Technology →
- 20 Nov 2008
- Working Paper Summaries
Was the Wealth of Nations Determined in 1000 B.C.?
To the extent that history is discussed at all in economic development, it is usually either the divergence associated with the Industrial Revolution or the effects of colonial regimes. Is it possible that precolonial, preindustrial history also matters significantly for today's national economic development? The authors find that technology adoption circa 1500 A.D., prior to the era of colonization and extensive European contacts, predicts approximately 50 percent of cross-country differences in both current per capita income and technology in a large cross-section of countries. When exploring the causes of this extreme persistence in technology, they find evidence in favor of the importance of the effect of current adoption on subsequent adoption as the main driver. This leaves a limited role to country-specific factors such as institutions, geography, or genes to explain the persistence of technology. Key concepts include: Precolonial, preindustrial differences have striking predictive power for the pattern of both per capita incomes and technology adoption across nations that can be observed today. Technology is very persistent both within countries and sectors. Adoption dynamics vis-à-vis country-specific factors such as institutions, geography, or genes appear to be the mechanism behind such persistence. Closed for comment; 0 Comments.
- 31 Oct 2008
- Working Paper Summaries
Technology, Identity, and Inertia through the Lens of ‘The Digital Photography Company’
Why do established firms find some technological change so challenging? While existing research has identified numerous sources of inertia in established firms exploring new technological domains, identity is a critical piece of the puzzle. As the core essence of an organization, identity directs and constrains action. The routines, procedures, capabilities, knowledge base, and beliefs of an organization all reflect its identity. So when a technology is identity-challenging to an organization—when pursuing it would violate the core beliefs of both insiders and outsides about what the firm represents—organizations face significant obstacles to adopting it. This study by Tripsas highlights the importance of recognizing and evaluating the tradeoffs associated with technological opportunity and organizational identity. Key concepts include: Identity serves as a lens that filters a firm's technical choices. It influences what gets noticed, how it is interpreted, and what action is taken. Opportunities that challenge identity may simply pass by unnoticed. The self-reinforcing dynamics among internal identity, external identity, organizational action, and the industry and technological context create a strong impediment to change. Closed for comment; 0 Comments.
- 24 Oct 2008
- Working Paper Summaries
Platform Rules: Multi-Sided Platforms as Regulators
Using case studies of Facebook, Tokyo's Roppongi Hills "mini-city," Harvard Business School, and TopCoder, a vendor of outsourced software products, Boudreau and Hagiu explore how multi-sided platforms (MSPs) regulate an industry ecosystem. An MSP is a platform that enables interactions between multiple groups of surrounding consumers and complementors. As the authors demonstrate, the regulatory role played in these cases by MSPs was pervasive and at the core of their business models. That regulatory role goes beyond price-setting and includes imposing rules and constraints, creating inducements, and generally shaping behaviors. These various non-price instruments essentially solve problems that could otherwise lead to market failure. The authors' analytical framework suggests a two-step approach for a platform owner: (1) maximize value created for the entire ecosystem, and (2) maximize the value extracted. "Platform Rules" is a chapter in the forthcoming book Platforms, Markets and Innovation, Gawer, A. (ed) (2009), Cheltenham, UK and Northampton, MA, U.S.: Edward Elgar. Key concepts include: The scope of strategy for multi-sided platforms is significantly wider than for normal firms. It is not limited to pricing, product design, and technology, but also and critically includes control over interactions that do not happen at the firm's boundaries. There is a wide array of strategic instruments available to implement MSP regulation, including contractual, technological, and information design. The need for and consequences of MSP regulation may evolve over time. Closed for comment; 0 Comments.
- 14 Aug 2008
- Working Paper Summaries
The Agglomeration of U.S. Ethnic Inventors
The higher concentration of immigrants in certain cities and occupations has long been noted. There has been very little theoretical or empirical work to date, however, on the particular agglomeration of U.S. immigrant scientists and engineers. This scarcity is disappointing given the scale of these ethnic contributions and the importance of innovation to regional economic growth. William R. Kerr's study contributes to our empirical understanding of agglomeration and innovation by documenting patterns in the city-level agglomeration of ethnic inventors (e.g., Chinese, Indian) within the United States from 1975 through 2007. It is hoped that the empirical platform developed in this study provides a foothold for furthering such analyses. Key concepts include: Ethnic scientists and engineers are an important and growing contributor to U.S. technology development. The Chinese and Indian ethnicities, in particular, are now an integral part of U.S. invention in high-tech sectors. The data collected and analyzed in this research document with greater detail than previously available the powerful growth in U.S. Chinese and Indian inventors during the 1990s. These ethnic inventors also became more spatially concentrated across U.S. cities. The combination of such growth and concentration helps stop and reverse long-term declines in overall inventor agglomeration evident in the 1970s and 1980s. Closed for comment; 0 Comments.
- 17 Apr 2008
- Working Paper Summaries
Diffusing Management Practices within the Firm: The Role of Information Provision
Managers face a range of options to diffuse innovative practices within their organizations. This paper focuses on one such technique: providing practice-specific information through mechanisms such as internal seminars, demonstrations, knowledge management systems, and promotional brochures. In contrast to corporate mandates, this "information provision" approach empowers facility managers to decide which practices to actually implement. The authors examine how corporate managers diffused advanced environmental management practices within technology manufacturing firms in the United States. The study identifies several factors that encourage corporate managers to employ information provision, including subsidiaries' related expertise, the extent to which the subsidiaries were diversified or concentrated in similar businesses, and the geographic dispersion of their employees. Key concepts include: This research can help managers better understand when to employ an "information provision" approach to facilitate knowledge transfer within their organizations. Corporate managers in the information and communication technology sector were more likely to use information provision to diffuse advanced environmental management practices when their subsidiaries on average possessed modest levels of related expertise, and when the levels of expertise varied greatly between subsidiaries. An information provision diffusion strategy was used more heavily by corporate managers of firms that were more diversified and where employees dispersed across more facilities. Closed for comment; 0 Comments.
- 06 Feb 2008
- Working Paper Summaries
On Best-Response Bidding in GSP Auctions
Keyword auctions have become a critical source of revenue for Google and Yahoo!, among others. This new form of advertising has provided a new way for advertisers to reach customers. But advertisers also face the complex task of optimizing bids to increase their exposure while avoiding unnecessary costs. HBS professor Benjamin Edelman and colleagues analyzed a class of bidding strategies that attempt to increase advertiser utility under limited assumptions about other players' behavior. Under a strategy they call Balanced Bidding (BB), advertisers converge to the advertiser-preferred equilibrium—achieving stability of bids and reducing advertisers' costs relative to other possible outcomes. Key concepts include: Sponsored search advertisers should consider others' responses when deciding how much to bid. If all players follow the BB strategy, it is possible to determine the expected time to convergence. Closed for comment; 0 Comments.
- 05 Nov 2007
- Research & Ideas
The Changing Face of American Innovation
Chinese and Indian scientists and engineers have made an unexpectedly large contribution to U.S. technology formation over the last 30 years, according to new research by HBS professor William R. Kerr. But that trend may be ebbing, with potentially harmful effects on future growth in American innovation. Key concepts include: Chinese contributions to U.S. innovation as recorded in patent and trademark data increased from under 2 percent of U.S. domestic inventors in 1975 to over 8 percent today. In the same period, Indian inventors also rose, to almost 5 percent of the total in 2000. Since 2000, Chinese scientists' contributions have leveled off, and Indian contributions have declined slightly. Will American innovation suffer? Closed for comment; 0 Comments.
- 25 Jul 2007
- Lessons from the Classroom
The Evolution of Apple
Apple's continuing development from computer maker to consumer electronics pioneer is rich material in a number of Harvard Business School classrooms. Professor David Yoffie discusses his latest case study of Apple, the 5th update in 14 years, which challenges students to think strategically about Apple's successes and failures in the past, and opportunities and challenges in the future. Key concepts include: Apple has an undeniable hit with the iPod, yet faces the question of whether the growth of that business and Apple overall can be sustained. Looking at Apple through the lens of the company's previous chief executives gives students insights into why Apple lost its way after Steve Jobs left the company. Student opinion of Apple tends to be excessively positive or excessively negative, depending on the company's current fortunes. Closed for comment; 0 Comments.
- 11 Jul 2007
- Working Paper Summaries
Managing Proprietary and Shared Platforms: A Life-Cycle View
The challenges facing platform managers vary systematically depending on (1) whether the platform is proprietary or shared and (2) the stage of platform development. This article summarizes the results of a multiyear research project on platform strategies, including interviews with 30 companies. It describes 3 stages of the platform life cycle—platform design, network mobilization, and platform maturity—and reviews in depth the strategic decisions and management issues for each stage. Key concepts include: As proprietary platforms mature, broad forces at work often open them up to new partners. Once network mobilization winds down, sponsors of a proprietary platform frequently license additional providers to serve market segments with diverse needs. These new providers will seek a say in the platform's direction. As shared platforms mature, their renewal may hinge on partners ceding power to a central authority that can set priorities and settle disputes over who will provide next-generation technologies. Over time, forces will tend to push both proprietary and shared platforms toward hybrid licensing forms, typified by central control over platform technology and shared responsibility for serving users. Closed for comment; 0 Comments.
- 10 Jul 2007
- Working Paper Summaries
Platform Envelopment
Established platform providers can be difficult to displace. This paper explores a path to platform leadership change that does not rely on breakthrough innovation or Schumpeterian creative destruction: a phenomenon the authors call "platform envelopment." In practical terms, envelopment entails one platform provider adding another platform's functionality to its own, and then offering a multiplatform bundle. Eisenmann and his colleagues describe a variety of envelopment attacks based on the relationship between the attacker's platform and its target's, and then discuss the economic and strategic motivations for each attack type. Key concepts include: Envelopment is a powerful force shaping platform evolution. Well-established incumbents that otherwise are sheltered from entry by standalone rivals, due to strong network effects and high switching costs, may be vulnerable to envelopment. A conglomeration attack means that platforms are functionally unrelated but may share common users and components. In such an attack, bundling can yield significant economies of scope. Example: Apple iPhone bundling smart phone with iPod. With an intermodal attack, the platforms are weak substitutes, and the attacker may neutralize an emerging competitive threat. Example: Blockbuster bundling DVD-by-mail service with store rentals. With a foreclosure attack, the platforms are complements. If envelopment reduces the appeal of a standalone provider's crucial complement, the attacker may strengthen its position vis-à-vis rivals in its core market. Example: Microsoft bundling Media Player with its Windows operating system. Closed for comment; 0 Comments.
- 21 Jun 2007
- Working Paper Summaries
Multi-Sided Platforms: From Microfoundations to Design and Expansion Strategies
The term "platform" is increasingly popular among executives today. Platforms, and multi-sided platforms (MSPs) in particular, serve the needs of interdependent constituents. Although MSPs have existed for centuries in the form of matchmakers and village markets, information technology has increased tremendously the opportunities for building larger, more powerful, and more valuable platforms. At the same time, by expanding the potential scope of platforms, information technology has also increased the number and complexity of factors, both economic and technical, that drive the strategic design of MSPs. Surprisingly, few companies rigorously analyze the underlying drivers of their MSPs, and the emerging business and economics literature on two-sided markets has not been very helpful in this direction, either. This article provides a general framework to help organize managerial thinking about MSPs. Key concepts include: This framework is useful because it induces systematic analysis of MSP strategic opportunities and the critical tradeoffs involved, based on fundamental economic functions that cut across any specific industry setting. Strategic design defines the relevant space in which the MSP operates, its multiple constituents, and its competitors, both actual and potential. Designing and expanding MSPs is a complex, daunting, and, most importantly, dynamic process. The most successful MSPs are constantly evolving. While this dynamism is especially true in high-tech markets, even traditional businesses can unlock powerful sources of indirect network effects with a little technological help and a good amount of creativity. The devil is in the details. Closed for comment; 0 Comments.
- 21 Jun 2007
- Working Paper Summaries
Merchant or Two-Sided Platform?
With ever more sophisticated logistics and the rise of information technologies, intermediaries and market platforms have become increasingly ubiquitous and important agents in the digital economy. While market intermediation is not a new phenomenon, the digital economy has revealed that there can be two polar types of intermediaries: "merchants," which acquire goods from sellers and resell them to buyers, and "two-sided platforms," which allow affiliated sellers to sell directly to affiliated buyers. As examples, retailers like Walmart.com and Amazon.com are (mostly) merchants; eBay is a pure two-sided platform; and Apple's iTunes digital music store exhibits both merchant and platform features. This research is a first pass at delineating the economic tradeoffs between the merchant and two-sided platform modes. Key concepts include: Economic tradeoffs are affected by several fundamental economic factors: indirect network effects between buyers and sellers; asymmetric information between sellers and the intermediary; and investment incentives, product complementarities, and substitutability. This analysis holds true for a monopoly intermediary. With competing intermediaries, more subtle strategic issues may arise that are beyond the scope of this research. Closed for comment; 0 Comments.
- 13 Feb 2007
- Working Paper Summaries
Electronic Hierarchies and Electronic Heterarchies: Relationship-Specific Assets and the Governance of Interfirm IT
Scholars have long been interested in the impact of information technology on the organization of work. As Andrew McAfee and colleagues argue in this study, the appropriate governance mechanism for an IT-facilitated collaboration depends on the type of IT being deployed: When an enterprise technology is required, so is an electronic hierarchy. The paper explores the issue of relationship specificity of IT assets, proposes a categorization of information technologies based on their levels of relationship specificity, and uses data from more than forty Italian industrial districts to test three hypotheses around governance of interfirm IT. These districts typically have close ties, both horizontal and vertical, and have historically worked in close collaboration with each other. Key concepts include: When an enterprise technology is required, so is an electronic hierarchy. Future research could reveal if there is a general pattern in relationship-specific investments and how entities other than powerful incumbent firms can successfully build electronic hierarchies. Future research could also help define the full spectrum of IT-based interactions and the appropriate governance mechanisms for each. Closed for comment; 0 Comments.
- 22 Jan 2007
- Research & Ideas
The Immigrant Technologist: Studying Technology Transfer with China
Immigrants account for almost half of Ph.D.-level scientists and engineers in the U.S., and are prime drivers of technology development. Increasingly, however, Chinese technologists and entrepreneurs are returning home rather than staying in the U.S. to pursue opportunities. Professor William Kerr discusses the phenomena of technology transfer and implications for U.S.-based businesses and policymakers. From New Business. Key concepts include: The trend of Chinese technologists and entrepreneurs returning home rather than staying in the U.S. is a trend that potentially offers both harm and opportunity to U.S.-based interests. Immigrants account for almost half of Ph.D.-level scientists and engineers in the U.S. and are strong contributors to American technology development. It is in the United States' interest to attract and retain this highly skilled group. U.S. multinationals are placing larger shares of their R&D into foreign countries, around 15 percent today. U.S.-based ethnic scientists within multinationals help facilitate the operation of these foreign direct investment facilities in their home countries. Closed for comment; 0 Comments.
- 08 Dec 2006
- Working Paper Summaries
The Industry R&D Survey: Patent Database Link Project
The development and diffusion of new innovations are central to economic growth, and understanding the firm-level underpinnings of technology progress is important to academics, policymakers, and business managers. While many researchers have examined (either separately or together) corporate research and development and technology diffusion, they run into two significant data constraints. William R. Kerr and Shihe Fu describe how they developed a new dataset for studying corporate innovation that encompasses three important existing datasets. This paper summarizes the Industry R&D Survey for researchers who want to study innovation through the Census Bureau's data. Key concepts include: The developed platform offers an unprecedented view of the R&D-to-patenting innovation process and a close analysis of the strengths and limitations of the Industry R&D Survey. This R&S platform can, through the Census Bureau's file structure, facilitate other studies of how innovation leads to productivity. Closed for comment; 0 Comments.
- 04 Oct 2006
- Lessons from the Classroom
Surviving Success: When Founders Must Go
At some point, a start-up's founder usually cedes CEO responsibilities to a seasoned manager. But what roles does the founder assume next? Professor Noam Wasserman discusses a recent case study and what students learn from it in the classroom. From HBS Alumni Bulletin. Key concepts include: Start-ups replacing their founder/CEO must consider what duties, if any, the founder assumes after succession. The replacement CEO may have very strong feelings on the future role of the founder. Closed for comment; 0 Comments.
- 28 Sep 2006
- Working Paper Summaries
Scale without Mass: Business Process Replication and Industry Dynamics
Over the past ten years there's been a clear link between IT investment and productivity growth in the U.S. economy. But what impact has IT had on competition? This paper identifies several recent changes in the competitive dynamics of U.S. industries and shows that they are associated with IT intensity; the more IT and industry has, the greater the changes. Using case studies, previous research, and a simple model, the authors offer a theory that explains these patterns in the data. They argue that IT allows the rapid spread of business process innovations, which in turn leads to more turbulent and concentrated industries. Key concepts include: Since the mid-1990s, IT-intensive industries have seen higher levels of turbulence and concentration growth than have non-IT-intensive industries. The improved ability of firms to replicate business innovations affects not only productivity, but also the nature of business competition itself. Future research on the competitive impact of IT within a single industry could use case studies combined with economy-wide data analysis. This method would help clarify the impetus for technology investments, their timing, and their effects. Closed for comment; 0 Comments.
- 23 Aug 2006
- Working Paper Summaries
Capturing Benefits from Tomorrow’s Technology in Today’s Products: The Effect of Absorptive Capacity
It seems clear that firms with an existing R&D function are better able to use related outside research than firms without an R&D function. But can specific products also "absorb" a firm's knowledge of related technologies? Using patent data and the example of automobile carburetors, Daniel Snow studied how companies may adapt a component of a "radical innovation" technology for their own current-technology products. He also poses a far-reaching question for companies: Can they capture the returns of these inventive activities? Key concepts include: Firms that have experience working with a "future technology" or radical innovation can efficiently adapt components from such innovations for their own current-technology products. They are also more likely to adapt such components. For any positive effects, the future-technology components should already be closely related to the product's current components. Whether firms can capture the returns of their own inventive activity may boil down to the fact that intellectual property is difficult to protect: The possibility of free-riding may affect firms' willingness to invest in future technologies. Closed for comment; 0 Comments.
- 09 Aug 2006
- Research & Ideas
Career Advancement Without Experience
Lacking experience, contract workers find it difficult to advance to a job with expanded responsibilities. But it can be done. Siobhan O'Mahony discusses research into the concept of "stretchwork" and the increasing complexity of career management. Closed for comment; 0 Comments.
The Sciences of Design: Observations on an Emerging Field
This paper examines the sciences of design as an emerging field of study that cuts across disciplinary boundaries. The paper summarizes and synthesizes the positions, reflections, opportunities, and challenges expressed at the first doctoral consortium to explore the topic, held in 2008. It thus provides a useful agenda for clarifying and articulating important strands of this nascent field. Key concepts include: Design sciences is a movement that affects not only the information systems discipline but also several allied disciplines, which must also contribute to its definition and participation. When a common language exists across disciplines, it enables an ongoing, productive pursuit of scientific knowledge. But common languages only come about through intense, repeated conversations between individuals with disparate views and open minds. Closed for comment; 0 Comments.