Innovation Ecosystem

written by Inge Rickhoff and Oscar Stark

In the modern world, organisations must be innovative to maintain a competitive edge; however, successful incumbent organisations continue to do what they do best because this is what initially made them successful. Being innovative is a difficult adjustment to make, thus these organisations will benefit from leveraging an innovation ecosystem to participate in disruptive developments and both contribute and partner for innovation enabling resources such as skills, funding, ideas, and access to infrastructure.

The stakeholders required to create an innovation ecosystem has long since been a debated subject by many academics. The "Triple Helix" model for innovation refers to interactions between universities, government, and industry as published by Razak and White, however, with the emergence of the digital era, MIT researchers Phil Budden and Fiona Murray reason that there are five key stakeholders in an innovation ecosystem, namely universities, government and industry (corporate), as well as risk capital providers and entrepreneurs.

The idea is that the participants in an innovation ecosystem draw on their core strengths as value propositions. Typically, large organisations give benefit to innovation ecosystem participants through their deep understanding of their consumers’ needs and industry problems or opportunities for addressing unmet needs. As a result, they not only present opportunities but also provide extremely useful customer insights.

In turn, organisations gain by collaborating with entrepreneurs in the innovation ecosystem through their perspective on cutting-edge technologies and solutions combined with fresh ideas framed from an often-different perspective. In turn, start-ups seek the experience and knowledge that corporates have for mentorship and guidance.

Governments are not always seen as the most active participants but play a crucial part in the innovation ecosystem by setting incentives and rules for economic engagement, in the broader socio-political scene. The impact plays out in both the local and broader country level, often playing out into the international scene.

Universities have traditionally been responsible for doing research and imparting knowledge, but governments and major corporations are increasingly enlisting the help of universities to promote economic development and innovation initiatives. Participating in the ecosystem gives graduates the chance to advance the conventional skills that institutions teach them while gaining new knowledge and real-world experience that will help them find jobs or start their own businesses. Businesses in turn gain access to leading thinking, that allows them to draw on new sources of solution sets to industry problems.

Risk capital providers must engage in the innovation ecosystem by taking on the risk of investing in fresh concepts and start-ups with the potential to make a difference. As noted by Budden and Murray, risk capital providers should not be assumed to only be venture capitalists and should consider other options such as angel investors and crowd sourcing, or from ecosystem participants such as government or large organisations.

The success of innovation ecosystems rests on how all the various participants collaborate towards common goals. As each participant plays a unique role, appreciating what other participants bring to the innovation ecosystem, and respecting their contribution is critical to collaborative success.

References:

Budden, P. & Murray, F., 2019. MIT's Stakeholder Framework for Building and Accelerating Innovation Ecosystems. [Online]

Available at: https://innovation.mit.edu/documents-library/

[Accessed 15 11 2022].

Razak, A. A. & White, G. R., 2015. The Tripple Helix Model for Innovation: a holostic exploration of barriers and enablers. Int. J. Business Performance and Supply Chain Modelling, 7(3), pp. 278-291.