Fleming & Sorenson (2001). The Dangers of Modularity. Harvard Business Review, September(2001), pp.20-21.
Kyutae Kwak
(Graduate School of Management of Technology, Ph.D Student)
■ Summary
The author tells that the invention does not come from brand new and useful things but rather come from mixture of existing. In terms of invention this study is focusing on the innovation process whether the number of components and their interaction affect or not. In other words the author identify whether the predictability of technology development is important or not, and analyze if the interdependence among the components affect to the innovation process velocity and complexity. To investigate these phenomenons, the characteristics of technology advances were drawn by mountainous landscape based on the data from U.S intellectual property office. Through these analysis a few facts were confirmed listed next. 1. Firms overemphasized the predictability. 2. Mostly many firms focused on the modular design. 3. Interdependent components amplify the innovation effect that it carries on to the development of breakthrough products. Therefore the phenomenon of that firms focusing on the modular technology, reduces the opportunity to realize the breakthrough technology advances and cause the result that the innovation process be weaken. Also, the author warns that because of the characteristics of predictability, which is thought to be important in modular design, firms cannot be free from the competitors in terms of product imitation. As a result, the author emphasizes on the need of contingent approach in terms of product development and also asserts that the development of intermediate levels of interdependence product is the most useful level of invention.
■ Main contribution
1. Based on the data from U.S intellectual property office, the authors warn the danger to the modularity that affect to the innovation process. Through the improvement of modular design, breakthrough technology development can be attained, however, such predictability, stable technology development method, shows the limitation of the development in the short writing.
2. The authors assort the components which is previous modular design, as interchangeable and interdependent characteristics. Through the division of concepts, the author examines the technology development innovation. Likewise, the author also analyze whether the different component development strategy has any meaning to the aspect of crisis management of product development, relationship between competitors and time flows, source of endurance competition, carry on to the technology development.
3. The study result seems very reliable due to the use of cumulative research result from U.S intellectual property office that stands more than 200 years, unlike the existing cross-section based study. However, it does not show the detailed methodology as article is not long enough.
■ Critique & Implications of further Research
The modularity is the methodology of that basically effectively produce and design the complicated system and process, and has many advantages suggested in previous studies--flexibility, cost saving from economy scale, standardization, specialization, diversification of product, elasticity of new product development, and etc. On the other hand, the author warns that if firm excessively depends on the modularity in a long view, the innovative product and technology development would not be successive. At this point, there are few problems that need to be checked. Above all, the benefits from the modularity seem too much underestimated. Suppose that the modularity, told above, is the strategy to standardize sharable interface between the components in the architecture of some specific product. Have the benefits through the modularity less effective value than the interdependent component of product strategy? The interdependent component development strategy performed with long-term investment compare to the modularity, and intra-firm learning should be activated as well as many existence of restriction of component outsourcing. Also, the flexibility to act quickly would be behind in market demand environment. Therefore, all or nothing based practical risks exist due that the flexibility might be able to give a restriction to the corporate strategies such as versioning & price differentiation strategy, and etc.
2. The author mentioned that the most useful invention is the intermediate levels of interdependence production. In terms of contingent interpretation, modularity and interdependence development method mixture are emphasized. However, this insistence seems a little bit idealistic, that is, with the limited resources, it is curious question how the firms that located in the market competition environment, practice with the certain standard and right time. Therefore, the result shown in the paper has a meaning itself, however, it seems there needs to be some more following studies to suggest the practical implications to the firms. Also, the limitation exists to estimate the effectiveness between interdependent technology development and modularity due to the lack of detailed information in the practical analysis.