The United States: Adaptive integration versus the silicon valley model

E-commerce in the United States has been shaped by the economic, social, and policy environment in which it developed, and in particular by the unique business patterns of the US high-tech industry sector. Many key e-commerce technologies and business processes were developed in the United States and the so-called Silicon Valley model – venture capital funding, entrepreneurial start-ups and spin-offs, and close ties to university research (e.g., Kenney, 2003) – has been the locus of much of the investment, innovation, hype, and despair associated with Internet-based e-commerce. Firms in the Silicon Valley model include many survivors of the dot.com era that are leaders in highly visible segments of B2C e-commerce, such as book and music retailing, online auctions, web portals, travel services, and online stock trading. But the Silicon Valley model is only one dimension of a rich and complex pattern of e-commerce diffusion in the USA. A much larger share of e-commerce activity is characterized by a pattern we call “adaptive integration,” whereby existing firms incorporate the new technologies and business models offered by the Internet to extend or revamp their existing strategies, operations, and supply and distribution channels. Adaptive integration is the dominant pattern for business-to-business e-commerce in most major industries, including manufacturing, wholesale trade, banking, insurance, and transportation, and B2B dominates B2C e-commerce by far.