58. International modularity

Since its inception in the 1990s, research on modularity has expanded along changes in technological markets, such as the increasing pace of innovation and the reduction in prior forms of coordination. One main contribution of research has been to show numerous instances of modularity’s influence on competition. These include allowing small firms to incubate innovations before suddenly disrupting markets, and enabling the rise of co-opetition strategies that generate network effects. These early days of modularity research culminated in Baldwin and Clark’s (2000) fundamental book and its depiction of modularity as an efficient coordination mechanism. They established modularity as an important field of research and seeded the promise of a “modularity revolution.” Advances in material knowledge, innovative contractual arrangements, and deregulation held the promise of a spread of modularity across all industries.