The Essential Trinity

Successful high-tech industries can be understood as ecosystems of enterprises and related organizations that are geared to develop platforms of global products, processes, and services; these platforms, by turn, are based on solid industrial architectures. This is called the Essential Trinity concept. In this way, the main objective of this chapter is twofold: first, to argue that information technology industries in developing countries, such as Brazil, can be understood through the Essential Trinity concept; and second, to argue also that the main characteristic of this industry in developing countries is that it has been historically organized only in terms of ecosystems of enterprises and related organizations, without developing either platforms of global products, processes, and services, or solid industrial architectures. In order to develop these arguments, the chapter presents the case of the IT industry in the state of Pernambuco (Northeast of Brazil), particularly through the development of its Porto Digital IT Park, as an example of an “unfinished essential trinity.”

The Management View

Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. The main tools of the managers are theories and insights from business experiences. Despite their differences, at least four schools represent attempts to resolve the same basic underlying problem: the tension between two conflicting business realities. The first reality is that advantage is transient. Even the most formidable market position can be vulnerable to some disturbances. The second reality is that corporate identity is slow to change. This chapter is organized in order to present some of the main theories and schools of thought developed by managers and business activists dealing with enterprises. Its main purpose is to address the main issues managers research in order to understand the way the enterprise should be managed and how its resources could be allocated as a source of competitive advantage.

The Role of Innovation Management

This chapter presents some of the most relevant aspects of the economics of innovation, as well as those of the technology and innovation management field, which are of crucial relevance to the role of innovation management in solving the complex relations subjacent to the “R&D-innovation-growth-nexus.” Its main purpose is to place the task of innovation management into a central role in the management of the enterprise, especially the management of the digital (or digitalized) enterprise. Moreover, as the management of innovation, either of a product (good or service) or a process (technological, organizational, or marketing) is rapidly becoming a business imperative, it is important to understand how Information and Communication Technologies (ICTs) are transforming the enterprise's innovation or are being transformed by innovation. The chapter ends with a brief treatment of some aspects of the innovation management in practice.

The IT Architecture Dimension

The main purpose of this chapter is to present some important aspects of a complementary domain of the concept of architecture: the Information Technology (IT) dimension of the enterprise, or its “IT architecture.” There are several ways to reveal the elements and importance of information and communication technologies (the application of computers and telecommunications equipment to store, retrieve, transmit, and manipulate data, often in the context of a business or other enterprise). A simple and straight description is offered by Englander (2009). Therefore, a proper understanding of the concept of IT architecture as a complement of the corporate dimension is what this chapter is about.

A Unified View (Economic + Management + Information Systems)

There are at least three disciplinary views associated to enterprises and markets: the economic view, the management view, and the information systems view. Thinking of each of them as representations of a particular complex system has been a historical endeavor, which evolved through several distinct theories, models, approaches, and dimensions. To think about these three disciplinary views, collectively, is, however, a subject matter that is unusual by nature, and is related to a specific and complex area of knowledge: the field of interdisciplinary studies. Therefore, this chapter is organized in order to introduce two novel and innovative models and methodologies—the AID (Analyticsize-Integrate-Decide) Model and the AGG (Architecture-Governance-Growth) Model (which is the core reason of this book)—to help academics and professionals to deal with the interdisciplinary context of combining the economic view, the management view, and the information systems view (characterized here as a unified view) of the enterprise in the digital age.

The Corporate Governance Dimension

The main purpose of this chapter is to present the definition of corporate governance, why corporate governance matters (especially from the viewpoint of the formative connections of the AGG Model), what is expected from corporate governance from a public policy perspective, and finally, the chapter shows some important governance aspects related to the model of “open innovation.” It attempts to present the most relevant theoretical and practical aspects of corporate governance that can contribute to a proper understanding of the concept of corporate governance as a connection between the architectural design, operation, and growth of enterprises, and its alignment to the architecture, operation, and growth of markets.

The Concept of Governance

This section of the book presents the second dimension of the AGG model (the governance realm). It discusses why it is necessary to understand the concept of governance in a general sense, as well as in the corporate and in the information technology senses. If this book argues that an enterprise's observable architectural characteristics determine its governance issues, and that the governance agenda of the enterprise determines its measurable growth conditions, then it is imperative that the concept of governance should be specified. This chapter deals with the concept of governance in a general sense, highlighting those aspects that are necessary for a proper understanding of the operation of market architectures, as well as those aspects related to governance at the enterprise level. The chapter also discusses a special case of governance, the concept of “bazaar governance,” a form of governance structure that has emerged with the growth of the open source movement for the development of software production.

The Economic View

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. In one of its most recognized academic definitions, it is known as “a science that studies human behavior as a relationship between ends and scarce means which have alternative uses” (Robbins, 1932). The main tools of the economists are theories and models. Economic models are theoretical constructs that represent economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified framework designed to illustrate complex processes, often but not always using mathematical techniques. This chapter is structured in order to present some of the main theories and models developed by economists dealing with the enterprise addressing its existence, structure, behavior, and relationship to the market. Its purpose is to highlight the main aspects economists research in order to understand how the enterprise emerges, organizes, and governs itself and grows.

Startups, Corporate Garage, High Growth Firms, and Their Entrepreneurial Environment

Given the importance of entrepreneurship to the emergence, design, management, and growth of enterprises, this section of the book intends to provide some insights into three recently observed combined phenomena. The first one is the phenomenon of the explosive growth of entrepreneurship activity via new startups (mostly technology- and innovation-based) and that of corporate venturing, called “corporate garage.” The second phenomenon is that of the growing importance of the High-Growth Firms (HGFs). These two phenomena are dealt with in this chapter. Finally, the third phenomenon, which is less well known, but can be understood as a foundation for the former two, is the importance of the business context, or environment, in which enterprises emerge, operate, and grow, and which is perceived by the growth of importance of concepts such as ecosystems, platforms, and architectures, which are examined in detail in Chapter 14.

The Corporate Architecture Dimension

The main purpose of this chapter is to develop further the treatment of the concept of architecture by dealing with what is called the corporate dimension of the enterprise architecture. It presents a way to employ this concept (the corporate or business dimension is used here interchangeably) through a methodology that defines what is called the market architecture, and how to design, operate, and sustain the enterprise architecture aligned to its specific market architecture.