An innovation ecosystem is the set of firms, universities, regulators and users needed to bring one innovation to market. It centres on the innovation, not on a single firm. It includes suppliers upstream and makers of complements downstream.
Table of Contents
Types of innovation ecosystem
- Firm-centric: one firm controls the core, such as the hardware and operating system, and partners build around it.
- Multi-centric: no single firm is in charge. A formal standard agreed by many firms holds the ecosystem together, as in mobile telecoms.
Key factors
- Every partner ready in time. The innovation reaches users only when components upstream and complements downstream are ready together.
- Substitutes as well as partners. Rival technologies and imitators sit inside the ecosystem too, and can take value from it.
- Ways to capture value. Patents, standards and contracts decide who earns from the shared work, which keeps partners investing.
- Public bodies. Universities, funders and regulators often play a bigger part than in other ecosystems, and their timing can speed or stall the innovation.
Examples
BioNTech. BioNTech’s Covid-19 vaccine drew on decades of university research into mRNA. Pfizer ran the large trials and manufacturing, specialist firms supplied the fatty particles that carry the mRNA, and regulators reviewed data as it arrived. The UK approved it in December 2020, under a year after work began.
ASML. ASML’s extreme ultraviolet machines print the smallest features on computer chips. They rely on optics from Zeiss and light sources from Trumpf, and chipmakers including Intel helped fund development. In December 2023 ASML shipped the first of its newer, more precise models to Intel.
Frequently asked questions
What is the difference between an innovation ecosystem and a business ecosystem?
A business ecosystem centres on a firm and everything that affects it. An innovation ecosystem centres on one innovation and the partners it needs to succeed.
Is an innovation ecosystem the same as a regional innovation system?
No. A regional system covers the institutions in a place, whatever they work on. An innovation ecosystem forms around one innovation and can span many countries.
Who introduced the idea of an innovation ecosystem?
Ron Adner made it widely used in a 2006 Harvard Business Review article. He argued that firms must judge the risks in their partners’ work as carefully as the risks in their own.
Can a government build an innovation ecosystem?
It can help, by funding research, training staff and setting rules. But an innovation ecosystem forms around a specific innovation, so public money works best where firms already see a market for it.