From Hierarchy to Market: the Changing Industrial Organization of Epistemic Communities During Hong Kong’s Transition to a Cashless Society (1965-2005)

26 09 2014

AS: I’ve written a paper on Hong Kong’s transition to cashlessness with Bernardo Batiz-Lazo of Bangor Business School. Bernardo will be presenting the paper next month at the University of Gothenburg. The paper is based on extensive archival and other primary source research. On a theoretical level, it draws on the work of Richard Langlois and Lars Håkanson. Here are the details of our talk.

Guest seminar with Professor Bernardo Batiz-Lazo, University of Bangor, UK

Organized jointly with Center of Finance and Department of Economy and Society, Unit of Economic History

Date: October 14 at 2 pm,

Place: D32 (in Main Building)

From Hierarchy to Market: the Changing Industrial Organization of Epistemic Communities During Hong Kong’s Transition to a Cashless Society (1965-2005)

Bernardo Batiz-Lazo (Bangor Business School) and Andrew Smith (Liverpool School of Management)


This paper documents how computer technology modified retail financial markets in Hong Kong in the period from the 1960s to the early 2000s. The forty years after the deployment of the first computer in 1965, saw a dramatic change in retail banking technology as Hong Kong moved towards being a cashless society. Prior to that pivotal year, none of the colony’s banks used computers whilst retail customers accessed their liquid balances via cash and cheques and only during banking hours. Over time, the ways in which people spent money became more diverse and transformed with the advent of technologies such as the ATM, point of purchase debit card terminals, the Octopus chip, and mobile phone payments. One could construct a straightforward narrative arc that links the acquisition of HSBC’s first computer in 1967 to the proliferation of electronic payment systems in the twenty-first century. Such a narrative, however, would obscure an important discontinuity in the history of retail payment technology. In the early stages of Hong Kong’s transition to the cashless society, the relevant technologies were installed and managed within the boundaries of large financial intuitions such as HSBC.  The second episode discussed in this paper is the successful launch of a micro-payments solution called “Octopus”. Initially designed as a transport payments card, cash balances stored within a smart chip grew outside financial institutions to become the leading payment solution in small value transactions. Over the course of the period covered by this article, the industrial organization of the relevant technologies transformed as the provision of much of the technology for retail payments had been outsourced to non-bank, non-financial institutions. In other words, the industrial organization of the relevant technologies had been transformed. This paper seeks to account for this shift in the organization of payments technology by drawing on literature around the boundaries of the firm as well as the theory of the firm as an epistemic community. It will be suggested that this process of vertical disintegration (i.e., a shift from hierarchy to markets) took place because of changes in the underlying conditions in Hong Kong’s economy.

Information about Porfessor Batiz-Lazo

Professor Batiz-Lazo is Professor of Business History and Bank Management at Bangor University and a Fellow of the Royal Historical Society. He read economics (at ITAM, Mexico and Autonoma de Barcelona, Spain), history (Oxford) and received a doctorate in business administration (Manchester Business School). He has been studying financial markets and institutions since 1988. He joined Bangor after appointments at Leicester, Open University and Queen´s Belfast.

Since 1998 he edits a weekly report on new working papers in business, economic and financial history (NEP-HIS). See

For the NEP-HIS blog, which reviews the highlights of these papers, see

For more information contact Susanna Fellman

Interview with Business Historian Bernardo Batiz-Lazo: The Cashless Society?

26 07 2013

My research collaborator Bernardo Batiz-Lazo was recently interviewed on BBC News about whether we are transitioning to being cashless societies. The interview is in the second half of this video clip.



Bernardo is Professor of Business History and Bank Management at Bangor University and a Fellow of the Royal Historical Society. We are working on a paper about the history of computerisation in international banking.

Visions of the Cashless Society in Science Fiction

13 04 2012

Bernardo Batiz-Lazo is Professor of Business History and Bank Management at Bangor University in Wales.  His research interests centre on the use technology in banking (e.g., the histories of the ATM, the debit card, and  direct payment technologies).

In a recent post on Bloomberg’s Echoes business history blog, Bernardo and his collaborators  Thomas Haigh and David Stearns noted that most of the classic works of science fiction (e.g., Isaac Asimov’s Foundation novels of the 1950s) did not anticipate the displacement of cash by new payment technologies. The characters in these novels zipped around the galaxy in ships that exceeded the speed of light, but when they engaged in commercial transactions, they relied on coins and paper money.

As they point out,

Many technological innovations surfaced first in science fiction and then became a reality.Think of Jules Verne imagining a flight to the moon and long-range submarines decades before such things existed…but literature foresaw only limited advances in the way we exchange money. Capitalism was the default social organization of American science fiction, and few authors put much energy into imagining its future. By the 1940s, many had adopted the term “credit” as the universal name for future currencies, including Isaac Asimov in his two main strands of work (the far-future “Foundation” saga and the near-future “Robot” stories). Usually, however, “credit” functioned as a simple linguistic substitution for “dollar,” and one reads of credits being slapped onto counters, flung to parking attendants, drawn from pockets and the like.