The Power of Non-Contractual Innovation

Currently, all major IT and telecom firms are busy trying to stimulate non-contractual complementary developments around their own core competences and offerings. But little has been done to explain the logic, strengths and weaknesses of non-contractual innovation. The literature on open platform leadership recognizes the importance of non-contractual innovation, but only within the limited confines of a normative approach based on two implicit assumptions: that a platform's core and periphery are sharply and easily differentiated and that platforms are always grown and orchestrated from a monolithic core. On the basis of the analysis of two cases of decentralized open innovation -- the emergence of video rental stores and the emergence of desktop publishing systems -- this essay argues that these assumptions do not apply to all open platforms. I conclude that by forcing a hierarchical framework onto the analysis, the normative approach underplays the role of non-contractual innovation and turns a blind eye on the radically self-organized and unforeseeable nature of some platforms' success