Organizing the Electronic Century
71 Pages Posted: 13 Nov 2007
Date Written: March 2007
This paper's title is an echo of Alfred Chandler's (2001) chronicle of the electronics industry, Inventing the Electronic Century. The paper attempts (A) a general reinterpretation of the pattern of technological advance in (American) electronics over the twentieth century and (B) a somewhat revisionist account of the role of organization and institution in that advance. The paper stresses the complex effects of product architecture and intellectual property regime on industrial organization and technological change. Whereas large research-oriented multi-divisional firms always played a crucial role in the industry's history, such firms proved most adept at systemic innovation, as in the case of television. But, as in the cases of early radio and of the IBM 360 mainframe computer, the multi-divisional firm was capable of bottling up within its boundaries (often through intellectual property rights) a relatively modular architecture whose "option value" such firms could not fully exploit. America's adherence to the model of industrial research within the vertically integrated corporation arguably contributed to the demise of American consumer electronics in the 1970s and 1980s. And America's subsequent relative success in semiconductors and personal computers - and in today's converged digital consumer electronics - owes much to the specialized and "fragmented" character of American industry, which could take fuller advantage of competitive global value chains and of the option value of modular architectures.
Keywords: electronics, modularity, product architecture, vertical integration
JEL Classification: L2, L63, N62, O33, O34
Suggested Citation: Suggested Citation