Internet of things capability and alliance: Entrepreneurial orientation, market orientation and product and process innovation

The purpose of this paper is to examine the role of capability and alliance arising from the internet of things (IoT), specifically in the relationships between strategic orientations (entrepreneurial and market foci) with product and process innovations. In addition, it investigates the direct relationship between IoT capability and alliance. Improving these relationships assist in ensuring that new knowledge from the IoT can be translated into tangible business innovations that contribute to economic development.

Data from 207 new high-technology IoT ventures in China were obtained after three-wave mailing (i.e. two reminders). Following a rigorous process to purify and validate the measurement scale items, the study used structural equation modeling to test the conceptual model.

Findings demonstrate that an IoT capability only enhances product innovation, however, with the addition and support from IoT alliance, both product and process innovation can be achieved in new high-tech IoT ventures. This nuanced insight suggests that new high-tech IoT ventures should focus on building their IoT capability, and at the same time, develop IoT alliances with value chain partners in order to fully take advantage of IoT and gain a better position to formulate more novel offerings.

The study is first to contribute with a much needed framework of IoT and entrepreneurship by examining the role of IoT capability further in the relationships between: entrepreneurial orientation and market orientation with product and process innovations arising from IoT; and the role of IoT alliance (interfirm relations, partnerships, etc.) on the relationship above.