Entrepreneurial Ecosystems

Apple, GE, Google and Toyota
remain popular firms for media analysts because they seemingly have it
all: a sustainable market position, the ability to leverage customer
knowledge, fast cycle times and resilience in the face of complexity
and uncertainty, and innovations that create new markets.  Their unique
conditions, market leverage and management teams may never be copied
again.  However, many insights from their existing enterprise architecture
could be adapted to a commercialisation pathway or spin-off company. 
Despite each company having their share of problems, managers in them
have read and acted on the insights of mid-1990s "business ecosystems"
thinkers notably Michael Rothschild, Dee Hock and Kevin Kelly.  The broader debates on climate change and sustainability will only increase the popularity of ecosystems thinking and entrepreneurial ecosystems as an innovation framework.

What can innovation researchers learn from Gross on entrepreneurial ecosystems and ecosystems thinking?

First, the relatively static world of Michael Porter's "5 Forces" and value chain methods is limited,  whilst even the non-linear promise of value networks remains untapped.  Ecosystems thinking
offers innovation researchers a framework to "reframe" the value chain and its
relationships in new ways, such as "cradle to grave" solutions for ICT
products and services.  Entrepreneurial ecosystems provide a way for innovation researchers to translate this thinking into a market outcome.

Second, any initiative needs to be attuned to evidence-based and market-based management. 
Apple, Google and Toyota are successful because they have gone beyond
manifestos, language games and vision statements to operationalise this
at process, project and work package levels.  The euphoria about each
company's respective cultures is really about their success at
embedding this approach in employee attitudes, practices, and value
creation.  Innovation researchers who aspire to similar global domination must
strive to develop ecosystems thinking as a cognitive capability and
practice-based approach, and to apply it on a daily basis in commercial
and research contexts.  In turn, this needs an organisational culture
that recognises, rewards and supports researchers who can operate in evidence-based and market-based management environments.

Third, innovation researchers need to cultivate an entrepreneurial outlook and to
harness the power of small teams.  If done effectively, this creates
the momentum and synergy to drive a research project from the lab to
market.  Two ways to achieve this are to have an opportunity evaluation process (Babson College and Swinburne University's Tom McKaskill
offer two examples) and to embed this as a "project gate" in strategic
planning.  To succeed researchers have to be prepared to critically
re-evaluate their most cherished assumptions, practices and
technologies or what Fred Brooks called "silver bullets".  BBC Two's series Dragon's Den will give you a taste of how brutal and confronting this opportunity evaluation process can be on a personal level.

Fourth, innovation researchers should look to untapped opportunities in value
ecosystems and their recombinations or permutations.  Gross suggests
that if you can't be an Apple, Google or Toyota there are still ways to be successful. 
He observes that other companies can take a coevolutionary position in
the niche, develop line extensions or create subsidiary markets:

• Apple's iPod created a subsidiary market in digital lifestyles accessories.

• Toyota has created a small publishing industry in its lean or Toyota Production System applied to manufacturing and software development.

• Google's PageRank algorithm has created a subsidiary market in search engine optimisation which changes each time Google updates its algorithms.

Fifth, instead of trying to chase the next next thing (unless you have the subcultural skills of a Malcolm Gladwell or Douglas Rushkoff style cool-hunter) you develop a portfolio or repertoire of projects. This is the mindset of Harry Markowitz and the Capital Asset Pricing Model in options pricing for capital markets and risk-aware portfolio management.  In contrast, the post-mortems on Bell Laboratories and Xerox PARC show plenty of researchers who staked their careers on one vision but lacked the voice.