In which direction will economies, institutions and societies evolve? It is inevitable that major changes are on the way. The first glimpse of the new ecology of competition (ecosystems) was written in this HBR article by James F. Moore in 1993.
The value of ecosystems is clearly defined by collaboration with several experts on innovation, production, distribution, sales, service and training. To stay successful, people and organisations have to create alliances shaping business ecosystems. Together they deliver services & products covering a market need better than single competitors or other business ecosystems.
Since 1993 societies and businesses have gone through major changes and crises and currently, we are amidst a technology disruption. Can a 21st century ecosystem offer solutions and value for businesses?
This article explores the ecosystems build for different purposes. There are many definitions from nature and business but not matching our experience and vision what an ecosystem should be. We have extended the BCG ecosystem definition as follows:
“A balanced interaction between all members contributing to the ecosystem solutions and governance resulting in an optimal distribution of wealth, power and freedom of choice”
Ecosystem Webinar – Oslo Innovation Week - 2020
This webinar gives insights and perspectives on the ecosystem emergence with speakers and panellists from various countries.
The ecosystem perspectives
The term ecosystem is used in different organisational settings, often defined by the ecosystem enabler. From our research emerged four organisational shapes all referring to themselves as ecosystems and government initiatives. Future will tell which perspectives matches current and emerging needs most.
A collaboration
Several independent companies bringing their expertise together creating a new service, product or knowledge, resembling the 1993 business ecosystem.
A community
Using a physical location and/or a digital platform to come together share ideas & services, sharing experiences and insights.
Network digitalisation
A corporation bringing an existing network of suppliers together on a digital platform to collaborate exchange knowledge and include related fields of expertise.
Ecosystem including customers
Several companies collaborate using technologies and platforms delivering services to customers who are also part of the ecosystem.
Governmental
The Dutch government initiated Digicampus which aims to establish collaboration between public and private parties solving societal challenges. The United Arab Emirates (UAE) has a country wide digital strategy to create digital government services for its citizens. “Digital Nation” describes the implementation of this strategy and gives examples how digitalisation improves government services delivered to citizens.
Ecosystem principles
Ecosystem principles in order to execute an ecosystem according to the definition:
“A balanced interaction between members, contributing to the ecosystem solutions and governance resulting in an optimal distribution of wealth, power and freedom of choice.”
Flow of value
We can distinguish three flows of value within an ecosystem
Trust
Ecosystem collaboration builds on trust and is therefore an essential value for its success. Trust is built up over time through communication, trial & error and the appreciation of different participants’ interest. Collaboration in practise means the exchange of good, services, ideas, knowledge & access to relations.
Services or products
Participants must deliver value to each other in an ecosystem willing to pay for or exchange it against another service or good. These goods can be physical, digital or the transfer of knowledge/ideas.
A transferable & reliable store of value
The ecosystem must facilitate exchange of services/goods or a uniform accepted form of value, today known as currency.
Governance
Power is defined as decision making within your scope. All members influence the ecosystem functioning, but at different levels and degrees of impact. Because decision makers dependent on the ecosystems well being, their decisions will be thoroughly reviewed. The variety of decisions, implementation and learning curves makes the ecosystem work like an organism. The ecosystem growth is slow but durable and the sum of all decisions defines the ultimate ecosystem resilience.
Responsibility
Ecosystems demand active participation of people making decisions. Decision making is strongly decentralised. A well-functioning ecosystem exposes decision maker first to experience the decisions’ consequences. This requires people to invest in relations, understanding how others will respond to their decisions and why people respond differently caused by the environment they operate within. This TEDx talk explains how to achieve this.
The environment around an ecosystem
The “long term” ecosystem functioning, and expansion depends on several support activities established and maintained. Superimposing Michael Porters Supply Chain Support functions over the ecosystem clarifies this. An ecosystem with people and organisations collaborating does not function without a wider support system consisting of infrastructure, (data) networks, electricity, safety and education.
It will be interesting to understand governmental views on ecosystems and to which extend they contemplate the participation in and supporting of ecosystems.
Courage
C stands for Chills & Courage. Participating in the Chills ecosystem requires Courage. Courage to step into the digital world build on ecosystems with new rules, new flows of value, surprises, challenges and much more. Giving and receiving trust is the most difficult & rewarding part of joining an ecosystem. Key in this process is the communication clarifying both parties’ intentions & expectations. After trust is established collaboration will follow and thereafter the flow of value.
Courage
Communication
Collaboration
Read in addition Garter’s 8 dimensions how to position yourself or a company within an business ecosystem.
Your challenge
Ask yourself in which ecosystem would you want to participate and collaborate. Are the principles above sufficient or do you miss something? Are we witnessing a society in evolution?
We foresee a future where people gain more freedom on the condition that they themselves take responsibility for their well-being.
Writers
Fredrik the Frisian CEO / Bård Øvrebø CTO, Dynamic Integrations - Backend-AI development