IDEAS home Printed from https://ideas.repec.org/a/kap/revaec/v34y2021i1d10.1007_s11138-020-00513-w.html
   My bibliography  Save this article

Plug-and-play, mix-and-match: a capital systems theory of digital technology platforms

Author

Listed:
  • Lynne Kiesling

    (Faculty Affiliate, Wilton E. Scott Institute for Energy Innovation, Carnegie Mellon University)

Abstract

Digital technology platforms have transformed the modern economy, disrupting existing industries and creating new ones. In this paper I synthesize Austrian capital theory with general systems theory to analyze why these digital platforms have had such a large and relatively rapid impact. In large part this impact arises from certain architectural features of digital technologies and networks, particularly modularity, which enables digital platforms to change their scale of operations and be adaptable to unknown and changing conditions. Modularity reduces the costs of combining and reconfiguring combinations of individual elements in networks. Austrian capital theory’s focus on the combination of specific capital elements in production thus provides a valuable lens through which to analyze digital technology platforms and the economic reasons for their large and rapid development.

Suggested Citation

  • Lynne Kiesling, 2021. "Plug-and-play, mix-and-match: a capital systems theory of digital technology platforms," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(1), pages 13-32, March.
    • Handle: RePEc:kap:revaec:v:34:y:2021:i:1:d:10.1007_s11138-020-00513-w
    DOI: 10.1007/s11138-020-00513-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11138-020-00513-w
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11138-020-00513-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Langlois, Richard N., 2002. "Modularity in technology and organization," Journal of Economic Behavior & Organization, Elsevier, vol. 49(1), pages 19-37, September.
    2. Harper, David A. & Endres, Anthony M., 2010. "Capital as a layer cake: A systems approach to capital and its multi-level structure," Journal of Economic Behavior & Organization, Elsevier, vol. 74(1-2), pages 30-41, May.
    3. Kirsten Foss & Nicolai J. Foss & Peter G. Klein & Sandra K. Klein, 2007. "The Entrepreneurial Organization of Heterogeneous Capital," Journal of Management Studies, Wiley Blackwell, vol. 44(7), pages 1165-1186, November.
    4. Gawer, Annabelle, 2014. "Bridging differing perspectives on technological platforms: Toward an integrative framework," Research Policy, Elsevier, vol. 43(7), pages 1239-1249.
    5. Reenu, 2008. "Role of Economic Reform in the Growth of Indian Economy," Journal of Commerce and Trade, Society for Advanced Management Studies, vol. 3(1), pages 19-22, April.
    6. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    7. Jean-Charles Rochet & Jean Tirole, 2003. "Platform Competition in Two-Sided Markets," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 990-1029, June.
    8. Anthony M. Endres & David A. Harper, 2012. "The kinetics of capital formation and economic organisation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 36(4), pages 963-980.
    9. Peter Lewin & Nicolás Cachanosky, 2018. "Value and capital: Austrian capital theory, retrospect and Prospect," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 31(1), pages 1-26, March.
    10. Daniel P. Gross, 2020. "Collusive Investments in Technological Compatibility: Lessons from U.S. Railroads in the Late 19th Century," Management Science, INFORMS, vol. 66(12), pages 5683-5700, December.
    11. Bresnahan, Timothy, 2010. "General Purpose Technologies," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 761-791, Elsevier.
    12. Puffert, Douglas J., 2000. "The Standardization of Track Gauge on North American Railways, 1830–1890," The Journal of Economic History, Cambridge University Press, vol. 60(4), pages 933-960, December.
    13. Carliss Y. Baldwin & Kim B. Clark, 2000. "Design Rules, Volume 1: The Power of Modularity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024667, April.
    14. Harper, David A. & Endres, Anthony M., 2012. "The anatomy of emergence, with a focus upon capital formation," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 352-367.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ha, Seungyeon & Park, Yujun & Kim, Jongpyo & Kim, Seongcheol, 2023. "Research trends of digital platforms: A survey of the literature from 2018 to 2021," Telecommunications Policy, Elsevier, vol. 47(8).
    2. Su, Jingqin & Zhang, Yajie & Wu, Xianyun, 2023. "How market pressures and organizational readiness drive digital marketing adoption strategies' evolution in small and medium enterprises," Technological Forecasting and Social Change, Elsevier, vol. 193(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Victor I. Espinosa & Miguel A. Alonso Neira & Jesús Huerta de Soto, 2021. "Principles of Sustainable Economic Growth and Development: A Call to Action in a Post-COVID-19 World," Sustainability, MDPI, vol. 13(23), pages 1-14, November.
    2. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & David P. McIntyre & Arati Srinivasan, 2017. "Networks, platforms, and strategy: Emerging views and next steps," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 141-160, January.
    3. David Harper, 2014. "Property rights as a complex adaptive system: how entrepreneurship transforms intellectual property structures," Journal of Evolutionary Economics, Springer, vol. 24(2), pages 335-355, April.
    4. Davide Consoli & Pier Paolo Patrucco, 2011. "Complexity and the Coordination of Technological Knowledge: The Case of Innovation Platforms," Chapters, in: Handbook on the Economic Complexity of Technological Change, chapter 8 Edward Elgar Publishing.
    5. J. Barkley Rosser, 2020. "Austrian themes and the Cambridge capital theory controversies," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(4), pages 415-431, December.
    6. Erik Hartigh & Claire C.M. Stolwijk & J. Roland Ortt & L. Matthijs Punter, 2023. "Configurations of digital platforms for manufacturing: An analysis of seven cases according to platform functions and types," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-17, December.
    7. Shi, Xianwei & Liang, Xingkun & Luo, Yining, 2023. "Unpacking the intellectual structure of ecosystem research in innovation studies," Research Policy, Elsevier, vol. 52(6).
    8. Liu, He & Li, Xuerong & Wang, Shouyang, 2021. "A bibliometric analysis of 30 years of platform research: Developing the research agenda for platforms, the associated technologies and social impacts," Technological Forecasting and Social Change, Elsevier, vol. 169(C).
    9. Junic Kim & Jaewook Yoo, 2019. "Platform Growth Model: The Four Stages of Growth Model," Sustainability, MDPI, vol. 11(20), pages 1-16, October.
    10. Satish Nambisan & Shaker A. Zahra & Yadong Luo, 2019. "Global platforms and ecosystems: Implications for international business theories," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(9), pages 1464-1486, December.
    11. Carmelo Cennamo & Hakan Ozalp & Tobias Kretschmer, 2018. "Platform Architecture and Quality Trade-offs of Multihoming Complements," Information Systems Research, INFORMS, vol. 29(2), pages 461-478, June.
    12. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    13. de Reuver, Mark & Sørensen, Carsten & Basole, Rahul C., 2018. "The digital platform: a research agenda," LSE Research Online Documents on Economics 80669, London School of Economics and Political Science, LSE Library.
    14. Carmen Leong & Silvia Lin & Felix Tan & Jie Yu, 2024. "Coordination in a Digital Platform Organization," Information Systems Research, INFORMS, vol. 35(1), pages 363-393, March.
    15. Anthony M. Endres & David A. Harper, 2012. "The kinetics of capital formation and economic organisation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 36(4), pages 963-980.
    16. Zhu, Weijun & Xie, Jiaping & Xia, Yu & Wei, Lihong & Liang, Ling, 2023. "Getting more third-party participants on board: Optimal pricing and investment decisions in competitive platform ecosystems," European Journal of Operational Research, Elsevier, vol. 307(1), pages 177-192.
    17. Davide Consoli & Pier Paolo Patrucco, 2011. "Complexity and the Coordination of Technological Knowledge: The Case of Innovation Platforms," Chapters, in: Cristiano Antonelli (ed.), Handbook on the Economic Complexity of Technological Change, chapter 8, Edward Elgar Publishing.
    18. Pujadas, Roser & Valderrama, Erika & Venters, Will, 2024. "The value and structuring role of web APIs in digital innovation ecosystems: the case of the online travel ecosystem," LSE Research Online Documents on Economics 121118, London School of Economics and Political Science, LSE Library.
    19. Patrucco, Pier Paolo, 2013. "The Evolution of Knowledge Organization: The Emergence of Innovation Platform in the Turin Car System," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201315, University of Turin.
    20. Pujadas, Roser & Valderrama, Erika & Venters, Will, 2024. "The value and structuring role of web APIs in digital innovation ecosystems: The case of the online travel ecosystem," Research Policy, Elsevier, vol. 53(2).

    More about this item

    Keywords

    D49; L22; O39;
    All these keywords.

    JEL classification:

    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revaec:v:34:y:2021:i:1:d:10.1007_s11138-020-00513-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.