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ISR Colloquium


Carliss Y. Baldwin

William L. White Professor of Business Administration
Harvard Business School

The Power of Modularity: The Financial Consequences of Computer and Code Architecture

March 31, 2005

Refreshments and Networking: 10:00 - 10:30
Presentation: 10:30 - 12:00



Faculty Host: Crista Lopes, lopes @ ics.uci.edu

RSVP: Email RSVP required to Nancy Myers at nmyers@ics.uci.edu by Monday, March 28.

Location: Main Library, Room 570

Cost: No cost to attend.


Abstract: In the 1970s, 1980s and 1990s, computer designers created a series of “option-rich modular design architectures” in both hardware and software. But a “pure” design is, strictly speaking, only an idea. Unless the design is reified—made real, brought into reality— it cannot affect the physical world and cannot be used or consumed. In order to affect the world and be valued, a design idea must be first completed and then made into something. Those actions in turn require human effort and human organization.

Designs need the economy for several purposes:

Designs influence the economy by creating perceptions of financial value. These perceptions in turn motivate investment and the creation of new economic institutions. Option-rich and modular architectures are extremely effective conduits of value, but their evolution may be difficult to control. In this talk, I will adopt the “designs’ point of view” in order to understand the economic institutions and mechanisms by which new designs and new artifacts come into existence.


About the Speaker: Carliss Y. Baldwin is William L. White Professor of Business Administration at the Harvard Business School . With Kim B. Clark, she is involved in a multi-year project to study the process of design and its impact on the structure of the computer industry. She and Clark have authored Design Rules: The Power of Modularity, the first of a projected two volumes on this topic. Volume 2, in progress, will focus on The Institutions of Innovation.


A specialist in corporate finance and real options theory, Baldwin received a bachelor's degree in economics from MIT in 1972, and MBA (with High Distinction) and DBA degrees from Harvard Business School . She has taught courses in finance at the MBA, doctoral and executive levels. Most recently, she developed and currently teaches Acquistions & Alliances, a second-year MBA course that looks at mergers, acquisitions and equity alliances. Within Harvard University , she serves on the policy and admissions committee of the joint Ph.D program in Information Technology and Management. She is also a director the Climate Neutral Network and a trustee of the Madeira School . She lives in Brookline, Massachusetts, with her husband, Randolph Hawthorne and two children.