8. Establishment of a Global Ecosystem and Its Expansion: Does the Platform Strategy Trigger a Transformation in the Structure of the International Division of Labor?

Figure 8.2 ② refers to a state in which the openness of the ecosystem is not maintained, although symbiont and user firms invest. In this case, because very few symbiont and user firms commit financial resources, the investment is unlikely to lead to expansion into a global ecosystem. Maintaining the openness of the ecosystem is the main topic in Chaps. 6 and 7.

This is easier to understand when we consider that the moves at inflection points a and b are made by chance, i.e., they are chance moves. The platform firm wins the move with a probability of p and the symbiont and user firms win the move with a probability of (1-p). The platform firm can increase probability p by implementing strategic levers (strategic standardization plus hub positioning). Rigorously speaking, both the platform firm and the symbiont and user firms have the chance to make a move at both inflection points a and b; for the sake of simplicity, the diagram depicts the player with the higher chance.

In actuality, there are various types of patent release: unlimited approval of patent use, approval of patent use for a set period of time and others. Sometimes, the firm wanting to use the released patent is restricted in exercising its own patent rights in the relevant field. In other cases, licensing is conditional on the firm benefitting from the use of a patent not initiating patent disputes with the firm releasing the patent.

In the GSM standardization process, discussions around patent rights were held based on the Gentlemen’s Agreement approach. According to Bekkers et al. (2002), five communications equipment providers (Ericsson, Nokia, Motorola, Alcatel and Siemens) cross-held SEPs. In such a scenario, SEPs function as a kind of cartel and, to enter the device market, a newcomer must pay royalties. If the newcomer itself holds SEPs, it can make trade-offs concerning royalties but, if it holds none, the total amount of royalty fees can be rather substantial. This issue is referred to as royalty stack. In the GSM environment, component providers and software vendors were not asked for patent licenses, and these industries went through accelerated growth thanks to the open standards. Additionally, it is difficult to ensure that SEP licenses are safeguarded in emerging economies, where the protection of intellectual property is not so strict, while it is easy in developed countries. Hence, addressing openness through SEPs is not necessarily a perfect strategy. Lastly, the handling of intellectual property (SEPs) based on Gentlemen’s Agreements is no longer recommended from the standpoint of competition laws.

As this was not a theme in these studies, it was not exhaustively described in the chapters.

It is not self-evident that firms in emerging countries grow as symbiont firms while the ecosystem expands globally. In the automotive industry, for example, when the industries in developed countries advanced into the global market, major component suppliers from those countries advanced along with the automotive manufacturers by making foreign direct investment. Such FDI included not only their own capital but joint ventures as well. The trend of open standardization in the automotive industry, explained in Chap. 7, began in the 2000s, when automotive electronics became prevalent.