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 14: The Effect of Technological Platforms on the International Division of Labor: A Case Study of Intel’s Platform Business in the PC Industry

Hirofumi Tatsumoto, Koichi Ogawa and Takahiro Fujimoto

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


Hirofumi Tatsumoto, Koichi Ogawa and Takahiro Fujimoto INTRODUCTION In this chapter we examine the diffusion process of platforms, focusing on the product architecture of platforms, and the acceleration of technological innovation transfer from developed countries to developing countries. These two factors have led, ultimately, to a change in the form of the international division of labor. The effect of product architecture on innovation is one of the central questions in existing research on technical innovation (Abernathy and Utterback, 1978; Henderson and Clark, 1990; Christensen, 1992; Ulrich, 1995; Baldwin and Clark, 2000). Product architecture is the basic concept used to describe how the functions of a product are allocated to components, and is classified into modular and integral architecture (Ulrich, 1995). A modular architecture involves a one-to-one mapping from functions to components, and uses decoupled and clear interfaces between components (Ulrich, 1995; Baldwin and Clark, 2000; Fujimoto, 2007). By contrast, an integral architecture involves a complex mapping from functions to components, and uses coupled and rough interfaces between components (Ulrich, 1995; Fujimoto, 2007). The growing use of modular architecture has led to an increase in the importance of innovations in modular cluster industries (Langlois and Robertson, 1992; Sanchez and Mahoney, 1996; Baldwin and Clark, 2000). The rise of the computer industry in Silicon Valley is the most typical and successful case of modular cluster innovations (Baldwin and Clark, 2000). 345 346 Platforms, markets and innovation The platform, meaning a system made of interdependent products or components, has played a key role...

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