Fostering innovation through learning from digital business ecosystem: A dynamic capability perspective

Abstract

Most research that utilizes ecosystems as subjects adopts an orchestrator perspective and focuses on large corporations. Meanwhile, studies that analyze the role of Small and Medium-sized Enterprises (SMEs) have been relatively scarce. This study aims to analyze how SMEs, as participants in the ecosystem, engage in learning to develop capabilities for fostering innovation. We conducted in-depth case studies using two SMEs participating in the digital business ecosystem. Employing a dynamic capabilities perspective, we build a framework explaining the capabilities required for pursuing innovation in the ecosystem: vigilant detection of change alerts, leveraging external resources, and evolutionary adaptation to market. Apart from that, we do not only identify these capabilities but also propose the path of learning for innovation: iterative learning with the digital business ecosystem, acquisition of knowledge and resources, capabilities development, and pursuing innovation. For managers, this study demonstrates the importance of a digital ecosystem for learning. Insights obtained from the ecosystem can be used to predict customer preferences and introduce product innovation. Although engaging in a digital business ecosystem offers benefits, excessive reliance on external partners may lead to unintended consequences. To what extent firms should rely on external partners from the digital ecosystem can be investigated in future research.