Scale(s) and scope: Technology evolution and firm dynamics in the music synthesizer industry

Chandler described why the modern diversified firm emerged and persists, and he detailed accompanying changes in industry structure and composition. In this paper, we build on Chandler’s insights by examining a partial exception to the pattern that he documented. Through an analysis of the music synthesizer industry, we show how this industry initially followed a pattern of consolidation around large integrated firms, especially as digital technologies emerged. But then, crucially, a segment of the industry departed from this pattern and now supports more small and specialized manufacturers than ever—most of which offer seemingly-outdated analog-based models. We attribute this pattern to a combination of changes in complementary and enabling technologies, and accompanying shifts in which instruments could best meet professional musicians’ preferences. Our observations serve to both reinforce and contextualize Chandler’s theory, and to connect his insights on firm evolution to other perspectives on technology evolution and use.