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MODELLING A BUSINESS ECOSYSTEM IN/FOR EMERGING INDUSTRIES

Contribution to mobilise europe by Prof. Dr. Eckehard Fozzy Moritz, innovationsmanufaktur, Munich

EXECUTIVE SUMMARY

  In this chapter, the development and first concept of a model of a business eco-system in or for emerging industries is illustrated. It is intended to be or become useful not only as a basis for analysis and understanding, but even more so as a tool aiding the development of policy recommendations.

The core reasoning:  
Why do we need a model for a business ecosystem?

   The idea to understand and foster business ecosystems that constitute the basis for a sustainable creation of wealth in emerging industries is increasingly gaining interest and acceptance within the European Union. And rightfully so: Focusing on the support of industry, academia and innovation alone suffices less and less, for at least two reasons: First, the best of innovative ideas and start up drives will never succeed if the environment does not support, in some cases not even allow, its emergence. And second, in an ever more complex industrial world it is impor-tant to understand the overall setting of innovation ventures, to be able to address all related stakeholders and create synergies or at least an understanding and an acceptance of novel solutions as a basis for success.

   Today, there is an increasing amount of useful publications on what consti-tutes a business ecosystem, the correspondent dimensions and descriptors, success factors, as well as good and bad practices. What you are holding in your hands right now is one publication, important because it addresses almost all of those issues. What is still often missing, however, is a systemic understanding of all important factors contributing to a holistic view of the interrelation of all those factors - which is, however, needed to transfer con-clusions into another context, and develop and prioritise recommendations for policy developments. On that account, we have been striving to develop the model introduced in this chapter, which has already been used as a mir-ror for designing the research approach of the EMMIA PLP project, and will continue to be used as a basis for interpretations and the development of a guideline for policy recommendations.

Setting and basic concepts: What does "business ecosystem in/ for emerging industries" mean?

   In what follows, I will just give you an idea about how we defined the terms “business ecosystem” and “emerging industry” – not to start a discussion on definitions, but to circumscribe the understanding used for the creation of the model illustrated here, and for the resulting development of policy recommendations: 

• A business ecosystem sums up all relevant aspects of a supportive, efficient, and resilient environment for actors who pursue the creation of sustainable wealth. This includes the set-up, organisation and administration of stakeholders, resources and infrastructure, but also the embedding of all these factors in their respective socio-cultural settings and in its infrastructure. Thus, this concept is much broader than the idea of a cluster or a network – concepts that mainly concentrate on actors, elationships, and resources. The frame of reference for a business ecosystem may be any pre-defined socio-industrial system large enough to host more than the critical amount of stakeholders and the necessary diversity. It often refers to metropolitan areas or regions, but may also be related to a state, a country, or even  an entity as big as the European Union. 

• An emerging industry is a promising opportunity for the creation of   sustainable wealth due to new products and/or services based on  innovative answers to tomorrow´s challenges. They may utilise new technologies, materials, processes, or organisations, but also or additionally be founded on new synergies, transformations or new thinking and acting of any other kind. Hence, focusing on an emerging industry in the attempt to create sustainable wealth necessarily implies  dealing with innovation, be it as prime mover, follower, or simply copier – note that copying is often the cheapest way but is rarely sustainable:  If you just copy others, your region will never leave the rat-race for continuous cost-cutting. 

Methodology in a nutshell: How we developed the model for a business ecosystem in emerging industries

   The model we are presenting here has been developed on the basis of quite a number of preparatory activities, some in parallel, some sequential. Among them are the following: 

• We applied the methodology of Holistic Innovation and our experiences from related projects by systematically developing a system representation of a business ecosystem.
• We adapted the results of a project for the German Ministry of Education and Research, in which we had developed a model for the long-term effective integration of stakeholders into innovation activities   (Holistic Innovation Center).
• We wrote a draft discussion paper and optimised it in continuous interaction with the EMMIA PLP expert group.
• We developed a first model, which also was discussed with core members of the EMMIA project ensuring that the results of existing studies are  represented.
• We developed a second model, and again put it to discussion.
• Finally, we designed the system to be easily understandable, resulting in what we introduce in this chapter.

Depicting the result: A model for a business ecosystem in/for emerging industries

Having been restricted to “a few pages only…” I will, contrary to my usual preferred procedure, show the model first (Fig. 1) and then add some explaining comments.

Now, how do we read the model?

   First of all, the focus of the model was explicitly put on highlighting the role of policies; not least in order to understand how they are framed and what sort of issues and system considerations may/must be addressed in the development of new policies. Hence, policies were put in the centre. Looking to the right, to the future, in the basic orientation of policies one needs to decide which target field is or should be addressed (i.e. mobility and mobile services), and which aspiration the respective city/region has. Do they want to be in the champions’ league, leading region in Europe, even the world? Or do they “only” aspire to become a regional hero? And what is their interpretation of “wealth”: Do they want more free enterprise or more social cohesion; rather focus on Gross (National) Product or Gross (National) Happiness?

  Looking to the right, all actors and instances are listed that otherwise enable and/or determine the policies: Apart from stakeholders and resources, which are depicted in more detail, we find drivers, promoters and catalysts, motivations and barriers, competences, processes and rationalities and, as a sort of catch-all, the innovation culture.

   One important element that has been put directly under policies is the mastermind. We maintain that it is good and necessary to have a person, better yet a network or institution that combines all of the knowledge, objectives and interests to define consistent policies. We are not sure, however, whether a mastermind always exists: Rather, the emergence of policies often seems to be a result of reacting and compromising, often under strong lobby influence.

  Stakeholders and resources are listed in more detail. Here, we particularly like to point out the scope of both categories. Especially the understanding of resources must definitely transcend the idea of just capital and manpower and include factors such as competences, image, ideals, cultural assets, and all of the environmental aspects listed below. 

   The embedding environment, thus, must be seen as a complex system able to determine between success and failure of business ecosystems and related policies. One rather practical aspect of the environment that can be influenced quite easily, and is thus depicted above as a separate category, is the infrastructure, both physical and ICT.

Now what: How can the model help in the development  of policy recommendations?

   Admittedly, this concept is still at a conceptual stage and needs further improvement, so it is certainly premature to assign a definite use value to it. Nevertheless, a few instances can already be summarised in/for which this model can be of good help:

• Most important of all, the model shall help to understand and consider the complexity of all aspects and interrelations of how a business ecosystem is constituted
• Regarding the development of policies, it helps to steer directions and processes, starting with aspirations and a target field, then understanding the forces behind policies, and finally also embedding policies in the core aspects of the determining environment. Furthermore, the call for a mastermind is small but present and important
• With regard to stakeholders, resources environment, the model may serve as a checklist to remember all important aspects and/or perspectives.

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