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Success factors of innovation

ecosystems: A literature review
Susanne Durst, Petro Poutanen

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 CO-CREATE 2013

Success factors of innovation

ecosystems - Initial insights from a
literature review* 1

Susanne Durst1 and Petro Poutanen2

1 Aalto
University School of Business, susanne.durst@aalto.fi and 2
University of Helsinki, petro.poutanen@helsinki.fi

ABSTRACT

The aim of this paper is to review research on innovation ecosystems to

derive success factors supporting the implementation of them. The
reviewed studies highlight different factors for the successful
implementation of innovation ecosystems which can be assigned to the
areas of resources, governance, strategy and leadership, organizational
culture, human resources management, people, partners, technology and
clustering. Based on the findings a number of future research directions
are proposed which may stimulate more research in this new field of
study.

KEYWORDS

Innovation ecosystems, Innovation, Success factors, Literature review

INTRODUCTION

Scholars as well as practitioners increasingly identify the usefulness of the

concept of innovation ecosystems for explaining cooperative innovative
activities. Yawson (2009) argues that one of the reasons behind the
emergence of ecosystem analogy is the inability of traditional innovation
models to identify successful policy strategies that drive innovations at
national levels. It is believed that the evidence-based platform for science
and innovation policy needs to be extended beyond input-output
correlations, such as R&D investments and patent counts (Yawson 2009).
Ecosystem thinking combines various perspectives from open innovation,

* This is an author’s copy of the paper published in Durst, S., & Poutanen, P.
1

(2013). Success factors of innovation ecosystems: A literature review. In R. Smeds

& O. Irrmann (eds.) CO-CREATE 2013: The Boundary-Crossing Conference on Co-
Design in Innovation (pp. 27-38). Aalto University Publication series SCIENCE +
TECHNOLOGY 15/2013.
 CO-CREATE 2013

crowdsourcing, strategic management, economics, structural theories etc.

to the biological and evolutionary analogies and metaphors. The
fundamental hope behind ecosystems thinking is to expand the capabilities
of one actor beyond its own boundaries and transfer knowledge into
innovation in collaboration with others (e.g. Adner 2006).

To make innovation happen a suitable innovation ecosystem must meet

different conditions. These conditions may address natural, structural,
organizational and cultural factors. Taking this path, the aim of this paper
is to review empirical research on innovation ecosystems to identify factors
that support a successful implementation of it. Accordingly, our research
question is the following: What are the success factors of innovation
ecosystems as derived from the empirical research literature? Innovation
ecosystem is a fairly new concept; consequently it is likely to assume that a
research field on its own has been not developed yet. Therefore, our
motivation is also to contribute to the academic discussion. Concurrently,
we hope our review would pinpoint relevant areas for future research
helping to further develop the concept of innovation ecosystem.

The paper is organised as follows: In the next section the literature and
concepts related to the research aim are briefly discussed. Then the
research method employed to answer the research problem is described.
Thereafter, the results are presented, and in the final section, the
conclusion and implications of the study are laid out.

THEORETICAL BACKGROUND

Innovations and ecosystems

In academic literature, innovations are often defined as new ideas,

improvements or solutions that are implemented and transferred into
useful outcomes (e.g. Bessant & Tidd 2011); thereby acknowledging that not
all creative ideas become innovations, but only if they are implemented and
adopted in a beneficial way. Innovations are generally discussed positively
(Jalonen 2012) and are seen as beneficial both for companies and for
nations in order to survive and develop in a market environment, “create
value”, and enhance competitiveness.

“Ecosystem” is a term combining the words “eco” and “system”. The former
has its origin in ecology and refers to the relation of living things to their
environment. The latter originates from Greek and stands for an organized
whole or body. Ecosystem as a scientific concept derives from the study of
natural ecological systems. In a biological sense, an “ecosystem is a set of
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organisms interacting with one another and with their environment of non-
living matter and energy within a defined area or volume” (Miller &
Spoolman 2009, p. 7).

Thinking innovations through ecosystems

Applying ecological concepts to management and organizational literature
have long traditions (e.g. Penrose 1952). From an ecological point of view,
human organizations have been studied either as populations of one branch
or as communities of populations competing and/or cooperating to obtain
resources from community environments (Monge et al. 2011). The
ecological perspective emphasizes environmental resource niches and
adaptation as fundamental driving forces of the community and dynamic
evolutionary processes, such as variation, selection, and retention (Monge
et al. 2008). The study of “innovation ecosystems” can be seen as a
continuation of the line of research using ecological analogies and
perspective.

Innovation ecosystems have been described in multiple ways. According to

Adner (2006), innovation ecosystems can be defined as “the collaborative
arrangements through which firms combine their individual offerings into a
coherent, customer-facing solution” (p. 98). Mercan & Göktaş (2011)
specify that an “innovation ecosystem consists of economic agents and
economic relations as well as the non-economic parts such as technology,
institutions, sociological interactions and the culture” (p. 102), suggesting
that an innovation ecosystem is a hybrid of different networks or systems.
The collaborative arrangements, as highlighted above, might be based on
local concentration of industrial specifications, such as Porter's (1998)
clusters, but the ecosystem model has expanded the idea of local clustering,
to encompass global, networked economy and various interdependent
actors (Rubens et al. 2011). Additionally, the idea of open innovation
expands the scope of potential participants of the innovation process from
internal actors of the R&D function to the numerous possible co-creators
and co-innovators outside an organization. In this sense, ecosystem
thinking comes close to what is called an open innovation. In open
innovation, actors purposively tap into the inflows and outflows of
knowledge by opening up the innovation process, thus accelerating internal
innovations and expanding markets for external use of it (Chesbrough
2003).
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Using the ecosystem analogy, innovation ecosystems are not a matter of

single actors, but of interacting populations of actors residing in a certain
environment. Rubens et al. (2011) refer to this idea as “creation nets” that
provide a mechanisms for “(a) goal-focused creation of new goods and
services tailored to rapidly evolving market needs, (b) with multiple
institutions and dispersed individuals, (c) for parallel innovation” (p. 1743).
These creation nets come close to what Wang (2009) refers to as
“innovation communities”. Innovations communities are “a set of
organizations and people with interests in producing and/or using a
specific innovation” (Wang 2009, p. 8). According to Wang, such
communities emerge and evolve around innovation orchestrating activities
and dissolve once the collective attention disappears. The innovation
ecosystem is thus, what constitutes a complex set of innovations and
communities, their producers and developers and interactions between
them (Wang, 2009). Behind the rationale for coming together to innovate
is, according to Adner (2006), the fact that innovations rarely succeed in
isolation but are dependent on many types of complementary innovations.
Therefore, an ecosystem allows firms to create value that no single firm
could make alone. Ecosystem approach extends the cooperation beyond
bargaining over the value capture of each actor and includes considerations
of challenges that different actors need to overcome to make sure that the
value is created in the first place (Adner & Kapoor 2010). Ecosystems
thinking can also been seen as a means to combine the idea of collaborative
“business ecosystems”, as coined by Moore (1993).

Ecosystem thinking has also been applied at national level (Carayannis &
Campbell 2012; Jackson 2011; Metcalfe & Ramlogan 2008; Yawson 2009).
Theories on innovation systems, such as national (Lundvall 1992), and
regional (Cooke et al. 1997) system of innovations have emphasized the idea
of innovations as an open and interactive, i.e. “systemic”, processes by their
very nature. However, for example, Yawson (2009) sees as one of the
reasons behind the introduction of the ecosystem framework traditional
innovations models’ inability to identify the successful policy strategies that
drive innovations at national level. In a similar way, Metcalfe and
Ramlogan (2008) redefine the traditional innovation systems models by
their ecological analogy. In innovation ecologies “the principal actors are
usually for-profit firms, universities and other public and private specialist
research organisations and knowledge-based consultancies” (Metcalfe &
Ramlogan 2008, p. 441). According to Papaioannou et al. (2007), the main
difference between traditional innovation system thinking and ecosystem
thinking is the stronger incorporation of market mechanism with the latter,
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whereas the traditional approach highlights the role of non-market

institutions and historically formed relationships.

As indicated above, ecosystems are discussed under different labels such as

platform leadership, keystone strategies, open innovation, value networks,
and hyperlinked organizations (Adner 2006); consequently a unified and
clear distinction has not emerged yet.

Critical thinking about the concept of innovation ecosystem

Papaioannou et al. (2007) ask whether the ecosystem analogy can be used
to describe socially dynamic environments of innovations and whether the
biological metaphor is plausible and consistent with the Schumpeterian
tradition of thought, according to which innovation is essentially
understood as a discontinuous and uneven historical process evolving
under the influence of complex economic, social and political factors.
Indeed, Papaioannou et al. (2007) argue that “eco-thinking … does not
adequately capture the distinction between innovation events and
structures, going beyond them to integrate innovation activity in companies
and organisations” (p. 5). In addition, Papaioannou et al. (2007) claim,
referring to Powell et al. (1996), that despite the abstract similarities
between biological and innovation ecologies, “the latter includes complex
social interrelations and networks … which are historically developed”
(Papaioannou et al. 2007, p. 5). Therefore, division of labour and
environment of knowledge and innovations are not biological and adaptive
but social and historical processes with contradictory and uneven relations
of power.

Wallner & Menrad (2011) claim that the perspective adopted by Adner and
Kapoor (2010) is rather linear and deterministic. According to Wallner &
Menrad (2011), the linear view is focused on input factors that are supposed
to influence innovation capacity, although “ecosystem is not a trivial
machine, with defined input-output ratio” (p. 2). Judy Estrin (2009)
provides an alternative view on innovation ecosystem at the national level.
She suggests that “innovation ecosystems are made up of communities of
people with different types of expertise and skill sets” and that the most
important communities are research, development, and application (p. 37–
38). According to Estrin, in order for ecosystems to be innovative, there
must be a constant and balanced cross-pollination of ideas, questions,
knowledge and technology between the most important communities. Each
community must receive “nutrients” through different supportive
structures, such as leadership, funding, policy, education, and culture. As
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Wallner & Menrad (2011) also note, cross-pollination is apparently, at least

partly, a cultural aspect calling for communication, and willingness and
trust to share and receive information.

Some of the remaining challenges concerning ecosystem thinking are

associated with its plausibility as an analogy, that is, whether the biological
analogy stands as a reasonable fundament for explaining human activity
and the social context. How to enable, for example, cultural values to
encourage knowledge sharing or other innovation fostering behaviour?
When using analogies, one must be aware that ultimately it is a matter of
innovation theories and empirical research and – in general – theories of
human behaviour, whether or not biological heuristics are plausible (cf.
Cohen 1994; Stewart 2001).

METHODOLOGY OF LITERATURE REVIEW

In the review process, the authors adopted the principles of a systematic
review as recommended by Jesson et al. (2011). First, a research plan was
developed comprising the research questions of interest, the keywords, and
a set of inclusion and exclusion criteria. The paper‘s aim was to determine
the current status of research on innovation ecosystems to identify success
factors facilitating the process. To help answer the research question
inclusion and exclusion criteria were specified. The inclusion criteria were:
peer reviewed journals, English language. Grey literature such as reports
and non-academic research, other languages than English represented
exclusion criteria. Additionally, an excel data sheet was produced consisting
of key aspects related to the research aim. In the given case these were:
name of author(s), year of publication, research aim / objectives, theoretical
perspective / framework, method, main findings, and name of the journal.
Once all the relevant issues had been specified, the databases Web of
Science, Proquest ABI/ INFORM and EBSCO were accessed and searched
for materials, using the keyword set. As keyword “innovation ecosystem”
was used. The databases were searched for articles that had explicitly
“innovation ecosystem” in the abstract or title. This proceeding led to 7 hits
with Web of Science, 6 hits with ABI/INFORM and 4 hits with EBSCO. The
search took place in November 2012 and again in March 2013. Next, one of
the authors scanned the articles’ titles, abstracts and, if relevant, more
parts, beginning with the conclusion section, to make sure that they actually
fell within the scope of interest. Nine papers fulfilled the criteria set and
thus formed the basis of analysis. In the next stage, the authors discussed
the findings, which helped them to clarify what is known about success
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factors related to innovation ecosystems. The final stage of the review

process comprised the writing up of findings.

PRESENTATION OF FINDINGS
Studies involved
The nine papers that formed the basis for our analysis are summarised in
Table 1. The oldest publications are from 2006 and the most recent one is
from 2012.
 Table 2 shows the factors seemingly facilitating innovation ecosystems as

following dimensions: resources, governance, strategy and leadership,

reported in the papers reviewed. The factors can be grouped based on the

organizational culture, human resources management, people, partners,

Theoretical
perspective / Method (empirical /
Author(s) Year Research aim/objectives framework theoretical) Main findings Journal
The authors highlights the following policies: Technology policy should
endeavor to generate innovation in a way to constructing a co-
evolution between innovation development cycle and advancement of
the institutional system. Given the systems efficiency in constructing

Table 1 Overview of empirical papers involved in the literature review

Reviews mutually the above coevolutional dynamism, potential resources in innovation
inspiring cycle between should be effectively explored and utilized in a systems perspectives.
Japan and the US and Comparative empirical Provided that seamless, all actors participation and on demand
To analyze the significance of a systems its consequence to the analysis of the development institutions requirements characterized by a ubiquitous society,
Watanabe & concept of coevolutionary dynamism National Innovation trajectories in the US and multilayer mutual inspiring cycle should be constructed in a global Journal of Services
Fukuda 2006 involving in an ecosystem. Ecosystem Japan context. Research
Main conclusion: If managers learn to assess ecosystem risks

Factors facilitating the open innovation process

To highlight the significance of having a holistically and systematically, they will be able to establish more
systematic approach for analyzing the risks realistic expectations, develop a more refined set of environmental Harvard Business
Adner 2006 in an ecosystem N/A N/A contingencies, and arrive at a more robust innovation strategy. Review
The key attributes of Google´s success are: strategic patience,
infrastructure built to support innovation, architectural control,
Iyer & To present and discuss Google´s innovation innovation built into job description, cultivated taste for failure and Harvard Business
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Davenport 2008 ecosystem N/A N/A chaos, use of data to vet inspiration Review
Mode 3, in combination with the broadened perspective of the
To provide a better conceptual framework Quadruple Helix, emphasises an Innovation Ecosystem that
(Mode 3) for understanding knowledge- encourages the co-evolution of different knowledge and innovation
based and knowledge-driven events and Mainly discuss the modes as well as balances non-linear innovation modes in the context
processes in the economy, and hence reveal underlying assumptions of multi-level innovation systems. Hybrid innovation networks and
Carayannis & opportunities for optimising public sector of the model to be knowledge clusters tie together universities, commercial firms and Int. J. Technology
Campbell 2009 policies and private sector practices. presented N/A academic firms Management
Brief review of the Single case study design
changes experienced in involving 15 in-depth
Rohrbeck, To analyse to what extent the open the industry and the interviews with Deutsche Deutsche Telekom uses most of the
Hölzle & innovation paradigm has been embraced research on open Telekom members and benefits of open innovation without betting ist survival on an open
Gemünden 2009 inside the Deutsche Telekom innovation partners innovation future. R&D Management
The paper is based on the assumption that

technology and clustering.

the neoclassical view is inaccurate and that
a new innovation model is required to guide
economic growth policy. Having this in
mind he provides rationales for this
Tassey 2010 assumption. N/A Secondary data Proposes a new manufacturing policy model J Technol Transf
Unbalanced panel data set
To explore the extent to which the local of all 328 Metropolitan
Samila & availability of venture capital might act as a Literature on venture Statistical Areas in the U.S. Show the relevance of the availability of venture capital to explain
Sorenson 2010 catalyst to commercialization capital of the
Review from 1993-2002. differences in metropolitan statistical areas Research Policy
To explain the effects and magnitude of innovation systems The interaction between universities and for profit industries International
effects of components above on innovation approach, its evolution Data from Global accelerates innovation making. The findings showed a positive but Research Journal
Mercan & making based on Global Innovation Index and innovation Innovation Index (2009- insignificant relationship between level of innovation culture and of Finance and
Göktas 2011 dataset. ecosystems 2010 database), regressions innovation output. Economics
Briefly summarises the
Considers the manner in which new steps from systems to
Mezzourh & business ecosystems develop to support ecosystems of Case study of Cytale Introduces the concept of “keystone innovations” and discuss how they The Business
Nakara 2012 innovation and strategic choice innovation (French start-up) affect business ecosystems Review
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Factors supporting innov ation ecosy stem s Studies

Resources
Resource management Watanabe & Fukuda (2006)
Resource allocation Adner (2006)
Resource av ailability Tassey (201 0)
Av ailability of different funding possibilities (priv ate and public) Tassey (201 0); Samila & Sorenson (201 0)

Governance
Continuous inv estments in infrastructure Iy er & Dav enport (2006); Tassey (201 0)
Architectural control Iy er & Dav enport (2006)
Rigorous decision making facilitated by data Iy er & Dav enport (2006)
Timing referring to all partners inv olv ed Adner (2006); Watanabe & Fukuda (2006)
Sy stematic risk assessment Adner (2006)
Demogracy Caray annis & Campbell (2009)
Own organizational structure Rohrbeck et al. (2009)
Use of internet platforms to support and foster interaction between partners Rohrbeck et al. (2009)
Flex ible sy stem that allows integration and ex pansion Rohrbeck et al. (2009)
Clear role assignment Tassey (201 0)

Strategy and Leadership Adner (2006); Tassey (201 0)

Patience Iy er & Dav enport (2006)
Clarity of purpose and attention to detail Iy er & Dav enport (2006)
Distant and distanced v iew on innov ation Mezzourh & Nakara (201 2)

Organizational culture Caray annis & Campbell (2009)

Open to failure and chaos Iy er & Dav enport (2006)
Innov ation culture Mercan & Göktas (201 1 )

Human resources management

Innov ation as integral part of job descriptions Iy er & Dav enport (2006)

People Caray annis & Campbell (2009)

Inv olv ing post-doctoral researchers to get access to worldwide R&D community Rohrbeck et al. (2009)

Technology Caray annis & Campbell (2009)

Partners
Pluralism of a div ersity of agents, actors and organisations Caray annis & Campbell (2009)
Use of a v ariety of partners Rohrbeck et al. (2009)
Univ ersity - industry collaboration Mercan & Göktas (201 1 )

Clustering
Foster interactions Mercan & Göktas (201 1 )

Table 2 Overview of success factors faciliating innovation ecosystems

The table indicates that especially the governance dimension plays a central
role in innovation ecosystems which is easily comprehensible given the
different actors and thus communication challenges that need to be coped
with in such a system. Thereby the factor addresses areas such as control,
structural and technological aspects, data management, data analysis and
data processing. Moreover, issues related to flexibility as well as the form of
governance are highlighted.

Additionally, strategy and leadership, organizational culture and partners

are viewed as critical aspects that need to be carefully handled to increase
the success of innovation ecosystems. These dimensions, too, are
understandable recalling the concept of innovation ecosystems as presented
in section 2. These dimensions are closely conntected to the dimension of
governance as well. The remaining factors represent more or less individual
entries and take account of the particular settings under investigation.

CONCLUSIONS
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This paper has reviewed existing articles that examined innovation

ecosystems. More precisely, the interest was to identify factors that enable a
successful implementation of innovation ecosystems. Given the assumed
relevance of innovation ecosystems to innovative activities an
understanding of those factors supporting its implementation is of utmost
relevance. In addition, as the study of innovation ecosystems is still in its
infancy the success factors identified may serve as a basis for future
research directions.

Based on a literature review the authors identified nine studies which

fulfilled the a priori set selection criteria. The small number of papers
identified clearly underlines our limited body of knowledge regarding the
topic. Current research in this area seems to be primarily driven by some
researchers´ personal interests. It can be thus concluded that the existing
literature provides only rather fragmented insights into innovation
ecosystems and their implementation in reality. Given the assumed
importance of innovation ecosystems there is a need for more intense
research activities. This would at the same time help to underpin the
legitimacy of open innovation as a research field.

The review of the papers suggests that factors for the successful
implementation of innovation ecosystems can be found in the areas of
resources, governance, strategy and leadership, organizational culture,
human resources management, people, partners, technology and clustering.
These areas clarify that well-known aspects need to be addressed, thus the
individuals in charge can to a certain degree built upon previous experience
and existing knowledge, respectively, when setting up innovation
ecosystems.

Considering the dearth of understanding, the authors see particularly four

issues that need more attention and development:

1) The evaluation of innovation ecosystems. The actors concerned need to

have measures at hand to better control and allocate their resources
regarding different business operations. Given the scope of innovation
ecosystems, these measures need to go beyond organization boundaries and
to address all actors involved and their concerns. In addition, funding
parties will be interested in measures as well in order to better assess the
return of their investments.

2) The role of people in innovation ecosystems. Innovation ecosystems

comprise different actors with different goals, expectations and attitudes, so
the authors of this paper call for more research on that topic as a deeper
 CO-CREATE 2013

understanding of any supporting and hampering factors concerning the

implementation of innovation ecosystems from a people-perspective.

3) The application of a variety of research designs and methods.

Longitudinal studies would enable researchers to study innovation
ecosystems as they actually enfold. In addition, longitudinal studies
provides the opportunity to observe whether and how innovation
ecosystems change over time as they mature or face new challenges,
respectively. Using mixed methods research approached would also help to
obtain a more holistic understanding of the subject of innovation
ecosystems than is possible using mono-methods approaches.

4) Country-comparisons. Our understanding would also benefit from

studies that discuss innovation ecosystems taking country differences into
consideration. Is it plausible to assume that innovation ecosystems will vary
from country to country (even region to region), reflecting each country´s
culture, individual systems and institutions. Therefore, comparative
settings would clarify what factors are likely to remain constant under
different conditions and what would change.

Moreover, based on our analysis of the definitions of innovation

ecosystems, a better conceptual understanding will be essential in order to
fully benefit from the analogy. For example, better conceptual linking is
needed between innovation and ecosystem literatures. What are meant by
different biological concepts in the context of innovations and human
interaction? Is the concept of innovation ecosystem to be understood as a
loose metaphor of co-operation beyond sectors or cluster borders or does it
represent a comprehensive shift in mindset?

The present study is not without limitations. Complete coverage of all the
articles considering innovation ecosystems may not have been achieved,
given the search proceeding chosen. So it may have left out papers that also
addressed innovation ecosystems but used different language. Finally, the
success factors derived from the small numbers of papers need to be treated
with caution.

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