Let a Thousand Flowers Bloom? An Early Look at Large Numbers of Software App Developers and Patterns of Innovation
Abstract
In this paper, I study the effect of adding large numbers of producers of application software programs (“apps”) to leading handheld computer platforms, from 1999 to 2004. To isolate causal effects, I exploit changes in the software labor market. Consistent with past theory, I find a tight link between the number of producers on platform and the number of software varieties that were generated. The patterns indicate the link is closely related to the diversity and distinct specializations of producers. Also highlighting the role of heterogeneity and nonrandom entry and sorting, later cohorts generated less compelling software than earlier cohorts. Adding producers to a platform also shaped investment incentives in ways that were consistent with a tension between network effects and competitive crowding, alternately increasing or decreasing innovation incentives depending on whether apps were differentiated or close substitutes. The crowding of similar apps dominated in this case; the average effect of adding producers on innovation incentives was negative. Overall, adding large numbers of producers led innovation to become more dependent on population-level diversity, variation, and experimentation—while drawing less on the heroic efforts of any one individual innovator.
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The digital platform represents a technology-based business system, on which a focal platform actor enforces control via a digital architecture represented by an extensible codebase that can incorporate third-party modules complementing to its core offering.
“The digital platform represents a technology-based business system, on which a focal platform actor enforces control via a digital architecture represented by an extensible codebase that can incorporate third-party modules complementing to its core offering (Boudreau, 2012;Tiwana, 2018).”
From Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems (2023) · cites this paper as Boudreau, 2012
New offerings from complementor integration may attract completely new groups of users to the platform, which then interact with other sides on the platform.
“These new offerings may even attract completely new groups of users to the platform, which then interact with other sides on the platform (Boudreau, 2012).”
From Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems (2023) · cites this paper as Boudreau, 2012
Uncontrolled entry of low-quality complementors caused a negative effect on the ecosystems' overall innovation output.
“In other empirical cases, uncontrolled entry of low-quality complementors caused a negative effect on the ecosystems' overall innovation output (Boudreau, 2012;Miric & Jeppesen, 2020).”
From Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems (2023) · cites this paper as Boudreau, 2012
Certain platform business models may hinder the DPE to reach the final orchestration stage.
“We acknowledge that certain platform business models may hinder the DPE to reach the final orchestration stage(Boudreau, 2012).”
From Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems (2023) · cites this paper as Boudreau, 2012
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“Platform research to date emphasizes how platform governance can prompt positive externalities (or indirect network effects) between producers and consumers (Boudreau, 2012; Cennamo & Santaló, 2013; Zhu & Iansiti, 2012).”
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- Authors
- Boudreau, K. J.
- Affiliations
- London Business School (GB)
- Corresponding author
- Boudreau, Kevin J.
- ORCID
- Boudreau, Kevin J.
- Venue
- Organization Science
- Published
- 2012-10
- Volume
- 23
- Issue
- 5
- Pages
- 1409-1427
- ISSN
- 1047-7039 (ISSN-L)
- 1526-5455
- OpenAlex
- W3125833157
- Cited by
- 676
- References
- 106
- Citations by year
- 2026: 40 · 2025: 52 · 2024: 64 · 2023: 65 · 2022: 62 · 2021: 62 · 2020: 61 · 2019: 46 · 2018: 57 · 2017: 42 · 2016: 32 · 2015: 40 · 2014: 27 · 2013: 17 · 2012: 8
- FWCI
- 55.99
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Organization Science (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Digital Platforms and Economics
- Social Sciences › Decision Sciences › Management Science and Operations Research › Innovation Diffusion and Forecasting
- Social Sciences › Business, Management and Accounting › Strategy and Management › Innovation and Knowledge Management
- Keywords
- innovation incentives, network effects, producer heterogeneity, product variety
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