Connecting different dimensions of ecosystems

Table 6.1 gives an overview of relations between network collaborations.

Each ecosystem type’s objective contributes in its own way to the integrated value chain and interactive network to enable innovation processes (Xu, Wu, Minshall, & Zhou, 2018). Scholars have integrated separate ecosystem types into overarching frameworks to explain their complementary nature. Valkokari (2015) connects innovation, business, and knowledge ecosystems, and explains that the innovation ecosystem integrates the explorative character of knowledge ecosystems and the exploitative character of business ecosystems. Scholars such as Xu et al. (2018) agree that an innovation ecosystem is an integration of knowledge and business ecosystems, though their explanation is different. Valkokari (2015) describes ecosystems as complementary, whereas Xu et al. (2018) explain the relation between ecosystem types as several relating layers. Gomes, Salerno, Phaal, and Probert (2018) add that the business ecosystem is about value capture and integration, whereas the innovation ecosystem is about value co-creation and distributed challenges across partners. The combination of ecosystem types enables niche innovation to flourish and being exploited (Valkokari, 2015). Scholars have not explained the relation of entrepreneurial ecosystems and the other ecosystem types. This is probably the case as entrepreneurial ecosystems tend to have a national or regional scope, and therefore move beyond the geographical scope of other ecosystem types. Within entrepreneurial ecosystems, governments provide the required institutional environments for entrepreneurs to develop innovations (Clarysse et al., 2014). We assume that the entrepreneurial ecosystem provides the overall economic and institutional environments that the other three ecosystem types need to stimulate innovation processes.

Table 6.1 Relation between ecosystem types and network collaborations

Ecosystem type/network collaboration

Alliance

Cluster

NIS

Platform

Business

~

~

~

Value capture and creation, structure

Innovation

Collaborative

governance

Multi-partner

innovation

Governmental

support

Entrepreneurial

Shared focus and knowledge base

Governmental

support

Knowledge

Mechanisms for value creation and capture from geographical location.

Focus points for investigating combined roles of ecosystem types in a sustainability transition

Previously, unique characteristics of different ecosystem types have been explained. The ecosystem types stood in order of appearance in the literature. We now construct five propositions that show the potential roles that each ecosystem type could take to increase the likelihood of a sustainability transition. We move beyond the technological focus that transition literature tends to take, into the complexity of social and technical elements that are required for niche-innovations to grow into or change existing dominant regimes. Ecosystem literature has not yet addressed the differences between ecosystem types regarding their contribution to sustainability transitions. By combining both literature streams, we create an understanding of the complexity of niche-innovation within different ecosystem types to increase the likelihood of sustainability transitions.

Sustainability transitions require radical innovations that are able to disrupt the existing regime. To trigger sustainability transitions, experimentation with niche-innovation has to be stimulated. Experimentation involves both technical and social aspects (Geels, 2004; Geels & Schot, 2007). The technical experimentation of niche innovation requires the development of new technical knowledge, to understand how a specific technology works, and how it can be applied within certain contexts. Niche-innovations need a shared knowledge base, and geographical co-location to enable technical experimentation. The knowledge ecosystem aims at knowledge exploration and joint value networks (Bathelt & Cohendet, 2014). Despite their local focus, knowledge ecosystems also integrate global resources to complement local knowledge (Van der Borgh et ah, 2012). Within sustainability transitions, the knowledge ecosystem can enhance the presence of a shared knowledge base and can work on enhanced learning processes. Therefore, we propose the following proposition:

To the extent that knowledge ecosystems allow for a shared knowledge base, there is an increased speed and quantity of technical learning within niche experimentation.

Sustainability transitions move beyond the technical dimension, and need social experimentation. The contexts often develop in parallel with technological innovations. To understand the needs and the interactions with customers/users, organizations should co-create with customers. Customer value creation is more important than ever to increase the likelihood that users are willing to switch to new technologies (Geels, 2004; Geels & Schot, 2007; Valkokari, 2015). Business ecosystems offer the opportunity to understand how users would like to use technologies (Clarysse et al., 2014; Valkokari, 2015). Business ecosystems offer network effects; the more people use the ecosystem, the more attractive the sub-platforms become for potential ecosystem partners to develop additional components. Business ecosystems consist of interacting platforms, that provide specific sub-parts of the technological innovation (Makinen et al., 2014). The more consumers use a certain sub-part, the more stakeholders will join the ecosystem to provide additional technologies (Gawer & Cusumano, 2014). The business ecosystem offers a self-reinforcing effect. Therefore we propose the following:

To the extent that business ecosystems allow for network externalities/ customer inclusion, there is an increased speed and quantity of social learning within niche experimentation.

Insights from social and technical experimentation need to be aligned and developed synchronously to create social and technical niche alignment. Within innovation ecosystems, a variety of stakeholders such as users and governments participate to enable co-learning between technology companies and other stakeholders. Co-learning offers insights into specific stakeholder needs and wishes for niche-innovations. The institutional context that is required for the niche-innovation can be developed, based on insights from co-learning. At the same time, technology companies combine their complementary technologies to build new technological innovations. Combining different modules is a learning process, as each company has challenges that need to be resolved before an innovation becomes successful (Adner & Kapoor, 2010). Innovation ecosystems offer room for continued experimentation by providing a system in which stakeholders can continue their understanding regarding societal and technical elements. The innovation ecosystem provides room for continued growth trajectories, by strengthening the competitive position of a niche-innovation and its potential to grow into a strong technology that can compete with existing regimes. We propose the following:

To the extent that innovation ecosystems allow for a continued growth trajectory of experimentations, there is an increased speed and quantity of niches experiments developing into a regime.

Governments need to consider how to manage large-scale transitions, by developing pathways for niche-innovations to disrupt existing regimes. Diverse stakeholders have different objectives to collaborate and therefore sustainability is a social issue that needs clear guidance. In line with ecosystem literature, TM offers a multi-stakeholder approach for innovation trajectories. Governments need to consider strategic, tactical, and operational activities to stimulate transitions (Kemp et al., 2007; Rotmans et al., 2000). Strategic activities focus on the development of a clear, long-term vision that is directed at stimulating transitions at the landscape and system level. Tactical activities focus on the interaction between the landscape and the regime. Tactical activities are important to interpret the visions of the strategic activities on the regime. Tactical activities are used to understand the barriers that niche-innovations can encounter. Actors that could influence a transition are invited to implement the vision in their own business models. Operational activities involve experimentation and learning processes at the level of niche-innovations. As the vision and potential barriers are known, operational activities enable the filtering up and transformation of lower level structures into new or modified regimes (Kemp et al., 2007).

Entrepreneurial ecosystems offer the institutional climate that is required for change. National governments can provide the institutional frameworks that communicate a certain entrepreneurial vision. Instruments, such as subsidies, new laws and regulations, legitimization of certain technologies, etc. can be developed to put pressure on the landscape. As a result, niche- innovations can be nurtured and stimulated to influence the regime or the development direction of the dominant regime. Entrepreneurial ecosystems offer the governmental support that is required for niches to grow into new regimes or to modify them. They influence the exogenous context to put pressure on existing regimes. We propose the following proposition:

To the extent that entrepreneurial ecosystems allow for entrepreneurial institutional climates, there is a higher frequency of new enterprises being created to compete with the regime.

Current incumbent actors (e.g. fossil fuel companies) prefer to keep the existing system in place. Therefore the dominant regime prefers incremental technologies on conventional technologies. Not all large incumbents react in a similar way when confronted with landscape pressures and niche developments. Some actors remain inert. Others engage with innovation actors with the intent to guide and delay radical transformations. Some incumbents engage in the transition by allowing an internal transformation. This way, some transitions may be enabled not only by growing niche developments, but also by transforming incumbent actors (Mossel et al., 2018; Smink et al., 2015). The interaction between a large incumbent actor and ecosystems is most outspoken within business ecosystems. Contrary to other ecosystem types, the business ecosystem is often centered around a focal private actor, being a large incumbent company. The business ecosystem can therefore play a crucial role in the internal transformation of the incumbent actor, triggering a gradual regime shift leading to a sector transition. This is not necessarily the case. The large incumbent focal actor may enter in the business ecosystem to “keep innovation on a leash” (Smink et al., 2015) or to develop new markets while keeping its traditional markets and regime activities intact. The difference between the two behaviors, between “stalling innovation speed” and “actively driving the innovation” in the business ecosystem, is determined by the type of activity that the incumbent is willing to engage in. An incumbent actor can participate in innovative business partnerships either to develop new peripheral markets and growing niches, or to transform its own core business. Only the last type of involvement of the incumbent actor indicates an alignment with the transition. As such the long-term strategy of focal actors within business ecosystems is highly indicative of the trajectory that is followed leading to sustainability transition. Therefore we propose the following:

To the extent that focal actors in business ecosystems are engaging their core business in ecosystem activities, there is a faster occurrence of a regime shift leading to a sustainability transition.

It is important to understand the interaction between ecosystems in order to facilitate the transition towards more sustainable systems. Each ecosystem type contributes in its own unique way to specific elements of socio- technical transition processes. By combining different ecosystem types, niche-innovations can compete with existing regimes (MLS) and they will be more resilient against external shocks. Both technological and social experimentations are important to understand the specific requirements of new niche-innovations to grow into new dominant regimes or to modify them. Future research should focus on investigating the relationships between and the most optimal configuration of the different ecosystem types to understand how their synergy can contribute to sustainability transitions. In addition, particular (geographical or sectoral) contexts may reflect specific attributes for sustainability transitions. Therefore future research should focus on investigating the effectiveness of different ecosystem types in effectively contributing to sustainability transitions within different institutional contexts and industries.

Discussion

This chapter focuses on the relation between different OI ecosystems and their potential contribution to increase the likelihood of the occurrence of a sustainability transition. The ecosystem concept has yet to address how different ecosystem types can potentially support sustainability transitions. Transition literature on the other hand has not yet been able to explain the systemic nature of transitions. To understand the different roles that ecosystem types could take, the ecosystem, socio-technical transition, and network collaboration literatures have been reviewed to develop five propositions that explain how ecosystem types could increase the likelihood of the occurrence of a sustainability transitions.

Each ecosystem could potentially influence a specific element of the transition. The knowledge ecosystem offers the development of a shared knowledge base to enhance the required technological learning within niche experimentation. The business ecosystem focuses on the social learning required for niche experimentation, by co-construction with customers and users. The innovation ecosystem connects exploration and exploitation of knowledge and business ecosystems, and offers a continued growth trajectory for experimentation. To offer niche-innovations the protected space they need for the experimentations, the entrepreneurial ecosystem can create a stimulating entrepreneurial institutional climate. This climate can make the niche more attractive for enterprises, as it becomes easier for them to compete with the regime. In some cases, the incumbent firm(s) are responsible for the change of the dominant regime. Incumbents can take part in the transition, as they want to lower the potential dangers of the ongoing niche-innovations or to steer developments in their desired directions, or in some cases even lead their own transformation. Only in the last case, they are contributing to the sustainability transition by using their power and legitimacy to influence the future directions of the dominant regime. The five identified propositions could guide future research, to enhance our understanding of the potential influence that ecosystem types could have. Grasping the interactions of ecosystem types can contribute to our understanding of how they can add to sustainability transitions.

The combination of ecosystem types can result in a local focus on nurturing niches, with national support to provide room for growth and the stimulation of entrepreneurship. The differences in ecosystems’ contributions to specific elements of sustainability transitions imply that firms and policy makers should combine ecosystem types to enable change. Policy makers and firms can create portfolios of different OI ecosystem types to enable social and technical niche experimentation. Each ecosystem type can contribute in its own, unique way to influence specific elements of the transition. When we understand the most optimal configuration of ecosystem types, policy makers and firms are better able to increase the likelihood of sustainable transitions. When each ecosystem has an optimal fit, sustainability transitions can be accelerated.

Acknowledgments

We are much indebted to the reviewers, in particular Dr. W. Ooms, for guidance and reflections on earlier versions of this text. This article reflects the position of the authors alone, and is not indicative of the position of the Flemish Government. All remaining errors are the sole responsibility of the authors.

 
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