Massive Modular Ecosystems: A Framework for Understanding Complex Industries in the Digital Age

Eric Thun, Daria Taglioni, Timothy J. Sturgeon and Mark P. Dallas

No 11106, Policy Research Working Paper Series from The World Bank

Abstract: The rapid evolution of industries driven by digitization and modularization has outpaced existing theoretical and policy toolkits. To help fill this gap, the paper offers a conceptual framework suitable for mapping the organization of complex global industries. This approach systematically identifies an industry’s main functions, key actors and roles, important interface standards, and prevailing and alternate governance forms. In this way, the authors are able to characterize the macro-organizational structure of the mobile phone industry as a Massive Modular Ecosystem (MME), an ecosystem of ecosystems where modularity prevails at the system level while various ‘sub-ecosystems’ layered and nested within the industry display a variety of modular and non-modular governance forms. The defining aspect an MME is not that every relationship is purely modular, but that non-modular relationships operate in a ‘sea of modularity,’ a context where modularity prevails. The study explores how governance structures at various layers of the mobile phone MME correlate with observed outcomes related to innovation, market structure, and economic geography; outcomes that cannot be adequately explained by existing theoretical work on modular governance, global value chains, business ecosystems, and other related literatures.

Date: 2025-04-23
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