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Faculty & Research


Beyond Connectivity: Artificial Intelligence and the Internationalisation of Digital Firms

Working Paper
The potential impact of artificial intelligence/machine learning technologies (AI/ML) on opportunities for born-digital firms to adopt new strategies for internationalisation has only recently begun to be systematically examined. In this paper the authors argue that by creating a digital space where users interact both with the entrant firm and between themselves, that a born-digital firm can engineer a situation where users reveal their preferences implicitly (unintentionally) through their behaviour. By deploying AI/ML tools to analyse data generated by these successive interactions, a firm can tailor its offering to an increasingly accurate picture of each individual user’s preferences. This, in turn, enables the firm to create additional value by personalising the offering to the individual user when it enters a new market, based solely on the results of its digital interactions. As a result, foreign direct investment aimed at helping the firm learn experientially about country differences, hitherto a core element of internationalisation theories, becomes unnecessary. The use of country proxies for differences in user preferences between target markets becomes redundant, being replaced by personalisation based on segments-of-one. The authors illustrate these propositions with reference to value-creation activities of the short-video streaming born-digital TikTok.

Affiliated Professor of Practice in Global Management