The main and contingent effects of the systems integrator and component supplier roles

Modularity theory has identified two archetypal sector roles for firms: systems integrator and component supplier. We consider the main and contingent effects of a firmpsilas sector role on its prospects. Main effects correspond to industry membership while contingent effects correspond to the industrypsilas position in the architecture of the sector. An industrypsilas position in the architecture of the sector determines its proximity to external events that may impact the performance of the firms in the industry. Our analysis shows that amongst communications equipment firms in Ottawa, Canada, the founding and financing of system integrators is more strongly associated with dramatic changes in sector GDP than the founding and financing of component suppliers. We interpret our findings as evidence that modularity theory provides important insights into the way in which firms self-organize to create the architecture of the economy.