Embeddedness of digital start-ups in development contexts: field experience from Latin America

Abstract

Context is a key mediator of the relation between digital and development, including digital enterprise and development. Yet this mediation is little-understood in terms of contextual embeddedness. To address this gap, we analyse field evidence on digital start-ups in Latin America’s four largest economies using the Triple Embeddedness Framework (TEF). We find digital start-ups have multiple, hybrid embeddedness: in product and digital sector regimes, in local and global industry regimes, and in their economic and socio-political environment. Successful digital start-ups have optimal embeddedness: strong enough to provide flows of knowledge and resources; not so strong as to constrain innovation. Positioning of global South digital start-ups on the relative periphery of the global economy has benefits; allowing ideas to flow in but offering some protection from external competition. Alongside this new conceptualisation of digital enterprise and development, conclusions are drawn for future research, government policy and business strategy.