How Ecosystems Enable Innovation

An ecosystem, according to Wikipedia, is a network of interactions occurring not only among ecosystemsorganisms, but also between organisms and their environment. They are dynamic entities controlled by both external and internal factors. Although varying ecosystems occur all over the world, they all require cooperation and collaboration to survive.

In the business world, it is no different. Organizations and individuals are the living organisms dependent on each other to generate goods and services that are of value to customers. This idea of a business ecosystem came from James F. Moore, expert in the field of co-evolution in social and economic systems.

His Harvard Business Review article, published in 1993, reads:

“I suggest that a company be viewed not as a member of a single industry but as part of a business ecosystem that crosses a variety of industries. In a business ecosystem, companies coevolve 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.”

This next round of innovations is characterized by businesses of all sizes’ desire for constant growth and innovation, says SAP’s Eric Duffaut on Xinhua (original in Chinese, English version on Financial Times here). However many businesses classified as small to midsized are “desperate to grow…[but] lack the resources and talent within their ranks to scale quickly”.

This concept of ecosystems is especially common in the high-tech industry. In the mid to late 90s, companies like Adobe were early adopters and implementers of this practice due to its highly successful track record for introducing new technologies into the marketplace.

I cannot put it any better than Eric when he shares that these partnerships and “co-innovation have huge potential to drive business growth for both companies and their partners…an ecosystem helps companies achieve what they can’t on their own.”

As Eric also shares in his article, companies like my employer SAP, partner with Bluekey Software Solutions to help South Africa’s Desmond Tutu HIV Foundation combat the spreading of HIV and AIDS. They do this by providing education, testing, and treatment. This organization runs on SAP’s Business One Software in an effort to drastically reduce the time spent managing operations. In turn, the Desmond Tutu HIV Foundation can spend more time on the ground instead of in the back office.

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