i i “book” — 2011/11/20 — 11:32 — page i — #1 i i Value of digital information networks: a holonic framework i i i i i i “book” — 2011/11/20 — 11:32 — page ii — #2 i i Value of digital information networks: a holonic framework Proefschrift ter verkrijging van de graad van doctor aan de Technische Universiteit Delft, op gezag van de Rector Magnificus prof. ir. K. CA. M. Luyben, voorzitter van het College voor Promoties, in het openbaar te verdedigen op maandag 12 december 2011 om 10:00 uur door Antonio´ Jose´ Pinto Soares MADUREIRA Elektrotechnisch ingenieur, Technische Universiteit Delft, Nederland en Engenheiro electrot´ecnico e de computadores, Faculdade de Engenharia Universidade do Porto, Portugal geboren te Porto, Portugal. i i i i i i “book” — 2011/11/20 — 11:32 — page iii — #3 i i Dit proefschrift is goedgekeurd door de promotor: Prof. dr. ir. N. H. G. Baken Samenstelling promotiecomissie: Rector Magnificus TU Delft Prof. dr. ir. N. H. G. Baken TU Delft, promotor Prof. dr. ir. W. A. G. A. Bouwman TU Delft Prof. dr. ir. E. R. Fledderus TU Eindhoven/TNO Prof. dr. ir. R. E. Kooij TU Delft Prof. dr. ir. I. G. M. M. Niemegeers TU Delft Dr. P. W. J. de Bijl Tilburg University en CPB Dr. ir. F. T. H. den Hartog TNO Prof. dr. ir. P. F. A. van Mieghem TU Delft, reserve lid This research was supported by the Delft University of Technology, the Royal Dutch KPN and TNO within the initiative Trans-sector Research Academy for complex Networks and Services (TRANS). Value of digital information networks: a holonic framework Copyright © 2011 by Ant´onio J. P. Soares Madureira Cover design: Ant´onio J. P. Soares Madureira Printed by Sieca Repro Delft, ISBN 978-94-6186-016-3 All rights reserved. No parts of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the author. i i i i i i “book” — 2011/11/20 — 11:32 — page iv — #4 i i iv i i i i i i “book” — 2011/11/20 — 11:32 — page v — #5 i i CONTENTS v Contents 1 Introduction 3 1.1 Digital Information Networks (DINs) . 3 1.2 Problemstatement ............................. 4 1.3 Researchobjective ............................. 4 1.4 Research approach and book outline . 6 1.5 Relevance of this thesis . 9 2 Value of digital information networks: a holonic framework 13 2.1 Literature on the value of DINs . 13 2.2 Literature on the value of Information Technology (IT) . ....... 15 2.3 HolonicFramework(HF) ........ ........ ........ 18 2.4 Discussion.................................. 25 2.5 Conclusions ................................. 32 3 Quantifying the value of digital information networks by employing the information processing capabilities of their users 35 3.1 Introduction ................................. 36 3.2 Model for value generation by holons in DINs . 36 3.3 Methodology ................................ 38 3.4 Results.................................... 43 3.5 Discussion.................................. 45 3.6 Conclusions ................................. 49 4 A capability-aware policy making framework 51 4.1 Introduction ................................. 51 i i i i i i “book” — 2011/11/20 — 11:32 — page vi — #6 i i vi CONTENTS 4.2 Advocacy Coalition Framework (ACF) and its limitations ....... 52 4.3 An alternative approach: the value of DINs . 57 4.4 Motivation to integrate the HF with the ACF . 59 4.5 Capability-aware Policy Framework (CaPF) . 60 4.6 Casestudy.................................. 65 4.7 Discussion.................................. 70 4.8 Conclusions ................................. 72 5 Exploring biological evolution through the value of digital information networks 75 5.1 Introduction ................................. 75 5.2 ModernSynthesis(MS) .......................... 77 5.3 CriticismstotheMS ............................ 78 5.4 A different approach: the value of DINs . 80 5.5 Discussion.................................. 82 5.6 Conclusions and future work . 84 6 A holonic framework to understand and apply information processes in evolutionary economics 87 6.1 Introduction ................................. 88 6.2 The initiative Generalized Darwinism (GD) . 90 6.3 An alternative approach: the value of digital information networks . 93 6.4 Strengths and limitations of the HF . 95 6.5 Conclusions ................................. 97 6.6 Futurework ................................. 98 7 A capability-aware business interoperability framework 101 7.1 Introduction ................................. 102 7.2 State-of-the-art ............................... 103 7.3 Theoretical approach . 108 7.4 Capability-aware Business Interoperability Framework (CaBIF) . 110 7.5 Casestudies................................. 113 7.6 Discussion.................................. 116 7.7 Conclusions ................................. 121 8 Conclusions 123 8.1 Mainfindings ................................ 123 8.2 Contribution to theorists . 125 i i i i i i “book” — 2011/11/20 — 11:32 — page vii — #7 i i CONTENTS vii 8.3 Relevant implications for the research domains . 127 8.4 Contribution to practitioners . 128 8.5 Limitations and future work . 129 i i i i i i “book” — 2011/11/20 — 11:32 — page viii — #8 i i viii CONTENTS i i i i i i “book” — 2011/11/20 — 11:32 — page 1 — #9 i i CONTENTS 1 Summary The extraordinary level of interest worldwide in Digital Information Networks (DINs)’ deployment is due to the strong perception that they bring economic, social and en- vironmental value. However, scientific attempts to evidence this perception lead to speculative, elusive or limited conclusions. In this thesis, we propose a novel frame- work to account for the value of DINs. Most relevantly, our framework is capable to account for any form of value, whereas existing literature tends to focus solely on orthodox economic measures of performance such as productivity. To exemplify, we use our framework to explain evolutionary change in policy making, economy and biology. With this approach, we underpin how DINs generate value in these three do- mains. We also provide significant theoretical contributions regarding the Advocacy Coalition Framework, the initiative Generalized Darwinism and the Modern Synthe- sis, which are frameworks used in policy making, evolutionary economics and bio- logical evolution respectively. Finally, this thesis addresses business interoperability, and as such also contributes to increasing the value generated through DINs. From an empirical perspective, our work is supported by a rich dataset of Eurostat on the use of ICT by enterprises and households, and a case study regarding an electronic identification management system in Austria. i i i i i i “book” — 2011/11/20 — 11:32 — page 2 — #10 i i 2 CONTENTS i i i i i i “book” — 2011/11/20 — 11:32 — page 3 — #11 i i 3 Chapter 1 Introduction 1.1 Digital Information Networks (DINs) Since the 1980s, the telecommunication sector has been expanding rapidly (Shiu and Lam, 2008). This is mainly caused by the conversion of analogue communication networks designed for telephony or TV services into multi-functional Digital Infor- mation Networks (DINs). The exponential growth of services offered over DINs can be explained by many factors, including technological advancements, market liber- alization and privatizations. The worldwide extraordinary level of interest in deploy- ing information networks is due to the strong perception that information networks bring economic, social and environmental benefits (Firth and Mellor, 2005). Some speculate that DINs may have a similar impact on society as transportation networks had during the 20th century (OECD, 2001). In long wave theory, this information driven economic era is known as the 5th Kondratieff economic cycle (Perez, 2003). A Kondratieff cycle manifests itself by a sinusoidal-like long-term cycle from ap- proximately 40 to 60 years in length with a semi-period of high productivity growth followed by a semi-period of relatively slow growth (Freeman and Louca, 2001). Some benefits of DINs can be observed directly. For example, construction of net- work infrastructures leads to direct increase in job employment. The benefits might also be more intangible, such as better quality of health care services, improved ed- ucation and organizational efficiency (European Commission, 2010). The Organi- zation for Economic Co-operation and Development (OECD) considered broadband DINs as key to enhancing competitiveness and sustaining economic growth (OECD, 2001). Many governments are increasingly committed to extending DINs to their cit- izens (Katz et al., 2009), particularly in the developing nations (Kagami et al., 2004). i i i i i i “book” — 2011/11/20 — 11:32 — page 4 — #12 i i 4 Chapter 1 . Introduction Consequently, the levels of interdependency between users and DINs’ providers in- creased dramatically (Dijk and Mulder, 2005) and the DIN infrastructure became an essential facility for all economic sectors. 1.2 Problem statement To justify policy support for further investments in DINs (e.g. in Fiber To The Home (FTTH)), it is necessary to learn from expenditures that have already been made and demonstrate their value. Our literature review on studies aiming to evi- dence the economic impact of DINs concluded that so far only speculative, elusive or limited conclusions have been taken. Generally speaking, these studies model an eco- nomic system as a black-box transforming inputs into outputs. DINs are considered an observable production