Coordination, Complementarity, and Innovativeness in Innovation Ecosystems

Abstract

Interdependence and complementarities are two fundamental premises for the existence of innovation ecosystems. Using a computational experiment, we compare the performance of four coordination structures (centralized governance, sequential structure, pooled structure, and coordination by customer choice) in innovation ecosystems under different types of complementarities. Our results show that ecosystems coordinated by downstream customers outperform the ones coordinated by centralized governance and the ones coordinated by either sequential or pooled structures. Moreover, the presence of complementarity between the focal firm’s and the complementor’s offerings in the ecosystem significantly improve the innovativeness of the complementor, and the pooled structure benefits more in comparison to the sequential structure. These results are shown to be robust to turbulence and the degree of technological interdependencies in the ecosystem. The study extends our knowledge on ecosystem coordination from the structural perspective and highlights the indispensable role played by complementors in innovation ecosystems.