Ecosystems and Innovation

Question 1

Define Ecosystems

Answer 1

“arrangement of mutual dependencies in a population by which the whole operates as a unit and thereby maintains a viable environmental relationship”
(Hawley 1986; p. 26)

“an economic community supported by a foundation of interacting organizations and individuals….The member organizations also include suppliers, lead producers, competitors, and other stakeholders. Over time, they co-evolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies”
(Moore 2006, p.26)

Question 2

Ecosystems

! Jacobides et al (2018):

Answer 2

• Business ecosystems - firm/market and interdependencies
• Innovation ecosystems - specific innovation
• Platform ecosystems - platform technology, sponsor and complementors

Question 3

Ecosystems
! Jacobides et al (2018):

Defining features:

Answer 3

• Complementarities (A and B are different products, assets, or activities) - modularity:

§ !Unique - ‘A doesn’t ‘function’ without B’

§ ! Supermodular - ‘more of A makes B more valuable’

• Interdependent interactions - with defined roles and rules for coordination (alignment)

Question 4

Ecosystems
! Jacobides et al (2018):
! Example: OS platform/app ecosystem:

Answer 4

“the app and the platform have a unique complementarity in the sense that the app does not function without the OS (unique complementarity, unidirectional, as the OS operates without most apps); and supermodular complementarity, as the presence of apps increases the value of the OS, and (possibly) the breadth of the OS installation increases the value of the app”

Question 5

• Ecosystem-as-affiliation:

Adner (2017):

Answer 5

“breakdown of traditional industry boundaries, the rise of interdependence, and the potential for symbiotic relationships in productive ecosystems”

Question 6

Ecosystem-as-structure:

Adner (2017):

Answer 6

“the alignment structure of the multilateral set of partners that need to interact in order for a focal value proposition to materialize”

Question 7

Value Creation in Innovation Ecosystems

! Adner and Kapoor (2010) ‘highlights’:

Answer 7

• Competitive advantage -> value creation
• Value creation depends upon ‘innovation’
• Innovation processes both internal and external
• Innovation challenges (‘bottlenecks’):
  ! Magnitude
  ! Location - Component vs. Complement
• Structure of technological interdependence
• Vertical integration as dynamic solution:
  ! Tech challenges dissipate with maturity (technology life cycle)
  ! Contractual challenges persist
  ! Solution: ‘Make’ to optimise strategic outcomes!