7 ways to develop innovative and living innovation ecosystems

Toward the concept of innovation ecosystem 4.0

By Eric Seulliet and Marcos Lima

This article was first published in French on 7x7

In recent years the notion of innovation ecosystems has largely become commonplace. This can be explained in particular by the rapid emergence of the notion of open innovation. Large companies want to interact with startups and vice versa. “Innovation Labs” are flourishing in many companies and leading to the development of collaborative links with external innovation players, including startup incubators, or directly with them. We also see the emerging concept of “excubators”: large companies are starting to outsource entrepreneurship projects in environments that are considered more open and more agile. Proof of this enthusiasm: a new function appears even in some companies, that of IEO (Innovation Ecosystem Officer).

This (over) valuation of the notion of innovation ecosystems has led to several ambiguities: what do modern innovation ecosystems really look like. It is therefore necessary to revisit this concept in the light of its new potential and old limitations, the new requirements of transparency and equity and new technological possibilities offered by such technologies as Internet of Things and Blockchain.

Let’s rewind back to the basics of innovation networks to understand the intrinsic characteristics of an ecosystem. This term was coined by Tansley in 1935 to designate the basic ecological unit of the environment and the organisms that live there. The term was later taken up by Moore (1993) to designate systems of actors with coopetition relationships (which we could call “Ecosystems 2.0”) This notion assumed that business clusters could optimize the flow of talent and knowledge if they shared geographic proximity. An example of such a system are Technology Parks such as Sophia Antipolis in France or the Research Triangle Park in North Carolina. In a recent article (available in French here), we argued that the biology metaphor was useful to designate these networks, in spite of some limits. Pushing the metaphor would allow for more organic, extra-territorial collaborations enabled by virtual, online learning networks (what might be called Innovation Ecosystems 3.0).

The 7 Dimensions of Innovation ecosystems 4.0

In the following paragraphs, we suggest that this concept can be pushed even further in the light of recent technological developments that offer distributed trust algorithms, like Blockchain-enabled Intellectual Property management systems. Another example of these larger learning networks is found in what are now called “Smart Cities”. We are calling these last-generation environments “Innovation Ecosystems 4.0”.

  1. Innovation Ecosystems may be virtual, but they need to be grounded in real-life hubs

Many innovation ecosystems rely on essentially virtual relationships. At the time of the web these are obviously unavoidable and have their advantages. Nevertheless an ecosystem 4.0 needs to be anchored somewhere in real life. Concretely this anchoring can be translated in various ways.

It can be by being located in a place in which members of the ecosystem come together to interact and co-create. This explains why many ecosystems are organized around meeting spaces as diverse as “innovation labs”, incubators, fablabs, etc. These places form in a way a real biotope favorable to their development. An example of such a space is the emblematic “Station F” inaugurated last year in Paris. Its 34,000m² are shared by incubators, investment funds, utilities and large companies looking for cooperation.

An ecosystem is also anchored by any element that contributes to forging its identity and authenticity: a history, a culture, traditions and know-how. By having a central theme, an ecosystem will be all the more effective for its members. Having a privileged domain of application makes it possible to focus without dispersing.

2. Innovation Ecosystems should be transversal and multidimensional

Although an ecosystem has a dominant theme or domain of expertise, it can also be diverse in nature. The more an ecosystem has transversal and transdisciplinary competences, the richer it will be and the more capable of absorbing new opportunities for innovation. Recall in this regard the law of Metcalfe which states that the more opportunities for interaction in a network, the more this network will be valuable. The more open and flexible an ecosystem, the more powerful it will potentially become. By not restricting an ecosystem to their usual partners (professionals, experts), an ecosystem can leverage on the knowledge and insight of customers, non-government organizations and undergraduate students, thus becoming more innovative.

An innovative ecosystem must not only foster interactions but facilitate symbiotic relationships among the various initiatives launched within its environment. This requires an active effort by “collective intelligence catalysts”, entities specialized in bringing together talent from companies, government and universities to think together about innovation opportunities.

Innovation Ecosystems 4.0 should proactively encourage co-creation through a flexible and adaptable structure.

3. Innovation Ecosystems should be open and connected

This is a corollary of the previous idea. An ecosystem must not operate in a vacuum. It will be all the more productive as it will be open to other ecosystems and facilitate connections among them. So they can then leverage open innovation.

Rather than operating in silos, these organisms must instead interconnect. It is on this condition that they will be able to revitalize themselves by feeding on external contributions while helping to spread a state of mind of innovation. Procter and Gamble is a good example of a company open to its ecosystem. Rather than developing its new products only in its R&D laboratories, P&G has become an expert in the competence of identifying innovative products among its suppliers, customers of the “lead user” type, and competitors. On the other hand, rather than discarding product ideas that do not fit their strategy (as they once did), P&G now prefers to create licenses and patents that can be exploited by other players in its ecosystem.

An ecosystem of innovation 4.0 should encourage its members to constantly interact with other ecosystem partners.

4. Innovation Ecosystems should avoid centralization and rethink governance

Often the current ecosystems are dominated — if not initiated — by an organization (company, institution) that plays a central role. The consequence of this position is that the ecosystem is under control of the said organization. The result is a capture of the added value produced by the members of the ecosystem for the benefit of this central entity.

In an ecosystem 4.0, governance is equitably distributed. It is a decentralized governance favoring horizontal peer-to-peer relationships.

A concrete example of this “uberisation of Uber” is given by the case of La`Zooz, an Israeli carpool startup owned by the community through a system of Blockchain-enabled governance.

This new type of governance will be all the more favored as communities of innovation will be at the heart of innovation ecosystems.

Eric von Hippel, a professor at MIT, is recognized for having shown that committed and forward-thinking users (the “lead users” mentioned above) by their role of leaders of communities could be major actors to innovate and co- create.

In recent years, large companies have become aware of the need to involve their customers and users in innovation processes. This is how communities of innovation are formed on their initiative. Already Renault, Michelin, Decathlon, Solomon, Schneider Electric, Seb have created their own communities. A recent book presents examples of how these communities were created and function.

Innovation ecosystems 4.0 are organized in a decentralized way around user communities.

5. Innovation Ecosystems should actively develop tools and methods to better collaborate

The optimal functioning of an advanced innovation ecosystem results from both spontaneous and informal exchanges, resulting from a natural serendipity but also from organized interactions. For these it is necessary to have methods and tools. Such methods and tools include collective intelligence management systems, ideation platforms, methods like design thinking and rapid prototyping, foresight analysis.

With new technologies like blockchain, virtual reality and 3D, artificial intelligence, smart data, neuroscience, etc. the new generation ecosystems are becoming more adaptive and efficient.

Innovation ecosystem 4.0 must evolve through tools, methods, new technologies.

6. Being ethical and straight

A classical ecosystem is often dominated by a reference actor (often the very one who was at the origin of the constitution of the ecosystem). This configuration results in the added value created by the members being largely captured by this actor, as previously argued this poses a major ethical dilemma. This state of affairs also generates a lower performance due to the lack of motivation of the members resulting from a lack of individual recognition. In a recent article published by Harvard Business Review France, we pointed out the limits of an innovation ecosystem and indicated that blockchain could be the solution to distributed systems of trust and sharing. This has indeed many advantages to restore equity among members of an ecosystem: traceability and notarization of individual contributions, deletion of a central control entity, facilitation of peer-to-peer exchanges.

Innovation ecosystem 4.0 should be based on the ethics of sharing: each contributor is recognized for his own contributions and the added value is equitably distributed.

7. Innovation Ecosystems should have a shared sense of direction, meaning and values

An ecosystem will be stronger if its members have shared values and goals, becoming more meaningful for its members. Just like in an organization, collective intelligence can only work if it is goal-oriented, if the ecosystem has a “raison d’être” that is shared and recognized by all stakeholders.

Only by having such shared goals and values will the members of the ecosystem feel motivated and involved. These common values ​​need to be identified and communicated in an ecosystem in the same way that it is done within an organization, so as to create an inter-organizational culture that binds its members by their common purpose. And if this goal seems noble, it will further promote their commitment.

Innovation ecosystems 4.0 should flourish by bringing together a community of members around a mission and clearly identified and shared values.

In conclusion, we can say that innovation ecosystems bringing together these various characteristics could function like huge “living labs”. By adding distributed technology for sharing ideas and tracing authorship and merit, these living labs could become the cornerstone of innovation ecosystems 4.0.

All these concepts will be discussed and presented at the Innovation Day 2018, 3rd edition of the Ecosystems Agora Innovation, co-organized by the RRI (Research Network on Innovation), The Fabrique du Futur, France Living Labs and Research Center of the Pole Leonard de Vinci Pole.

Information and registration via https://journeeinnovation2018.eventbrite.fr

Sidebar: ValYooTrust, example of innovation ecosystem 4.0

ValYooTrust is the first Trust Marketplace for Innovation 4.0, built around a private blockchain that rewards co-innovators in the form of Innovation Coins, in recognition of the sharing of their intangible assets, as far upstream as possible in the innovation process.

ValYooTrust responds to three requests for so-called “collaborative” innovation that aims to benefit from the massive transversality effect linked to the largest possible number of contributors in the innovation ecosystem:

1. Give an agile digital response (4.0) to the complexity, heaviness and slowness of the negotiation scenario of all the disruptive forces of innovation (Researchers, Entrepreneurs, Key Accounts, ETI, SMEs, Investors, etc. .)

2. Involve the citizen-user-consumer as far upstream as possible in the process of innovation, in application of the new paradigm of sustainable digital that places the human at the center of societal disruptions, industrial, etc.

3. Establish as soon as possible a “proven” mutual trust relationship between the offerers and the applicants of the innovation ecosystem, in accordance with the GDPR and providing 4.0 protection and a fair return on the sharing of intangible assets, particularly for business project holders.

ValYooTrust is co-sponsored by major higher education organizations including IMT, major accounts, ministries, start-ups and think tanks, including La Fabrique du Futur, CCI de France, etc. A first version of the Platform is expected for summer 2018.