Sunil Mithas，Professor of University of Maryland: Does Platform Owner's Entry Crowd out Innovation? Evidence from Google Photos
Title: Does Platform Owner's Entry Crowd out Innovation? Evidence from Google Photos
Speaker: Sunil Mithas, Professor of University of Maryland
Time： 14:00-16:00pm, Monday, November 14th, 2016
Location: Weilun 453
Abstract: We study platform owner’s decision to enter the market complementary to its platform with its own complement, and the consequences of such an entry on complementors’ decision to innovate in the affected market category. We ask: if a platform owner like Google releases an app for its Android platform, does it keep app developers from innovating in the future? We investigate two mechanisms that suggest entry to stimulate complementary innovation. A racing mechanism, which prompts affected complementors to innovate due to competitive "Red Queen" dynamics, and an attention spillover mechanism, which suggests increased innovation to result from spillover consumer attention to same-category complements. We exploit a unique setting provided by Google’s entry into the market for photography apps on its own Android platform in 2015 as a quasi-experiment. Whereas several models predict such an entry will erode complementors’ incentives to innovate, our difference-in-differences analyses of time-series data on a random sample of 6,620 apps suggest the contrary. After entry, app developers were more likely to incrementally innovate their photography apps and to release new apps to the affected market category. Although we do not observe a racing effect, our analyses support the attention spillover effect. In other words, Google's entry created additional consumer attention and demand for photography apps, which spill over to complementors in the same category. We discuss implications of our findings for further research and policy.
Bio: Sunil Mithas is a Professor in the Robert H. Smith School of Business at the University of Maryland, where he is Research Director of the Center for Excellence in Service and Co-Director of the Center for Digital Innovation, Technology and Strategy. He is the author of the books Digital Intelligence: What Every Smart Manager Must Have for Success in an Information Age and Dancing Elephants and Leaping Jaguars: How to Excel, Innovate, and Transform Your Organization the Tata Way (published by Penguin India in 2015 for the Indian subcontinent under the title Making the Elephant Dance: The Tata Way to Innovate, Transform and Globalize). He earned his PhD from the Ross School of Business at the University of Michigan and an engineering degree from IIT, Roorkee.
He was identified as 2011 MSI Young Scholar by the Marketing Science Institute, which selects about 25 such scholars every two years. Sunil is a frequent speaker at industry events for senior leaders. He has worked on research or consulting assignments with organizations such as Johnson & Johnson, Lear, A.T. Kearney, the Tata group, the Social Security Administration, and the U.S. Census Bureau.
Sunil’s research focuses on strategies for managing innovation and excellence for corporate transformation, and provides insights on the role of technology and other intangibles, such as customer satisfaction, human capital, and organizational capabilities. His papers have won best-paper awards, have received best-paper nominations, and have been featured in practice-oriented publications such as MIT Sloan Management Review, Bloomberg, CIO.com, Computerworld, and InformationWeek.