The European Training Network for InduStry Digital Transformation across Innovation Ecosystems
As I wrote in the last post, in June I participated in the first two live conferences of my PhD.
At ISPIM, I presented a preliminary study on Technology Social Ventures (TSVs), namely companies with a social mission and a tech-based strategy, taking an ecosystem perspective. Instead, at EURAM, I shared the findings of a work focusing on the entrepreneurial level, to understand how TSVs manage the social and technological component of their strategy.
Based on that, you may have realized that my main research interests lie at the intersection between technological innovation, societal challenges and ecosystems. Today, I would like to talk about this last topic.
Indeed, taking inspiration from the conversations I had at ISPIM conference, I realized:
Therefore, in this blog I would like try to address this mismatch providing a brief overview on what characterizes an ecosystem, according to the literature.
But before that, why are we even talking about ecosystems in the management literature? To answer this question, we should go back to the early 90s, when J.F. Moore adopted a Darwinian perspective to describe market competition’s dynamics. He argued that:
“Successful businesses are those that evolve rapidly and effectively.”
That is, those who are best able to adapt to the environment. Yet innovative businesses can’t evolve in a vacuum.
In fact, drawing from other recent anthropological and biological discoveries, he suggests that a company can be viewed not as a member of a single industry but as part of a business ecosystem that crosses a variety of industries (Moore, 1993).
However, the diffusion of this concept remained latent for almost a decade, until Iansiti and Levien (2004) recalled it in their HBR Article titled “Strategy as Ecology”. Finally, it is a few years later, when Adner (2006) showed how most traditional companies fail to commercialize breakthrough innovations in isolation, that the ecosystem concept definitely took hold.
Most likely, one of the enabling factors of the increasing adoption of this term in the late 2000s is the advent of digital technologies. Accordingly, collaborations between organizations became easier and more frequent, making the proper management of interdependencies crucial, as predicted by Moore three decades ago.
That said, what is an ecosystem?
An ecosystem can be defined as “an interdependent network of self-interested actors jointly creating value” (Bogers et al., 2019). In other words, we can see an ecosystem as a set of organizations collaborating to offer a specific product or service, without having formal bonds or hierarchical relations.
However, ecosystems can take several forms, which makes our blog even more interesting (or complex, depending on the perspective 🙂 ). Here, I will briefly present four of them (Scaringella & Radziwon, 2018), starting from the most embedded in the geography literature to the most abstract one:
After having seen the definition, now I will report some of the main elements that help to identify an ecosystem from other concepts.
Among the most relevant factors, we can mention:
Ecosystems must be identified just with the first two typologies (Jacobides et al., 2018).
While complementarities represent an economic relationship in terms of the potential for value creation, interdependencies represent a structural relationship between offers, in terms of how they are connected for the value to be created (Kapoor, 2018).
In a nutshell, this means that they are even more complex to manage, because they are not directly related to an economic exchange.
To be clearer, I will report an example related to Tesla, drawn from Kapoor (2018):
Therefore, the core concern for research grounded in an ecosystem perspective is to explain firms’ strategies and outcomes through the lens of such complementarities and interdependencies.
It follows that the co-evolution of actor’s strategies represents another key element, given the kind of relationships that exist between them (Ritala & Almpanopoulou, 2017), as well as the existance of a system-level outcome (Autio & Thomas, 2021).
Finally, we should highlight that these relations between different parties are usually multi-lateral and not hierarchically or formally controlled, compared to the dyadic relations that can be found in other structures, such as supply chains, markets and networks (Adner, 2017; Shipilov and & Gawer, 2020).
As you can see, talking about ecosystem means looking beyond the strict boundaries of an organization, something that now is more needed than never, given the complex societal challenges we are facing. And this is what I like the most about this concept, as it is an example of how and why managers should adopt wider lenses to define their strategies (Adner, 2012), aligning them with all the relevant stakeholders.
I hope that this post helped to clarify (even though in a non-exhaustive way) the ongoing conversation about ecosystems.
Now, it’s time for the second episode of my column!
The best lesson on writing structure I've ever read: pic.twitter.com/Vx9JwMNuHv
— Nathan Baugh (@nathanbaugh27) June 22, 2022
Adner, R. (2006). Match your innovation strategy to your innovation ecosystem. Harvard business review, 84(4), 98.
Adner, R. (2012). The wide lens: A new strategy for innovation (Vol. 34, No. 9). Penguin Uk.
Adner, R. (2017). Ecosystem as structure: An actionable construct for strategy. Journal of management, 43(1), 39-58.
Autio, E., & Thomas, L. D. (2021). Researching ecosystems in innovation contexts. Innovation & Management Review.
Bogers, M., Sims, J., & West, J. (2019). What is an ecosystem? Incorporating 25 years of ecosystem research. Proceedings. https://doi.org/10.5465/AMBPP.2019.11080abstract
Iansiti, M., & Levien, R. (2004). The keystone advantage: what the new dynamics of business ecosystems mean for strategy, innovation, and sustainability. Harvard Business Press.
Jacobides, M. G., Cennamo, C., & Gawer, A. (2018). Towards a theory of ecosystems. Strategic management journal, 39(8), 2255-2276.
Järvi, K., Almpanopoulou, A., & Ritala, P. (2018). Organization of knowledge ecosystems: Prefigurative and partial forms. Research Policy, 47(8), 1523-1537.
Kapoor, R. (2018). Ecosystems: broadening the locus of value creation. Journal of Organization Design, 7(1), 1-16.
Moore, J. F. (1993). Predators and prey: a new ecology of competition. Harvard business review, 71(3), 75-86.
Ritala, P., & Almpanopoulou, A. (2017). In defense of ‘eco’in innovation ecosystem. Technovation, 60, 39-42.
Scaringella, L., & Radziwon, A. (2018). Innovation, entrepreneurial, knowledge, and business ecosystems: Old wine in new bottles?. Technological Forecasting and Social Change, 136, 59-87.
Shipilov, A., & Gawer, A. (2020). Integrating research on interorganizational networks and ecosystems. Academy of Management Annals, 14(1), 92-121.
Stam, F. C., & Spigel, B. (2016). Entrepreneurial ecosystems. USE Discussion paper series, 16(13).
Van der Borgh, M., Cloodt, M., & Romme, A. G. L. (2012). Value creation by knowledge‐based ecosystems: evidence from a field study. R&D Management, 42(2), 150-169.
I need to to thank you for this wonderful read!! I certainly enjoyed every
little bit of it. I have got you saved as a favorite
to look at new things you post…
That’s great, I am glad it was useful!
And a new blog post is coming out 😉
What’s up, I log on to your new stuff regularly.
Your writing style is awesome, keep it up!
Much appreciated, thank you 🙂