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Publications
  • 2012
  • Working Paper
  • HBS Working Paper Series

IP Modularity: Profiting from Innovation by Aligning Product Architecture with Intellectual Property

By: Joachim Henkel, Carliss Y. Baldwin and Willy C. Shih
  • Format:Print
  • | Language:English
  • | Pages:25
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Abstract

In this paper we explain how firms seeking to take advantage of distributed innovation and outsourcing can bridge the tension between value creation and value capture by modifying the modular structure of their technical systems. Specifically, we introduce the concept of "IP modularity," a special form of modularity that seeks to protect and capture value from intellectual property (IP). We define what it means for a system to be "IP-modular," and illustrate the application of this concept in a number of practical situations. From the examples, we derive a comprehensive framework that can be used to design and evaluate value capture strategies for modular systems.

Keywords

Modularity; Value Appropriation; Distributed Innovation; Open Innovation; Strategy; Open Source Distribution; Value; Complexity; Intellectual Property

Citation

Henkel, Joachim, Carliss Y. Baldwin, and Willy C. Shih. "IP Modularity: Profiting from Innovation by Aligning Product Architecture with Intellectual Property." Harvard Business School Working Paper, No. 13-012, August 2012. (Revised November 2012.)
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About The Authors

Carliss Y. Baldwin

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Willy C. Shih

Technology and Operations Management
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Related Work

    • 2012
    • Faculty Research

    IP Modularity: Profiting from Innovation by Aligning Product Architecture with Intellectual Property

    By: Joachim Henkel, Carliss Y. Baldwin and Willy C. Shih
Related Work
  • IP Modularity: Profiting from Innovation by Aligning Product Architecture with Intellectual Property By: Joachim Henkel, Carliss Y. Baldwin and Willy C. Shih
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