Globalization of Innovation: The Personal Computing Industry

Abstract

August 2006 marked the 25th anniversary of the release of the original IBM PC, the product that defined the standards around which a vast new industry formed. Unlike the vertically integrated mainframe industry, the PC industry consisted of a global network of independent suppliers of systems, components, peripherals and software (Grove, 1996; Dedrick and Kraemer, 1998). The key factor shaping the industry's structure was the design of the IBM PC as a modular, open system with standard interfaces. This allowed many newcomers to enter the market by specializing in one industry segment and developing innovations that could be integrated into any IBM-compatible system. It also permitted producers of parts, components, and systems to achieve global economies of scale as most of the world except Apple adopted the IBM standard. In time, desktop PCs were joined by portable laptop/notebook PCs and PC servers as the industry innovated on this common standard.