When 'Vertically Integrated Markets' Transform into 'Augmented Markets'

Richard Le Goff () and Jonathan Bainée ()
Additional contact information
Richard Le Goff: UEA - Unité d'Économie Appliquée - ENSTA Paris - École Nationale Supérieure de Techniques Avancées - IP Paris - Institut Polytechnique de Paris, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique
Jonathan Bainée: UEA - Unité d'Économie Appliquée - ENSTA Paris - École Nationale Supérieure de Techniques Avancées - IP Paris - Institut Polytechnique de Paris

Post-Print from HAL

Abstract: Reading the financial press can cloud the contemporary industrial economist. One troubling fact we can quote. In the digital industries, the infomediary Google launched - in 2010 - a subsidiary called Google Energy that allows him to become an electricity provider. Simultaneously, the company deployed his activities in projects related to charging point networks for electric vehicles and the autonomous car, the so called Google Car. This significant evolution happens in the digital, as well as in energy and transports industries. It questions the dominant logic of quasi-vertical integration, or "compartmentalization", which prevailed until today within each of these industries. Indeed, while in the twentieth century, these three major sectors were vertically organized, it seems that new strategies, capitalizing on the principle of sectoral "decompartmentalization" are implemented by many existing manufacturers or by new operators. Conceptually, we must assess the relevance of the tools providing by economic sciences for understanding the industrial reality of such a change in the nature of activities and, if necessary, consider creating new concepts. That's why we propose the concept of "augmented market", which marks the transition from a quasi-vertical integration to quasi- diagonal integration or cross-sectoral integration. It should capture the strategic investment decisions in the private industrial groups, not in reference to the portfolio management model of activities (usual practice of large consulting firms, such as Boston Consulting Group), but with reference to the "augmented" scope of the market, that is to say the market as it reconfigures itself by sharing infrastructure networks supporting services provided in the field of the digital, energy and transports industries.

Date: 2013
References: Add references at CitEc
Citations:

Published in 88th Annual Conference of the Western Economic Association, 2013, Seattle, United States

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00980384

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().