The term ‘ecosystem’ — like many others in the field of business and innovation — is on the verge of becoming a buzzword that is used for everything. It therefore makes sense to distinguish the commonly used related terms and consider their subtleties. Ecosystems emerge on different levels. There can be national innovation ecosystems; sector and regional innovation ecosystems, focal company innovation ecosystems; product-service or technology innovation ecosystems; and many more . These are the most commonly differentiated levels:
A community of hierarchically independent yet interdependent heterogeneous participants who collectively generate an ecosystem output.
A collection of players and processes that co-evolve through their symbiotic interactions (both cooperative and competitive): “An innovation ecosystem consists of a group of interdependent players and processes who together, through their interactions, make innovation happen. This innovation changes the products and services that are produced by the ecosystem. Over time the innovation ecosystem as a whole evolves, as do its players and processes […] .” We often also just say ‘innovation system’ if we mean this level, as we assume that these days all innovation should be driven by open innovation and co-opetition.
Business Examples: Pearson, Intuit, Bosch, Apple and their customers, partners, and suppliers;
The term innovation ecosystem itself is also used at different levels: e.g. at an organizational level, industry level, or even a national level, forming ‘national systems of innovation’, which Christopher Freeman (who coined the term) described as “network[s] of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies.” As such they feed entrepreneurial ecosystems too – just think about the government-driven history of Silicon Valley.
National Level Examples: Japan’s national innovation system (1970s), UK’s Department for Business, Innovation and Skills (2011).
“[Companies co-evolving] capabilities around a new innovation: they work cooperatively and competitively to support new products, satisfy customer needs, and eventually incorporate the next round of innovations .”
Examples: ‘marketplaces’+ like Amazon or Alibaba; IT platform systems like Apple, SAP, or Android; hospitality platforms like AirBnB or Open Table; ride hailing like Uber or Lyft; freelance labor like Fiverr; financial transaction platforms like PayPal or Klarna; etc.
The (often unrelated) products and services a user combines when trying to get a job done in contexts where no institutionalized solution yet exists. Researching such user practices helps organizations to design a product-service ecosystem by enabling them to discover possible partners and new business opportunities.
Examples: Hacking a router to make it work with an Arduino plant watering pump and a portable solar panel
A regional community of hierarchically independent yet interdependent heterogeneous participants who facilitate the start-up and scale-up of new entrepreneurial ventures that compete with innovative business models.
Examples: Silicon Valley, Milan Fashion (Tech) Cluster, Tel Aviv, Shenzhen areas
A regional community of hierarchically independent yet interdependent heterogeneous participants who advance the transferral of advances in research knowledge into products and services.