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How to solve big problems: bespoke versus platform strategies
[‘Location Decisions of Large Firms: Analyzing the Procurement of Infrastructure Services’]

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  • Atif Ansar
  • Bent Flyvbjerg

Abstract

How should government and business leaders solve big problems? Ought policy responses to occur in bold leaps or multitudinous methodical moves? Here we show that one-off major projects, with a high level of bespoke content, are prone systematically to poorer outcomes than projects built with a repeatable platform strategy. Repeatable projects are cheaper, faster, and scale in volume and variety at much lower risk of failure. We arrive at these conclusions using comparative evidence—NASA vs SpaceX—on cost, speed-to-market and schedule, and scalability outcomes of their respective space missions. Our reference class dataset consists of 203 space missions spanning 1963–2021, of which 181 missions belong to NASA and 22 belong to SpaceX. We find that SpaceX’s platform strategy was 10X cheaper and 2X faster than NASA’s bespoke strategy. Moreover, SpaceX’s platform strategy was less risky, virtually eliminating cost overruns. We further show that achieving platform repeatability is a strategically diligent process involving experimental learning sequences. Sectors of the economy where governments find it difficult to control spending or timeframes or to get benefits quickly enough—e.g. health, education, climate, defence—are ripe for a platform rethink.

Suggested Citation

  • Atif Ansar & Bent Flyvbjerg, 2022. "How to solve big problems: bespoke versus platform strategies [‘Location Decisions of Large Firms: Analyzing the Procurement of Infrastructure Services’]," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(2), pages 338-368.
    • Handle: RePEc:oup:oxford:v:38:y:2022:i:2:p:338-368.
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