Platforms, Markets and Innovation

Platforms, Markets and Innovation

Edited by Annabelle Gawer

Annabelle Gawer presents cutting-edge contributions from 24 top international scholars from 19 universities across Europe, the USA and Asia, from the disciplines of strategy, economics, innovation, organization studies and knowledge management. The novel insights assembled in this volume constitute a fundamental step towards an empirically based, nuanced understanding of the nature of platforms and the implications they hold for the evolution of industrial innovation. The book provides an overview of platforms and discusses governance, management, design and knowledge issues.

Chapter 2: The Architecture of Platforms: A Unified View

Carliss Y. Baldwin and C. Jason Woodard

Subjects: business and management, strategic management, economics and finance, economics of innovation, industrial organisation, services, innovation and technology, economics of innovation


2. The architecture of platforms: a unified view Carliss Y. Baldwin and C. Jason Woodard INTRODUCTION Product and system designers have long exploited opportunities to create families of complex artifacts by developing and recombining modular components. An especially common design pattern has come to be associated with the concept of a ‘platform’, which we define as a set of stable components that supports variety and evolvability in a system by constraining the linkages among the other components. Our goal in this chapter is to shed light on the relationships between platforms and the systems in which they are embedded, in order to better understand firms and industries where platforms play an important role. We begin by reviewing the use of the term ‘platform’ in three distinct but related fields: product development, technology strategy and industrial economics. Although the term is used in diverse ways that seem difficult to reconcile, we find a number of common threads – most importantly, the conservation or reuse of a core component to achieve economies of scale while reducing the cost of creating a wide variety of complementary components. This combination of conservation and variety has been harnessed both in product lines within the boundaries of a single firm (for example, the Sony Walkman®) and in large clusters or ecosystems of interdependent firms (as in the computer industry), as well as in the more general setting of multi-sided markets such as credit cards, shopping malls and search engines. We argue that the fundamental architecture behind all...

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