Creating and capturing value in a regional innovation ecosystem: a study of how manufacturing SMEs develop collaborative solutions

Abstract

In this paper, we investigate how a set of small and medium sized enterprises (SMEs) can engage in business model development within a regional innovation ecosystem. We present a case study based on an action research project on how a set of Danish manufacturing SMEs contributed to the development of their local ecosystem in collaboration with a number of external partners. We specifically examine how these SMEs interact with both competitors and complementors in an innovative automation project. The findings include key drivers and challenges that these companies faced while creating and capturing value both for them and the ecosystem at large. We find that the value creation process is enabled by common goals and financial support, while companies need to balance their core activities with their commitment to the joint initiative. Moreover, ecosystem development is centrally dependent on the value-capture process, which also takes place at the inter-organisational level. Such open innovation process implies a purposive management of knowledge flows at the level of the innovation ecosystem that fits a multi-layered structure of the business model. Through our findings, we link the notions of business model and ecosystems to contribute to the innovation management literature, and to provide practical guidance for future actions within business model and ecosystem development.