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Innovation Ecosystems: A New Way of Seeing (Part 1)

As Victor Hwang wrote in a Forbes article last April (2014), “…in actuality there aren’t many new business ideas. Most of the time we just slap new labels on old things.”

brainstorm

So when we hear or read about an actual new idea, it’s time for us to sit up, take notice and think about what makes it a new idea and the implications and applications of the idea. The new idea is the term from the natural world “ecosystem”, as applied to the term “business ecosystem, and more importantly for our consideration, the “Innovation Ecosystem”.

Hwang notes that the term seemingly “spikes out of nowhere” when looked at using Google’s NGRAM viewer and phrase search trends around 2007. Interestingly, the phrase “innovation ecosystem” began trending in Google searches in late 2010 and continues today.

ecosystem

When we considered the concept, read more about it, and talked about with our partners and clients, the application of the natural world concept of an ecosystem applied to innovation has some very real questions and implications for organizations in

  • How they approach innovation
  • The design of their innovation programs
  • How they manage their innovation process and
  • Where their innovation ideas come from

Seeing and thinking about innovation in the context of an innovation ecosystem pushes us past the ideas of “clusters”, “networks”, “value chains” and even “organizations” as these are all man made constructs in their basic form. Networks, clusters and organizations might be complicated but they aren’t especially complex(1). It’s usually pretty clear about how they interact, where and how the primary avenues of information and value flow are defined, and how activities in one part will affect other parts.

office workers

An ecosystem however is a nonlinear complex adaptive system, and is therefore not the sum of its parts. It constantly adapts to changes in the environment – often in unexpected ways – since in complex systems the same actions within the system do not always produce the same results. Within the system there are dynamic networks of interconnections, and creation, destruction, survival and evolution. The ecosystem can only be considered as a whole and not piecemeal since every part of the system depends on and has a functional effect on the others. The system is relatively stable, and change within the system is regulated to maintain equilibrium. An ecosystem is a complex set of relationships among the living resources and the physical environment.

social-network

An individual, group or organization is the centre within the construct of a social network or cluster. When we consider a Value Network for example, or a social network, each member can see and act as if it is the central organizing node. The contrast of an ecosystem’s characteristics with those of clusters and networks is pretty clear.

Expanding the analogy of the ecosystem to the concept of the innovation ecosystem crates a new way of both seeing and thinking of innovation. In the Innovation Ecosystem:

  • Innovation is the organizing center of the ecosystem, the primary goal and driving force, and is the desired outcome
  • The innovation ecosystem can exist within and around any number of environments, including an industry sector or subsector, an innovation or technology area, an area of research & development, a state, province or country – any of which can serve as an ecosystem environment.
  • There is a convergence of multiple components, acting as any ecosystem would, experiencing:
    • Creation,
    • Destruction,
    • Survival and
    • Evolution, where
    • Membership is fluid and connections are liquid, and are dynamically changing
  • Economic, material and human resources, value added, knowledge and money flow as they are pulled and pushed within and throughout the ecosystem as needed or demanded
  • There are Stewards that maintain stability and regulate change
  • Commercial economies and knowledge economies exist concurrently

Consider this Venn diagram – purposely simplistic – as a way of envisioning an innovation ecosystem, and think of how it compares when you envision a network:

suppliers

Regardless of where you are in the innovation ecosystem, you and all other players in the system could be a customer, a supplier, or resource (or any combination of the three) at any point in time.  All components touch one another, innovation occurs at the boundaries of those touchpoints in a continuous cycle, membership is fluid, and connections are liquid.

One thought about networks within an innovation ecosystem – Man made networks can and do exist within an innovation ecosystem.  However they are not the “social” networks we talked about above, the ones you usually think of when you hear the word “networks”.

Rather, they are purpose designed networks built around cores of desired outcomes within the ecosystem, and not individuals.  Examples include Collaborative Innovation Networks (CoINs) that are organized around specific and focused innovation areas and needs, and Collaborative Knowledge Networks (CKNs) designed to share ideas and knowledge about ideas and  innovation(s) across the system. We would also expect see networks designed by the ecosystem Stewards geared to maintaining stability and regulation of change within the system.

Visit us next week for Part 2 when we explore just what this all means for your business and industry.

If you’re already chomping at the bit and looking to unleash the innovation within your organization, contact us today to learn about our Innovating for Productivity assessments and workshops.

(1) Charting the Innovation Ecosystem, Mary Anne Gobble, Industrial Research Institute, RTM Journal, Vol 57, July-August 2014.

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