Modularity and Product Innovation in Digital Markets

Marc Bourreau, Pinar Dogan () and Matthieu Manant ()

Review of Network Economics, 2007, vol. 6, issue 2, 19

Abstract: Most digital goods have a modular design; that is, they consist of complementary and distinct building blocks, called modules. Modular product design, in contrast to integrated (or integral) design, enables alteration of a specific module that is usually assigned for a specific function without necessarily requiring an entire redesign of the product. This feature facilitates product innovation. The possibility of having common modules embedded in a range of products is likely to affect firms' product innovation strategies and post-innovation competition both in traditional and digital markets. In this paper, we explore such effects with a focus on digital markets.

Date: 2007
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DOI: 10.2202/1446-9022.1116

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