The rules of the game: How to survive and thrive in Business, Innovation, and Knowledge Ecosystems

by Katri Valkokari

“How dreadful… to be caught up in a game and have no idea of the rules.” –Caroline Stevermer In Sorcery & Cecelia or The Enchanted Chocolate Pot

The purpose of this blog post is to describe the rules of the game (i.e., the logic of action) in the three different ecosystem types: business, innovation, and knowledge ecosystems (see Figure below), while these three ecosystem types are interconnected from the viewpoint of the ecosystem actor. For practitioners, the aim is to shed more light on how the different types of ecosystems differ and demonstrates that different models are needed in order to operate in different ecosystems.

ecosystems

In business ecosystems as well as service or industrial ecosystems, the economic outcomes and business relationships between actors are highlighted. The approaches of innovation (eco)systems and regional clusters focus on mechanism and policies fostering the creation of innovative startups around so-called regional hubs or clusters. Finally, knowledge ecosystems have their main interest and outcome in creation of new knowledge through joint research work, collaboration, or the development of knowledge base. The table below clarifies how the ecosystem types differ in terms of their outcomes, interactions, logic of action, and actor roles.

Table: Characteristics of ecosystem types

Business ecosystems Innovation ecosystems Knowledge ecosystems
Baseline of ecosystem Resource exploitation for customer value Co-creation of innovation Knowledge exploration
Relationships and connectivity Global business relationships both competitive and co-operative Geographically clustered actors, different levels of collaboration and openness Decentralized and disturbed knowledge nodes, synergies through knowledge exchange
Actors and roles Suppliers, customers, and focal companies as a core, other actors more loosely involved Innovation policymakers, local intermediators, innovation brokers, and funding organizations Research institutes, innovators, and technology entrepreneurs serve as knowledge nodes
Logic of action A main actor that operates as a platform sharing resources, assets, and benefits or aggregates other actors together in the networked business operations Geographically proximate actors interacting around hubs facilitated by intermediating actors A large number of actors that are grouped around knowledge exchange or a central non-proprietary resource for the benefit of all actors

A primary motivation for utilising ecosystem concepts in management studies has been the desire to exploit self-organizing properties of natural ecosystems. Although formal authority is invisible in man-made ecosystems, they are not entirely self-organized: they are organizational designs that are held together on the condition that their members are in formal or informal agreement about shared purpose (baseline) and operation modes (logic of action). Previously, research has typically focused on only one of the ecosystems at a time, when in the real-world systems the interest of actors (i.e., organisations), who are the ecosystem inhabitants, come bundled together with multiple ecosystem parts. In an ecosystem, each actor has their own role to play and, in this way, they view the partially overlapping ecosystems from their own unique perspective. Thus, relationships and interactions between ecosystems types need to be analyzed at several levels in order to understand how connections flow between different ecosystems in the real business world.

All these ecosystems are dynamic, changing, and also changeable through ecosystem orchestration. Different organisms (i.e., species in natural ecosystems or actors with complementary roles in man-made ecosystems) are necessary to keep the ecosystem balanced, and removing one can cause a chain reaction felt throughout the entire ecosystem. Biological ecosystems are characterized by one or more equilibrium states, where a relatively stable set of conditions exist and maintain a population or nutrient exchange at particular levels. It is, however, important to note that the equilibrium of biological ecosystems is seldom optimal from the viewpoint of all species in the ecosystem. Thus, an ecosystem always induces both competition and cooperation, which leads to the selection and adaption of species. And, despite hitherto mainly positive approaches to man-made ecosystems, which have typically perceived ecosystems as positive and collaborative systems, that is also true within business, knowledge, and innovation ecosystems. In order to survive and thrive in an ecosystem, the essential point is to understand that different forms of interaction are required in different ecosystems.

Reference:

Valkokari, K. Business, Innovation, and Knowledge Ecosystems: How They Differ and How to Survive and Thrive within Them. Technology Innovation Management Review; 5(8) pp.17-24. http://timreview.ca/article/919

Keywords:

business ecosystem, innovation ecosystem, knowledge ecosystem, ecosystems, platforms, communities

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