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Abstract
The recent surge of interest in “ecosystems” in strategy research and practice has mainly focused on what ecosystems are and how they operate. We complement this literature by considering when and why ecosystems emerge, and what makes them distinct from other governance forms. We argue that modularity enables ecosystem emergence, as it allows a set of distinct yet interdependent organizations to coordinate without full hierarchical fiat. We show how ecosystems address multilateral dependences based on various types of complementarities - super modular or unique, unidirectional or bidirectional, which determine the ecosystem’s value-add. We argue that at the core of ecosystems lie non-generic complementarities, and the creation of sets of roles that face similar rules. We conclude with implications for mainstream strategy and suggestions for future research. Managerial Abstract We consider what makes ecosystems different from other business constellations, including markets, alliances or hierarchically managed supply chains. Ecosystems, we posit, are interacting organizations, enabled by modularity, not hierarchically managed, bound together by the non-redeployability of their collective investment elsewhere. Ecosystems add value as they allow managers to coordinate their multilateral dependence through sets of roles that face similar rules, thus obviating the need to enter into customized contractual agreements with each partner. We explain how different types of complementarities (unique or supermodular, generic or specific, uni- or bi-directional) shape ecosystems, and offer a “theory of ecosystems” that can explain what they are, when they emerge and why alignment occurs. Finally, we outline the critical factors affecting ecosystem emergence, evolution, and success -- or failure.
Highlights
Over the last few years, there has been a surge of interest in the concept of “ecosystems” as a new way to depict the competitive environment
Beyond practice and the popular business press, ecosystems have been eagerly adopted in the field of strategy, with Teece (2014, p. 1) suggesting that “the concept of ecosystem might substitute for the industry for performing analysis.”
We further argue that examining the nature, directionality, and intensity of these complementarities, and what firms do to influence them, shaping ecosystem formation and structure, can help explain the distinct value creation and capture dynamics within and between ecosystems
Summary
Over the last few years, there has been a surge of interest in the concept of “ecosystems” as a new way to depict the competitive environment. Ecosystems are groups of firms that must deal with either unique or supermodular complementarities that are nongeneric, requiring the creation of a specific structure of relationships and alignment to create value.
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