Digital Platforms: between Innovation and Standardization

Last week I attended the #platfmosphere event in Milan, setup and run by Mia-Platform, an excellent Italian cloud native end to end digital platform provider. 

There are actually many things to comment on; the event was rich in insights and inspirations, which I hope to soon find some time to articulate. For now, I take this opportunity to explore an aspect which while tangent to platforms, it nonetheless embodies a trait found in any well-architected platform, bringing undeniable benefits throughout the software production chain. I am talking about the supposed "tension" between standardization and innovation, which probably deserves a standalone essay, but an extreme summary doesn't seem impossible. 

Standardization vs Innovation

I believe that the long-standing opposition between standardization and innovation is only partially justified. In fact, the real enemy of innovation, I maintain, is not standardization (properly understood) but the centralization of decision-making authorities and the consequent top-down imposition of operational methods by those who are "distant" from the problem domain. These factors can in fact stifle individual initiative and experimentation, essential elements for progress and the development of novel ideas. 

I dare to say: innovation is a "negative"* concept, meaning it is defined in terms of what hinders it and not by a prescriptive and a priori rule. To say that there is no recipe for innovation, but there are clearly obstacles to its potential realization. Centralization and regulation by bodies not directly involved in the problem space, are classic obstacles. 

In this context, digital platforms represent a peculiar synthesis: on one hand, thanks to their internal dynamism, they promote and incorporate common elements that gradually emerge while seeking efficiency and order, and on the other, they enable an ecosystem of actors to build and innovate according to needs not known a priori. The quality of the interplay between these two planes defines the level of efficacy of platforms. 

Standardization (properly understood) is born out of this dynamism: standards often emerge to meet practical needs and real problems encountered by those working on the problem or directly affected by it. When producers and consumers encounters common difficulties, the motivation and the economic and practical convenience to define standards arises. That an external entity, for example ISO, is needed at some stage to certify the standard, does not detract from this "spontaneous" nature of standardization. In fact, this is the final step in a chain of events and ideas that precede the external certifiers. 

However, when standardization is not conceived of this way, it often manifests itself as an intent to regulate (in a barely concealed way), perhaps even in the name of nebulous ideals, to favour narrow groups of operators but always at the expense of the end customer (among many examples, see the problems caused by the forced adoption of the USC-C standard). 

Fortunately, the history of human progress shows us that despite centralizing forces, "spontaneous" standards in fact facilitate innovation. 

I have chosen to tell the story of the role played by the standardization of shipping containers and the consequent unleashed innovation (it will resonate more easily with software professionals for the obvious connections). 

The evolution of shipping containers

In the mid-20th century, transportation economics experienced an unprecedented acceleration. Shipping containers, particularly from the mid-19th century, began to play a fundamental role starting with rail transport. From the 1950s onwards, with the push of a pioneer like Malcom McLean, who, overcoming many cultural resistances, effectively proposed the outsourcing of logistics transport and won a contract to build a container terminal at Cam Ranh Bay to handle the transport of military goods by Sea-Land container ships from California to Vietnam. Nevertheless, for about the next twenty years, many shipping companies used incompatible dimensions for containers and corner fittings used to lift them. This, in turn, required multiple variants of equipment to load and unload containers and made it difficult to develop a complete logistics system. 

A real problem that the community, that is, those directly involved and impacted by the problem, solved by standardizing - despite political interference to seize control -  the loads through the container, enabling intermodal transport, i.e., the use of different means of transport (ships, trains, trucks) without any intermediate handling of the goods and with a drastic reduction in the labour needed for unloading and loading operations, resulting in significant cost and time advantages**.

Containerized freight traffic has been one of the greatest transformations in the field of transport in the era of mechanical propulsion, and it was a true and almost unexpected revolution after a nearly traditional recovery of traffic in the immediate post-war period.

Tools for Innovation

We like to think that innovation derives from unfettered chaos. Wrong! It is the search for order that generates great innovative breakthroughs. It is misleading to oppose standards and innovation. Generally, two types of errors are made: the error that standardization is the child of centralized "governance," or its opposite, that innovation arises or even emerges from a supposed melting pot of ideas, feelings, intuitions, and thus from a fundamentally chaotic and disorganized setup. In reality, the motivated search for innovation inevitably generates "products" that are usable across the board and thus standardizable. This is the real measure of progress.

* I have borrowed this concept from Isaiah Berlin who defines "negative liberty" as the absence of coercion or interference with agents' possible private actions, by an exterior social body

** Impacts of Containership Size, Service Routes, and Demand on Texas Gulf Ports (bts.gov)