Bridging the Digital Divide through IT-enabled Service Innovations: A Service-Dominant Logic Perspective

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1 Association for Information Systems AIS Electronic Library (AISeL) PACIS 2017 Proceedings Pacific Asia Conference on Information Systems (PACIS) Summer Bridging the Digital Divide through IT-enabled Service Innovations: A Service-Dominant Logic Perspective Ching Seng Yap Curtin University Malaysia, yapchingseng@curtin.edu.my Farah Waheeda Jalaludin Universiti Tunku Abdul Rahman, farah@utar.edu.my Rizal Ahmad Universiti Tun Abdul Razak, rizal@unirazak.edu.my Ik Ying Ngu Curtin University Malaysia, nguik@curtin.edu.my Yet Mee Lim Universiti Tunku Abdul Rahman, limym@utar.edu.my See next page for additional authors Follow this and additional works at: Recommended Citation Yap, Ching Seng; Jalaludin, Farah Waheeda; Ahmad, Rizal; Ngu, Ik Ying; Lim, Yet Mee; and Chan, Kwok Mow, "Bridging the Digital Divide through IT-enabled Service Innovations: A Service-Dominant Logic Perspective" (2017). PACIS 2017 Proceedings This material is brought to you by the Pacific Asia Conference on Information Systems (PACIS) at AIS Electronic Library (AISeL). It has been accepted for inclusion in PACIS 2017 Proceedings by an authorized administrator of AIS Electronic Library (AISeL). For more information, please contact elibrary@aisnet.org.

2 Authors Ching Seng Yap, Farah Waheeda Jalaludin, Rizal Ahmad, Ik Ying Ngu, Yet Mee Lim, and Kwok Mow Chan This article is available at AIS Electronic Library (AISeL):

3 Bridging the Digital Divide through IT-enabled Service Innovations: A Service-Dominant Logic Perspective Research-In-Progress 1 Ching Seng Yap Curtin University Malaysia yapchingseng@curtin.edu.my 3 Rizal Ahmad Universiti Tun Abdul Razak rizal@unirazak.edu.my 5 Yet Mee Lim Universiti Tunku Abdul Rahman limym@utar.edu.my 2 Farah Waheeda Jalaludin Universiti Tunku Abdul Rahman farah@utar.edu.my 4 Ik Ying Ngu Curtin University Malaysia nguik@curtin.edu.my 6 Kwok Mow Chan Curtin University Malaysia kwokmow@curtin.edu.my Abstract The issue of digital divide has an enormous impact on the development of a country as it encompasses social, economic and political issues. The Malaysian government has initiated various digital strategies to bridge the digital divide among the citizens from different economic, social, and geographical background. However, existing literature has limited knowledge of digital divide in Malaysia. This research aims to investigate the level of digital divide in Malaysia, evaluate the impact the government s digital initiatives have in bridging the digital divide, and examine the role of IT-enabled service innovations in helping to bridge the digital divide. Based on the underlying concepts of service-dominant logic, a theoretical framework will be developed to examine the role of IT-enabled service innovations in bridging the digital divide. Specifically, the tripartite framework of service innovation comprising the components of service ecosystem, service platform, and value co-creation will be discussed. This study will employ a two-stage research design. Firstly, a questionnaire survey will be used to collect the data on various levels of digital access from 1,400 users of 1Malaysia Internet Centres throughout the country. Secondly, this study will employ a case study design to examine the role of service innovations in bridging the digital divide among the citizens at two locations which had been affected by massive flood Kemaman, Terengganu and Kota Belud, Sabah. Data from the archives and face-to-face semi-structured interviews of stakeholders, who are involved in developing and using the disaster management systems, will be analysed. The outcome of this research is expected to have important implications for theory by extending the body of knowledge on the role of service innovations in bridging the digital divide. The implication for practice is that it should offer ideas for improving national digital policies and strategies to bridge the digital divide in Malaysia. Keywords: Digital Divide, IT-Enabled Service Innovations, Service-Dominant Logic, Disaster Management Systems, Flood Monitoring Systems, Value Co-Creation, Malaysia. Introduction The issue of digital divide has an enormous impact on the development of a country as it encompasses social, economic and political issues. The Malaysian government has initiated various digital strategies to bridge the digital divide among the citizens from different economic, social, and geographical background. Digital divide has been defined as the gap between those who have and do not have access to computers and the Internet in the mid 1990 s (van Dijk, 2006). However, the definition has

4 been broadened to include the skills needed to effectively use the computer and the Internet and later the strategic outcome of digital literacy. In other words, digital divide can be viewed from three levels access level, skill level, and outcome level. While many undeveloped and developing countries still struggle for physical access level (first-level access), most developed economies have progressed to assessing the outcome of digital use (third-level access). Existing literature has not examined the level of digital divide in Malaysia at large. Besides, the proposed study argues that IT-enabled service innovations based on the service-dominant logic would enjoy a higher level of acceptance and adoption by Malaysian people and able to bridge the digital divide. The service-dominant logic is rooted in the marketing and information systems literature. The service-dominant logic defines service as the application of operant resources knowledge and skills, through deeds, processes, and performance for the benefits of an entity including the entity itself (Lusch & Vargo, 2014). In this study the disaster management systems used to manage major floods serve as a good example of IT-enabled service innovations that help to bridge the digital divide in the communities. Floods are the most common natural disaster in the country, contributing 62% of total disaster damages. For instance, the floods occurred in the east coast of Peninsular Malaysia between 16 to 30 December 2014 has caused 17 deaths, affected 230 thousand victims, and estimated USD 284 million of damages (EM-DAT, 2016). The tripartite framework of service innovation comprising the components of service ecosystem, service platform, and value cocreation is guided by the important role played by various actors (stakeholders) such as citizens, government departments and agencies, and third sector organisations in the innovation process. Citizens at the affected locations are pushed to participate in the development and utilisation of the systems. Specifically, the utilisation of the systems involves various stages of a disaster, for instance, prevention, preparedness, response, and recovery. The disaster management systems provide up-todate and accurate information to the victims of natural disasters and those are involved in helping them out. Prior studies have identified the role of service innovation in business sectors. Specifically in the medical and healthcare (Srivastava & Shainesh, 2015), tourism and hospitality (Jiménez-Zarco, Martínez-Ruiz, & Izquierdo-Yusta, 2011), and banking and finance (Chen & Hsu, 2007). However, the literature of service innovation in the social sector is limited, with an exception of Chang (2013) who examined reduction of drug abuse using IT-enabled e-government site. The use of IT-enabled service innovations that are developed based on the service-dominant logic to bridge the digital divide would potentially expand existing literature. As such, this study is arguably significant and timely. In the context of Malaysia, this proposed research aims to investigate, firstly, the level of digital divide among Malaysian people, and secondly, to evaluate the impact government s digital initiatives have on the digital divide. The third objective is to examine the role of IT-enabled service innovations in bridging the digital divide. In order to achieve the first two research objectives, a questionnaire survey will be carried out by asking 1,400 users of 1Malaysia Internet Centres throughout the country. A case study approach will be employed to achieve the third research objective. This case will examine how IT-enabled service innovations of disaster management systems had helped the victims of natural disaster at two locations which had been seriously affected by flood Kemaman, Terengganu and Kota Belud, Sabah, the case study will examine how the development and implementation of the systems may have helped to bridge the digital divide in the local communities. Data will be collected from the stakeholders (the policy makers, the systems developers, and the end users) using face-toface semi-structured interviews. The research has two intended outcomes. Firstly, the results would provide information to develop national policies and strategies to bridge the digital divide of the country. Secondly, it serves as an initial platform for researchers to explore the role of IT-enabled service innovations that are based on the service-dominant logic in the social sector. The paper is structured as follows: the next section provides an overview of the government s digital initiatives in Malaysia, and defines and reviews the theoretical concepts of digital divide, servicedominant logic, and service innovations. Research method is discussed next in terms of data collection methods, sample and sampling procedures, and survey instrument and procedures. Last section provides concluding remarks by highlighting the potential implications of the proposed research for theory and practice.

5 Literature Review An Overview of Government s Digital Initiatives in Malaysia Malaysia has one of the highest penetration rates of digital access in Asia (ranked the 10th). Based on the Malaysian Communications and Multimedia Commission Report (MCMC, 2016), as of the third quarter of 2016, the broadband penetration rate per 100 households has increased to 77.9% compared to the year 2013 which was at 67.1%, while mobile-cellular penetration rate per 100 populations has reached 141.6%. The total fixed broadband and mobile broadband subscriptions stand at 2.7 million and 28.0 million respectively. Various digital initiatives have been implemented which include upgrading of broadband access infrastructure and community projects under the Universal Service Provision (USP) Program. According to the annual report on Universal Service Provision 2015 (USP, 2015), the USP programs have brought great changes to reduce the digital gap between urban and rural areas, as well as between privileged and underprivileged groups. The programs include 1Malaysia Internet Centre (657), Next Generation 1Malaysia Internet Centre (2), Mini Community Broadband Centre (120), Community Broadband Library (44), Community Wifi (2,978), 3G coverage sites (1,409), and 4G (LTE) coverage sites (307). Nevertheless, apart from providing the latest statistics about the development and installation of various services, no empirical evidence was reported that digital divide has been reduced, specifically the Level-2 and the Level-3 digital divides in the country were not included in the report. Digital Divide Digital divide has earlier been defined as the gap between those who have and do not have access to computers and the Internet (van Dijk, 2006) in the mid 1990 s. However, the concept has been broadened to include the gap in skills needed to effectively use the computer and the Internet. More recently, it goes beyond the skills by emphasising the strategic outcome of the digital use. In other words, digital divide can be viewed from three levels access level, skill level, and outcome level. van Deursen and Helsper (2015) classified the three levels of digital divides as follows. First-level digital divides are about individuals access to the ICT infrastructure, including autonomy and continuity of access (van Dijk, 2005). As more citizens have had the access to this infrastructure, second-level divides in skills and usage became the focus of digital divide researchers (e.g., van Dijk, 2005). Studies of second-level digital divides enriched literature on the types of skills needed to effectively use ICTs and the types of activities people perform online (e.g., Blank & Groselj, 2014; van Deursen & van Dijk, 2014). The third-level digital divide distinguishes from first-level and second-level divides, as the former concerns differences in infrastructural access, and latter deal with difference in skills and usage patterns (Hargittai, 2002). Insufficient skills have been found to constrain effective use of ICTs and the Internet. An individual user who has high-quality continuous access and adequate skills may not generate the similar outcome on his Internet use with another individual user who has the similar capacity (van Deursen et al., 2014). As such, the third-level digital divide concerns towards achieving the strategic goals of individuals from the digital use. Digital divide can also be viewed from a process model which is recursive and cumulative to demonstrate the successive kind of access to ICT (van Dijk, 2005). In this model material access is preceded by motivational access and succeeded by skills access and usage access. Prior to physical access one should have the motivation to own a computer and to be connected to the Internet. Reasons not to have one and get connected to the Internet include (van Dijk, 2005): 1. no need or significant usage opportunities; 2. no time or liking; 3. rejection of the medium (the Internet); 4. lack of money; and 5. lack of skills. The concept of material access comprises physical access and conditional access such as subscriptions, accounts, and pay-per-view. The concept of skills access is divided into three types of skills in the

6 following order operational skills, information skills and strategic skills. The most basic skills are instrumental or operational, referred to as the capacities to work with hardware and software. Information skills are the skills to search, select, and process information in computer and the Internet. Strategic skills are the capacities to use computer and the Internet as the means for particular goals to improve one s position in the society. The concept of usage access refers to actual usage of computer and the Internet is the final stage and ultimate goal of the total process of appropriation of ICT. Usage access can be measured by: 1. usage time; 2. usage applications and diversity; 3. broadband or narrowband use; and 4. active or creative use. Service-Dominant Logic Service-dominant logic comprises four meta-theoretical foundations actor-to-actor networks, resources liquefaction, resource density, and resource integration, which are relevant to service innovation (Lusch & Nambisan, 2015). All actors in the network are resource integrators who are potential to co-create value, unlike the traditional perspective of producer (dominating) and consumer (passive) relationship. Resources liquefaction decouples information from physical devices and that information must be shared with others in order to be useful. Resource density is the mobilization of relevant resources for a particular situation in the most effective and efficient manner. All actors in the network combine and bundle resources to create value through various mechanism, such as resource exploitation, resource combination, and resource reinforcement (Lusch & Nambisan, 2015). Service Innovations Parallel with the definition of service in the service-dominant logic, service is viewed as a process rather than a unit of output that is produced or consumed. Service innovation is defined as rebundling of diverse resources that create novel resources that are beneficial to some actors in a given context, including producers (value creators) and beneficiary (customers) (Lusch & Nambisan, 2015). Resources include both tangible goods and intangible resources such as knowledge, skills, technology, and institution. Based on the service-dominant logic, service innovation can be described through a tripartite framework comprising service ecosystem, service platform, and value co-creation. A service ecosystem is a self-contained and self-adjusting system of mostly loosely coupled social and economic actors connected by mutual value creation through service exchange (Lusch & Nambisan, 2015, p.161). A service platform offers a venue for service exchange which consists of tangible and intangible resources that allows the actors to interact with. The service platform leverages resource liquefaction and enhances resource density where resources are exchanged and integrated which lead to value co-creation and service innovation. In the process of value co-creation and service innovation, the actors (users) integrate resources by providing knowledge about their needs, developing new service from matching and mixing the knowledge, and disseminating the knowledge across multiple ecosystems. Linking IT-Enabled Service Innovations with Digital Divide This study attempts to bridge the disconnect between IT-enabled service innovations and digital divides. The conceptualization of service innovation focuses on value experienced by the beneficiary (people in remote areas) and their active participation in the innovation process. The development and utilisation of the disaster management systems at the locations seriously affected by natural disasters provide an excellent opportunity for the actors policy makers, system developers, and people of the local communities to engage in the service ecosystem by utilising a service platform to co-create value for the actors. Various value-creating mechanisms can be observed through the proposed case study. Apart from bridging the digital divide by using the systems, the people may benefit from the desirable outcome such as increasing situational awareness about disaster events, increasing disaster preparedness, and reducing disaster losses or damages.

7 Method This study adopts a multi-method approach in data collection and data analysis. Data Collection Methods To achieve the first two objectives, a questionnaire survey will be used to collect responses to questions pertaining to level 1, level 2, and level 3 digital divide; and evaluate the impact of government s digital initiative in bridging the digital divide among the citizens. To achieve the third objective, a case study approach will be used to examine the role of IT-enabled service innovations in bridging the digital divide. Sample and Sampling Procedures To achieve the objective 1 and 2, the population of this study consists of all Malaysian citizens. The target population is the Internet users at 1Malaysia Internet Centre. The sampling frame is obtained from the directory of 1Malaysia Internet Centre throughout Malaysia. Multi-stage sampling procedures will be employed. Firstly, the directory of 1Malaysia Internet Centre in all states and the federal territory is obtained from the Malaysian Communications and Multimedia Commission (MCMC) website. If the number of centre in a state or federal territory is more than 10, 10% of the centre will be randomly selected. If the number is less than 10, a centre will be randomly selected. The state of Penang and the federal territory of Labuan each only has a centre and as such the centre will be selected. In total, 70 centres will be selected. The managers of the selected centres will be approached to provide the lists of users. Secondly, twenty users will be randomly selected to fill out the questionnaire survey, which would generate a total sample of 1,400 users. To achieve the objective 3, two locations under the Smart Communities Project Kemaman, Terengganu and Kota Belud, Sabah are selected. The two sites are selected because they have many victims of natural disasters. Both locations have disaster management systems which serve as a good case study for digitally enabled service innovations based on the tripartite framework involving service ecosystem, service platform, and value co-creation. The stakeholders involved in the development and utilisation of the systems will be interviewed to solicit for their responses to questions pertaining to various value creating mechanisms that had been designed to achieve desirable outcomes such as increasing situational awareness about disaster events, increasing disaster preparedness, and reducing disaster losses or damages. Survey Instrument and Procedures A survey instrument will be adapted from the prior literature to determine the level of digital divide among the citizens in the country. The first-level divides include motivation access (5 items) and material access (5 items), adopted from van Dijk (2006). The second-level divides comprise skills access in terms of operational skills (10 items) and informational skills (4 items), adopted from van Dijk (2006). Finally, the third-level divides consist of strategic usage access in terms of usage in economic (5 items), social (4 items), educational (3 items), political (3 items), and institutional (3 items). These 18 items are adapted from van Deursen and Helsper (2015). The impact of government s digital initiatives on citizens digital access will be measured in terms of the level of digital divides in various locations throughout the country. The achievement of the first objective would provide the necessary data to determine the effectiveness of government s digital initiatives under the Universal Service Provision (USP). The case study will use a multi-method approach by using archival analysis; questionnaire survey; and face-to-face semi-structured interviews. Based on the tripartite framework of innovation, this study will seek for opinions of stakeholders such as the policy makers, the systems developers, and the end users of the flood monitoring systems at the two identified locations, particularly in terms of how they contribute in co-creating value.

8 Concluding Remarks The results of this proposed research are expected to have important implications for both theory and practice. For theory, IT-enabled services innovations based on the service-dominant logic may serve as a powerful underlying framework for developing theories that would explain digital divide and other social problems. Other researchers may replicate the research in other areas of the social sector, whose results would broaden the body of knowledge. For practice, policy makers would, having identified the level of digital divide, be able to evaluate the effectiveness of existing digital initiatives and identify areas for improvement, and if necessary, revise the respective policies in order to address the digital divide in Malaysia. Finally, successful IT-enabled service innovations may be replicated in remote locations and in disaster-prone areas to close the digital divide in Malaysia, other ASEAN countries and beyond. References Blank, G., and Groselj, D Dimensions of Internet Use: Amount, Variety, and Types, Information, Communication & Society (17:4), pp Chang, L. F. K The Reduction of Drug Abuse in Taiwan and Its Information System Application An IT Enabled Service Innovation in E-Government, Journal of Service Science and Management (6), Chen, J. S., and Tsu, H. T Information Technology Adoption for Service Innovation Practices and Competitive Advantage: The Case of Financial Firms, Information Research: An International Electronic Journal (12:3). EM-DAT The International Disaster Database, ( Hargittai, E The second-level digital divide: differences in people s online skills, First Monday: Peer-Reviewed Journal on the Internet (7:4). Jiménez-Zarco, A. I., Martínez-Ruiz, M. P., and Izquierdo-Yusta, A Key Service Innovation Drivers in the Tourism Sector: Empirical Evidence and Managerial Implications, Service Business (5:4), pp Lusch, R. F., and Nambisan, S Service Innovation: A Service-Dominant Logic Perspective, MIS Quarterly (39:1), pp Lusch, R. F., and Vargo, S. L The Service-Dominant Logic of Marketing: Dialog, Debate, and Directions. New York: Routledge. MCMC Communications and Multimedia: Facts and Figures, 3Q 2016, ( Srivastava, S. C., and Shainesh, G Bridging the Service Divide through Digitally Enabled Service Innovations: Evidence from Indian Healthcare Service Providers, MIS Quarterly (39:1), pp van Deursen, A. J. A. M., and Helsper, E. J "The Third-Level Digital Divide: Who Benefits Most from Being Online?" In Communication and Information Technologies Annual, pp van Deursen, A. J. A. M., and van Dijk, J. A. G. M The Digital Divide Shifts to Differences in Usage, New Media & Society (16:3), pp van Dijk, J. A. G. M The Deepening Divide Inequality in the Information Society. Thousand Oaks, CA: Sage Publications. van Dijk, J. A. G. M Digital Divide Research, Achievements and Shortcomings, Poetics (34:4-5), pp Universal Service Provision Annual Report - Universal Service Provision. Cyberjaya, Selangor: Malaysian Communications and Multimedia Commission.