1

Platform Leaders, True Believers, and Platform Leaders, True Believers, and Coordinated Innovation:Coordinated Innovation:

The Role of Key Architects In Influencing The Role of Key Architects In Influencing Technology TrajectoriesTechnology Trajectories

Erica R.H. FuchsErica R.H. FuchsAssistant ProfessorAssistant Professor

Department of Engineering and Public PolicyDepartment of Engineering and Public Policy

Carnegie Mellon UniversityCarnegie Mellon University

2

Moore’s LawMoore’s Law

““The complexity for minimum component costs has increased at a The complexity for minimum component costs has increased at a rate of roughly a factor of two per year… Certainly over the short rate of roughly a factor of two per year… Certainly over the short term this rate can be expected to continue…” term this rate can be expected to continue…” (Moore 1965)(Moore 1965)

… … or double every year or double every year (Moore 1975, 1995)(Moore 1975, 1995)

• Somewhere along the way…Somewhere along the way…– Doubling of number of components / circuit every 18 monthsDoubling of number of components / circuit every 18 months

– Doubling of processing power / chip every 18 monthsDoubling of processing power / chip every 18 months

– Doubling of computing power every 18 monthsDoubling of computing power every 18 months

– Price of computing power falling by half every 18 monthsPrice of computing power falling by half every 18 months

• Enormous Impact on Information EconomyEnormous Impact on Information Economy– 50% growth in GDP in last decade due to technology progress in 50% growth in GDP in last decade due to technology progress in

information technology information technology (Jorgenson 2001)(Jorgenson 2001)

3

Critical Technological ChallengesCritical Technological Challenges

• A multicore trajectoryA multicore trajectory– IBM 2001, AMD 2005, Intel 2006IBM 2001, AMD 2005, Intel 2006

• New challenges in…New challenges in…– Processor Architecture Processor Architecture (Hennessey and Patterson ACM Queue 2007)(Hennessey and Patterson ACM Queue 2007)

– Interconnects on and off chipInterconnects on and off chip• Processor to processorProcessor to processor• Processor to memoryProcessor to memory• Processor to acceleratorProcessor to accelerator

– Programming of chipProgramming of chip

• Requires… radical architectural innovation Requires… radical architectural innovation (Nelson (Nelson and Winter 1982, Abernathy and Clark 1985, Henderson and Clark 1990)and Winter 1982, Abernathy and Clark 1985, Henderson and Clark 1990)

– Integration of fringe technological communities: Integration of fringe technological communities: optoelectronics, parallel programmingoptoelectronics, parallel programming

4

What are the institutions and processes What are the institutions and processes coordinating innovation to meet Moore’s coordinating innovation to meet Moore’s Law?Law?

How well-suited are these to continuing Moore’s Law in How well-suited are these to continuing Moore’s Law in the upcoming decades?the upcoming decades?

5

Moore’s Law: The Metronome for the Computing Moore’s Law: The Metronome for the Computing and Communications Industryand Communications Industry

““I think of Moore’s Law like a drummer on a slave I think of Moore’s Law like a drummer on a slave ship. He pounds down this hammer and goes, you ship. He pounds down this hammer and goes, you know, ‘0.35 microns.’ Boom. ‘0.25 microns.’ Then know, ‘0.35 microns.’ Boom. ‘0.25 microns.’ Then ‘0.18.’ And on that slave ship, the guys that own disk ‘0.18.’ And on that slave ship, the guys that own disk drive, the disk drive makers – and the processor drive, the disk drive makers – and the processor designers, and the software guys, and the fiber optic designers, and the software guys, and the fiber optic guys, currently all those guys have oars. And if they guys, currently all those guys have oars. And if they pull all at the same time, the ship goes forward, really pull all at the same time, the ship goes forward, really good. But if any one of them does good. But if any one of them does thisthis,, and screws and screws up, then none of the oars work. And the ship won’t go up, then none of the oars work. And the ship won’t go anywhere.”anywhere.”

(Frank Levison, former CTO Finisar Corp.)(Frank Levison, former CTO Finisar Corp.)

… but what determines the direction of the technology?

6

Background: A New Game?Background: A New Game?

Significant changes over the last decade in…Significant changes over the last decade in…

• Industrial and Government FundingIndustrial and Government Funding– Shift away from corporate R&D labs Shift away from corporate R&D labs (Mowery 2000, NAS 2006)(Mowery 2000, NAS 2006)

– Many U.S. firms “externalize” portion of R&D Many U.S. firms “externalize” portion of R&D (Mowery 2000)(Mowery 2000)

• Industry StructureIndustry Structure– Initially few pioneering firms supplied computers, Initially few pioneering firms supplied computers,

today hundreds loosely linked suppliers today hundreds loosely linked suppliers (Breshnan 2000)(Breshnan 2000)

9

New Model: Networks of InnovatorsNew Model: Networks of Innovators

• Complex networks of firms, universities Complex networks of firms, universities government labs, esp. in industries with rapid government labs, esp. in industries with rapid technological progress technological progress (Powell and Grodal 2005)(Powell and Grodal 2005)

• Increased reliance on external sources of R&D Increased reliance on external sources of R&D (NRC 1998, Mowery 1999:7, Powell and Grodal 2005)(NRC 1998, Mowery 1999:7, Powell and Grodal 2005)

• Interdependency of Innovation trajectories across Interdependency of Innovation trajectories across products and services products and services (Breshnahan 2000, Macher, Mower, and Hodges 2000, (Breshnahan 2000, Macher, Mower, and Hodges 2000, Powell and Grodal 2005)Powell and Grodal 2005)

• Marked increase by mid-1990s in alliances linking Marked increase by mid-1990s in alliances linking U.S. firms to their domestic competitors U.S. firms to their domestic competitors (NSF 1999)(NSF 1999)

WhoWho are the main actors? are the main actors?HowHow do they coordinate to influence technology do they coordinate to influence technology trajectories?trajectories?

10

Networks, Knowledge Flow, & CoordinationNetworks, Knowledge Flow, & Coordination

• Strong vs. weak ties Strong vs. weak ties (Granovetter 1973)(Granovetter 1973)

• Knowledge flows across ties Knowledge flows across ties (Argote, McEvily, Reagans 2003)(Argote, McEvily, Reagans 2003)

– Properties units: individual, organizationProperties units: individual, organization– Properties knowledge: tacit Properties knowledge: tacit (Nonnaka 1991)(Nonnaka 1991), codifiability , codifiability (Zander and Kogut (Zander and Kogut

1995)1995), stickiness , stickiness (Von Hippel 1994)(Von Hippel 1994), ambiguity , ambiguity (Szulanski 1996)(Szulanski 1996), complexity , complexity (Hansen (Hansen 1999; Sorenson, Rivkin, and Fleming 2002)1999; Sorenson, Rivkin, and Fleming 2002)

– Properties relationships between units:Properties relationships between units:• Relational proximity: (common identity, language) similarity between Relational proximity: (common identity, language) similarity between

scientists scientists (Song, Alemeida, Wu 2003)(Song, Alemeida, Wu 2003), communities of practice , communities of practice (Brown and Duguid 2001)(Brown and Duguid 2001)

• Geographic proximity Geographic proximity (Allen 1970, Teece 1977, Mansfield 1982, Saxenian 1994, Porter 2001)(Allen 1970, Teece 1977, Mansfield 1982, Saxenian 1994, Porter 2001)

• Labor markets Labor markets (Azoulay 2003)(Azoulay 2003)

• Coordinate?Coordinate?– Platform leadership: complementary innovations Platform leadership: complementary innovations (Gawer and Cusumano (Gawer and Cusumano

2002)2002)

– Engineers share knowledge among rivals Engineers share knowledge among rivals (Allen 1983, Von Hippel 1987)(Allen 1983, Von Hippel 1987)

• Game TheoryGame Theory– Cooperative Technical Organizations Cooperative Technical Organizations (Rosenkopf and Tushman 1998)(Rosenkopf and Tushman 1998)

• Task forces, standards bodies, technical committeesTask forces, standards bodies, technical committees• Small collection experts, span multiple organizations, limit group sizeSmall collection experts, span multiple organizations, limit group size

14

MethodsMethods

• Grounded Theory-Building Grounded Theory-Building (Glasner and Strauss 1967)(Glasner and Strauss 1967)

– Two starting propositions: Intel, DARPA, (ITRS)Two starting propositions: Intel, DARPA, (ITRS)– Snowball effect Snowball effect ((Rosenkopf and Tushman 1998)Rosenkopf and Tushman 1998)

• Five leading computing firms (Intel, AMD, IBM, HP, Sun)Five leading computing firms (Intel, AMD, IBM, HP, Sun)• Start-ups, Universities, Government InstitutionsStart-ups, Universities, Government Institutions

– 35 semi-structured interviews 35 semi-structured interviews ((Miles and Huberman 1984)Miles and Huberman 1984)

• Personal history, network of architects (75 references)Personal history, network of architects (75 references)

– Participant observationsParticipant observations• Conferences, within firmsConferences, within firms

– Four-day ethnography elite, invitation-only workshopFour-day ethnography elite, invitation-only workshop

• Who is influencing technology directions?Who is influencing technology directions?• How? -- i.e. by what processes?How? -- i.e. by what processes?

15

A few key architects…A few key architects…

(Not Intel, not DARPA…)(Not Intel, not DARPA…)

Context Matters -- Context Matters --

Two groups: different identities, Two groups: different identities, incentives, characteristics…incentives, characteristics…

16

A Few Key ArchitectsA Few Key Architects

EstablishmentEstablishment

“…“…there’s a small number of 15-20 people who actually there’s a small number of 15-20 people who actually know what all of these I-O technologies are going to be, know what all of these I-O technologies are going to be, and where they’re going to go, and how they fit together. and where they’re going to go, and how they fit together. And, we could tell you where they’re all going, and we And, we could tell you where they’re all going, and we could tell you, in fact, what each of our companies is could tell you, in fact, what each of our companies is going to do….”going to do….”

FringeFringe

“ “We were part of a little parallel programming mafia. We were part of a little parallel programming mafia. Once we realized we both were working in the same Once we realized we both were working in the same area, we probably met once a week.”area, we probably met once a week.”

18

Established Architects:Established Architects:Coordinating Innovation -- WhyCoordinating Innovation -- Why

Some of your closest competitors you actually share more Some of your closest competitors you actually share more information sometimes than with your suppliers, simply information sometimes than with your suppliers, simply because you’re trying to…figure out a solution or an because you’re trying to…figure out a solution or an environment that’s a win-win for all. And not get into this environment that’s a win-win for all. And not get into this really tweaky, fractured stuff that just throws everything off really tweaky, fractured stuff that just throws everything off kilter.”kilter.”

You just can’t make anything happen in industry on your You just can’t make anything happen in industry on your own because it’s completely impossible. You have to find a own because it’s completely impossible. You have to find a partner, you have to convince your competition this is the partner, you have to convince your competition this is the right thing to do.right thing to do.

You’re guiding people to do the most common sense You’re guiding people to do the most common sense things, and they ask, why are you helping me with this? things, and they ask, why are you helping me with this? And the fact is you give them information so the suppliers And the fact is you give them information so the suppliers are in the right place for you.are in the right place for you.

19

Established Architects:Established Architects:Coordinating Innovation -- HowCoordinating Innovation -- How

““You get to know what people are looking for and why. You get to know what people are looking for and why. And you find, the industry as a whole is all actually on the And you find, the industry as a whole is all actually on the same track.”same track.”

“… “… you have this connection, and we share information. you have this connection, and we share information. You know, we don’t violate our confidentiality, because You know, we don’t violate our confidentiality, because some things are very confidential, but we know enough some things are very confidential, but we know enough about what is going on, that we can talk about problems or about what is going on, that we can talk about problems or whatever, and we can pretty much figure out what they’re whatever, and we can pretty much figure out what they’re trying to solve.”trying to solve.”

““I can tell you what you’ll find. I was there… (at the I can tell you what you’ll find. I was there… (at the workshop), and they’re all presenting to each other what workshop), and they’re all presenting to each other what they’re going to do. They’re all talking to each other. And they’re going to do. They’re all talking to each other. And they’re all doing the same thing.”they’re all doing the same thing.”

20

Established Architects:Established Architects:Coordinating Innovation -- WhoCoordinating Innovation -- Who

Despite extensive coordination, higher ups say Despite extensive coordination, higher ups say choosing the next technology a “wet finger choosing the next technology a “wet finger test”…test”…

““The best way to get my company to make the The best way to get my company to make the product I develop is to leak my idea to product I develop is to leak my idea to <competitor company>, and then go back to my <competitor company>, and then go back to my boss and say, ‘hey, look what <competitor boss and say, ‘hey, look what <competitor company> is doing,’ and he’ll decide we better do company> is doing,’ and he’ll decide we better do it, too.”it, too.”

22

Fringe Architects:Fringe Architects:Cliques, MafiasCliques, Mafias

““We were part of a little parallel programming We were part of a little parallel programming mafia. Once we realized we both were working in mafia. Once we realized we both were working in the same area, we probably met once a week.”the same area, we probably met once a week.”

““It’s a real clique between MIT, Stanford, and It’s a real clique between MIT, Stanford, and Berkeley.”Berkeley.”

23

Fringe Architects:Fringe Architects:Identity -- OutsidersIdentity -- Outsiders

““So it’s a small group of people. Half of them So it’s a small group of people. Half of them have a visually apparent speech problem. have a visually apparent speech problem. Something’s a little bit off about the people Something’s a little bit off about the people attracted to this problem.”attracted to this problem.”

““We tried to get the government interested in We tried to get the government interested in funding research in this area, but they weren’t funding research in this area, but they weren’t interested. interested. They couldn’t see the problem.They couldn’t see the problem. The The vendors also aren’t interested. It’s really hard to vendors also aren’t interested. It’s really hard to convince people that this is a problem. They say, convince people that this is a problem. They say, ‘IBM wouldn’t build it if they couldn’t program it.’ ‘IBM wouldn’t build it if they couldn’t program it.’ Well, that’s nice, but it’s not true.”Well, that’s nice, but it’s not true.”

24

Fringe Architects: Who -- Knowledge Fringe Architects: Who -- Knowledge Complexity, Limited TalentComplexity, Limited Talent

““I have the kind of brain that can solve these I have the kind of brain that can solve these types of problems. There’s sort of this group of types of problems. There’s sort of this group of people … who really understand these ideas. …people … who really understand these ideas. …It’s like writing a song. Anyone can write a song. It’s like writing a song. Anyone can write a song. You can write a song. I can write a song. Anyone You can write a song. I can write a song. Anyone can serial program. But writing a program for can serial program. But writing a program for 100,000 processors is like writing a symphony. 100,000 processors is like writing a symphony. Only a few people can write a symphony.”Only a few people can write a symphony.”

““There’s not a lot of people, and it’s slow finding There’s not a lot of people, and it’s slow finding people to add to the community. You need people to add to the community. You need someone with enough passion and talent.”someone with enough passion and talent.”

25

Fringe Architects: Incentives -- Fringe Architects: Incentives -- Direction Regardless of FundingDirection Regardless of Funding

Are you familiar with the allegory of the cave?… Outside …Are you familiar with the allegory of the cave?… Outside …(is) a campfire. The people inside the cave are trying to (is) a campfire. The people inside the cave are trying to deduce what is happening outside from the shadows. It’s deduce what is happening outside from the shadows. It’s the same thing with the funding. The technology direction the same thing with the funding. The technology direction is a separate thing.is a separate thing.

A lot of technology being offered is just being renamed. A lot of technology being offered is just being renamed. Anant, for example, was already developing this Anant, for example, was already developing this technology. When the BAA came along, he just technology. When the BAA came along, he just repackaged what he was doing to look like it fit the BAA… repackaged what he was doing to look like it fit the BAA… The Stanford guys are like Anant, in that they already were The Stanford guys are like Anant, in that they already were developing technology…. Mark Horowitz (at Stanford) was developing technology…. Mark Horowitz (at Stanford) was already going to do what he was doing, regardless of the already going to do what he was doing, regardless of the BAA.BAA.

26

Fringe Architects:Fringe Architects:Why (Incentives) -- True BelieversWhy (Incentives) -- True Believers

Q: So why are you doing this? I mean, you’re not Q: So why are you doing this? I mean, you’re not getting funding, why does someone do this?getting funding, why does someone do this?

A: Because you believe in what you’re doing and A: Because you believe in what you’re doing and that this is the right thing to do.that this is the right thing to do.

““The community was made up of believers. The community was made up of believers. Believers that this is a superior way of Believers that this is a superior way of maintaining research. There was only a total maintaining research. There was only a total investment of $5M over 5 years. That this investment of $5M over 5 years. That this technology is actually being used is a big feat.”technology is actually being used is a big feat.”

27

Fringe Architects:Fringe Architects:How -- Beyond what’s published.How -- Beyond what’s published.

Q: So what are the conversations like between Q: So what are the conversations like between the five to six people with whom you talk?the five to six people with whom you talk?

A: ‘Hey, did you see this? I noticed this. What A: ‘Hey, did you see this? I noticed this. What did you think of that? I saw this person’s paper, did you think of that? I saw this person’s paper, what’s really going on there?’ You get the real what’s really going on there?’ You get the real scoop on stuff.scoop on stuff.

28

Networks of Innovators: Context MattersNetworks of Innovators: Context Matters

EstablishedEstablished FringeFringe

SizeSize 12-1512-15 5-65-6

Labor Market Labor Market (Azoulay 2003)(Azoulay 2003) FluidFluid Relatively fixedRelatively fixed

Supply/DemandSupply/Demand High/HighHigh/High Low/LowLow/Low

Relational/Geographic Relational/Geographic ProximityProximity

Yes/NoYes/No Yes/NoYes/No

DynamicDynamic Select communitySelect community Build communityBuild community

IdentityIdentity StatusStatus OutcastOutcast

Knowledge Complexity Knowledge Complexity (Sorenson, Rivkin, Fleming 2002)(Sorenson, Rivkin, Fleming 2002)

MedMed HighHigh

IncentivesIncentives Job maintenanceJob maintenance

Technology Technology control,control,

coordinationcoordination

True believersTrue believers

Idea/influence Idea/influence expansionexpansion

29

Implications for Architectural InnovationImplications for Architectural Innovation

• Radical architectural change Radical architectural change (Henderson and Clark 1990)(Henderson and Clark 1990)

– Firm-competence destroying Firm-competence destroying (Nelson and Winter 1982, Abernathy and Clark (Nelson and Winter 1982, Abernathy and Clark 1985)1985)

– Need to re-integrate functions Need to re-integrate functions (Fine 1998; Chesborough 2001, 2003)(Fine 1998; Chesborough 2001, 2003)

– Theory hold for so many interlinked, co-dependent firms?Theory hold for so many interlinked, co-dependent firms?

• Lessons from/for network theoryLessons from/for network theory– BrokersBrokers– Co-evolution of networks and technology Co-evolution of networks and technology (Rosenkopf and Tushman (Rosenkopf and Tushman

1998)1998)

• By what processes?By what processes?• Does network context matter?Does network context matter?

– Network origins, evolution, extinctionNetwork origins, evolution, extinction

• Lessons for other industriesLessons for other industries– Inter-firm coordinationInter-firm coordination– Standards bodies, Roadmapping institutionsStandards bodies, Roadmapping institutions