Wednesday, May 27, 2009

Academic victory for open standards

One of my major research (and blogging) interests has been on the open-ness of standards. A particular pet interest has been on semi-open standards — how firms decide which elements of openness to offer and which ones to block. (I’m also interested in how open standards relate to other aspects of innovation openness such as open source and open innovation).

A decade before I even knew there was an academic literature on standards, there were four academics cranking out the seminal work on the fundamental economic principles of standards creation and adoption — a literature known as network effects. Writing in two teams, journals like American Economic Review and Journal of Political Economy were filled with papers by Michael Katz and Carl Shapiro or Joseph Farrell and Garth Saloner. (Katz was also an FCC economist and Shapiro a Justice Dept. antitrust economist).

My dissertation is filled with references to these two themes, as well as to Information Rules, the HBS book Shapiro co-authored with Hal Varian.

One paper I did not fully appreciate until recently (because it appeared in a journal most libraries don’t carry) is a 1990 paper on open standards by Saloner. I am often proud of my chapter on open standards (in a 2006 book on the economics of standards), but it’s now clear that Saloner was the first to seriously consider openness in standards as an intentional tradeoff.

All of this is a long intro as to why I was intrigued by a Stanford press release issued Tuesday:

Economist Garth Saloner, a scholar of entrepreneurship and business strategy, will be the next dean of Stanford University's Graduate School of Business, President John Hennessy and Provost John Etchemendy announced today.

Saloner, 54, who joined the Stanford faculty in 1990, is the Jeffrey S. Skoll Professor of Electronic Commerce, Strategic Management and Economics, and a director of the Center for Entrepreneurial Studies at the Graduate School of Business. He will succeed Robert Joss, who is stepping down after 10 years as dean. Saloner's appointment is effective September 1, 2009.
In addition to his prodigious research, Saloner is credited with helping to lead Stanford’s particularly complex re-architecting of its MBA curriculum.

What I find particularly interesting is Saloner is one of the few people within GSB that seems to care that Silicon Valley can be found just outside the boundaries of “The Farm.” Rather than local problems of interest, most of the faculty of GSB are oriented towards an international disciplinary audience such as economics, sociology, psychology, or applied math. At Stanford, the greatest concentration of Silicon Valley-oriented business scholars are found in one department of the Engineering School.

Will Saloner’s appointment make the GSB (and its new Phil Knight Management Center) a new hotbed for the study of Silicon Valley entrepreneurship? Or will the institutional norms of the various fields drown out whatever preferences the dean and local alumni might have? Stay tuned.


Garth Saloner, “Economic issues in computer interface standardization,” Economics of Innovation and New Technology, v. 1, n. 1 (1990), pp. 135–156.

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