Networked ecosystems and platform businesses are big news. Given the rise of companies that capitalize on the interdependence of industries and products–Alibaba in China, Google, Uber, Facebook, and dozens of others in the U.S.–London Business School scholar, Michael G Jacobides, says it as high time to more closely examine ecosystems and what makes them distinct.
Jacobides posed several questions at a recent MIT IDE seminar on the theory of ecosystems: “Are we in a very large ‘ecosystem’ bubble right now?” “How are today’s ecosystems different than in the past?” And, “Why should we care about them?”
“The recent surge of interest in ecosystems in strategy research and practice has mainly focused on what ecosystems are and how they operate,” he said. A key distinction is that they operate beyond industry silos..and they operate interdependently. “We’re seeing an unbundling of industry sectors, and a highly changing economy” that has created “powerful new groups without ownership,” he said aoubt the current ecosystem landscape.
Jacobides holds the Sir Donald Gordon Chair of Entrepreneurship & Innovation at London Business School, where he is an Associate Professor of Strategy. He is also a Visiting Scholar at the New York Fed.
Modularity is a key feature of today’s ecosystems, according to Jacobides, as is complementarity. Modularity enables ecosystem emergence and allows organizations to operate separately, yet in community with other stakeholders. One challenge is to balance this autonomy with collaboration, he said. Jacobides offered theories on how different types of interdependencies map onto different types of ecosystems, and how to structure ecosystems to optimize these characteristics.
Watch the seminar video on YouTube here.