Design Rules, Vol. 1: The Power of Modularity

by Carliss Y. Baldwin, Kim B. Clark

We live in a dynamic economic and commerical world, surrounded by objects of remarkable complexity and power. In many industries, changes in products and technologies have brought with them new kinds of firms and forms of organization. We are discovering news ways of structuring work, of bringing buyers and sellers together, and of creating and using market information. Although our fast-moving economy often seems to be outside of our influence or control, human beings create the things that create the market forces. Devices, software programs, production processes, contracts, firms, and markets are all the fruit of purposeful action: they are designed. Using the computer industry as an example, Carliss Y. Baldwin and Kim B. Clark develop a powerful theory of design and industrial evolution. They argue that the industry has experienced previously unimaginable levels of innovation and growth because it embraced the concept of modularity, building complex products from smaller subsystems that can be designed independently yet function together as a whole. Modularity freed designers to experiment with different approaches, as long as they obeyed the established design rules. Drawing upon the literatures of industrial organization, real options, and computer architecture, the authors provide insight into the forces of change that drive today's economy.

Genres: Design, Business, Nonfiction, Software, Architecture

483 pages, Hardcover

First published March 2, 2000

Reviews

[Marks54 · Rating 5 out of 5]

I read this in preparing a course on internet strategy at Purdue. It is a very unusual book that links the idea of modularity (sort of a chunkiness of design that allows for decomposibility) across both the physical design of a product and the social design of the industry producing the product. The industry of interest is mainframe computers and the book chronicles IBMs decision to produce a system (system 360) where the software is separable from the hardware. This in turn, coupled with some institutional changes and the competitiveness of Microsoft and Intel, led to the transformation of the computer business from a situation of domination by IBM to a fluid center of innovation and technological transformation in an age of networked computers. The book is by two professors (one of them a Dean) at the Harvard Business School and the overall result is a stupendous achievement. This is very unusual for a trade book of a highly technical nature. Perhaps the most memorable section for me was the linking of modular design with the expanded potential for innovation that results from letting other firms compete for innovation in subassemblies, as long as they fit at the interface. I have returned to this book more times than I remember and it is valuable in a wide range of topics related to business, technology, and innovation.