Modular design for balancing imitation and innovation

How “good or appropriate” modular designs may be realized in the face of complexity is investigated. This paper proposes that the sheer complexity of a product architecture can raise a barrier to imitation. Using capture recapture model of ecology, total unique ideas are measured. By formulating a model of modular design for balancing imitation and innovation, it is proven that (1) if there is no idea surplus and the ratio of unique ideas is the same in spite of modular design, then total unique ideas are the same in any case, (2) opportunity space of innovation is bigger in case of modular design if there is an idea surplus in modular design, and (3) if the ratio of unique ideas is smaller in case of modular design, then sufficient number of modules will compensate the opportunity space of innovation. By balancing the imitation risk and the setup cost for opportunity space, we obtain an optimum number of modules also.