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  • 2018
  • Working Paper
  • HBS Working Paper Series

Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 7 The Value Structure of Technologies, Part 2: Technical and Strategic Bottlenecks as Guides for Action

By: Carliss Y. Baldwin
  • Format:Print
  • | Language:English
  • | Pages:23
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Abstract

The purpose of this chapter is to present analytic tools based on functional maps that can be used to identify investment opportunities and to formulate strategy in large, evolving technical systems. I argue that the points of value creation and value capture in a technical system are the system’s bottlenecks. Bottlenecks arise first as important technical problems to be solved. Once the problem is solved, the solution in combination module boundaries and property rights can be used to capture a stream of rents. In this chapter I extend the functional mapping techniques developed in the last chapter to locate technical and strategic bottlenecks, modules, and property rights. I then show how these analytic tools can be used to construct narratives explaining the dynamics of three nascent technical systems: early aircraft, high-speed steel in machine tools, and container shipping.

Keywords

Bottlenecks; Information Technology; System; Investment; Opportunities; Strategy

Citation

Baldwin, Carliss Y. "Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 7 The Value Structure of Technologies, Part 2: Technical and Strategic Bottlenecks as Guides for Action." Harvard Business School Working Paper, No. 19-042, October 2018.
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About The Author

Carliss Y. Baldwin

→More Publications

More from the Author

    • 2021
    • Faculty Research

    Computer-Implemented Methods and Systems for Measuring, Estimating, and Managing Economic Outcomes and Technical Debt in Software Systems and Projects: US Patent 11,126,427 B2

    By: Daniel J. Sturtevant, Carliss Baldwin, Alan MacCormack, Sunny Ahn and Sean Gilliland
    • 2020
    • Faculty Research

    Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 7 The Value Structure of Technologies, Part 2: Strategy without Numbers

    By: Carliss Y. Baldwin
    • 2020
    • Faculty Research

    Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 6 The Value Structure of Technologies, Part 1: Mapping Functional Relationships

    By: Carliss Y. Baldwin
More from the Author
  • Computer-Implemented Methods and Systems for Measuring, Estimating, and Managing Economic Outcomes and Technical Debt in Software Systems and Projects: US Patent 11,126,427 B2 By: Daniel J. Sturtevant, Carliss Baldwin, Alan MacCormack, Sunny Ahn and Sean Gilliland
  • Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 7 The Value Structure of Technologies, Part 2: Strategy without Numbers By: Carliss Y. Baldwin
  • Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 6 The Value Structure of Technologies, Part 1: Mapping Functional Relationships By: Carliss Y. Baldwin
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