This paper gives a selective overview on contributions studying issues of complexity, near-decomposability and modularity in relation to economic behaviour and the theory of the firm. In the first part the paper reviews contributions studying the relationship between human problem solving in the face of complex problems and the emergence of specific technological and organisational designs. The second part of the paper reviews recent research that has studied the impact of modular designs in the organisation of production at the firm level on industrial organisation and dynamics. The paper draws some conclusions on future avenues of research.
Innovation decision catching up distance to frontier