Open Innovation Ecosystem: The Winner Takes It All

Abstract

Recent research and practical implementations in the area of open innovation and business ecosystems have found that ecosystem theory can play an important part in strategic management. The term Open Innovation Ecosystem stands for an ill-defined concept. In both theory and practice, the term is used in different combinations and with different meanings. The attempt of this paper is to briefly define the open innovation ecosystem, including the derivation of its two theories, i.e. open innovation and (business) ecosystem. We explain the conceptual analogy between the biological ecosystem, as observed in nature, and our understanding of the open innovation ecosystem that we adopted from manufacturing and technology. By examining the financial sector, we found some generally valid definitions. The focus of our research is the value of creating open innovation ecosystems and the forces and processes that cause them to evolve over time. Based on a case study of Alibaba’s cross-sector ecosystem, we show that in today’s sharing economy, the winner takes it all. We conclude by suggesting strategy development through the lens of the ecosystem theory, as this approach clearly drives innovation and growth in an increasingly connected digital world.

Keywords: Open innovation, open innovation ecosystems, digital transformation, value constellation, Alibaba, Ant Financial, China