Abstract & Introduction

STARTING UP AN ECOSYSTEM FOR INNOVATION

Based on eight in-depth case studies we have developed a set of six propositions about how an ecosystem leader can start a new ecosystem for innovation … We also provide three levers that can be used to promote growth of an ecosystem…

ABSTRACT

The value of deploying and managing ecosystems to innovate, in situations where the innovator is confronted with a high level of uncertainty and a lack of resources, has been well documented. Most of these publications describe the relevance of such an ecosystem, and to some extent how they are managed. But there is less guidance on how to start up an ecosystem from scratch.

Based on eight in-depth case studies we have developed a set of six propositions about how an ecosystem leader can start a new ecosystem for innovation: ensure that the ecosystem leader is credible; bring foundation partners onboard; provide an initial roadmap; clarify what the value is to partners of joining; reduce the entry barriers and the transaction costs; and select partners that can bring a sub-ecosystem along.

We also provide three levers that can be used to promote growth of an ecosystem: have a clear architecture for the ecosystem; avoid the creeping risk of encroaching on partners’ activities; and create incentives for partners to co-invest.

INTRODUCTION

The value of deploying and managing ecosystems to innovate, in situations where the innovator is confronted with a high level of uncertainty and a lack of resources, has been well documented (Moore,1993; Iansiti and Levin, 2004; Williamson and De Meyer, 2012; Adner, 2017; Jacobides et al, 2018). As ecosystems have proven to be of growing interest to practitioners, consultants have also developed and published practical insights on the implementation of ecosystems.

Gartner Inc argues that the use of technology to stimulate business innovation has gone through three phases. The first one had a focus on the value chain and on ‘doing better what we do already’. The second phase was platform-led and had a focus on creating new services and developing platforms to deliver them. And the third phase focused on playing a part in the ecosystem, exerting influence but not control (Blosch and Lowendahl, 2018). The Boston Consulting Group has also produced insightful reports on the management of ecosystems (Jacobides et al, 2019, Pindun et al, 2020). Many of these publications focus on what an ecosystem is and how it differs from platform companies and describe success factors for ecosystem. In our interaction with practitioners we observed that many of them have accepted the value of ecosystems to innovate in conditions of high uncertainty, but they then go on to ask how to start up such an ecosystem. There is indeed far less written about how to do so.

Based on eight in-depth case studies we have developed a simple model of how to start up and grow an ecosystem. In our recent book (De Meyer and Williamson, 2020) we also address other aspects of managing the ecosystem, such as how to improve productivity in the ecosystem, how to monetise the contribution to the ecosystem or how to provide leadership.

This paper will focus on the start-up and growth of the ecosystem. It is organised in three parts: a short overview of the relevant literature, a description of the methodology and the case studies, and the discussion of six recommendations for starting up an ecosystem, and three tools that can be used to enhance rapid growth of an ecosystem.

Next section – Literature Review

Previous section – Outline

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Starting up an Ecosystem for Innovation – Abstract and Introduction

by EcosystemEdge
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