INTRODUCTION

Platforms constitute a major organizational innovation that builds upon the new oppor­tunities provided by information and communication technologies (ICTs) to improve efficiency in the generation and exploitation of technological knowledge.

More specifically, platforms can be regarded as an innovative organizational mecha­nism that enhances the capability of its members to integrate externalities in the recombinant generation of technological knowledge and to increase their capabilities to appropriate the benefits of this knowledge. As is well known, technological knowledge as an economic good has several limits ranging from partial appropriability and divis­ibility, to non-excludability, non-exhaustibility and intrinsic tacitness. The generation of technological knowledge is a recombinant process in which knowledge is at the same time the output of a dedicated process and an indispensable input. Access to existing knowledge is crucial to effectively generating new knowledge as much as its appropria­tion is necessary to providing adequate incentives and guiding a correct allocation of resources for its generation. Because of the intrinsic complexity of this trade-off, perfect markets and pure hierarchies fail in the allocation and organization of resources to its generation and use.

Sophisticated knowledge governance mechanisms are necessary to organize its genera­tion and exploitation (Arrow, 1969). Platforms constitute a major organizational inno­vation that makes it possible to improve the responsible participation and the dynamic identification of competent players in a collective and yet selective process of knowledge generation and exploitation that is based upon incentive and reward mechanisms.

Platforms are a key element of the emerging knowledge economy because they make it possible to ‘industrialize’ the generation of knowledge and to reduce the effects of the knowledge trade-offs that limit the working of both the markets for knowledge and hierarchies. Platforms allow the organization of the necessary division of scientific labor, identification of the incentives to specialize and improvement of the opportunities for the

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exchange of different knowledge items (Ostrom and Hess, 2006; Ostrom, 2010; Antonelli, 2015).

The notion of a ‘knowledge economy’¹ emerged gradually in the 1990s to appreci­ate and describe the fundamental changes occurring in the structure and dynamics of economic systems, as well as in the competitive drivers utilized by firms to increase their economic gains and market power. The term ‘knowledge economy’ is meant to stress the shift in importance from traditional physical inputs in production processes, such as capital and labor, to immaterial inputs such as competencies, skills and knowledge (OECD, 1996).

Since the 1990s an array of factors have emerged that led to a rapid and radical transformation of the environment in which firms compete, raising questions about the applicability of the traditional capitalist model to the new innovation landscape. First, the increasing environmental turbulence (for instance, due to greater instability in prices, fluctuating cost of inputs, and variability of demand) and the intensification of global competition reduce the effectiveness of managerial planning and command.

New ICTs have played a major role in this context since they contributed to changing the innovation landscape, acting as centrifugal forces that support decentralization of activities, outsourcing, specialization and division of labor. In particular, the emergence of a bundle of intertwined and interdependent innovations in technologies (ICTs) and organizations (networks) introduced such a dramatic transformation in the structure and dynamics of economic coordination that Chris Freeman (2009) coined the term ‘ICT paradigm’² to describe this pervasive change in the economic setting and in the way in which firms and organizations evolve, adapt and react to new emerging economic con­ditions. ICTs and networks developed in parallel and reinforced each other’s diffusion, questioning the traditional, hierarchical way in which firms coordinated their productive and innovative capabilities.

Since the 1990s the rapidly expanding adoption of ICTs and the Internet as process innovations in the organization of productive activities has been associated with trans­formations in the conditions under which the production of goods and services takes place, and more precisely in the way in which economic agents interact with each other in order to coordinate such production. The pervasive diffusion of computer-based ICTs has exerted strong pressure on the governance mechanisms and the structure of formal

Organizational innovations, ICTs and knowledge governance 325 organizations, fostering the adoption of administrative simplification, flatter hierarchi­cal control and lean production processes. These transformations in both the technology and the organization of firms have been connected to the emergence of alternatives to traditional coordination structures like the well-known vertically integrated, hierarchical, and Fordist firm. Networks are increasingly viewed as structures that challenge formal organizations characterized by hierarchical control and well-defined boundaries.

The new gale of digital technologies has changed in depth not only the organization of corporations and the division of labor among firms, but also the organization of the gen­eration of technological knowledge and of the introduction of new technological innova­tions. The introduction and diffusion of ICTs parallels the emergence of new models for the division of the innovative labor that is necessary to introduce new technologies. The generation of technological knowledge becomes a crucial activity where the borders of innovative firms need to be more and more porous so as to be able to access, absorb and use the distributed competence and the existing knowledge dispersed in the system. ICTs and the Internet are perceived as centrifugal forces that foster decentralization, boundary crossing and networking because they make available technological tools for the efficient development of subcontracting, outsourcing and modular strategies (Kallinikos, 2009).

This chapter focuses on innovation platforms that are emerging as new means to manage the recombinant generation of new technological knowledge and to coordinate the introduction of technological innovations exploiting the organizational opportunities opened up by technological innovation in ICTs and the Internet. At the same time, the innovation platform is itself an organizational innovation, widely diffused and adopted in the ICTs and Internet industries by platform leaders such as Cisco, Microsoft and Google.

However, despite this empirical relevance, the growth of innovation platforms across a range of industrial sectors, with new ICTs and the Internet at the forefront, has received only limited attention from innovation scholars. The nature of these structures and how they influence the evolution of industrial sectors and innovation processes remains a puzzle and few studies explore the impact of the emergence of platforms on industrial dynamics, the creation of new forms of competition and on new relations of inter-organizational cooperation in the framework of innovation processes (Gawer and Cusumano, 2002; Prencipe et al., 2003; Consoli and Patrucco, 2008; Patrucco, 2012).

In this context, this chapter defines platforms as hierarchical networks, that is, as net­works in which the interactions do not emerge and evolve spontaneously, but in which key players (e.g., platform leaders and system integrators) exercise a guiding role in the behavior of the other actors, selecting the members of the platform itself and directing the behavior and the evolution of the system as a whole. A second distinctive element of these organizational forms is represented by the active search for knowledge complemen­tarity and exploitation of variety (contrasted to mere agglomeration) between different activities. Hence platforms are institutional arrangements to internalize knowledge spillo­vers and externalities. They are structured and designed with precise and predetermined innovation objectives in mind (in contrast to spontaneous phenomena such as some types of networks such as innovation districts).

In this sense, with respect to both the coordination mechanisms and the assumptions about the characteristics of knowledge, platforms represent a significant organizational innovation, different from integrated companies, markets and the networks themselves.

Integrating a complexity approach to organizations into economics of innovation, this chapter traces the emergence of innovation platforms as both a result of technological innovation produced by the ICTs and as an organizational innovation widely adopted in the same sector to achieve and sustain competitive position and growth of the players.

The chapter is structured as follows. Section 15.2 briefly recalls the basic tenets of the economics of ICTs, of which the Internet is credibly the most evident and widespread subset of technologies and applications. Section 15.3 articulates the structures and dynamics that characterize the new innovation and knowledge landscape after the advent of the ICT paradigm, the rise of networked organizations and the demise of the tradi­tional, Fordist mode of innovation based on large, vertically integrated corporations. Section 15.4 is dedicated to developing an understanding of the different features and processes that characterize platforms - a specific and nowadays pervasive type of net­worked organization - and the means by which platforms generate and manage innova­tion. Conclusions briefly summarize.

15.2