New product development, Modular Innovation, and Radical Innovation

The management literature defines modular innovation as a way to make technological changes in product modules that does not necessarily change the product architecture. However, engineering science shows that new product modules not only change the product architecture, but they can also be used for technologically radical next generation products. Therefore, there seems to be a misalignment in how the role of modular innovation is seen as an innovation management phenomenon and the actual practice of product design and engineering. We revisit the role of modular innovation by combining management and engineering approaches. We demonstrate the applicability of this approach through two cases that utilize patent data of two recent technologically innovative products: Tesla’s Model X and iRobot’s Roomba automated vacuum cleaner. The examples show, in detail, how the changes in product modules and functions have led to broader changes at the system architecture level, leading to new functionalities. The findings contribute to the innovation management literature by unveiling a more nuanced role of modular innovation by embedding it in the product architecture, thus broadening the discussion on architectural innovation and technological radicalness.