NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

There are a lot of buzzwords out there when it comes to technology, so we try not to get caught up with each new fad. But everywhere we look, we see a concept that promises to be a powerful driver of not only innovation, but also economic progress: technology stacks.

A technology stack is an innovative idea layering several underlying platforms which complement each other to create something new. Ride-hailing services Lyft and Uber are an example: The apps run on smartphones, which run on mobile infrastructure and mapping applications, which in turn use public address records and GPS system.

As a new application is layered on top of it, each technology becomes a platform. Another case in point: Messaging apps started as single-purpose programs for SMS and chat. Now, they can be used for customer service, bill pay, e-commerce, and more.

By kick starting this virtuous cycle of innovation and adoption, technology platforms have proven to be especially useful in reaching an exponentially growing number of people at rapidly falling costs. Moreover, platforms are self-reinforcing, encouraging participation from a larger number of players, and attracting investment capital.