Heydari Receives NSF CAREER Award
MIE Associate Professor Babak Heydari was awarded a $490K NSF CAREER grant in August 2018 for “Architecting Products to Balance Innovation and Competition in Business Ecosystems”.
Integrating the Engineering Design Process with the Socio-economic Ecosystem
The technology revolution is having a profound effect on the engineering design process, moving it from static and predictable to enabling more dynamic and evolving systems that require greater degrees of independent decision-making.
For Mechanical and Industrial Engineering Associate Professor Babak Heydari, this trend offers an opportunity to help tech companies make strategic decisions about the architecture of their systems and products that balance innovation and competitive advantage. Heydari’s research, which earned him a National Science Foundation CAREER Award in 2016, represents a potentially groundbreaking approach to integrating the engineering design process with the socio-economic ecosystem.
Looking at the R&D process and the innovation process during the design phase, Heydari notes that “in most traditional systems, it’s done by a set of R&D people or teams of R&D people in different organizations. With development moving towards Open Source/open innovation, many systems now rely on what we refer to as ‘distributed innovation.’” Case in point: Apple’s decision to open app development to external developers for its iPhone created a massive distributed innovation network and, within a short period, a large number of new apps that would have been otherwise unimaginable.
“Think of a product as a two-sided platform where the owner creates an architecture that matches the two sides of a platform, for example, app developers and innovators on one side and users/consumers on the other side,” says Heydari. “We want to formalize that process. What are the parameters of such decisions? When and under what conditions and how much should the platform owner open up part of the platform architecture for external use?” Heydari notes that opening the platform too much could negatively impact a company’s ability to maintain its competitive advantage.
Finding the sweet spots
“There is a sweet spot when we decide on the optimal architecture of a platform,” explains Heydari. “Part of my work is to create formal models that could give us an understanding of how to find those sweet spots.
“If we can find a formal methodology to integrate the engineering design process with the socio-economic ecosystem, it will be groundbreaking because as we move forward with developments in AI and IoTs in the coming decades, we’ll deal with systems where the technical and social sides co-evolve with each other. That co-evolution determines much of the behavior of these systems and if they’ll be successful or not, if they’ll create a desirable social outcome.”
Heydari believes his research will ultimately help companies make better decisions about the architecture of their products, integrating ecosystem parameters into their architecture and reducing trial-and-error. Society will also benefit when attributes normally left to after-the-fact regulation are integrated through platform governance during the design stage.
Working with faculty across a variety of disciplines—engineering, computer science, law, business and public policy—is vital to Heydari’s research on complex socio-technical systems. “Within Northeastern, we are well positioned to create research and educational programs on these complex technical systems because of the interdisciplinary culture of the university,” he says. “Northeastern has great potential to become a leader in this field.”
Abstract Source: NSF
This Faculty Early Career Development (CAREER) grant will test the hypothesis that technology firms can make strategic decisions about the architecture and modularity levels of systems and products, so that they can use distributed innovation networks while keeping their competitive advantage in the market. In a paradigm shift from the traditional model in which product development is driven by internal R&D activities, new product development in many technology firms today relies on distributed innovation. In distributed innovation, a large number of autonomous firms, individuals and communities form a network through their common connection with an underlying technical system. Outcomes of this research will significantly improve the ability of engineers and product developers to make strategic decisions regarding systems architecture, determine the degree of openness and modularity of product platforms, and make design decisions to trigger or strengthen long-lasting cycles of distributed innovation. This, in turn, will increase the social value of design through more informed strategic architecture decisions. This research builds on several disciplines including complex and social network analysis, game theory, engineering design and complex adaptive systems. The educational objectives include integration of the science of complex socio-technical networks with engineering design to create activities that foster interdisciplinary analytical thinking in current and future engineers.
To model the interaction of system architecture with dynamics of innovation and competition, a three-layer model will be developed. A unique aspect of the research is that it explores how to use explicit dynamic network representations of components, knowledge, and market competition, and the interaction between them to improve architecture decisions in order to maximize delivered value. In this sense, the research uses recent advances in network theory to bridge the gap between the engineering design and organization science and innovation management. Dynamics of modularity will be used, as a proxy for structural changes in each of these layers and network-embedded game-theoretic methods will be applied to create analytical models that relate technology modularity to market modularity. Stylized models will also be created to explore necessary conditions for stimulating episodes of architecture-driven, self-reinforcing distributed innovation. The theoretical thrust is complemented by an empirical study of the rapid transformation of the commercial wireless industry via absorbing CMOS technology, and the role of product architecture and changes in system modularity at each stage of this transformation for the ten-year period that led to the commercialization of smartphones. The educational activities include designing short, interactive workshops on complex networked systems for high school students, and collaborating with a science museum in New York City to integrate some of the results of the research part of this grant on multi-level networks into their visual, interactive infrastructure for K-12 students. At the college level, tasks are aimed at integrating recent developments in complex network methods and multi-agent systems in engineering design at undergraduate and graduate levels.