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

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  • 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
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    References listed on IDEAS

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    Cited by:

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    2. 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).

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    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

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