Value co-creation between foreign firms and indigenous small- and medium-sized enterprises (SMEs) in Kazakhstan’s oil and gas industry: The role of information technology spillovers

Funding information National Natural Science Foundation of China (NSFC), Grant/Award Number: 71532002; The Newton Fund Institutional Links Grant; Local content impact: economic development, technology and entrepreneurship in Kazakhstan’s energy value chain—developing a center for competitiveness in Kazakhstan, Grant/Award Number: 172697816 Abstract Study related to the extractive sector still plays a limited role in the mainstream international business (IB) and management literature, with even less focus on ongoing liberalization and digitalization in the industry. This article was motivated by the question of how collaboration between foreign and indigenous oil and gas (O&G) companies can support small-sized and medium-sized indigenous technological development. The main contribution of this article is the development of a model that explains how different actors can cocreate value in the ecosystem of the O&G industry through digital technologies. A three-stage qualitative–interpretive method based on interviews with industry experts was adopted to build three vignette case studies. This article proposes what companies and the government could do to increase the competitiveness of the local economy, diversify from O&G into high technological industries, and support industrial development through information and communication technologies (ICT).


| INTRODUCTION
Resource-rich countries 1 place great emphasis on oil and gas (O&G) industrial competitiveness because it is crucial to this sector of the economy in creating jobs and stimulating growth, as well as providing potential for diversification from the O&G industry into the growing service sector, namely the information and communication technologies (ICT) 2 industry, among others. Industrial competitiveness is associated with the "industry's ability to obtain and utilize resources to participate in competition" (Zhao & Wen, 2004). It also indicates the capacity of a country to support the development of businesses, and is especially important for small-and medium-sized enterprises (SMEs), the backbone of every economy (Hobohm, 2001). The development of SMEs is important in terms of job creation, especially for reducing urban poverty in developing countries, as they account for around 70% of employment, around 35% of exports, and the majority of national earnings in any economy (Navickas & Malakauskaite,1 Resource-rich countries: at least 20% of their total exports are natural resources, or at least 2009). SMEs are especially important for emerging resource-rich countries (ERRC) to move out of the middle-income trap (Radosevic & Yoruk, 2018), defined as the inability to sustain growth and transition from resource-driven growth, based on low-cost labor and capital, to productivity-driven growth (Khakas & Kohli, 2011). To boost industrial competitiveness, many resource-rich countries are, or have been, pursuing development policies aimed at maximizing the impact of natural resources on the whole economy (Ramdoo, 2015). These policies are focused on supporting domestic producers in expanding their activities, at least partially with domestic inputs, and gaining access to international technological and managerial expertise to enhance their competitiveness (Kalyuzhnova, Nygaard, Omarov, & Saparbayev, 2016). According to OECD (2013), business linkage 3 policies are an example of a public-private partnership (PPP), where development can enable increased interaction between local SMEs and international companies. It can incorporate a wide range of targets, including business development, boosting competitiveness, and diversification of the economy. Typically, these policies attempt to foster business between local companies and international companies, and have been used in many different countries and industries; for example, in hightech industries in the Czech Republic, Costa Rica, and Ireland. No policy is, to some extent, context-independent: because the business setting is always changing, transferring practices from one country to another is difficult. Therefore, policies are always designed for a specific industry's characteristics, a specific country's characteristics, and time settings.
As such policies' designs differ substantially over time and geographic location, the literature gives contradictory views toward answering the question of how collaboration between foreign and indigenous O&G companies can support indigenous SME in their technological development, taking into consideration the ongoing digitalization 4 of the O&G industry. The fact that Kazakhstan has managed to attract significant foreign investments, predominantly in the natural resource sector, and, therefore, has built its O&G sector on foreign investments (Delevic & Heim, 2017). The collaboration between foreign and indigenous companies could play an important role in the transfer of international technological and managerial expertise to the indigenous SME in the O&G industry. Previous study in international business (IB), however, has also stressed foreign multinational enterprises (MNEs) tend not to agglomerate with local domestic companies, but are willing to agglomerate with other foreign MNEs (Mariotti, Piscitello, & Elia, 2009). This is, in large part, why governments of resource rich-countries pursue policies aiming to develop their domestic industrial capacity to support links with indigenous firms, and not only with other foreign MNEs. As such, further research is necessary to make such initiatives as successful as possible, accepting that our knowledge about them will continue to evolve (Tirole, 2017). In particular, the literature does not provide necessary multidimensional theoretical foundations for industrial development, as it is predominantly informed by economic and political theories (Shapiro, Hobdari, & Oh, 2018), and strategic management perspectives are virtually absent (Hansen, 2017). IB research has often excluded extractive industries and the service sector, claiming that they are likely to be subject to restrictions on the extent of foreign ownership in those businesses (Smarzynska-Javorchik & Wei, 2002).
This article aims to address this research gap, providing new theoretical insights into possible cooperation between local firms and MNEs in the O&G sector in Kazakhstan from the strategic perspective, taking into consideration recent trends such as liberalization of the extractive sector and convergence of the NDE.
The findings encourage policymakers, as well as indigenous SMEs, to take advantage of the digitalization of the O&G industry, including opportunities based on cooperation with foreign firms through facilitation of technology spillovers. 5

| IMPACT OF FDI TECHNOLOGY SPILLOVERS ON LOCAL INDUSTRY
The literature on IB highlights the fact that foreign investments bring a package of capital, technology, and management skills to the host country, including those in the form of spillovers. For example, agglomeration spillovers refer to the vertical (buyer-supplier) and technological spillovers that arise from clusters and networks; these impacts can be intra-industry or interindustry (Dunning & Lundan, 2008). The empirical focus of research has been mostly on technological spillovers (Eden, 2009). Technological spillovers are informal, involuntary, nonmarket transfers (Eden, Levitas, & Martinez, 1997). An example of an agglomeration spillover is a knowledge spillover generated by geographically clustered high-tech firms in Silicon Valley (Almeida & Kogut, 1999). Technological spillovers represent differences between social and private impacts that are not reflected in market prices, and can, therefore, generate inefficiencies. As a result, public policy intervention may be needed for market prices to reflect social costs and benefits (Eden, 2009).
The extensive literature on horizontal foreign direct investments (FDI) spillovers (in the same industry) is inconclusive; the results show the presence of FDI seems more often than not to have no statistically significant productivity effects on domestic firms in the same (horizontal) industry (see, among others, Javorcik, 2004). FDI-induced performance (or productivity) spillovers take place when local firms learn about new technologies, marketing, or management techniques by: observing a foreign firm subsidiary (demonstration effects), hiring workers trained by the foreign firm subsidiary (labor market impacts), or using technologies shared by a foreign firm (technology-sharing impacts), thereby improving their performance. Competition may force a local firm to improve performance; however, competition may also negatively affect a local firm, reducing its revenue. For example, Aitken and Harrison (1999) and Javorcik (2004)  upstream industries and as such, reflect supplier linkage effects rather than intra-industry technology transfer and learning effects. In general, the literature widely confirms the absence of positive effects within the same industries, as well as the presence of positive effects between industries (Altomonte & Pennings, 2009;Görg & Greenaway, 2004;Görg & Strobl, 2000, 2005Javorcik & Spatareanu, 2008). In the O&G industry, production linkages can exist along the same value chain or in an intra-industry context, but they can also be interindustry or horizontal (Narula, 2018). These latter linkages are essential for sustainable development. Interindustry linkages are important for the generation of new industries (industries supporting O&G, such as banks, transportation, logistic, and ICT companies), or industries outside of O&G that initiate new value chains in other, nonextractive sectors (Kaplinsky, Morris, & Kaplan, 2011). As such, returns from extractive sectors (often referred to as "rents") have the potential to create the basis for further economic activity in other (renewable) industries, therefore acting as a driver for sustainable development.

| Value cocreation process between foreign and indigenous firms
Value cocreation is a paradigm in the management literature that emerged from the service management field, innovation management studies, and marketing and consumer research (Galvagno & Dalli, 2014;Prahalad & Ramaswamy, 2000;Vargo & Lusch, 2004). In the early 2000s, Dyer and Singh (1998) and Dyer (2000) proposed a firm's resources may cross over firm boundaries and be shared with other firms. Later, the idea that companies and customers are able to create value through interaction pervaded the literature (Galvagno & Dalli, 2014;Grover & Kohli, 2012). Barrett, Velu, Kohli, Salge, and Simoes Brown (2011) demonstrated firms are increasingly looking to other firms to collaborate and cocreate ICT-enabled 6 products and services.
The cocreation view states suppliers and customers interact with each other for the development of new business opportunities. There is an ongoing debate in the literature about the differences between cocreation and coproduction (Galvagno & Dalli, 2014;Grönroos & Voima, 2013). The marketing perspective considers value cocreation as a network of interactions between actors, evaluating the available and potential resources to understand what they have and what they can do (Mele, Russo-Spena, & Colurcio, 2010). According to the innovation and technology management perspective, the interaction between customers and companies, which technological platforms often mediate, leads to innovation, customer participation, and improved customer services (Galvagno & Dalli, 2014). Grover and Kohli (2012) demonstrate there are four components that determine value cocreation: relationship-specific assets, knowledge-sharing routines, complementary resources and capabilities, and effective governance. The value cocreation view has been previously applied to the settings of an MNE subsidiary in a knowledge-intensive industry (Heim, Tian, & Ghobadian, 2018). In this research, we focus on the foreign and indigenous actors in the O&G industry, value cocreation, and taking advantage of foreign ICT resources 7 for indigenous firms. Built on the review of the literature (Gomez, Baron, & Fiore-Silfvast, 2012;Gummesson & Mele, 2010;Jaakkola & Hakanen, 2013;Okonkwo, 2018;Vargo & Lusch, 2011) and the guiding theories of the value cocreation, we develop a value cocreation model at the network level for the O&G industry, which describes the process of intercompany alignment in the ecosystem of public and private organizations ( Figure 1). Our research questions stand as follows:

1.
To what extent is ICT adopted in the energy sector of Kazakhstan, and how is it used by private and public stakeholders to cocreate value within each organization, as well as between organizations and sectors?

2.
How can the adoption of ICT in a multiple-stakeholders environment facilitate industrial development through value cocreation between private and public stakeholders in the O&G sector?
We argue the deployment of ICT contributes to each layer of value cocreation, and the competitiveness of the O&G industry can be improved by further adoption of ICT and value cocreation in collaborative publicprivate networks.

| Model derivation
Based on our analysis of how previous studies have modeled ICTenabled value creation in a single organization, we conclude the locus value cocreation in an environment of multiple stake-holders' in the O&G industry is the ICT provider, which can be a subsidiary of an international O&G company (model constructs are given in Table 1). The ICT 6 ICT-enabled products and services are business opportunities emerging from the use of ICT. 7 ICT resources are physical and intellectual assets related to ICT. 8 ICT provider is a department or an entity, supporting companies with ICT, including technologies and services. provider invests in and deploys ICT resources. Indigenous firms can take better advantage of the underused resource. External factors also play a role in shaping the extent to which ICT business value can be generated and captured (Melville, Kraemer, & Gurbaxani, 2004).
The Business-ICT Value Cocreation model ( Figure 1) consists of three domains: • the foreign ICT provider • the competitive environment, including industry characteristics and multiple stakeholders, such as national O&G companies (NOC), international IOCs, local SMEs, and banks • the macro-environment, including government.
The first domain is the ICT provider, which generates ICT business value through the deployment of ICT resources and sharing of digital platforms with multiple stakeholders of the second domain. This domain also includes regulation at the industry level, such as government promotion and regulation of technology development. It also includes industrial policies; for instance, local content for the ICT and O&G sectors. ICT increasingly diffuses organizational boundaries, linking multiple firms via electronic networks and software applications, and melding their business processes (Basu & Blanning, 2003;Hammer, 2001;Mukhopadhyay & Kerke, 2002;Straub & Watson, 2001). The application of ICT and complementary organizational resources by an ICT provider may result in the improvement of business processes and impact performance in the multiple stakeholder environment. The third domain is the macro-environment, which includes regulation at the country level, such as laws on PPPs, special economic zones and tax subsidies, the availability of ICT specialists, and finally, the information infrastructure. We included country characteristics in the model to emphasize the increasing role of public policies in shaping ICT business value in developing countries, where local organizations, such as SMEs, may face constraints in their application of information technologies.

| METHODOLOGY AND THE EMPIRICAL STUDY
Our study focuses on the underinvestigated process of value cocreation in the ecosystem of PPPs with a foreign ICT provider and indigenous O&G firms. We adopt a multiple case study research methodology because it is the most appropriate for such exploratory research-especially when the boundaries between phenomena and context are not clearly evident (Eisenhardt, 1989 : "a research strategy that examines, through the use of a variety of data sources, a phenomenon in its naturalistic context, with the purpose of 'confronting' theory with the empirical world." Yin (1994Yin ( , 2014 argued an industry may be investigated using a case study design. Pauwels and Matthyssens (2004) concluded, in many IB studies, theoretical sampling for multiple case studies is complicated by its intrinsic multilevel character. Furthermore, while the multinational firms have to be sampled, cases within those firms' business units, foreign subsidiaries, and even individual managers or other actors also have to be selected. Lee and Baskerville (2003) demonstrated it is possible to generalize from empirical evidence, even from a single case study, to wider theoretical constructs and structures. As an instrument to stricture the information from case studies based on interviews we use vignettes; systematically elaborated short descriptions of concrete social situations that contain precise references to what are thought to be the most important factors in the decisionmaking processes of respondents (Alexander & Becker, 1978). Qualitative vignettes are particularly useful for exploring "actions in context" (Barter & Renold, 1999). Recent examples of studies include public services (Rice, 2017). In IB research, use of qualitative illustrations, such as vignettes, to illustrate and emphasize the key elements and relationships in the theory makes its communication to the management audience easier (Doz, 2011).
As the focus of this study is on collaboration between foreign and indigenous companies in the ecosystem of the O&G industry, Value co-creation process at the individual level, cases of IOC and SME F I G U R E 2 (a) Value co-creation model at the individual level for the cases of international O&G company (IOC) and small-and medium-sized enterprise (SME). (b) Value co-creation model at the relationship level for the case of IOC and SME [Color figure can be viewed at wileyonlinelibrary.com] 9 NOC-National Oil Company, a major, often state-owned, company operating only in the domestic market (KazMunayGas, Kazakhstan), IOC-international oil company, global company operating in international markets (CNPC, China). 10 (Pichkov, 2013).
We attempt to find a way to turn these strategies into advantages for the host-country economy. To address this methodological issue, we used triangulation to integrate multiple data sources. For this purpose, we conducted interviews with industry experts and studied secondary cases, such as educational, research, and industry institutions (see Appendix), as well as consulted extensive secondary and webdata sources and described our vignette case studies.
From the theoretical perspective, we use the existing theory of the value cocreation framework. The rationale for choosing this approach is that ICT can be used as an enabler for value creation by companies with different levels of ICT adoption in one industry, while companies that are more advanced in terms of ICT adoption can share their ICT resources with companies of lower levels of adoption. The latter would use ICT for the improvement of business processes, which would lead to better overall organizational performance. As both companies are interconnected in the O&G value chain, as are their customers and suppliers, this would allow them to cocreate value within their industry. To meet the aims of the research, while recognizing the fact that there is no established theoretical model applicable for a value cocreation process using ICT in the O&G industry, we use a three-stage qualitativeinterpretive research method (Klein & Myers, 1999).
We explore how information systems influence value cocreation in the context of the O&G industry, and how industry influences the adoption of the information systems. First, we conduct a literature review to identify relevant theories, which will be used as an initial guide to inform the topics of research and data collection (Walsham, 1995). Second, we adopt the theory to the circumstances of the O&G industry to identify key domains for interviewing. This leads to the inductive development of the business-ICT value cocreation model at the network level for the O&G industry ( Figure 1). This model, the result of the preliminary stage of theorizing, is the construction of an initial theoretical lens using the constructs and propositions from an appropriate theory meant as a "sensitizing device" to guide subsequent data collection and analysis (Pan & Tan, 2011). It was developed by the authors as a theoretical framework for testing in the circumstances of the O&G industry in Kazakhstan. Third, the lead author conducted semistructured interviews (Appendix) and examined the data from secondary sources, such as policies and the companies' websites. To limit bias, we used an approach proposed by Eisenhardt and Graebner (2007), and have selected highly knowledgeable informants who view the focal phenomena from diverse perspectives.
The methodology is depicted in Figure 3. Interviews were negotiated through one of the authors, who is a reputable academic and researcher on Kazakhstan's energy sectors. These credentials granted the researchers immediate legitimacy and credibility (Patton, 1990). This stage involves deductive advancement through in-depth interviews to identify the level of ICT adoption in Kazakhstan's O&G sector, and constructs a model for each type of O&G organization.
Three vignettes described cases that were different from each other in terms of company ownership and size, private local SME, state-owned NOCs, and international O&G companies; however, we acknowledge the quasi-state ownership of the selected enterprise.
The aim of the present vignette study is to generate first outcomes in the form of a model of ICT-based collaboration for each case and for the O&G cluster. The three vignette case studies each had a similar structure (see Table 2). They started with a brief paragraph about the company. The story continued with more information about the company's main characteristics of ICT adoption, skills available, and investments in ICT. These capabilities are critical for the decision to collaborate. Finally, information about ICT-based collaboration is presented in the form of visual models (Figure 4 and Figure 5).
Criteria for the vignette case study selection were the following: for the local private company, we wanted to select a large enterprise, defined by the World Bank (WB) (2015) as having more than 100 employees but less than 250 employees, operating in the O&G industry for a minimum of 20 years, and covering all regions at the national level. For the national O&G company (operating predominantly in one country), we selected a major state-owned enterprise (SOE) operating in the O&G industry. For the international O&G company (operating in more than one country), we selected a subsidiary of a foreignowned major international O&G Company with more than 10 years of business experience in Kazakhstan. This likely allows the company to overcome the competitive disadvantages of operating in a foreign environment, as the organizational learning processes of emerging economies may take a minimum of 5 years (i.e., Wei & Clegg, 2015).
Finally, we develop a framework of ICT collaboration in the O&G industry cluster (Figure 6).

| DATA ANALYSIS AND RESULTS
An overview of findings from three typical case studies in the O&G industry-indigenous SME, national O&G company (NOC), and IOCare presented in Table 2. The case of the IOC will be discussed in detail later, as it gives information about technologies available to such companies and the ways indigenous firms can collaborate.

| Case study
We identified three main cases within the O&G industry through theoretical sampling (Eisenhardt & Graebner, 2007;Silverman, 2006): a privately owned SME, a NOC, and an IOC. The main characteristics of ICT adoption for these three case studies are summarized in Table 2  There are no plans to implement new technologies, nor any strategic plans. New technologies such as cloud and mobile are not available. The reason is that there is limited availability of such services even from major national telecom companies, namely Kazakhtelecom.

Stages Output
Adaptation of the business-

Structure of ICT investments
The organization has no informal or formal ICT or digitalization strategy. ICT is not used to increase efficiency, reliability, or to keep costs low (there is no enterprise research planning or ERP); ICT is not used in customer services or product innovation (there is no customer rela- The aforementioned empirical findings can be summarized in the framework (Figure 6), which shows how an SME can benefit from the PPP in the O&G industry.

| Vignette study 2: National O&G company (SOE)
In the case of a national O&G company (KazMunayGas or NOC KMG), the level of ICT adoption can be described as in the middle, between the SME discussed in the previous section, and an MNE, which will be discussed in the next section. Kazakhstan's NOC KMG is owned by which is a group of state-owned companies, a sovereign wealth fund, and a joint stock company in Kazakhstan. NWF Samruk-Kazyna also owns, either in whole or in part, many major companies in the country, including the national rail and postal service, the telecommunication company Kazakhtelecom, the state uranium company Kazatomprom, and Air Astana, as well as numerous financial groups.
The state is the sole shareholder of the fund.  also organizes workshops on business and IT strategy alignment, as well as IT courses in the IT Academy in its corporate "university." Public-private partnership in the oil and gas industry network

Structure of ICT investments
We analyzed the IT expenditure of the NOC KMG. From Table 3, it is evident that KMG creates expenses rather than drives value, because the company procures mostly hardware, while less is spent on the implementation of ERP, CRM, and BI 12 systems. Such systems have been in existence as technology for decades, and are now using new technologies such as cloud, mobile, and big data, which can really have a great impact on business. The problem is that KMG still does not understand how these newer technologies can be integrated into its business models, and, therefore, also does not grasp the effects that it can provide. From our point of view, the situation described here corresponds to the middle stages of ICT adoption: basic management processes and controls are in the process of establishment and transformation.
The data in Table 3 show that the local value added in IT goods and programs is very low, with services achieving nearly full localization.
The aforementioned empirical findings can be summarized in the framework (Figure 6), showing the PPP for a NOC cooperating on projects with an indigenous SME in the O&G industry:

| Vignette study 3: International O&G company (MNE)
International According to the managing director: integration and sharing of ICT digital resources allowed the company to save significant financial resources and improve the competitiveness of the group companies.
We are also ready to deliver our services to any external companies from the O&G industry. Our headquarters in their home market in China delivers about 30% of services to the companies which do not belong to the group. This allows to co-create value within the O&G industry between companies of different sizes and parts of the O&G value chain. there is no automatization of this process, companies must transmit data manually, often on a daily basis, but sometimes, in extreme cases, only on a weekly basis.

Level of ICT development
Another expert expressed an opinion that about 30% of O&G companies in Kazakhstan have a relatively high level of ICT adoption. About 60%, however, still have a low level, and 10% have a very low level. O&G companies in Kazakhstan used to spend only 1.5% of their revenue on ICT; since the downturn in oil prices, this has decreased to 1% or less. In most companies, the ICT function reports to the chief financial officer (CFO), so there is no CIO position at the C-level. In CNPC, about 20% of the ICT budget is spent on innovations and 80% is spent on maintenance.
T A B L E 3 Plan of IT procurement of national oil and gas company (KazMunayGas) (NOC KMG)

Skills available
Richfit International also participates in some ICT projects in Africa, Venezuela, and Russia, but Kazakhstan is one of the priority markets for CNPC, as it is the closest geographically, and is where it owns the highest number of foreign entities. The provider supplies information construction plans, consulting, support, and technical services for the petroleum industry, large enterprises, and public institutions. The total number of ICT employees in headquarters is 3,000, and Richfit International in Kazakhstan accounts for about 50 employees. The company has carried out its business activities in Kazakhstan for 3 years.
Business activities include outsourcing and implementation of ERP systems, outsourcing of ICT services, infrastructure outsourcing, and implementation of ICT solutions developed by the headquarters in the home country (e.g., office automation systems, digital control systems, and production of temperature and pressure sensors for these systems

Structure of ICT investments
When making decisions on budget, the ICT department acts as a driver of innovation in most cases. Technologies such as the industrial internet or internet of things (IoT) and cloud computing are being adopted by the company. For example, CNPC has recently built the largest single-enterprise ("private") cloud data center in Asia. The reason for this was that the operating environment, which included hundreds of ICT applications, had become too complex and lacked the ability to perform its critical functions, so it was necessary to integrate the architectures to enable the company to centrally manage its ser- The process of ensuring theory-data-model alignment in this study involved recursively iterating between existing guiding theories.
These theories include value cocreation in networks, the PPP developmental model, empirical data, and the emergent conceptual model to ensure all dimensions were aligned (Eisenhardt & Graebner, 2007).
The aforementioned empirical findings form the basis for the conceptual framework, showing PPP linkages in the O&G cluster presented in Figure 6 and summarized in Table 4 later.

| CONCLUSIONS AND FUTURE WORK
The ICT industry plays a crucial role in the development of any state.
The advantage of digital technologies, for example, cloud computing, is that they allow the implementation of standard services in a number of companies in a short period of time, and make it possible to react to business strategy changes in a timely manner. In developing resource-T A B L E 4 Public-private partnership linkages in the O&G cluster (see Figure 6)

Main characteristics Indicative literature
1 The government provides guarantees to the SME or the ICT provider. The current research results confirm the inability of SMEs to prove their long-term financial stability and their ability to repay a loan. Marchese and Potter (2011) 2 and 8 The current research results demonstrate a lack of financial resources for investments in ICT equipment and services. The bank provides financial support to the ICT provider for infrastructure investment and operational needs. (2011) 3

Marchese and Potter
The government provides a special tax regime for the ICT provider. To set up knowledge clusters, appropriate incentives would have to be coordinated, financed, and provided.
Meller (2008) 4, 6 and 10 The ICT provider delivers services to the different companies of the O&G cluster: SMEs, IOCs, and NOCs. The current research results demonstrate that the share of local content in ICT goods and software procured by the NOC is too low, whereas it is high in services. This means that local service providers are linked to the NOC but not to the local oil SMEs. The value of ICT to users may rise due to network externalities from a community of users. Thus, one firm's ICT investment could increase the productivity of others, and this demonstrates a classic spillover effect. Lee and Guo (2004) 5 The government provides a special tax regime for the SME.

7
The government participates in the NOC. State participation in the O&G sector via the NOC provides the government with better control along the value chain. The presence of the NOC benefits the overall efficiency levels in the industry and thus improves value creation.
Tordo (2011) 9 The IOC sets up the ICT provider and transfers knowledge and know-how. Acquiring ICT through foreign investments is another opportunity to develop technology Meller (2008) 11 The government imposes local content requirements Government of Kazakhstan (2010); Kalyuzhnova et al. (2016) Abbreviations: ICT, information and communication technologies; IOC, international O&G company; NOC, national oil company, O&G, oil and gas; SME, small-and medium-sized enterprise. Source: Authors. rich countries, using the wealth created by the energy sector to boost the domestic industry is highly important (Kalyuzhnova, 2008). The key challenge is that many of those countries have no financial or technological resources of their own to invest in the domestic industry, so they need to attract FDI to develop their O&G reserves. Due to the fact that international O&G companies tend to use global procurement opportunities, including for ICT procurement, these expenditures create low knowledge spillovers in the national economy, and, therefore, create inequalities in the distribution of O&G wealth between the host and home countries. That is why facilitating efforts from the state are necessary to develop the local industry.
This study helps to understand how ICT can create value in the O&G industry and offers insights into the value cocreation process in PPPs. Existing studies do not offer a vigorous model or guidelines on how to create business value from ICT through a cocreation process within a network of public and private organizations. This is particularly pertinent to the O&G industry as it starts to experience the conver- We adapt the value cocreation approach to construct our models of PPPs, advancing the current theoretical understanding of the business-ICT value cocreation process. The inductive part of our research was augmented by deductive empirical testing. Because the proposed models help them to understand how ICT-enabled value cocreation process leads to development, both practitioners and academics will benefit.
We contribute to the literature by developing a theoretical foundation for ICT-led development, drawing on a widely accepted new paradigm in the management literature, namely the value cocreation framework. Moreover, we extend this perspective by linking it with the strategic use of ICT and draw possible advantages for the local industry through the development of local capabilities via integration with international O&G companies. Furthermore, apart from the general theoretical contribution, our research identifies detailed constructs of the value cocreation process that are strongly supported by empirical evidence. This is the first time that these constructs have been incorporated with a strong empirical grounding in a value cocreation model in the O&G industry. It demonstrates how ICT can integrate different public and private actors in the network to cocreate value and how local industry gains the competitive advantages necessary for long-term survival and development. We maintain that our research will help practitioners as well as policymakers to adapt their businesses in the digital age. Practitioners such as managers and SME leaders will benefit from this model by guiding their enterprises toward business competitiveness.
This study is not without limitations. We acknowledge our study is confined to one industry in one country and our results must be tested on a larger sample. We believe, however, the model we developed offers a promising basis for future research on the role of ICT in industrial development. To improve the generalizability of our findings, we will test our framework in a setting of other O&G-rich countries. As the data are available, we recommend conducting quantitative research based on this model. We believe the network value cocreation model may be appropriate for any highly integrated industries; therefore, future research can also include an expansion of this model to other industries. Further research may also more deeply explore the differences in adoption patterns more deeply by relating the differences to more organizational dimensions that go beyond the size of the organization and its form of ownership to encompass aspects such as innovativeness, strategic orientation, an incidence of joint venturing, exposure to global commerce, etc.
Through such an approach, the manner in which ICT adoption occurs at different types of firms can be explored in more detail, explaining the ways in which positive spillovers occur, and the approaches that provide the positive results wider adoption of ICT can bring.

ACKNOWLEDGMENTS
We thank John Dilyard, reviewers of this article and participants of