Intro for Managing in a Modular Age

Carl Shapiro, and Hal R. Varian

1/01/2005

In the course of research for "Standards Wars" we investigate several historical examples of such wars, including railroad gauges, AC v DC power, and telephone networks. Our reading of these episodes confirmed our believe that "technology changes, economic laws do not." The same forces that were at work in the telephone battles of 1910 show up in Internet backbones in 2000, albeit in somewhat different forms. One striking fact that emerges from the historical record is that standardization is difficult. The first attempts to standardize parts for arms manufacture occurred in the 1770s in France. Thomas Jefferson was quick to recognize the potential of interchangeable parts, and pushed for this technology in the US.