<<
>>

CONCLUSION

Platforms constitute a major organizational innovation in knowledge governance that exploit the advantages of ICTs in terms of improved flexibility, enhanced control and efficient networking.

Platforms are becoming crucial tools for implementing and sup­porting knowledge governance, both at the firm and the system levels. At the firm level, the creation of and the inclusion in a platform is essential to manage the knowledge­generation process, thus widening the range of competencies that can be accessed and integrated by recombination. Platforms make it possible to increase the amount and the quality of external knowledge that can be used by each firm. As such, platforms enable a drastic reduction of the need to generate new technological knowledge and to introduce technological innovations within a single organization. Rather, firms can sub­stitute cheaper external knowledge for internal more expensive research and development

Table 15.3 Platform strategies and characteristics in the ICTsector

Key Platform Dimensions
Scope Architecture External network
Intel Exploration of external resources

Collaboration with external producers of complements

Modular structure

Open interfaces Collaboration on

standard setting

Long-term collaborations with complements producers

Value sharing

Microsoft Exploitation of internal core competencies Closed structure

Proprietary interfaces and standards

Horizontal and vertical competition

Horizontal and vertical integration of producers

Value appropriation

Cisco External knowledge exploitation and acquisition Mixed structure

Open standards and interfaces

Proprietary development of new technologies

Proprietary software

Long-term collaborations with complements producers

Horizontal and vertical integration of producers

Palm Exploitation of internal core competencies on hardware and software

Collaboration with external producers of applications

Modular structure that facilitate complements development

Proprietary technologies on OS

Open interfaces on applications

Long-term collaborations with complements producers

Strong user-producer relations

Collective learning

DoCoMo Exploitation of internal resources

External collaborations

Modular structure

Open interfaces and standards

Long-term collaborations with producers
Linux Strong exploration of external resources Open standard Collective learning

Sources: Authors’ elaboration on information provided in Bresnahan (2002), Gawer and Cusumano (2002), Casadesus-Masanell and Yoffie (2007), Gawer and Henderson (2007), Tee and Gawer (2009) and Eisenmann et al.

(2011).

activities. The advantages of knowledge cumulability and non-exhaustibility are better exploited. From this viewpoint, platforms are an emerging organizational innovation that is likely to replace the Chandlerian corporation in many areas.

Platforms make it possible to better organize the valorization of technological knowl­edge after its generation, reducing uncontrolled leakages and exploiting economies of scope with the systematic internalization of potential complementarities with a wide range of partners. At the firm level, platforms make it possible to command the endog­enous creation of knowledge externalities and, in so doing, make it possible at the same time: (1) to shrink the absorption costs that stem from a variety of activities such as search, screening, identification, decodification and recodification that are necessary to actually using external knowledge as an input into the generation of new knowledge, and (2) to increase the command of the knowledge exploitation processes. This accelerates the rate of technological innovations and increases their market value.

Support for the diffusion of platforms at the system level may become a major tool of economic policies aimed at increasing the quality of knowledge governance. First, platforms can become a key element of national and regional innovation systems. In an evolutionary perspective, the notion of an innovation system stresses the role that the variety of actors and the connections among those actors play in the generation of new knowledge and innovations. The implementation of platforms within innovation systems emphasizes that both the active selection of the members of the innovation system and their structured coordination should become a major goal for policy-makers in order to support the creation and diffusion of new knowledge and the introduction of innovations (Patrucco, 2014a). The active selection of the members of the system should be cen­tered on the exploitation of knowledge complementarities, minimizing redundancies of endowments, skills and competencies.

In this regard, the active selection of the members and their structured and dynamic coordination enable overcoming the limits of the spon­taneous coordination of innovative efforts within networks.

Furthermore, the identification of potential platforms and the intervention of public authorities to stir their implementation may help the economic system to hasten the rate of generating of new technological knowledge and of the introduction of technological innovations. Integrating public procurement with active support for the creation of plat­forms on the supply side can become an effective framework to improve the capability of the system to command the endogenous creation and exploitation of knowledge exter­nalities, using public procurement as a powerful incentive. Because platforms, like a glass mirror, make it possible to multiply the light of knowledge candles, a system in which public policy has been able to facilitate the implementation of a variety of platforms is likely to experience better performance in the generation of new technological knowledge at lower unit costs than one with fewer or more homogeneous platforms.

NOTES

* This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement no. 266959.

↑ The authors acknowledge the institutional support of the Collegio Carlo Alberto and the University of Torino.

1. The term ‘knowledge society’ is also used as a synonym for ‘knowledge economy’.

2. The emergence of the so-called ‘ICT paradigm’ has been paralleled by a broader set of changes introduced in the telecommunication industry itself. Impinging upon the centrifugal properties of new communication technologies and the diminishing importance of scale economies, regulators liberalized telecommunication markets worldwide. Moreover, in the EU especially, they supported the entry of new players, which often delivered their communication services (such as, broadband services, TV on demand, Internet Protocol TC [IPTV] and Voice-over-IP [VoIP]) exploiting new communication technologies, of which the Internet is just the epitome.

In this regard, the emergence of the ‘ICT paradigm’ implies market changes both in the telecom market broadly speaking and in the industry that makes intensive use of ICTs. With regard to the former, ICTs and the Internet form both a product and a process innovation that radically change the way in which communication services are delivered (e.g., the shift from copper wires to fiber-optic cable and the introduction of wireless technologies) as well as the content of the services themselves (e.g., IPTV and VoIP). With regard to the latter, ICTs and the Internet are mainly used as process innovations that

Organizational innovations, ICTs and knowledge governance 341 change the way in which production is organized, products are manufactured and services are delivered (for instance, increasing delocalization and outsourcing). These changes have greatly improved efficiency and control over production, and have relaxed the requirement of physical proximity between producers and users to deliver a given service.

3. By ‘technological convergence’ we mean the growing direction that characterizes technologies originally belonging to different systems to progressively carry out similar tasks. In particular, this is the case for technologies such as voice (e.g., telephony features), media and video (e.g., music and television services), and data (e.g., productivity applications) that previously were delivered separately and now, exploiting digitalization, share network and other resources and interact with each other through single physical devices (e.g., tablets and smartphones). In this sense, technological convergence relies upon technologi­cal complementarities and network effects and implies a networked product architecture. The Internet is itself a driver and a product of technological convergence, and probably the most powerful and pervasive result of such a convergence between new information and communication technologies (Fransman, 2010).

4. We can define interactions as personal and socially based forms of coordination for economic activity that do not need formal agreements, such as contracts, and do not rely on a price system.

On the other hand, transactions are defined as formalized and often standardized modes of coordination based on contracts and the price system. These two cases are clearly the two theoretical extremes of a continuum where inter­mediate combinations of interactions and transactions open the scope for empirical analysis of different forms of coordination.

REFERENCES

Antonelli, C. (2001), The Microeconomics of Technological Systems, Oxford, UK: Oxford University Press.

Antonelli, C. (2003), The Economics of Innovation, New Technologies and Structural Change, London: Routledge.

Antonelli, C. (2006), ‘The governance of localized knowledge: An information economics approach to the economics of knowledge’, Industry and Innovation, 13 (3), 227-61.

Antonelli, C. (ed.) (2011), Handbook on the Economic Complexity of Technological Change, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing.

Antonelli, C. (2015), ‘The dynamics of knowledge governance’, in C. Antonelli and A. Link (eds), Handbook on the Economics of Knowledge, London, Routledge, pp. 232-62.

Arora, A., A. Gambardella and E. Rullani (1998), ‘Division of labour and the locus of inventive activity’, Journal of Management and Governance, 1 (1), 123-40.

Arrow, K.J. (1969), ‘Classificatory notes on the production and transmission of technical knowledge’, American Economic Review, 59 (2), 29-35.

Arrow, K.J. (1974), The Limits of Organization, New York: W.W. Norton.

Baldwin, C.Y. and K.B. Clark (1997), ‘Managing in an age of modularity’, Harvard Business Review, 75 (5), 84-93.

Bonazzi, G. and C. Antonelli (2003), ‘To make or to sell? The case of in-house outsourcing at Fiat Auto’, Organization Studies, 24 (4), 575-94.

Bresnahan, T.F. (2002), ‘The economy of the Microsoft case’, Stanford Law and Economics Olin Working Paper No. 232, accessed 3 July 2014 at http://ssrn.com/abstract=304701.

Brynjolfsson, E. (2011), ‘ICT, innovation and the e-economy’, EIB Papers No.

8/2011, European Investment Bank, Economics Department.

Brynjolfsson, E. and L.M. Hitt (2000), ‘Beyond computation: Information technology, organizational transfor­mation and business performance’, Journal of Economic Perspectives, 14 (4), 23-48.

Casadesus-Masanell, R. and R. Yoffie (2007), ‘Wintel: Cooperation and conflict’, Management Science, 53 (4), 584-98.

Chandler, A.D. (1977), The Visible Hand, Cambridge, MA: Harvard University Press.

Chandler, A.D. (1990), Scale and Scope: The Dynamics of Industrial Capitalism, Cambridge, MA: Belknap Press.

Chesbrough, H. and D. Teece (1996), ‘Organizing for innovation: When is virtual virtuous?’, Harvard Business Review, 74 (1), 65-74.

Chesbrough, H.W., W Vanhaverbeke and J. West (eds) (2006), Open Innovation: Researching a New Paradigm, Oxford, UK: Oxford University Press.

Ciborra, C. (1996), ‘The platform organization: Recombining strategies, structures and surprises’, Organizational Science, 7 (2), 103-18.

Consoli, D. and P.P. Patrucco (2008), ‘Innovation platforms and the governance of knowledge: Evidence from Italy and the UK', Economics of Innovation and New Technology, 17 (7), 701-18.

Consoli, D. and PP Patrucco (2011), ‘Complexity and the coordination of technological knowledge: The case of innovation platforms’, in C. Antonelli (ed.), Handbook on the Economic Complexity of Technological Change, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, pp. 201-20.

Cusumano, M.A. and A. Gawer (2002), ‘The elements of platform leadership’, MIT Sloan Management Review, 43 (3), 51-8.

Davenport, T.H. and L. Prusak (1998), Working Knowledge: Managing What Your Organization Knows, Cambridge, MA: Harvard Business School Press.

David, P.A. and E. Steinmueller (1994), ‘Economics of compatibility standards and competition in telecommunication networks’, Information Economics and Policy, 6 (3-4), 217-42.

Edquist, C. (ed.) (2003), The Internet and Mobile Telecommunications Systems of Innovation, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing.

Eisenmann, T., G. Parker and M.W. van Alstyne (2011), ‘Platform envelopment’, Strategic Management Journal, 32 (12), 1270-85.

Ethiraj, S.K. and D. Levinthal (2004), ‘Modularity and innovation in complex systems’, Management Science, 50 (2), 159-73.

European Commission (2004), Technology Platforms: From Definition to Implementation of a Common Research Agenda, Director-General for Research.

Foray, D. (2004), The Economics of Knowledge, Cambridge, MA: MIT Press.

Fransman, M. (2002), Telecoms in the Internet Age: From Boom to Bust to...? Oxford, UK: Oxford University Press.

Fransman, M. (ed.) (2006), Global Broadband Battles: Why the US and Europe Lag Behind While Asia Leads, Stanford, CA: Stanford University Press.

Fransman, M. (2010), The New ICT Ecosystem: Implications for Policy and Regulation, Oxford, UK: Oxford University Press.

Freeman, C. (2009), ‘The ICT paradigm’, in R. Mansell, C. Avgerou, D. Quah and R. Silverstone (eds), The Oxford Handbook of Information and Communication Technologies, Oxford, UK: Oxford University Press, pp. 34-54.

Garud, R. and A. Kumaraswamy (1996), ‘Technological designs for retention and reuse’, International Journal of Technology Management, 11 (7/8), 883-91.

Gawer, A. (ed.) (2009), Platforms, Markets and Innovation, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing.

Gawer, A. and M.A. Cusumano (2002), Platform Leadership: How Intel, Microsoft, and Cisco Drive Industry Innovation, Boston, MA: Harvard Business School Press.

Gawer, A. and R. Henderson (2007), ‘Platform owner entry and innovation in complementary markets: Evidence from Intel’, Journal of Economics & Management Strategy, 16 (1), 1-34.

Gerstein, S. (1992), ‘From machine bureaucracies to networked organizations: An architectural journey’, in D.A. Nadler, M.A. Gerstein and R.B. Shaw (eds), Organizational Architecture: Designs for Changing Organizations, San Francisco, CA: Jossey-Bass, pp. 11-38.

Hagedoorn, J. and G. Hesen (2007), ‘Contract law and the governance of inter-firm technology partnerships. An analysis of different modes of partnering and their contractual implications’, Journal of Management Studies, 44 (3), 342-66.

Henderson R.M. and K.B. Clark (1990), ‘Architectural innovation: The reconfiguration of existing systems and the failure of established firms’, Administrative Science Quarterly, 35 (1), 9-30.

Iansiti, M. and R. Levien (2004), The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Cambridge, MA: Harvard University Press.

Jacobides, M.G. (2006), ‘The architecture and design of organizational capabilities’, Industrial and Corporate Change, 15 (1), 151-71.

Jacobides, M.G. and S. Billinger (2006), ‘Designing the boundaries of the firm: From “make, buy, or ally” to the dynamic benefits of vertical architecture’, Organization Science, 17 (2), 249-61.

Jacobides, M.G., T. Knudsen and M. Augier (2006), ‘Benefiting from innovation: Value creation, value appro­priation and the role of industry architectures’, Research Policy, 35 (8), 1200-221.

Jones, M. and WJ. Orlikowski (2009), ‘Information technology and the dynamics of organizational change’, in R. Mansell, C. Avgerou, D. Quah and R. Silverstone (eds), The Oxford Handbook of Information and Communication Technologies, Oxford, UK: Oxford University Press, pp. 293-313.

Kallinikos, J. (2009), ‘ICT, organizations, and networks’, in R. Mansell, C. Avgerou, D. Quah and R. Silverstone (eds), The Oxford Handbook of Information and Communication Technologies, Oxford, UK: Oxford University Press, pp. 273-92.

Kim, D. and B. Kogut (1996), ‘Technological platforms and diversification’, Organization Science, 7 (2), 283-301.

Lane, D., D. Pumain, S. van der Leew and G. West (eds) (2009), Complexity Perspectives on Innovation and Social Change, Berlin: Springer.

Langlois, R.N. (2002), ‘Modularity in technology and organization’, Journal of Economic Behavior & Organization, 49 (1), 19-37.

Langlois, R.N. (2003), ‘The vanishing hand: The changing dynamics of industrial capitalism’, Industrial and Corporate Change, 12 (2), 351-85.

Langlois, R.N. (2004), ‘Chandler in a larger frame: Markets, transaction costs, and organizational form in history’, Enterprise & Society, 5 (3), 355-75.

OECD (1996), The Knowledge-Based Economy, Paris: Organisation for Economic Co-operation and Development.

Ostrom, E. (2010), ‘Beyond markets and states: Polycentric governance of complex economic systems’, American Economic Review, 100 (3), 641-72.

Ostrom, E. and C. Hess (eds) (2006), Understanding Knowledge as a Commons: From Theory to Practice, Cambridge, MA: MIT Press.

Patrucco, P.P. (2008), ‘The economics of collective knowledge and technological communication’, Journal of Technology Transfer, 33 (6), 579-99.

Patrucco, P.P. (2012), ‘Innovation platforms and the knowledge-intensive firm’, in M. Dietrich and J. Krafft (eds), Handbook on the Economics and Theory of the Firm, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, pp. 354-78.

Patrucco, P.P. (2014a), ‘The evolution of knowledge organization and the emergence of a platform for innova­tion in the car industry’, Industry and Innovation, 21 (3), 243-66.

Patrucco, P.P. (ed.) (2014b), The Economics of Knowledge Generation and Distribution: The Role of Interactions in the System Dynamics of Innovation and Growth, London: Routledge.

Penrose, E. (1959), The Theory of the Growth of the Firm, Oxford, UK: Oxford University Press.

Prencipe, A., A. Davies and M. Hobday (eds) (2003), The Business of System Integration, Oxford, UK: Oxford University Press.

Richardson, G.B. (1972), ‘The organisation of industry’, Economic Journal, 82 (327), 883-96.

Rochet, J.C. and J. Tirole (2003), ‘Platform competition in two-sided markets’, Journal of the European Economic Association, 1 (4), 990-1029.

Schilling, M. (2009), Strategic Management of Technological Innovation, New York, McGraw-Hill.

Shapiro, C. and H.R. Varian (1999), Information Rules, Cambridge, MA: Harvard University Press.

Smith, A. (1776), An Inquiry into the Nature and Causes of the Wealth of Nations, London: W Strahan and T. Cadell.

Suarez, F. and M.A. Cusumano (2009), ‘The role of services in platform markets’, in A. Gawer (ed.), Platforms, Markets and Innovation, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, pp. 77-98.

Tee, R. and A. Gawer (2009), ‘Industry architecture as determinant of successful platform strategies: A case study of the i-mode mobile Internet service’, European Management Review, 6 (4), 217-32.

van Schewick, B. (2010), Internet Architecture and Innovation, Cambridge, MA: MIT Press.

Von Hippel, E. (1988), The Sources of Innovation, Oxford, UK: Oxford University Press.

Von Hippel, E. (2005), Democratizing Innovation, Cambridge, MA: MIT Press.

Weitzman, M.L. (1996), ‘Hybridizing growth theory’, American Economic Review, 86 (2), 207-12.

Weitzman, M.L. (1998), ‘Recombinant growth’, Quarterly Journal of Economics, 113 (2), 331-60.

Wheelwright, S.C. and K.B. Clark (1992), ‘Creating project plans to focus product development’, Harvard Business Review, 70 (2), 70-82.

16.

<< | >>
Source: Bauer J., Latzer M. (Eds.). Handbook on the Economics of the Internet. Edward Elgar,2016. — 603 p.. 2016
More economic literature on Economics.Studio

More on the topic CONCLUSION: