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Theorizing Digital Business Innovation: Platforms and Capabilities in Ecosystems

28 Pages Posted: 16 Oct 2014 Last revised: 17 Dec 2016

N. Venkat Venkatraman

Boston University - Department of Management Information Systems

Omar A. El Sawy

University of Southern California - Marshall School of Business

Paul A. Pavlou

Temple University - Department of Management Information Systems; Temple University - Department of Strategic Management

Anandhi Bharadwaj

Emory University

Date Written: September 1, 2014

Abstract

This paper focuses on how information and technology drive digital business innovation in business ecosystems where multiple co-contributors work together to innovate new business models. Specifically, we develop a framework based on two novel concepts — (1) digital business innovation (DBI) platforms; and (2) digital business innovation capability at the ecosystem level of analysis. First, we describe DBI platform through three properties — scale, scope and speed. Second, we describe DBI ecosystem capability using three dimensions — operational, dynamic and improvisational capabilities. The DBI platform and capabilities together give rise to business value that are created at the level of the ecosystem and shared by the various co-contributors. We generate a set of theoretical propositions by bringing the role of information and technology as drivers of value creation and capture in ecosystems. While extant research on IT and innovation has focused on the individual, organizational, and rarely at the inter-organizational level of analysis, this paper argues for the importance of innovation ecosystems, which are complex, interdependent, and constantly evolving. We support our conceptual framework and propositions with a case example of digital business innovations with digital technologies underway in the automotive sector. We conclude with a set of critical issues for further development of theory on DBI platforms and ecosystem capabilities that are disrupting and transforming firms, industries, and markets. Our belief is that IS research could make important contributions to the broader innovation literature by explicating how information and technology — individually and in tandem — give rise to business value co-created in ecosystems and shared by the various co-contributors in the ecosystem. Accordingly, we hope this paper will entice IS research to rethink digital business innovation at the level of the ecosystem.

Keywords: Digital Business Innovation, Ecosystems, Ecosystem Capabilities, Platforms, Innovation

Suggested Citation

Venkatraman, N. Venkat and El Sawy, Omar A. and Pavlou, Paul A. and Bharadwaj, Anandhi, Theorizing Digital Business Innovation: Platforms and Capabilities in Ecosystems (September 1, 2014). Fox School of Business Research Paper No. 15-080. Available at SSRN: https://ssrn.com/abstract=2510111 or http://dx.doi.org/10.2139/ssrn.2510111

N. Venkat Venkatraman (Contact Author)

Boston University - Department of Management Information Systems ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Omar A. El Sawy

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

Paul A. Pavlou

Temple University - Department of Management Information Systems ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States

Anandhi Bharadwaj

Emory University ( email )

201 Dowman Drive
Atlanta, GA 30322
United States

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