercial activities (Liang et al., 2012; Kim & Park,
2012).
Stephen and Toubia (2010) defined s-commerce as a form of Internet-based
social media, which enables individuals to engage in the selling and marketing of
products and services in online communities and marketplaces.
Dennison, Bourdage Braun and Chetuparambil (2009) adopted a definition
provided by IBM and explained it as the marriage of e-commerce and electronic
word-of-mouth (eWOM). Marsden and Chaney (2012) conceptualized social
commerce as the selling with social media websites, such as Facebook, Twitter,
LinkedIn, Pinterest, and YouTube (the “Big Five”), which support user-generated
content and social interaction.
According to Liang and Turban (2011) and Chen, Su and Widjaja, (2016), s-
commerce is the use of Web 2.0 and social technologies to support interactions in
an online context to support consumers’ acquisition of services and products on
the Internet.
Social commerce can also be defined as word of - mouth applied to e-
commerce (Dennison, Bourdage-Braun & Chetuparambil, 2009), and it involves a
more social, creative and collaborative approach than is used in online
marketplaces (Parise & Guinan, 2008; Jiang et al., 2014).
Recent research identified two major types of social commerce: (1) social
networking sites that incorporate commercial features to allow transactions and
advertisements; and (2) traditional e-commerce websites that add social tools to
facilitate social interaction and sharing (Huang & Benyoucef, 2013; Liang &
Turban, 2011).
In s-commerce, consumers are active and they have social relationships
with other friends, members of other communities, and e-vendors. They
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
communicate, rate other products, review others’ opinions, participate in forums,
share their experiences, and recommend products and services (Mahmood, 2013).
The progressive development of technologies suggests that the era of s-
commerce will eventually become the mainstream for marketing, following the
success of SNS (Marsden, 2010; Stephen & Toubia, 2010).
Additionally, the benefits gained from s-commerce depend on the
behavior of individuals on online platforms and the information that is shared or
spread publicly via such platforms. Therefore, s-commerce has become an
important area of exploration for university and industry researchers interested
in online technologies and their impacts on consumers and businesses (Lee &
Phang, 2015).
To analyze this commercial phenomenon, researchers have focused on
finding factors that affect social commerce (Kim & Park, 2013; Wang & Zhang,
2012; Zhang, Zhang, & Hans-Dieter, 2013) and there have been several published
studies seeking to understand the relationship between social commerce factors
and consumer purchase intentions.
Previous studies have shown that platform technological services (Curty
& Zhang, 2013; Huang & Benyoucef, 2013; Wu & Wang, 2011), interaction/
information communication (Gabriela, Hor-meyll, & De Paula Pessôa, 2014) and
relationships (Liang, Ho & Li., 2012; Welbourne et al., 2006) have a significant
influence on consumers’ purchase intention.
TRUST IN SOCIAL MEDIA CONTEXTS: A MODEL
The perception that leads to purchasing consumer behavior in social media
context as approached in this study is in agreement with the concepts stated in
the Theory of Reasoned Action (TRA) model by Fishbein & Ajzen (1975), the
Theory of Planned Behavior (Ajzen, 1991) and the UTAUT2 (Unified Theory of
Acceptance and Use of Technology 2) Model (Venkatesh, Thong, & Xu, 2012).
The identification of consumer motives is important for marketers and
retailers to use to enhance the probability that the products and experiences they
develop and provide satisfy consumers’ needs (Kang & Johnson, 2015).
In light of these developments, the main objective of this study is to
investigate the usage of s-commerce mediated by intention regarding behavioral
factors that enhance trust as a key factor that influences shopping intention.
These factors were selected to be in line with the available literature.
Trust is a concept studied in different disciplines such as philosophy,
economics, sociology, management, and marketing (Jim et al., 2014; Blois, 1999;
Rousseau et al., 1998).
Trust can be considered as a function of the degree of risk inherent in a
certain situation (Koller, 1988). Many researchers argue that trust is a crucial issue
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in online shopping environments where there may be lots of uncertainty (Pavlou,
2003; Mutz, 2005; Gefen, Karahanna & Straub, 2003).
It has been shown that trust plays an important role in the e-commerce
adoption process (Aljifri, Pons & Collins, 2003), also, consumers who trust e-
commerce may not necessarily trust s-commerce. Bansal and Chen (2011) claimed
that consumers are more likely to trust e-commerce sites than s-commerce sites.
Trust is more important in social commerce platforms where uncertainty is
higher due to the lack of face to face communications and the high level of user-
generated content (Lin & Lu, 2010; Featherman & Hajli, 2015), and because it
reduces “transaction cost” in business interactions (Mutz, 2005; Piller & Walcher,
2006).
It reduces the tendency to monitor other parties’ activities and is an
element in sanctioning systems as reliable (Mutz, 2005). Many different
practitioners and researchers on e-commerce believe that social trust is a key
component in a country’s economic expansion and whether they can benefit
from economic potential introduced by e-commerce (Mutz, 2005).
Previous studies have emphasized the important role of trust in s-
commerce. Moreover, It has been confirmed that trust has a significant role in a
customer’s intention to buy (Shin, 2010; Han & Windsor, 2011; Lin & Lu, 2010)
Having confidence in the provider and with less perceived risk, a customer will
search for new items or services in the online environment and be more likely to
make a purchase (Hassanein & Head, 2007; Shin, 2010).
Some authors argue that s-commerce and the emergence of Web 2.0 can
help customers to reduce their risk and increase social trust. Applications on Web
2.0, such as customer ratings and review, would be a good solution to overcome
this barrier. Social technologies enable consumers to have social activities in SNSs
(Han & Windsor, 2011), where interactions among the connected users can
increase trust among the participants (Han & Windsor, 2011; Swamynathan et al.,
2008).
Trust is an important determinant in considering a consumer’s intention to
buy (Roca, García, & De la Vega, 2009; Han & Windsor, 2011). The more trust the
consumers have, the more likely it is that they will buy (Han & Windsor, 2011).
Hence, it is important to investigate exhaustively the role of trust in a
social commerce adoption system. Trust can come from different sources. Linda
(2010) claimed that various factors such as information quality, communication,
and WOM effects could make s-commerce trustworthy because consumers
themselves create them.
Kim and others (2005) claimed that gaining consumers’ trust is a key
factor in s-commerce and found that various constructs such as the reputation
and size of the s-commerce site.
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Figure 1: Conceptual research model
Source: Own elaboration.
Figure 1 demonstrates a model for research. This research model includes
five constructs: informational support, emotional support, trust to SNS, trust to
friends in the SNS, eWOM from friends in the SNS, the reputation of the s-
commerce company are the independent variables, and purchase intention is the
dependent variable. The variables included in the research model are
hypothesized as follows.
Social support
Social support, a notion from psychology is defined as the social interaction of
individuals in a network that is cared for, answered to, and supported (Ali, 2011;
Albors, Ramos & Hervas, 2008).
Strong social support makes a user feel connected to friends as well as
builds trust with others in an online community (Crocker & Canevello, 2008;
Weber, Johnson, & Corrigan, 2004).
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Social support refers to the perception of a member of a group or
organization of being helped, responded to, and cared for physically and
psychologically by others in the group or organization (Crocker, 2008).
In s-commerce, social support is useful in building close relationships
among users and enhancing users’ well being in organizations (Obst, 2010).
On social media platforms, the user receiving shared information
perceives others as being caring and helpful when they provide useful life or
product information.
After receiving such information, the user will be willing to acquire or
share valuable shopping information with others. Frequent sharing of supportive
information can enhance friendship and trust among users; which may further
increase the intention to conduct commercial activities (Liang & Turban, 2011).
Previous studies have also revealed that social support exists in three
forms: emotional, tangible, and informational (Schaefer, Coyne & Lazarus, 1981).
Emotional support
Emotional support includes being able to confide in and rely on another
person, contributing to the feeling that one is loved or cared about or even that
one is a member of the group and not a stranger. In social commerce, emotional
support is present when users perceive themselves as being cared for or
empathized with based on the information provided by other users. Taylor and
Heejung (2004) found that the emotional support provided by others in the
group may reduce stress.
Emotional support will help members open up and look for help from
other members of the community. In particular, some scholars have
demonstrated that caring is the basis for trust development (Ommen et al., 2008).
Therefore, through emotional exchange and connection with other
members within the community, people will develop their trust toward other
members and the social commerce community. Therefore,
Hypothesis 1. Emotional support is positively related to trust toward SNS
friends.
Hypothesis 2. Emotional support is positively related to trust toward SNS.
Informational support
Informational support refers to providing information and advice that
could help another person. The various forms of UGC, including
recommendations, advice, and knowledge, are all manifestations of information
support.
Coulson (2005) found that information, particularly factual evaluation
information, posted in response to queries by members may help to solve
problems. It is not difficult to understand that if people can consistently obtain
instrumental assistance, such as valuable advice and immediate help from their
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
online friends or the focal community, they will be more likely to have
confidence on the other side's benevolence, integrity, and ability, and further
form a feeling of trust toward the information providers (Prahalad &
Ramaswamy, 2004; Porter & Donthu, 2008; Chen, Xiao-Liang, & Shen, 2015).
Based on this reasoning, the following hypotheses emerge:
Hypothesis 3. Informational support is positively related to trust toward
SNS friends.
Hypothesis 4. Informational support is positively related to trust toward
SNS.
Trust toward SNS
Trust toward community refers to one's perception of the focal community
as a reliable and predictable place for social interaction. Online communities
often have commonly accepted standards to ensure mutual and reciprocal
benefits for its members.
As the reciprocal nature of communication lying in the center of the
virtual community (Chen, Zhang, & Xu, 2009; Yadav et al., 2013), the extent to
which community can follow the established rules will directly determine
members' participatory activities in the community.
Besides, the benevolence and integrity of a community will smooth away
users' worry about opportunistic behaviors, such as deceptive advertising or
inappropriate use of personal information.
The relationship between trust toward a community and customers'
loyalty was well established in the literature (Schaefer, Coyne, & Lazarus, 1981;
Salo & Karjaluoto, 2007; Chen, Zhang, & Xu, 2009; Wu & Chang, 2006; Shen,
2012). Therefore,
Hypothesis 5. Trust toward SNS is positively related to social shopping
intent
Trust toward SNS friends
In this study, trust toward SNS friends is defined as an individual's willingness to
rely on the words, actions, and decisions of friend’s members in a social
commerce community.
Prior studies have found that trust toward members positively affected
online participatory behaviors, such as getting and giving information in the
focal community (Shen, Lee, & Cheung, 2014; Ridings, Gefen, & Arinze, 2002),
this is especially true if these members are also friends.
This is because, in a trusting environment, people tend to help each other
and further engage in shared social activities. In particular, information obtained
from credible sources is usually regarded as more useful and thus will be used as
a decision aid (Sussman & Siegal, 2003).
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In a similar vein, people prefer to share their product/service
consumption experience when the other side has some trustworthiness attributes
(i.e. benevolence, integrity, and ability). This will let them converse easily based
on common knowledge background and help to reduce possible opportunistic
behaviors. Therefore,
Hypothesis 6. Trust toward friends in the SNS is positively related to social
shopping intention.
eWOM
WOM theory was first developed by Arndt (1967). The original WOM theory
assumes that WOM information is an indispensable experienced source created
by individuals or marketers, and is then diffused by consumers or marketers toot
their consumers (Arndt, 1967; Engel, Kegerreis, & Blackwell, 1969).
The relationships between WOM-related constructs and consumer
purchase behavior have been well illustrated in the existing literature (see
Cheung & Thadani, 2012).
WOM information aims to help consumers fully understand a service or a
product before its consumption and might also shape expectations of service
(Wang & Chang, 2013; Bansal & Voyer, 2000; Zeithaml & Bitner, 1996).
WOM referrals refer to online activities in which consumers exchange
information or experiences to help others make purchasing decisions (Kim &
Prabhakar, 2000; Park, Chaiy, & Lee, 1998;).
The phenomena of eWOM show that online consumers can share their
experiences, opinions, and knowledge with others on popular topics (Huang,
Hsieh, & Wu, 2014; Prendergast, Ko, & Yuen, 2010), and eWOM appearing in
SNS can deliver brand messages to millions of SNS users, and that will reap the
potential to retain existing customers and attract new consumers (Chu & Kim,
2011; Shanmugam et al., 2016).
That is, online buyers, play a crucial role in promoting products or
services for s-commerce firms through WOM referrals. In online shopping, as
consumers do not have the first-hand experience of a product, such as touching it
or smelling it, reviews provided by other customers become ever more valuable,
especially if these customers do have hands-on experience of the product or
service (Do-Hyung & Kim, 2008).
Their comments, reviews, and ratings become vital supports for other
potential customers (Do-Hyung & Kim, 2008). Consumers are more likely to
value others’ information and opinions than advertising when purchasing
products or services (Park et al., 1998).
Previous studies of trust have demonstrated that online buyers influenced
by WOM referrals are likely to have a positive trust propensity. For example,
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Brown and Reingen (1987) claimed that WOM referrals represent a major factor
influencing individuals’ behaviors through unofficial communication channels.
Kim and Prabhakar (2000) demonstrated that WOM referrals play a major
role in increasing the level of trust in e-commerce. Kuan and Bock (2007) found
that WOM referrals in SNS settings are more likely to inculcate consumers’ trust
in online environments than in offline environments. S-commerce makes use of
SNSs for WOM referrals, which differentiates s-commerce from other forms of e-
commerce. S - commerce users are likely to trust other users’ experiences and
opinions concerning certain products and services or s-commerce sites.
Therefore, WOM referrals may play a more important role in inducing
consumers’ trust for s-commerce than for other forms of e-commerce. In this
regard, the following hypothesis is proposed:
Hypothesis 7. eWOM referrals have a positive effect on consumers’ intent
to purchase in s-commerce sites.
The Reputation of the s-commerce company
The Reputation of the s-commerce firm, defined as the extent to which
consumers believe that a firm is honest and concerned about its customers
(Doney & Cannon, 1997; Wang & Yu, 2017).
A firm with a good reputation or image enjoys a higher level of customers’
trust (Doney & Cannon, 1997; Jarvenpaa, Tractinsky & Vitale, 2000). Also, a good
reputation is a valuable intangible asset for many e-retailers and provides
consumers with potential cues for enhancing trust (Park, Gunn & Han, 2012).
Thus, creating a positive reputation is particularly important for those
companies to be successful. Koufaris and Hampton-Sosa (2004) claimed that
consumers’ perception of the reputation of an e-commerce site plays a key role in
building their trust in that site. Therefore, a good reputation has to be forged to
increase consumers’ trust.
Also, the reputation of a firm is often shared among consumers and thus
plays an important role in fostering their trust (Chen, 2006; Teo & Liu, 2007).
Besides, the reputation of an s-commerce firm (or a small/medium-sized firm)
indicates the level of consumers’ trust in the firm.
In this regard, the perceived reputation of a s-commerce firm has a
positive effect on the formation of the relationship between the s-commerce firm
and its customers and becomes a key determinant of trust (Jarvenpaa et al., 2000;
Park, Gunn, & Han, 2012; Teo & Liu, 2007).
Previous studies of e-commerce have demonstrated a close relationship
between reputation and trust (Casaló, Flavian, & Guinaliu, 2007; Janda, Trocchia,
& Gwinner, 2002).
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S-commerce users are likely to consider a firm’s reputation as an
important factor in evaluating their trust in the firm when purchasing products
or services. In this regard, the following hypothesis is proposed:
Hypothesis 8. A s-commerce firm’s reputation has a positive effect on
consumers’ intent to buy in SNS.
Intention to buy
Intention to buy is a construct of the technology acceptance model (TAM),
one of the most successful theories in predicting an individual’s intention to use
a system (Pavlou, 2003).
There are two core theories to test and predict an individual’s intention to
utilize information systems (Mathieson, 1991). These two theories are TAM and
the theory of planned behaviour by Ajzen (1991).
TAM is a core theory in e-commerce studies (Martins, Oliveira, &
Popoviˇc, 2014; Park et al., 2009) and many authors developed this model (Hsiao
& Yang, 2011). Intention to buy in the present study is defined as a customer’s
intention to engage in online buying in social networking sites.
RESEARCH METHOD
To test the stated hypotheses, a questionnaire was developed to measure the
constructs in the research model and all questionnaire items were measured on a
5-point Likert-scale, with 5 equivalent to “strongly agree” and 1 to “strongly
disagree.”
We implemented an online survey, which was run through the Survey
Monkey web site. Survey respondents were randomly selected among Facebook
users in Mexico. Facebook was selected, since, among numerous SNSs, Facebook
has the largest number of users Worldwide at 2,320 million, followed by YouTube
at 1,900 million, WhatsApp at 1,600 million, Facebook Messenger at 1,300
million, We Chat at 1,098 million and Instagram at 1,000 million (Statista, 2019).
Facebook not only assists communication and exchanges information but
also enables businesses to facilitate and execute sales transactions. Facebook
commerce (f-commerce), a form of s-commerce, refers to the buying and selling
of goods or services through Facebook (Marsden, 2010). !
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Table 1. The operational items
Source: Own elaboration.
No restrictions were set for age, sex, educational level, or profession.
Respondents were 305 young Mexicans. The mean age of the group was 24.65
years, the standard deviation of 1.257 years. We believe it is representative of
Mexican Facebook users as young cohorts are the most active and frequent users
of social media (AMIPCI, 2014). The operational items used to measure the
problem-solving approach construct are presented in Table 1.
Constructs
Measurement Variables
Informational
support
1. On Facebook, some people offer me suggestions when I need help.
2. When I have a problem, some people on Facebook give me
information to help me overcome it
3. When I face a difficult situation, some people on Facebook help me
find the cause and give me suggestions
Emotional
support
1. When I face difficulties, some people on Facebook are on my side
2. When I face a difficult situation some people on Facebook have
comforted and encouraged me.
3. When I have a problem some people on Facebook have expressed their
interest and concern for my welfare.
Trust in SNS
1. Facebook's performance always meets my ex Facebook's performance
always meets my expectations
2. Facebook is a good social networking site.
3. Facebook is a reliable social networking site.
Trust in SNS
Friends
1. Facebook friends always try to help me if I have trouble.
2. Facebook friends always keep their promises.
3. Facebook members are sincere when dealing with others.
eWOM
propensity
1. I like to present new brands and products to my Facebook friends
2. I like to help my Facebook friends, providing information about many
types of products.
3. My Facebook friends ask me to get information about products or
places to go shopping.
4. My Facebook friends consider me a good source of information when
it comes to new products or sales.
Reputation of s-
commerce
company
1. I buy at a s-commerce site because it is well known
2. I buy at a s-commerce site because it has a good reputation
3. I buy at a s-commerce site because it’s an honest company
4. I buy at a s-commerce site because I am acquainted with the company.
Intention to
purchase
1. I consider the buying experiences of other Facebook members when I
need to buy something.
2. I ask other Facebook members to give me suggestions before buying.
3. I am willing to buy products recommended by other Facebook
members.
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DISCUSSION OF DATA ANALYSIS AND RESULTS
To assess H1 to H8, a Structural Equation Model (SEM) was utilized. Our
analyses followed Anderson and Gerbing’s (1988) two-step approach whereby
the estimation of a confirmatory measurement model precedes the simultaneous
estimation of the structural model, as described next.
The Measurement Model
Confirmatory factor analysis was performed using EQS 6.2 to confirm the
variables measuring the constructs in the model. The reliability of the
measurement model was examined by calculating Cronbach’s alpha coefficient
for each of the constructs separately.
We also report the composite reliability and AVE of the constructs because
it is generally acknowledged that composite reliability is a better measure of
scale reliability than Cronbach’s alpha coefficient (Bagozzi & Yi, 1988).
Table 2 shows that the alpha coefficient value for all the constructs is
greater than 0.7, which is considered to be acceptable for the constructs to be
reliable (Hair et al., 2006).
The composite reliability values of all the constructs are greater than 0.6.
Following recommendations from Bagozzi and Yi (1988), this further strengthens
our assessment of reliability for all the measured constructs.
The measurement model indicates an adequate model fit of the data
(Bagozzi & Yi, 1988, Bearden, Sharma & Teel, 1982, Bentler, 1990). (χ² = 557.568 df
= 208, NFI = 0.884; NNFI = 0. 907; CFI = 0. 923; and RMSEA = 0.074).
Convergent Validity
Convergent validity was examined by calculating the average variance extracted
(AVE) and the factor loadings of the measurement items on respective constructs
in the model (Fornell & Larcker, 1981).
Table 2 shows that all the measurement variables had significant loadings
onto the respective latent constructs (p<0.05) with values ranging between
0.453and 0.881. Also, the AVE for each construct is equal to or greater than 0.50,
but for three of the constructs (‘Informational support, ‘Trust in SNS’ and ‘Trust
in SNS Friends’), which further supports the convergent validity of five of the
constructs.
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
Table 2. Reliability and convergent validity
Source: Own elaboration.
Discriminant Validity
Discriminant validity was assessed in two ways. First, as suggested by Fornell
and Larcker (1981), it was assessed by comparing the average values of variance
extracted for each construct with the corresponding inter-construct squared
correlation estimates.
Table 3 shows that most of the AVE values are greater than the inter-
construct squared correlations; two squared correlations are slightly larger than
correspondent AVE –eWOM/Intention to purchase and Informational support/
Trust in SNS, while Emotional support/eWOM shows a high difference to its
correspondent AVE, showing with this, a problem of discriminant validity.
!
Constructs
Measurement
Items
Loadings
Cronbach’s
Alpha
Composite
Reliability
AVE
Informational
support
IS1
0.453
0.844
0.702
0.451
IS2
0.794
IS3
0.720
Emotional
support
ES1
0.714
0.708
0.757
0.509
ES2
0.728
ES3
0.699
Trust in SNS
TS1
0.650
0.750
0.710
0.450
TS2
0. 697
TS3
0. 664
Trust in SNS
Friends
TF1
0. 662
0.670
0.605
0.407
TF2
0. 698
TF32
0.543
eWom
propensity
EW1
0.629
0.858
0.768
0.410
EW2
0.709
EW3
0.576
EW4
0.506
Reputation of
s-commerce
company
RSC1
604
0.909
0.867
0.574
RSC2
0.881
RSC3
0.762
RSC4
0.636
Intention to
purchase
IP1
0.619
0.853
0.700
0.439
IP2
0.648
IP3
0.716
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Table 3. Reliability and convergent validity
Note: The upper triangle has the values of squared inter-construct correlations and the lower triangle has
the inner construct correlations values with a confidence interval of 95 %; the diagonal elements are the AVE
values (bold).
Source: Own elaboration.
This may be due to problems in translating the meaning of the items but
further research is needed. Second, to test whether the inter-construct correlation
was significantly different from unity, we used the chi-squared difference tests
(Bagozzi, Yi, & Phillips, 1991).
Chi-squared difference test was performed by estimating the
measurement model by constraining the inter-construct correlation to unity and
then the same model was estimated freely, estimating the inter-construct
correlation.
The test statistic is the difference between the chi-square values of 14 more
degrees of freedom, and all changes in chi-square obtained were significant at p <
0.05 level of significance. In this case, eWOM/Trust in SNS show constructs
overlap. Overall, we believe measurement scales utilized are reasonably reliable
and valid except for the aforementioned. The Structural Model and Hypotheses
Testing
The proposed hypotheses were tested using structural equation modeling
using EQS 6.2. Results indicated an adequate model fit with a significant chi-
square statistic (Bagozzi & Yi, 1988, Bearden, Sharma, & Teel, 1982, Bentler, 1990).
(χ² = 557.568 df = 208, NFI = 0.884; NNFI = 0. 907; CFI = 0. 923; and RMSEA =
0.074) also indicated an acceptable fit of the structural model with the data.
Table 4 shows the parameter estimates of the structural model. Seven of
the hypotheses were supported. Results show that the path coefficients between
Informational support Trust towards SNS, Emotional support Trust towards
SNS, Informational support Trust towards SNS friends, Emotional support Trust
2
3
4
5
6
7
8
Information
al support
0.451
0.460
0.083
0.271
0.130
0.069
0.143
Emotional
support
0.84/0.51
0.509
0.187
0.745
0.276
0.097
0.191
Trust in SNS
0.40/0.18
0.66/0.38
0.450
0.328
0.270
0.169
0.291
Trust in SNS
Friends
0.48/0.24
0.37/0.15
0.50/0.25
0.407
0.300
0.128
0.204
eWOM
propensity
0.59/0.28
1.06/0.67
0.69/0.36
0.46/0.16
0.410
0.323
0.460
Reputation
0.60/0.27
0.73/0.42
0.67/0.37
0.55/0.27
0.70/0.38
0. 574
0.612
Intention to
purchase
0.71/0.39
0.50/0.22
0.61/0.30
0.73/0.41
0.85/0.50
0.97/0.60
0.439
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
towards SNS friends, Trust towards SNS friends Purchase Intention, eWOM
propensity Purchase Intention, and Reputation of the s-commerce site Purchase
Intention are positive and significant at p < 0.05 while the path Trust towards
SNS → Purchase Intention, is not significant p < 0.05 supporting HI, HIII, and
HV. Hence, seven linear relationships in the model were supported.
Table 4. Estimated path coefficients
Source: Own elaboration.
LIMITATIONS, IMPLICATIONS ANDS FUTURE RESEARCH DIRECTIONS
There are some limitations of this research, which needs to be considered while
interpreting our research findings. First, these findings need to be qualified with
some cautionary notes due to several limitations of the research design: this
study was based on a “snap-shot” questionnaire instead of a longitudinal study.
The quantitative analyses were developed from psychometric measures
obtained by a self-reporting questionnaire, which allowed an empirical test of the
proposed model based on statistical significance.
Investigating the usage of s-commerce concerning important behavioral
factors could provide valuable information for companies in establishing policies
and strategies.
It could also be useful for management studies and researchers in
understanding the consumers’ attitude towards the usage of social media for
commercial purposes. S-commerce creates opportunities for firms.
Based on findings this research provides insights with major implications
for marketers, who would like to generate direct sales on social network
platforms. Future research should use other moderating variables that may affect
the shopping intention in social media commerce sites.
Hypothesized paths
Path coefficients
Results
Informational support
Trust towards SNS
0.259*
H1 (Accepted)
Emotional support
Trust towards SNS
0.219*
H2 (Accepted)
Informational support
Trust towards friends
0.224*
H3 (Accepted)
Emotional support
Trust towards friends
0.578*
H4 (Accepted)
Trust towards SNS
Purchase Intention
0.054
H5 (NOT Accepted)
Trust towards friends
Purchase Intention
0.202*
H6 (Accepted)
eWOM propensity
Purchase Intention
0.254*
H7 (Accepted)
Reputation of S-C site
Purchase Intention
0.538*
H8 (Accepted)
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137
Further studies could apply a variant of research methods to include other
techniques such as interviews, which allow for a deeper understanding of the
problem and issues
CONCLUSIONS
This study investigates the factors influencing purchase intentions in social
commerce and develops a research model to study this type of commerce. Seven
significant linear relationships were supported to influence s-commerce adoption
among Mexican Facebook users.
Through this study, the theory that trust is a determining factor in the
process of adopting electronic commerce and in the intention to purchase is
confirmed.
It is expressed that the behavioral factors that are related to the purchase
intention in social media are: informational support, emotional support, trust in
social networking sites, which are areas in which companies and marketing
specialists should give them the main interest.
Consumers are content creators, they form their brand communities in
which with the information they generate, they can positively contribute or harm
the brand image of companies once it becomes viral content; therefore,
companies being aware of behavioral factors can take advantage of user-
generated content in their favor.
It was found that users trust the informative and emotional support from
other users on Facebook and that they trust the social network site as a means of
communication and information and this, in turn, guides users to make a
purchase, consequently the adoption of social commerce increases.
These relationships must be understood to observe the behavior of
consumers, monitor what they say about companies, create strategies that
generate interaction, creation, and viralization of content, stimulate trust and
finally these actions lead to the realization Shopping; that in a broader sense it
contributes to brand recognition, positioning and new methods and ways of
purchase that have been developed through the advancement and use of
technologies.
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Adaptability of Small and
Medium-Sized Businesses and
E-Commerce
Luis-Alberto Bellon-Álvarez
Universidad de Guadalajara, Mexico
INTRODUCTION
umanity from its origins has been characterized by being in
permanent evolution, that is why the world is also distinguished by
being in constant change.
Although, certainly in recent decades we have witnessed how these
changes that have been occurring in society are becoming faster. This
phenomenon also affects the business world, so companies must also be
prepared for such changes and have the capacity to adapt to them.
Specially, because markets around the world are characterized by being
increasingly competitive, so companies to be successful and be able to stand out
in those markets must have the ability to adapt to the changes that occur in the
market.
That is why the managers of any company have a central role in the
organizations they lead since they are the ones who determine the course to
follow, which is why they must be able to have a clear vision of the future that
they want to their company and the way to achieve it.
So, it is very important to study the process of organizational change in
companies, because, this allows to know what factors influence in the process of
change, as well as to know the obstacles that must be resolved to achieve it, such
as the resistance to change, which is a very common phenomenon that occurs in
the company personnel.!
H
Adaptability of Small and Medium-Sized Businesses and E-commerce
Bellon-Álvarez, L.
149
The e-business perspective indicates that there must be managerial
effectiveness that implies management effectiveness and efficiency, in other
words, of all those who have decision-making power, within organizations to
join the change in the new logic of the digital economy.
The vertiginous changes that we live in the business world motivate the
entrepreneur to prepare themselves adequately to face the strategic action, which
is already assimilated as a concept of modern management.
Small and medium-sized businesses are more flexible to adapt to change
and the needs that appear by the contingent phenomenon. No matter how small
a company is; its owners, managers, and professionals must be prepared to
develop an organizational growth strategy.
THEORETICAL FRAMEWORK
The procedure by which any process of organizational change is established
turns out to be quite complicated since firms need to face a variety of obstacles of
a different nature than hinder or make their implementation impossible.
Carrying out an analysis of an organizational change is highly relevant
since companies are in an incessant metamorphosis, therefore the importance of
understanding as best as possible how companies change and the reasons why
these changes are made or not.
The arrival of the Internet dramatically changed the world. This is because
the Internet is not only an efficient way of exchanging information. The Internet
has become the core part of e-business.
Electronic business has experienced considerable expansion thanks to the
emergence of the Internet, which has provided excellent business and commerce
opportunities for all kinds of organizations, facilitating the possibility of
extending its portfolio of buyers everywhere.
Along with this phenomenon, there is the trend that occurs throughout
the world, which follows a path towards the commercial opening and the
globalization of international markets, specially in the last twenty years of the
20th century and the beginning of the 21st century. International trade has
generated a series of links around the world, causing companies to operate in a
virtual market, and not only in physical markets.
The emergence of a new economy, which rests on a new class of company,
production models, and technological supports, has its greatest elements on the
Internet and in electronic business.
E-business is for companies, something that overcomes technological
organizational change. The challenges that a company must face when joining
the virtual business arena require adopting specific management skills and
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tactics that must be provided by the company's organizational culture. It is a very
revealing evolution in systems and in the way of organizing work and methods.
The increase in the use of the Internet throughout the world has enormous
potential, since it decreases costs of distribution of goods and services, and
overcomes the geographical boundaries, facilitating the exchange between
suppliers and consumers (Gangeshwer, 2013). This development has stimulated
the emergence of new business models, among which, stand out the digital
marketing, e-commerce, and electronic business.
Since the beginning of the 21st century, research on electronic business has
been a topic of international relevance, Libu and others (2016) and Zeng and
others (2017) point out that 2010 to 2012 stand out for the studies on this topic.
Currently, electronic business is considered a very important subject of study due
to its impact on economic and social development.
E-business or electronic business is defined as a concept in the process that
details the procedure of buying-selling, or exchanging information, goods or
services through computer networks that involve the use of the Internet (Janita &
Chong, 2013).
Whereas for Jarvenpaa and Tiller (1999), electronic business is the
automation of transactions, communication, and interaction using ICTs.
According to Damanpour (2001), electronic business is any business activity that
modifies external and internal relationships, generating value and exploiting the
opportunities that arise in markets influenced by the new rules of the
interconnected economy in which we live.
Electronic business refers to the impact of electronic commerce on
business, understood as a series of activities carried out in the organization by
which a series of inputs are transformed into outputs that create value for a
customer.
It redefines an organization's methodology by interconnecting it with
shareholders, consumers, and vendors (Hackbarth & Kettinger, 2000). Therefore,
the company must be reorganized; so that the company exchanges products,
services, capital, and Know-how digitally, that is, using Internet-based ICTs.
1 Inputs: all kinds of resources received from the external environment.
2 Outputs: product or result of the organization's activity. Results.
SMEs have structural, organizational, and economic characteristics that
put them at a disadvantage compared to large companies, a situation that can be
balanced with the use of electronic business (Erum, Rafique & Ali, 2017).
Electronic businesses can help promote the development of SMEs (Kurnia
et al., 2015; Ueasangkomsate, 2015), by selling directly to the end customer or
other companies. While Freathy and Calderwood (2016) indicate that e-business
has enormous benefits for customers.
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In turn, Gallego, Bueno and Terreño, (2016), mention that the buying and
selling operations of business firms through e-business are increased. Electronic
business drives the economic development of both companies; as from
underdeveloped and developed countries (Gutiérrez & Nava, 2016; Moon et al.,
2017).
E-business is a young type of commerce. The first indications of the
electronic business date back to 1948, but it was in the 1970s that financial
companies standardized their use, having great growth in the 1990s, due to the
emergence of new ICTs, and bringing new niche markets. (Fernández et al., 2015).
These new technologies had an impact on companies, causing
organizational changes that improved productivity, organizational structure,
effectiveness, decision-making, competitive advantages, and processes through
their simplification. (Ganga & Aguila, 2006).
The field of electronic business can be studied and analyzed from different
perspectives such as technology, economics, marketing, and new processes,
infrastructure, electronic links, value creation through information, market-
making, legislation (Shaw, 2000); as well as, strategic, organizational, and social.
(Águila & Padilla, 2001). The adoption of e-business and digital marketing is a
topic widely studied by several authors (Chen & Holsaplle, 2013; Wong &
Yazdanifard, 2015; Abed, Dwivedi & Williams, 2015; Libu et al., 2016).
The study of organizational change and its relationship with electronic
business covers various aspects, such as electronic commerce and organizational
change, the impact on organizations of the use of information and
communication technologies (Reix, 2002), strategic alignment and business
operation (Bergeron et al., 2002), challenges and effects in new information
systems, understanding of business models and strategies (Afuah 2003).
Águila & Padilla (2001) and Fresco & Álvarez (2000) study the process of
organizational change, taking Electronic Business as a starting point for their
study and analysis.
According to the Chuang model (2005), Enterprise Resource Planning,
Supply Chain Management, and electronic commerce are systems that
incorporate business processes that result in greater flexibility and better
response time by reducing barriers between functional departments.
It stands out in this axiom that electronic commerce is a process that
interacts exclusively with the buyer since the supply procedures are linked to the
Supply Chain Management process.
This reflects that electronic commerce is a subsystem of electronic
business. Due to the importance of electronic business, it is essential to carry out
digital marketing activities. To do this, you must have adequate e-commerce
solutions that ensure the success of the company (Gerrikagoitia et al., 2014).
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Electronic business is defined as the use of Internet technologies to link
employees, buyers, sellers, and business partners, using at least some of these
cases: (a) e-commerce Internet sites that provide sales transactions, (b) Internet
sites to serve customers, (c) business information portals, (d) supply chain
extranets, and (e) IP-based electronic data interchange. (Wu et al., 2004).
E-commerce is a particular type of electronic business and refers to all
business activities that use the Internet to change business relationships and take
advantage of business opportunities, influenced by an interconnected economy.
E-commerce takes advantage of the Internet as a profitability factor. This
stage is called the electronic business and covers all the applications and
processes that allow a company to carry out commercial transactions. In addition
to including e-commerce, electronic businesses consider both internal and
external applications of the company.
Thus, electronic businesses deal with e-commerce transactions, Internet
sales, and purchases; They are strategies that redefine the old way of doing
business, with the help of technological innovations, increasing buyer value, and
profits. Electronic businesses seek the path to profitability. (Kalakota & Whinston,
2001).
Concerning the review of the bibliography, Chan & Swatman (2000)
discover that the study on the implantation of computer systems and
information technologies in previous research, suggests that the use of theories of
diffusion of innovation or administration of the change, help to understand the
procedure of adoption and implementation of the change.
There is research that is based on the theory of innovation, which
highlights the adoption of technology. (Drury & Farhoomand, 1996; Pfeiffer,
1992). On the other hand, some works are based on theories of change, which
emphasize the phases involved in the implementation of change. (Ginzberg &
Shulz, 1987; Zand & Sorensen, 1975; Zmud & Cox, 1979).
Through a meta-analysis, a significant relationship was found between the
organizational adoption of technological innovations and various potential
determinants. Among those that stand out are the attitude of the leaders,
centralization, idle resources, internal and external communication, and attitude
towards change. In turn, 4 types of moderators were studied: organization class,
adoption phase, innovation class, and range of innovation. (Damanpour, 1991).
Additionally, organizational factors affect the sophistication of ICT
management, helping to increase the adoption rate of electronic businesses
(Jones, Motta & Alderete, 2016).
Ndeta, Katriou and Siakas (2015) point out that a limitation of traditional
workflow systems is that they can only support simple, static and predictable
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processes, but not dynamic and complex processes found in many e-business
companies.
These workflow systems bring together explicit product models and
processes, requiring a fully specified workflow design that can be modified to
show organizational change every time it occurs. Such workflow design patterns
can be seen as generalized solutions to recurring problems in e-business. Proven
solutions can be reused to solve recurring problems in the e-business
environment characterized by uncertainty and variations.
For his part, Pare´ and others (2011), indicate that change, clarity of vision,
organizational flexibility, the effectiveness of change, project validity, and
collective self-efficacy are indicators of readiness for organizational change,
eventually leading to the adoption of changes based on ICTs. Smith (2016), points
out that, among the best possible opportunities to face change, are technological
solutions, which support their business vision of the future, since they would be
the basis for that change.
Both the presence and the philosophy of leadership in ICTs have a positive
effect on organizational transformations that use technology as a tool for change.
Leavitt's Model of Organizational Change indicates that the information and
knowledge generated by the new solution can be used to make the company do
new and innovative things.
While Perdigón, Viltres, and Madrigal (2018), establish that technological
progress causes an important organizational change in the international business
field and fortifies its intervention in the digital age through the possibilities that
the Internet and ICTs give in the business environment.
Change is a reality for all types of companies. The forces driving this need
for change come from different sources. As part of the internal forces, it can be
mentioned from a redefinition of the strategy or variations in the workforce.
Additionally, the external forces of the company such as the market itself,
government legislation, labor market turmoil, technology, and economic
changes, help drive the need for change (Robbins & Coulter, 2000).
One of the forerunner studies in the field of organizational culture change
was proposed by Lewin (1951). The model he formulated for cultural change is
made up of three stages that have been adopted in subsequent research on this
topic. The 3 stages proposed are: thawing, changing, and freezing.
Collins and Porras (1994), studying the practices of successful and
visionary companies, found that the companies that survive are those that are
based on stable values and that are flexible to adapt to changes in the
environment around them.
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The change in organizational culture is required for the company to
subsist and in this context, the internet is a stimulus for this new organizational
culture and a facilitator of it. The role of leaders is crucial, therefore the role that
the senior change managers have had in the organizational culture change of
successful companies must be emphasized.
Correct change management will give the organizational flexibility that
the company requires to adapt to the changes; the speed that the Internet
economy requires, and the courage to accept taking risks is the beginning for
innovation; in turn, collaboration and teamwork will produce revenues through
new business models.
In summary, the orientation of the electronic business perspective
postulates that there must be managerial effectiveness, which in turn needs
executive efficiency. It is essential that the management of a company is efficient
and efficacy, so these characteristics must be possessed by all the members of the
company; since it is essential that the organization be effective in its performance.
RESEARCH METHODOLOGY
To carry out the present study work, two stages had to be carried out: in the first
instance, an analysis of a theoretical nature was made, within which a search was
carried out concerning the theoretical framework of the subject studied; secondly,
an empirical analysis was performed.
As part of the empirical analysis, a compilation of the information
obtained in this research project was made, for which a questionnaire was
designed, which was made up of a series of closed questions, which covered the
response alternatives to each questioning, so, this questionnaire is the research
instrument used for the present investigation.
Unit of Analysis
Within this study project, business organizations whose characteristics were:
1. Being Small and medium-sized businesses were investigated (1 to 250
employees).
2. Entities of the Economic sector commercial
3. Located in the Guadalajara Metropolitan Area (GMA) (Guadalajara,
Zapopan, San Pedro Tlaquepaque and Tonalá).
Sample
For this research, a non-probabilistic sampling was used, for which the
questionnaire was administered as a research tool to 78 individuals who are part
of the workforce of 78 SMEs in the commercial sector, who had an organizational
change process.
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According to SIEM, in Mexico 69% of businesses are engaged in
commerce, while the industrial-manufacturing sector is 7%, 21% is from the
service sector and only 1% is from the mining and agricultural sector.
Operationalization of Variables
Within the present investigation, the variables were operationalized
through the use of graduated questions with the Likert Scale. Which uses
affirmations that indicate the attitude, positive or negative about the questioning.
For the study, the respondents were asked to externalize their level of agreement
or disagreement, on each statement, to establish how favorable or unfavorable
their point of view is on the topics under study.
Problem Statement
The internet has an increasingly important role in our lives, both in daily
life and in business, with electronic business being a clear example of this. This
research aims to determine what are the effects and factors inherent to electronic
business, which influence the implementation of an Organizational Change
process in commercial organizations, installed in the Guadalajara metropolitan
area, whether they favor or hinder that process.
So, for this project, the research questions that were asked are:
What factors related to the electronic business were involved in an
organizational change in small and medium-sized businesses located in the
GMA?
What effects does e-business have on an organizational change in small
and medium-sized businesses located in the GMA?
Research objectives
The objective of this work is to determine what factors inherent to
electronic business intervened in an Organizational Change in small and
medium-sized businesses located in the GMA.
Another objective is to establish the effects that electronic business has in an
Organizational Change in small and medium-sized businesses located in the
GMA.
Hypothesis
The hypotheses formulated for this investigation are:
H1: Electronic Businesses contribute to the implementation of an organizational
change process in small and medium-sized businesses located in the GMA.
H2: The commercial opening, favors the organizational change through the
electronic businesses in small and medium-sized businesses located in the GMA.
Collection and processing of information
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
For this work, the research instrument that was used was a questionnaire
made according to the information obtained in the bibliography consulted, and
with which it was intended to determine which factors related to electronic
business influenced an organizational change in small and medium-sized
businesses located in the GMA.
Therefore, a structured questions survey was made to distinguish these
factors. Once the information was obtained, the results were examined and
classified.
To check the reliability and consistency of the research instrument, it was
determined which is the Cronbach's Alpha. The KMO Sample Adequacy
Measure and the Bartlett Test were also obtained to determine that the variables
are correlated and factor analysis is feasible.
For the empirical study of this work that aims to establish how electronic
business intervenes in a change in organizational culture, the degree of
significance of the ANOVA (analysis of variance) was determined, by relating
variables associated to electronic business, with the effects that they might have
on an organizational change, and with certain factors that contribute or hinder
the implementation of a change in organizational culture.
RESULTS OF FIELD RESEARCH AND DISCUSSION
As part of this research work, a study of electronic business was made as a study
perspective that examines the process of organizational change; and within the
research instrument used, certain questions that analyze the organizational
change from the perspective of electronic business were considered in this
questionnaire.
This study was carried out through personal surveys with employees who
participated in the process of an organizational change in the companies
considered, they were administered the questionnaire that was made for this
work, and which was used to study the hypotheses presented.
Therefore, for the study, certain questions related to the perspective of
electronic business were considered. Additionally, Cronbach's Alpha was
determined, as well as the Bartlett's Test and the KMO (Table 1).
Table 1. Cronbach's Alpha of the Electronic Business variables
Source: Own elaboration based on the results of the SPSS.
Reliability statistics
Cronbach Alfa Coefficient
Number of Elements
0.813
24
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According to the statistical result of reliability, Cronbach's Alpha turns out
to be of high consistency, 81.3% of reliability, which demonstrates a high level
because the approximation of the statistic is close to 1.00, in addition to the fact
that the variables of the questionnaire are they consistently applied, that is, that
the general trends and correlations can be described in depth through
multivariate analysis, for which it is necessary to understand the level of
adjustment between the groups according to a factorial analysis KMO and
Bartlett's Test (Table 2).
Table 2. KMO and Bartlett Test
Source: Own elaboration based on the results of the SPSS
If. Sig. (P-value) <0.005 H0 (null hypothesis)> factor analysis can be applied.
If. Sig. (P-value)> 0.005 H0 is rejected> factor analysis cannot be applied.
The results indicate that the level of significance obtained by being zero is
representative since the closer it is to zero, the test will be more satisfactory.
The most significant variable is the commercial opening in the world,
followed by the process of market globalization; which indicates that electronic
businesses are benefited by this process of commercial opening and by the
globalization that occurs in the world, which contributes significantly to
companies venturing into electronic businesses.
Technological innovation and information technologies, on the other
hand, are also significant variables related to electronic business, since these
technological advances are required to promote electronic business in companies.
Interviewees were asked if they think e-business was a determining factor
in deciding that the company would make the organizational change. This when
considering that due to the changes that have occurred in society, the economy,
culture, in the technological field, in the governmental environment and
international markets, these have been aspects that served to generate innovative
ways of doing business, just like e-business.
Additionally, interviewees have also questioned if commercial opening in
the world was a factor that influenced the decision to make a change in their
organizations, and in which way it helped to carry out such change. Given that
according to the electronic business perspective, the process of globalization and
commercial opening requires that the process of change be faster, which implies
Kaiser-Meyer-Olkin.measure of sampling adequacy
0.649
Bartlett esphericity Test
Squared Chi aprox.
745.535
gl
276
Sig.
0.000
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Sánchez-Gutiérrez, J. & González-Alvarado, T.
having a deep knowledge of international markets; predicting the future
becomes more complicated every day, therefore change must be managed
quickly.
Table 3. Communalities
Source: Own elaboration based on the results of the SPSS.
Group 1
Group 2
Group 3
Group 4
Group 5
Group 6
Intensity of commercial opening
0.904
Frequency of commercial opening
0.903
Frequency of the market globalization
process
0.852
Intensity with which the globalization
of markets influences
0.836
Technological innovation was
essential for the company to decide to
make the change
0.816
ICTs were decisive for the company to
make the change
0.815
Consumer expectations
0.761
E-business was decisive in bringing
about the organizational culture
change.
0.726
Culture
0.668
Buyers' prospects
0.643
Intensity of competition rivalry
0.624
Anticipate the future and its changes
0.616
Aggressive competitiveness
0.594
The society
0.588
Flexible clients
0.558
Temporary business focus
0.545
Competitively the company works
better now than before the change
0.543
Forecast future market evolution
0.542
Learning organizations were an
important factor in making the culture
change
0.528
Information and analysis of the
change process is documented
0.526
The company was based on
quantifiable data
0.499
Before the change there was order
0.494
Vision
0.492
Comprehensive buyers
0.403
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In the instrument used, certain hypotheses and questions that examine
organizational change from the perspective of the current study of electronic
business were considered, and they are:
H1: Electronic Businesses contribute to the implementation of an
organizational change process in small and medium-sized businesses located in
the Guadalajara Metropolitan Area.
Table 4. Electronic Business was a decisive factor for the Company to choose to
carry out the Organizational Culture Change
Source: Own elaboration based on the results of the SPSS
According to the results obtained, an existing relationship was discovered,
between Electronic Businesses, and: technological innovation was essential for
the company to decide to make the change; information and communication
technology were decisive for the company to make the change process; learning
organizations; the commercial opening in the world, and anticipating the future
and its changes. They were important factors in producing culture change.
ANOVA
Sum of
squares
gl
Quadratic
mean
F
Sig.
Technological innovation was
essential for the company to
decide to make the change
Between
-groups
22.281
3
7.427
9.353
0.000
Whitin-
groups
46.058
58
0.794
Total
68.339
61
Information and
communication technology
were decisive for the company
to make the change process
Between
-groups
26.791
3
8.930
14.979
0.000
Whitin-
groups
34.580
58
0.596
Total
61.371
61
Learning organizations were an
important factor in effecting
culture change
Between
-groups
12.717
3
4.239
7.975
0.000
Whitin-
groups
30.831
58
0.532
Total
43.548
61
The commercial opening in the
world
Between
-groups
13.430
3
4.477
4.664
0.005
Whitin-
groups
55.667
58
0.960
Total
69.097
61
Anticipate the future and its
changes
Between
-groups
9.703
3
3.234
5.337
0.003
Whitin-
groups
35.151
58
0.606
Total
44.855
61
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This indicates that these factors related to electronic business influence the
implementation of organizational change. Therefore, H1: Electronic Businesses
contribute to the implementation of an organizational change process in small
and medium-sized businesses located in the Guadalajara Metropolitan Area, it is
accepted. (See Table 4).
About this point, according to an investigation by Soto-Acosta, Popa &
Palacios-Marques (2016), in the results they obtained, they refer to the existence
of a direct positive effect of the use of electronic business in an organizational
change that leads to the innovation of the company.
This discovery supports existing literature that concludes that e-business
enables and promotes innovation in organizations (Amit, Zott 2001; Wu, Hisa
2004, Zwass 2003).
Therefore, the organization can be used to distribute and share individual
experiences and innovations across the company (Bhatt et al. 2005) and provides
an opportunity to leverage knowledge to create new products, services, or
processes.
In turn, the results of the study carried out by Soto-Acosta, Popa &
Palacios-Marques (2016), corroborate that organizational innovation generates a
relationship between the use of electronic business and the performance of the
company.
This finding confirms what is indicated in the existing bibliography that
proposes that there are positive direct and indirect links between Information
Technology and the performance of organizations (Meroño & Soto 2007; López &
Meroño 2011; Pérez & Alegre 2012). Therefore, SMEs have to make intensive use
of e-business to achieve business innovation that improves organizational
performance.
Respondents' answers show that e-business is a factor of great importance
that must be considered when seeking to make an organizational change, for this,
it is required that companies increasingly use these technological tools that help
conduct business internationally, therefore, it is necessary to take advantage of
this type of support, since not doing so would lose considerable opportunities to
reach business agreements. (See Table 4).
H2: The commercial opening, favors the organizational change through
the electronic businesses in small and medium-sized businesses located in the
Guadalajara Metropolitan Area.
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Table 5. Commercial openness in the world
Source: Own elaboration based on the results of the SPSS.
Under the results obtained in this study, it was discovered that there is a
relationship between Commercial Openness in the world with: Before the
change, there was an order, ICTs were decisive for the company to make the
change process, the process of globalization of markets and the world economy,
culture and society, competitively the company is working better now than
before the change, and information and analysis of the change process is
documented.
This shows that the commercial opening in the world and electronic
businesses favor the implementation of organizational change. For this reason, it
is essential that the Company's Management goes into the process of
organizational change, and that they train the personnel, so that they know their
new role in the company.
ANOVA
Sum of
squares
gl
Quadratic
mean
F
Sig.
Before the change there
was an order
Between-
groups
8.123
3
2.708
4.781
0.005
Whitin-
groups
32.845
58
0.566
Total
40.968
61
ICTs were decisive for the
company to make the
change process
Between-
groups
12.547
3
4.182
4.969
0.004
Whitin-
groups
48.824
58
0.842
Total
61.371
61
The pr oc es s o f
globalization of markets
and the world economy
Between-
groups
17.633
3
5.878
6.591
0.001
Whitin-
groups
51.722
58
0.892
Total
69.355
61
Culture and society
Between-
groups
18.764
3
6.255
9.273
0.000
Whitin-
groups
39.123
58
0.675
Total
57.887
61
Competit iv el y th e
company is working
better now than before the
change
Between-
groups
5.767
3
1.922
4.711
0.005
Whitin-
groups
23.668
58
0.408
Total
29.435
61
Information and analysis
of the change process are
documented
Between-
groups
7.110
3
2.370
4.662
0.005
Whitin-
groups
29.487
58
0.508
Total
36.597
61
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For this reason, H2: The commercial opening, favors the organizational
change through the electronic businesses in small and medium-sized businesses
located in the GMA, is accepted. (See table 5).
One of the most important aspects of achieving change is the commercial
opening in the world; as the changes are becoming quicker. In this regard,
authors such as Ndeta, Katriou, and Siakas (2015), establish that there are in-
depth studies that indicate that in organizational adoption, the characteristics of
the company such as size, as well as structural variables (centralization and
formalization) and the attitude of management to the change process, they can
influence the adoption of innovations by the company.
In today's globalized world, characterized by commercial openness,
companies must continually adapt to changes in their environment to remain
competitive and even survive. This situation is even greater in electronic
business, as technology and trends change faster. For this reason, virtual
companies must manage frequent organizational changes and adjust their
business processes.
The results of this research indicate that commercial openness in the world
is a factor that appears more and more in international markets and companies
cannot avoid it, which influences that many firms choose to carry out an
organizational change since the commercial opening in the world implies the
organizations that must contend in the markets with international companies,
and although they are operating directly in a certain country, this competition is
increased through electronic business.
As local companies take advantage of the opportunity that is the
commercial opening of markets, they can enter in new markets, being electronic
business an instrument that allows firms to do business with companies from
other countries, which helps them expand their markets and, due to the greater
requirements of international business and the ever-increasing demands of
buyers from other countries, they force national companies to be more efficient
and competitive, which makes such organizations more open to changes that
occur over time in the company, and in the markets.
CONCLUSIONS
The world we live in is characterized by being in permanent change. Business
markets reflect that competition is increasingly exacerbated between companies,
and the prevailing commercial openness provides an opportunity for buyers to
have more and more options to choose from, making customer expectations
higher and higher.
For this reason, it is essential that organizations seek to be more efficient
and thereby succeed in satisfying such consumer expectations before and better
Adaptability of Small and Medium-Sized Businesses and E-commerce
Bellon-Álvarez, L.
163
than the competition. Changes in the business environment cause companies to
adapt to the uncertainty that prevails in the business environment, this generates
that changes must be made in companies, such as changes in their production
systems, coupled with their organizational culture; so that the company has a
better performance.
Continuous changes in the corporate environment reveal the
unpredictability of business. This generates that considerable changes must take
place in companies, develop new production processes, devise innovative
products that exceed customer expectations.
Organizations cannot remain immobile, they have to continually learn
because if they don't, competitors will outperform them. The most successful
companies are characterized by anticipating changes, and even promoting them,
to be leaders in the market, forcing competitors to adapt to changes.
Making an organizational change can be onerous, but if it is carried out correctly,
its benefits will be greater, which will make companies more efficient, reduce
costs, and make the organization more competitive.
The results of this study work allow us to conclude that the 2 hypotheses
are accepted:
H1: Electronic Businesses contribute to the implementation of an
organizational change process in small and medium-sized businesses located in
the Guadalajara Metropolitan Area.
H2: The commercial opening, favors the organizational change through
the electronic businesses in small and medium-sized businesses located in the
Guadalajara Metropolitan Area.
In this research related to the influence of electronic business on an
organizational change process, it was found that electronic business needs
management efficiency, adding the change in the direction of the new logic of the
era of the digital economy.
An unpredictable environment implies that companies adapt and move
forward with changes, which will help them to make the organizational change.
They were found to be factors that benefit organizational change from
electronic business: technological innovation was essential for the company to
decide to make the change, commercial openness, anticipate the future and its
changes, the information, and analysis of the change process are documented,
and the learning organizations; were important factors in the implementation of
the culture change.
Electronic businesses show the degree of technological progress and
contribute to the process of commercial opening of the world and for companies,
this is a great help in producing organizational change.
Social Inclusion and the Future of Work
164
Sánchez-Gutiérrez, J. & González-Alvarado, T.
Research shows that commercial openness in the world is an increasingly
present factor and that it contributes to the removal of trade barriers and to
greater business opportunities throughout the world, which is facilitated by the
expansion that the Internet and consequently electronic business had.
This phenomenon influences all kinds of companies to effect
organizational change since commercial openness requires business firms to
compete with organizations from other countries.
National companies will become more competitive as they break into
world markets and take advantage of Mexico's trade agreements with other
countries. This reflects the commercial opening of the markets at the
international level.
At the same time, electronic business is an instrument of great relevance,
with which corporations can have greater development in international markets,
providing a better service, being more efficient in their systems and processes
and to achieve greater competitiveness.
There is no way to guess what will happen in the future, but it is possible
to prepare for what the future brings us. Correct preparation of the companies
will allow them to face those challenges that the future holds. Every organization
must be able to adapt to changes. Making an organizational change is a way of
subsisting that companies adapt to stay in the markets.
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Social Inclusion and the
Future of Work is for interest
to those who expect a critical
but positive vision of the
times we attend. Experts
explain the situation of the
organization, institutions and
regions according to resilience,
creativity and digital
innovation for the future of
work, social inclusion, and the
Sustainable Development
Goals (SDGs). SDGs are
considered as the essential
guidelines that facilitate the
strategic consideration of the
future of work and social
inclusion in pandemic times
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