How do we differentiate (traditional) approaches of Innovation to (evolving) Innovation Ecosystems?
Is your innovation process closed only to you? Or have you gone to being more open in innovation with outside selected partners? Well we do need to move beyond both of these and start thinking and designing with Innovation Ecosystems.
I would argue we need to adapt to thinking and designing in Innovation Ecosystems. True differentiation comes from solving unique challenges in ways others will find difficult and expensive to attempt to replicate as it is the combined value, experience, diversity and knowledge within a network of partners that can be unique.
For me, innovation ecosystems in their ability to provide added value are important to recognize.
In recent years we have been moving away from open innovation but not at the accelerated rate I would have expected, taking this into Innovation Ecosystem design and thinking.
We do need to recognize we are in an evolution stage moving from open innovation into this innovation ecosystem thinking and design. Business ecosystems are the present and future need to build, and build correctly.
To get to this point though does needs significant business ecosystem understanding, exploring, investigating, investment and cultural shifts.
So a brief point of separation between Open Innovation vs. Innovation Ecosystems
- Open Innovation: This approach involves sourcing ideas, technologies, or solutions from outside the organization and integrating them with internal R&D efforts. The focus is on collaboration with external entities to bring in new perspectives, reduce development costs, and speed up innovation.
- Innovation Ecosystems: This goes beyond open innovation by creating a network or system of interconnected players, including businesses, governments, universities, startups, and more. The goal is to create a self-sustaining environment where innovation is continuously nurtured through collaborative efforts, shared resources, and aligned objectives across the ecosystem. An innovation ecosystem is more holistic, focusing on the relationships and interactions within the network rather than just external input.
You will find numerous posts on my interconnected approach to building Business Ecosystems on this site paul4innovating.com and also on my ecosystems4innovating.com site.
Five rich examples of companies moving to Innovation Ecosystems
In practice many successful innovation strategies involve a combination (even a progression) of both open innovation and ecosystem thinking and they do complement each other effectively. A lot of it is what stage of maturity or adoption are organizations in. For example:
Siemens is moving towards a fully integrated ecosystem engaging a network of partners to create synergies beyond simple collaboration. Its digital twin, metaverse approaches and industry 4.0 emphasis is facilitating more real-time collaboration and innovation. Siemens has actively presented itself as the Ecosystem Orchestrator through its sharing of its platform Xcelerator, data exchanges and co-innovation spaces. It strongly is leveraging AI-driven insights to share, forecast and anticipate changing needs and drive more targeted innovation solutions.
Proctor & Gamble established a classic open innovation model P&G Connect + Develop more focused on bringing in external ideas. This is moving to greater sharing and collaborations in real-time on product development, testing and marketing for a more continuous, interactive process. It is placing more emphasis on building out its customer-centric ecosystem on consumer date and insights and also in its sustainability-driven ecosystem to drive circular economy activities to counter rising consumer demand for responsible brands.
Apple has built the App Store Ecosystem and is looking at its next steps of cross-platform ecosystem, assessing more decentralized platforms that can lead to new forms of digital transactions and contracts within the Apps Store for greater partner control/ involvement, and looking to expand this App Store through augmented reality (AR) and virtual reality (VR) to create a different level of marketplaces.
General Electric with its split of businesses has gone beyond its initial Ecomagination Challenge and within GE Vernova it has allowed the potential to build out scaling and specializing in clean energy ecosystems focusing on Global Clean Energy to address the entire energy value chain. Also to offer specialized and niche ecosystems like hydrogen, renewable energy financing or climate start- ups to accelerate these but benefit from their broader ecosystem expansion. They equally are establishing circular economy integration by focusing on resource efficiency, tracing, recycling emphasis and building more sustainable product designs.
Toyota with their approach to developing hydrogen fuel cell cars is rooted in ecosystem thinking. Building a broad network of government, energy companies and other automakers to create infrastructure and market conditions and although this is more open there next steps there is Mobility-as-a-service for ride-sharing, public transit and autonomous vehicles to become a growing service provider besides the manufacturer of the vehicles. They are also looking to integrate into Smart City concepts moving towards a seamless, connected urban transportation ecosystem and finally, move towards a carbon-neutral ecosystem collaborating with new and different partners to create zero-emission ecosystems.
They are all moving from open innovation into their innovation ecosystem domains
Each has taken a distinctive, individual path forward. They are deepening their ecosystem strategies by leveraging advanced technologies, broadening collaborations and aligning more closely with market and global trends. They are making distinctive choices by combining the rich human knowledge available through their approaches with technology application.
This pathway for each is evolving, offering opportunities to drive greater and more distinctive innovation and value creation but more importantly be positioned to transform entire industries through a growing pioneering leadership to create new market from emerging opportunities and technology / human interface advantage.
We are all aware of how Open Innovation has contributed over the years but perhaps Innovation Ecosystems are presently underappreciated and will form the next innovation wave of growth, impact and value.
Finding the distinguishing points of Innovation Ecosystems
My next post asks what really distinguishes the innovation ecosystem thinking and design, are they common distinguishing points.