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What Corporates Can Do to Help an Innovation Ecosystem Thrive -- and Why They Should Do It
Abstract
Given the pace of change in nearly every aspect of society, transformative innovation is imperative. At the same time transformation is very difficult for large established companies. Open innovation – collaboration with outside entities such as startups -- is a powerful tool for exploring both business model and technological innovation. A thriving ecosystem provides a healthy environment in which dramatically different types of entities can find each other and the resources they need to explore and ultimately engage in transformative innovation. Given these benefits, corporates can and should play a role in the creation and growth of thriving ecosystems. We describe the work done to create the life sciences ecosystem in Boston/Cambridge through the eyes of Author 2 who was a central leader in that effort. And we describe in detail both the benefits corporates can enjoy, and the role corporates can play in developing a thriving ecosystem.
... Incorporating Hofstede's exploration of cultural dimensions could enhance the comparative analysis, thereby broadening the understanding of how cultural variances influence VC practices globally. The Innovation Ecosystem Theory (IET) is also relevant to this study's analysis, focusing on how the interplay between various actors within the ecosystem, such as startups, investors, government, and academia, drives the growth of the VC industry (Gu et al., 2021;Joseph et al., 2021). This theory posits that a vibrant innovation ecosystem, supported by strategic governmental policies and a collaborative culture among stakeholders, is critical for the success of venture capital in fostering economic growth and technological advancement. ...
... It is also well-known that information technology (IT) startups face many challenges in finding investment resources at the beginning of the idea and business venture. At the same time, 31% of startups rate a "Somewhat strong" ability of startups in this field to engage foreign investments (Joseph et al., 2021). ...
... As startups are often obliged to disclose the core information about their business to VC companies to receive investments, some VC firms may intend to exploit startups' ideas and information in their own best interests. Thus, understanding these two possible different intentions of VC companies related to reputation is a crucial requirement for examining the effects of VC investment on startup performance (Joseph et al., 2021). Journal of International Business and Management (JIBM) https://rpajournals.com/jibm ...
This research explores Kazakhstan's venture capital (VC) landscape, focusing on its evolution, challenges, and strategies for sustainable development. Using a mixed-methods approach, the study combines qualitative interviews with quantitative market data to examine the VC ecosystem and its role in driving innovation and economic growth. Key findings reveal that Kazakhstan's VC sector has seen significant growth in recent years, supported by governmental initiatives, including establishing the Astana International Financial Centre (AIFC) and regional innovation hubs. However, challenges like market immaturity, regulatory hurdles, and limited late-stage funding persist. The study identifies critical success factors, including fostering international partnerships, streamlining regulations, and promoting entrepreneurship through targeted policies. The methodology involves snowball sampling and semi-structured interviews with active venture capitalists to capture diverse perspectives. The thematic analysis highlights the importance of government support, collaboration among stakeholders, and the need for accessible data to drive informed decision-making. Survey responses further emphasize the reliance on early-stage investments, the lack of strategic investors, and difficulties securing funding for local startups. Comparative analysis with other Central Asian markets reveals that Kazakhstan's ecosystem is more advanced but still faces challenges in sustaining growth. Strategic recommendations to enhance the investment climate include aligning regulatory frameworks with international standards, improving access to finance, and expanding entrepreneurial education, underscoring the need for regional cooperation among Central Asian countries to foster VC investment across borders. By addressing these challenges and leveraging identified opportunities, Kazakhstan and neighboring countries can establish sustainable VC ecosystems to support economic diversification and innovation. This research contributes to understanding VC dynamics in developing economies and provides actionable insights for stakeholders aiming to optimize the venture capital environment in Central Asia.
... The Innovation Ecosystem Theory (ECT) is also relevant to this study's analysis, focusing on how the interplay between various actors within the ecosystem, such as startups, investors, government, and academia, drives the growth of the VC industry [9,10]. This theory posits that a vibrant innovation ecosystem, supported by strategic governmental policies and a collaborative culture among stakeholders, is critical for the success of venture capital in fostering economic growth and technological advancement. ...
... It is also well-known that information technology (IT) startups face many challenges in finding investment resources at the beginning of the idea and business venture. At the same time, 31% of startups rate a "Somewhat strong" ability of startups in this field to engage foreign investments [10]. ...
... As startups are often obliged to disclose the core information about their business to VC companies to receive investments, some VC firms may intend to exploit startups' ideas and information in their own best interests. Thus, understanding these two possible different intentions of VC companies related to reputation is a crucial requirement for examining the effects of VC investment on startup performance [10]. ...
This paper analyzes Kazakhstan's venture capital (VC) industry within the context of Asia's developing markets, exploring its evolution amidst global innovation trends. Kazakhstan's potential for growth in tech startups is evident through governmental policies and the establishment of the Astana International Financial Centre. However, challenges such as market instability, regulatory issues, and the impact of COVID-19 hinder its progress. The study investigates these challenges through a literature review and mixed-methods research involving VCs in Kazakhstan, emphasizing the importance of partnerships, technology, and local market knowledge. It stresses the need for a supportive entrepreneurial ecosystem, transparent regulations, and international standards to boost investment and drive economic development and innovation in Kazakhstan. The paper offers practical suggestions for navigating the complexities of the VC industry in developing countries, focusing on Kazakhstan's distinctive environment.
... Dynamic ecosystems put pressure on large companies, pushing them to collaborate with start-ups to increase the productivity of their innovation processes (Basu et al., 2011;Dushnitsky & Lenox, 2005b;Joseph et al., 2021). In addition to dynamism, a feature of the ecosystem that influences partnerships between large companies and start-ups is the spread of open innovation practices (Svensson et al., 2019;Onetti, 2019). ...
... Since large companies may have outdated products, organizational structures, and processes, collaborating with start-ups may allow them to acquire new, complementary knowledge. Such knowledge often includes new technologies, new markets, or customer needs, as well as novel internal practices (Huang & Madhavan, 2020;Joseph et al., 2021;Minshall et al., 2008;Onetti, 2021). For example, Urbaniec and Ż ur (2020) find that through collaboration with start-ups, large companies can learn how new business models can be applied. ...
... They can also learn the dynamics in sectors where they traditionally have not operated (Weiblen & Chesbrough, 2015). A rather often cited strategic advantage is the possibility-through partnerships with start-ups-to create links with a business ecosystem (e.g., Baloutsos et al., 2022;Decreton et al., 2021;Richter et al., 2017) or even influence its development (Joseph et al., 2021). Indeed, competition takes place among ecosystems rather than only companies, whereby occupying a strong position in a successful ecosystem is critical . ...
Collaboration between large companies and start-ups presents unique characteristics that distinguish them from other forms of partnership and can effectively drive innovation for both entities. To enhance the understanding of this phenomenon, this study systematically examines the relevant literature on the subject. By analyzing and synthesizing 103 articles from peer-reviewed journals, a comprehensive framework is developed, elucidating the pertinent antecedents, mediators, and outcomes of such collaborations. Furthermore, fundamental gaps in research content are identified, including 1) the influence of individual and organizational factors on partnership dynamics and performance, 2) the effectiveness of such collaborations in different types of innovation pursuits, and 3) the negative consequences for partners in the event of collaborative project failure. Based on these defined concepts and identified gaps, an agenda for future research is proposed in terms of theoretical, content-related, and methodological directions.
... Thus, this paper focuses on innovations that can potentially transform the food system or significantly improve the food system in one of the four areas of transformation, so-called transformative innovations [44]. It thereby concentrates on transformational innovations in contrast to other innovations in the food system, e.g., new flavour combinations. ...
... It is noteworthy that in a functioning ecosystem, all or nearly all the mentioned stakeholders, factors, and resources that are conducive to transformative innovation must be present [44]. None of the activities or actors alone are sufficient, and only through combination and interaction, transformative innovations are made possible. ...
... Recent research found that the innovation ecosystem in Germany already provides numerous support opportunities and many actors are involved in the process [44]. ...
The food system represents a key industry for Europe and Germany in particular. However, it is also the single most significant contributor to climate and environmental change. A food system transformation is necessary to overcome the system’s major and constantly increasing challenges in the upcoming decades. One possible facilitator for this transformation are radical and disruptive innovations that start-ups develop. There are many challenges for start-ups in general and food start-ups in particular. Various support opportunities and resources are crucial to ensure the success of food start-ups. One aim of this study is to identify how the success of start-ups in the food system can be supported and further strengthened by actors in the innovation ecosystem in Germany. There is still room for improvement and collaboration toward a thriving innovation ecosystem. A successful innovation ecosystem is characterised by a well-organised, collaborative, and supportive environment with a vivid exchange between the members in the ecosystem. The interviewees confirmed this, and although the different actors are already cooperating, there is still room for improvement. The most common recommendation for improving cooperation is learning from other countries and bringing the best to Germany.
... The network of interactions between the players in the system (start-ups, large companies, intermediaries, research institutions, and public institutions) becomes increasingly dense and the relationships more complex, giving rise to actual innovation ecosystems (Joseph et al., 2021). ...
... In CIEs, the management of collaborations with start-ups must consider a double level: on the one hand, it is important to manage correctly individual collaboration projects, because their results can be relevant both for large companies and start-ups; on the other hand, it is necessary to cultivate good relationships to favor the development of the ecosystem as a whole (Joseph et al., 2021). ...
Start-up collaboration units (SCUs) are organizational units specifically created by large companies to facilitate collaboration with start-ups within their corporate innovation ecosystems (CIEs). The purpose of this study is to analyze the role of SCUs with reference to the transfer of knowledge between start-ups and large companies in collaborative innovation projects. An embedded case study was undertaken with three large original equipment manufacturers (OEMs) in the automotive sector. Interviews were conducted with managers of the three OEMs, of the intermediaries they collaborate with, and of the start-ups involved. Data were systematically coded and analyzed. The main barriers to knowledge exchange in partnerships between large companies and start-ups were identified, i.e. mismatches in the interpretation of knowledge and mismatches in the expectations of the partners. In addition, strategies have been identified that can be used by SCUs to facilitate knowledge flows, namely building networks, integrating communication, knowledge elicitation, orchestrating dialog, thinking outside the box, and increasing agility. This study is one of the first to focus on SCUs. It contributes to understanding collaborative innovation processes involving start-ups by studying the knowledge-broker role played by SCUs in the complex network of actors (large companies, start-ups, innovation intermediaries, public institutions) that make up a CIE.
... This research contributed significantly to our understanding of alliance management dynamics. Joseph et al. (2021) advocated for the pivotal role of corporations in nurturing innovation ecosystems. Their work emphasized the proactive engagement of corporations and outlined strategies to foster thriving ecosystems. ...
This chapter comprehensively examines corporate collaboration's role in innovation, encompassing objectives such as a literature review, exploration of collaboration forms, analysis of critical success factors, investigation into government-industry-academia partnerships, and comparison of startup and mature corporation innovation models. Utilizing a systematic literature review, the research defines objectives, crafts a search strategy, screens papers, extracts data, conducts thematic and comparative analysis, and assesses research paper quality. Key findings highlight the impact of corporate accelerators on innovation and corporate agility, emphasizing strategic alignment and effective communication in collaborations. The research underscores the significance of transparent, cooperative engagement, shared vision, and trust in open innovation relationships, contributing to understanding corporate collaboration's transformative potential in the 21st-century business world, providing practical implications for enhancing innovation capabilities through strategic partnerships.
... It shows that it is becoming increasingly complicated for a single company to engage in innovation independently, and it is more and more necessary to work together with other actors to create and capture value through innovation (Adner, 2006), for instance with universities, researches institutions, other companies, technological centers, suppliers or end users (Cant u et al., 2021). This applies to smaller companies that do not have EJMBE 32,5 enough resources to develop this innovation process by themselves (Zhang et al., 2021) and to larger companies that want to remain competitive in highly dynamic environments (Joseph et al., 2021). This has given rise to what we understand as innovation ecosystems, i.e. networks of hierarchically heterogeneous and independent organizations that collaborate for the co-creation of a value proposition (Thomas and Ritala, 2022;Konietzko et al., 2020;Moreau et al., 2018). ...
Purpose:
The sharing economy (SE) is significantly affecting traditional companies, which have felt a need to adapt their business model. The aim of this study is to identify the different types of adaptation developed by companies within a SE context, and to examine how they relate to their characteristics.
Design/methodology/approach:
A content analysis involving 149 real-world adaptation cases was carried out, after which a Kruskal–Wallis test and a multiple correspondence analysis were used to explore the relationships between the types of adaptation identified, the business characteristics and the strategic decisions taken for these adaptations.
Findings:
Through the analyses proposed in the study, the main conclusions suggest that the way companies adapt to SE is related to business characteristics and the strategic decisions taken for these actions, demonstrating throughout the article what types of adaptations are made depending on variables such as sector of activity or business orientation.
Originality/value:
This study is the first to examine the variables affecting the decisions among traditional companies in response to the SE. In addition, this work explores the SE from the business point of view, shedding light on the participation in SE by traditional companies.
... Behind this transformation of the city's entrepreneurial ecosystem was an aggressive and collaborative effort of a wide range of stakeholders, including city government, universities, and entrepreneurs involved in publicprivate partnerships. The city's investment arm, NYC Economic Development Corporation, partnered with private investors, entrepreneurs, and universities on efforts like Varick Street Incubator, East River Science Park, Audubon Business and Technology Center, and Harlem BioSpace (Batra, 2017;Cohen, 2013;Joseph et al., 2021;Schrock and Wolf-Powers, 2019). ...
Although the literature on accelerators, an important and newer model of entrepreneurial support, considers their performance and the definition of the form, little is known about how accelerators populate in a single ecosystem over time. We find accelerators are established by different types of entities such as non-profit organizations, local governments, universities, and even foreign government agencies with different goals. Based on a novel dataset of all 107 accelerator programs that ever operated in New York City, we propose a new way of categorizing accelerators by their founding attributes. We confirm that the emergence of accelerators in New York City started with the entry of non-profit accelerators for the purpose of local economic development. For-profit actors followed. Accelerators began from the periphery of the city’s geographic boundaries, but over time became concentrated in Manhattan. We also observe a shift toward sector specialization. Our contributions are to examine the development of one entrepreneurial support organization over time in one ecosystem, present a method to categorize accelerators based on their sub-niches, and to provide evidence of a catalyzing role of local government in fostering ecosystem emergence.
... Incremental changes are not enough to transform the food system (3). Thus, this paper focuses on innovations that can potentially transform the food system or significantly improve the food system in one of the four areas of transformation, so-called transformative innovations (23). It thereby concentrates on transformational innovations in contrast to other innovations in the food system, e.g., new flavour combinations. ...
The food system represents a key industry for Europe and particularly Germany. However, it is also the single most significant contributor to climate and environmental change. A food system transformation is necessary to overcome the system's major and constantly increasing challenges in the upcoming decades. One possible facilitator for this transformation are radical and disrup-tive innovations that start-ups develop. There are many challenges for start-ups in general and food start-ups in particular. Various support opportunities and resources are crucial to ensure the success of food start-ups. One aim of this study is to identify how the success of start-ups in the food system can be supported and further strengthened by players in the innovation ecosystem in Germany. There is still room for improvement and collaboration toward a thriving innovation ecosystem. A successful innovation ecosystem is characterised by a well-organised, collaborative, and supportive environment with a vivid exchange between the members in the ecosystem. The interviewees confirmed this, and although the different actors are already cooperating, there is still room for improvement. The most common recommendation for improving cooperation is learning from other countries and bringing the best to Germany.
... Internships and company-sponsored projects are common features of many bioentrepreneurship programs because they offer learners first-hand local industry exposure and the opportunity to network and develop soft skills. Likewise, internships and company-sponsored projects provide firms access to cutting-edge science and an informal way to test the prospective graduate recruits in a competitive labor market 11 . While online bioentrepreneurship internships and companysponsored projects existed before COVID-19 12 , the dominant model was the in-person experience where learners worked at the firm's premises or visits for meetings. ...
That COVID-19 has changed multiple facets of our working and social lives is a claim that few would challenge. COVID-19 also changed the focus of the business of biotechnology and how business is done. New collaborations rapidly formed and cooperated openly, collegially, and virtually in ways rarely seen in a field where intellectual property rights loom large.
In its nature, a startup is dependent on an innovation ecosystem. The innovation ecosystem, as well as the interactions that a startup maintains, aims to create new products, gain access to specific resources, and promote partnerships with other startups and organizations. The innovation ecosystem’s importance for a startup’s success is recognized by its managers. However, it is challenging to assess the competitive potential of the innovation ecosystem, such as identifying the positive or negative factors, decision-making on new alliances to improve competitiveness, and promoting improvement actions for the entire scenario. The present research aims to propose a measurement tool to verify the competitiveness performance of startups’ innovation ecosystem in the view of startup managers. Indicators related to the innovation ecosystem were extracted from a systematic literature review and developed based on the Analytic Hierarchy Process (AHP) methodology. The performance measurement tool comprises six Fundamental Points of View (FPV) and 22 Key Performance Indicators (KPI), applied in 46 startups. From the application results in 46 startups, the performance according to the global competitiveness index is between 59.50 and 72.15%, considering the innovation ecosystem is potentially competitive. In contrast, the innovation ecosystem of 79% of startups fails to generate more and better opportunities, providing secure economic advantages for the creation and maintenance of talent. The main contribution of this work is the measurement method we developed to diagnose the competitiveness level of startups’ innovation ecosystem. Stakeholders can apply this model in innovation ecosystems, promoting reflections on which indicators need to be improved to increase the competitiveness of the ecosystem or helping startups choose different ecosystems to promote their business.
The concept of innovation ecosystems has become popular during the last 15 years, leading to a debate regarding its relevance and conceptual rigor, not the least in this journal. The purpose of this article is to review received definitions of innovation ecosystems and related concepts and to propose a synthesized definition of an innovation ecosystem. The conceptual analysis identifies an unbalanced focus on complementarities, collaboration, and actors in received definitions, and among other things proposes the additional inclusion of competition, substitutes, and artifacts in conceptualizations of innovation ecosystems, leading to the following definition: An innovation ecosystem is the evolving set of actors, activities, and artifacts, and the institutions and relations, including complementary and substitute relations, that are important for the innovative performance of an actor or a population of actors. This definition is compatible with related conceptualizations of innovation systems and natural ecosystems, and the validity of it is illustrated with three empirical examples of innovation ecosystems.
Place-based innovation ecosystems play a crucial role in driving local and regional economic development. This role has been documented and understood for over 40 years in industrialized economies but is only starting to be appreciated in the context of emerging and developing economies. However, in the past several years we have seen an intensification of interest in innovation ecosystems among global development actors as well as practitioners and policymakers working across the Global South. In contexts ranging from Oaxaca, México to Accra, Ghana, MIT D-Lab has been asked over the past year to convene ecosystem actors and stakeholders in order to facilitate joint ecosystem strengthening work. In preparing for these engagements, we have researched the state of the field regarding both innovation and entrepreneurial ecosystems as well as existing ecosystem frameworks, models, and tools. In doing so, it has become clear that much of the current thinking and practice related to these concepts is drawn from research on innovation processes and entrepreneurial clusters in highly developed economies — places like Silicon Valley and Kendall Square, Boston. Much less is known about innovation ecosystems in less-developed contexts in terms of how they can be characterized, how they function, and — most importantly — how they can be strengthened.
To that end, the Local Innovation Group at D-Lab has been conducting primary and secondary case study research on local innovation ecosystems in the types of contexts where D-Lab and our partners engage. Based on this research, we have developed a framework for understanding local innovation ecosystems, which we share in this publication. We start by clarifying the concept of a “local innovation ecosystem” and presenting the core ideas informing the visual model. We then describe the model and each of its individual components. We follow with guidance from our research on best practices for conducting ecosystem strengthening work, and share three examples of how we have used the model to facilitate ecosystem-strengthening conversations in distinct local contexts.
Under pressure from mounting forces of change, corporations must engage in innovation more than ever. The transformative types of innovation required for organizations to thrive in the long-term are extremely difficult for established incumbents, in part because they have existing businesses to maintain. We focus on these transformative innovations that are difficult to achieve since they require exploitation of both technological and business model advancements. The Innovation Dashboard 2.0 that we describe herein offers a way for organizations, especially established corporates, to determine innovation activities, measure those activities, build innovation capacity, and align stakeholders across the organization around those activities.
Four models are identified for organizations to pursue simultaneous core growth and transformative innovation leveraging open innovation principles: 1) corporate accelerators —engage with or create autonomous startups; 2) external startup platforms — engage with startups through established third parties, 3) consortia or alliances — leverage resources of peers and emergent players across the innovation ecosystem; and; 4) direct entrepreneurial approach -- work from within the organization to develop new units. We identify “innovation maturity” as the key factor to select which model is most appropriate for the organization. Additional considerations include the resources, processes and values of the organization, and the developmental status of the transformative technology. Model choice(s) are dynamic and can evolve over time as the innovation capacity of the organization matures and adapts to change.
We focus on the processes and strategies utilized by entrepreneurs to commercialize new technologies, thereby creating significant change and value in new, or existing markets, i.e. innovation. A cross-industry approach utilizes available theories and strategies applicable to commercialization and innovation. Our contribution is to leverage these theories, but augment their application by informed use of design thinking, and lean entrepreneurial principles to create and apply an iterative and unified framework for innovation. The coupling of strategy with informed execution is intended to provide the entrepreneur (or innovator) with an early and evolving understanding of unmet customer and user need, and how to address that need thru offerings from market entry through growth. We also utilize the “jobs to be done” framework to identify opportunity to create value for the customer/user, and for the entire ecosystem in multi-sided, networked markets. Section One covers our methodology, surveys the extant theories, and provides a framework that is applicable to commercialization and innovation in any industry. Also, we describe in Section One the innovation culture that is needed to drive and support innovation. We present our extension of the Balanced Scorecard – the Innovation Strategy Dashboard - as an appropriate methodology to measure innovation in any organization. Section Two is dedicated to applications of these principles and models to emerging opportunities in Biopharma, MedTech and Digital Medicine. Section Two includes a general healthcare industry overview highlighting its evolution and current challenges. We also include contributed articles pertinent to the production side of the healthcare industry, e. g. marketing and product positioning for biopharma, and further extend the role of design thinking to service design in healthcare. These are followed by several mini-case studies applicable to biopharma, MedTech, and digital medicine.
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