Firm Capabilities, Competition and Industrial Policies in a History-Friendly Model of the Computer Industry

In this paper, we explore some problems that industrial policy faces in industries characterized by dynamic increasing returns on the basis of a 'history friendly model' of the evolution of the computer industry. How does policy affect industry structure over the course of industry evolution? Is the timing of the intervention important? Do policy interventions have indirect and perhaps unintended consequences on different markets at different times? We focus on two sets of policies: antitrust and interventions aiming at supporting the entry of new forms in the industry. The results of our simulations show that, if strong dynamic increasing returns are operative, both through technological capabilities and through customer tendency to stick with a brand, there is little that antitrust and entry policy could have done to avert the rise of a dominant firm in mainframes. On the other hand, if the customer lock in effect had been smaller, either by chance or through policies that discouraged efforts of firms to lock in their customers, the situation might have been somewhat different. In the first place, even in the absence of antitrust or entry encouraging policies, market concentration would have been lower, albeit a dominant firm would emerge anyhow. Second, antitrust and entry encouraging policies would have been more effective in assuring that concentration would decrease. The leading firm would continue to dominate the market, but its relative power would be reduced. © Elsevier Science B.V

Vertical Integration and Dis-integration of Computer Firms: A History Friendly Model of the Co-evolution of the Computer and Semiconductor Industries

In this paper we present a history-friendly model of the changing vertical scope of computer firms during the evolution of the computer and semiconductor industries. The model is "history friendly", in that it attempts at replicating some basic, stylized qualitative features of the evolution of vertical integration on the basis of the causal mechanisms and processes which we believe can explain the history. The specific question addressed in the model is set in the context of dynamic and uncertain technological and market environments, characterized by periods of technological revolutions punctuating periods of relative technological stability and smooth technical progress. The model illustrates how the patterns of vertical integration and specialization in the computer industry change as a function of the evolving levels and distribution of firms' capabilities over time and how they depend on the co-evolution of the upstream and downstream sectors. Specific conditions in each of these markets - the size of the external market, the magnitude of the technological discontinuities, the lock-in effects in demand - exert critical effects and feedbacks on market structure and on the vertical scope of firms as time goes by

The (In)Difference engine: explaining the disappearance of diversity in the design of the personal computer

At the time of writing there is a clear perception of all office computers as being more or less identical. Discussion with users entails repetitive rhetoric as they describe a landscape of boring beige boxes. The office PC is indeed a ‘clone’ - an identical, characterless copy of a bland original. Through the exploration of an archive of computer manufacturer’s catalogues, this article shows how previous, innovative forms of the computer informed by cultural references as diverse as science fiction, accepted gender roles and the discourse of status as displayed through objects, have been systematically replaced by the adoption of a ‘universal’ design informed only by the nondescript, self-referential world of office equipment. The acceptance of this lack of innovation in the design of such a truly global, mass-produced, multi-purpose technological artefact has had an enormous effect on the conception, perception and consumption of the computer, and possibly of information technology itself. The very anonymity of the PC has created an attitude of indifference at odds with its potential.</p

The Evolution of E-Inclusion: Technology in Education for the Vision-Impaired

The 1970s and 1980s saw a rapid take-up in the use of personal computers. During the same time period, society began to move towards providing equity for people with disabilities. As legislators around the world created new disability and Information Technology policies, more people with disabilities were given access to education and the evolving computing tools provided unprecedented educational opportunities. These opportunities were due to the use of new technologies such as outputting of electronic text to voice synthesizers. The provision of assistive technology was not only helpful; it also provided education through a medium that was previously unavailable, particular to the blind and vision impaired. For much of the 1980s the development of text-processing sensory technologies, connected to personal computers, led to a closer equality between the educational services of the able-bodied and people with disabilities. Unfortunately this evolution as not without notable difficulties: issues surrounding the cost of products, the lack of support from large corporations and choice of platform resulted in substantial difficulties for educators in the assessment of appropriate technology. In addition, many of these products became largely redundant in the late-1980s as corporations began to place more emphasis on the Graphical User Interface (GUI). Although the GUI was remarkably successful in allowing the general public to gain better access to personal computing, it’s non-text nature once again caused a digital divide for people with disabilities. Although it is clear that the evolution of the personal computer has had a significant impact on the provision of education for people with disabilities, this paper highlights the historical repetition where innovation is prioritized above e-inclusion

Strange Bedfellows in the Personal Computer Industry: Technology Alliances between IBM and Apple

Until recently technological development in the personal computer industry could be characterized by the competition between two basic designs. The current dominant design in this industry is associated with the IBM and Microsoft personal computing architecture. The other version of personal computing originated in the Macintosh computer from Apple Computer Company. In recent years we also see an increasing number of alliances between IBM and Apple. Joint technological development appears to be a major and somewhat surprising objective of these alliances. This paper analyzes the technology alliances between these companies in the context of recent technological changes, focusing on the timing and the objectives of these alliances. Technology partnering between these proponents of competing basic designs are found to only materialize several years after the DOS-based design of IBM and Microsoft had become dominant. This study is of a qualitative and exploratory nature, using both a small data set and two case studies.management and organization theory ;

Indices that capture creative destruction: questions and implications

The paper argues that micro and macro economists interested in the dynamics of creative destruction can gain important insights by using indices that capture the effect of innovation on the relative position of firms. This is due to the uneven and 'destructive' effect that radical innovation has on firm rankings. One such index is the market share instability index. On the financial side, the excess volatility of stock prices and idiosyncratic risk also appear to capture the uneven dynamics of creative destruction. The paper concludes by considering the implications of these propositions for economy-wide growth during periods of radical innovation (e.g. GPTs)

Business and intercultural communication issues: Three contributions to various aspects of business communication

This paper describes psychological contracts and how they are created. Even though the phenomenon of the psychological contract can be observed in a variety of relationships, this paper solely discusses psychological contracts in business settings. The paper discusses in particular how psychological contracts affect the employee/employer-relationship.The findings will then be applied to the example of IBM in the early 1990s, when IBM decided to lay off employees despite its no-layoff policy. Finally, suggestions are made as to what could have been done to prevent the negative effects of psychological contract violation at IBM. -- Der Aufsatz definiert die Eigenschaften eines psychologischen Vertrages und erklärt sein Zu-standekommen. Obwohl psychologische Verträge in vielen Situationen auftauchen, konzent-riert sich diese Arbeit auf psychologische Verträge in Arbeitsverhältnissen. Besonders wird betrachtet, welchen Einfluss psychologische Verträge auf das Arbeitnehmer-/Arbeitgeber-verhältnis haben. Die Ergebnisse werden dann auf das Beispiel von IBM in den 90er Jahren übertragen. IBM entschied zu diesem Zeitpunkt, Arbeitnehmer trotz eines Arbeitsplatzsicherheits-Grundsatzes zu entlassen. Letztendlich werden Vorschläge unterbreitet, wie die negativen Effekte der Ver-letzung des psychologischen Vertrages bei IBM hätten verhindern können.Psychological Contracts,IBM,Workplace Relationship,Psychologische Verträge,Arbeitsplatz-Verhältnisse

How open is open enough?: Melding proprietary and open source platform strategies

Computer platforms provide an integrated architecture of hardware and software standards as a basis for developing complementary assets. The most successful platforms were owned by proprietary sponsors that controlled platform evolution and appropriated associated rewards. Responding to the Internet and open source systems, three traditional vendors of proprietary platforms experimented with hybrid strategies which attempted to combine the advantages of open source software while retaining control and differentiation. Such hybrid standards strategies reflect the competing imperatives for adoption and appropriability, and suggest the conditions under which such strategies may be preferable to either the purely open or purely proprietary alternatives

Elhauge on Tying: Vindicated by History

This video of this paper being presented is also available