An introduction to Innovation Ecosystem

The most obvious reality of how businesses have been dealing with the crisis has been by innovating, by pivoting for short-term survival aligned with restructuring for long-term growth. 

In New Zealand, most businesses are starting to shift towards figuring out how short-term pivots achieved during the Lockdown can be converted into long-term sustainable growth?  

The biggest threat to any business is that consumers are willing to experiment with different offerings during the crisis and see this as a great opportunity to redesign their lifestyle and consumption patterns. In a B2B scenario, customers are restructuring for long-term growth which means working with new talent and service providers. Early trends also suggest that consumers and customers are favouring businesses who are doing more for society.  

So how can the innovation strategy of an enterprise cater to this complex problem of navigating from short-term survival to long-term growth? The answer might be – implementing an innovation ecosystem. 

This article explores just that. What is an innovation ecosystem is, how to create one, what are its benefits, how to monitor performance, and manage risks. 

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Innovation ecosystem definition

Innovation ecosystem gets its definition from the natural world where each part component and its relationship to one another create interactions that collectively drive value efficiently and effectively for everyone involved.  

An innovation ecosystem is a symbiotic network of actors, activities, entities, and relationships that are important for generating innovative performance in the form of new ideas, products, resources, culture, and image. 

Innovation ecosystems exist at multiple levels (e.g. city, regional, national) and within various sectors (e.g. energy, agriculture, education). They often include government, enterprises, accelerators, incubators, private investors, foundations, innovators, entrepreneurs, education providers, mentors, and media. They all play a role in creating value within an ecosystem.  

The core purpose of an ecosystem

The focus of an innovation ecosystem is the value creators; the innovators and entrepreneurs solving problems that are of value to customers and consumers. An innovation ecosystem puts its resources towards identifying the best innovators and entrepreneurs that create immeasurable value. The core purpose of an innovation ecosystem is executing the innovation strategy of an enterprise. 

Components of an ecosystem

Each innovation ecosystem is unique and deeply influenced by local history and culture. When creating an innovation ecosystem, getting the right components working well together is critical. 

Idea generation 

The process of value creation occurs organically without a plan or controlling authority. Innovation ecosystems emerge from the free flow of ideas between entrepreneurs and diminish when tightly controlled. Encouraging ideas generation will constantly challenge an enterprise’s innovation priorities. 

Ecosystem Strategy 

Crafting a strategy for innovation ecosystem will require strong alignment with innovation strategy and execution of ecosystem components based on priority. Having a clear innovation strategy and assessment of the existing innovation ecosystem health will determine the development of a robust ecosystem strategy. 

People 

A part component of a productive innovation ecosystem is people; the inventors, innovators, entrepreneurs, makers, investors, regulators, consumers, and customers. In an enterprise, the right people are upper-level management that fund projects, product owners or managers, leaders who have had success with innovations in the past, upcoming innovators, technical experts, regulators, consumers, customers, and external partners. 

Partners

A network of external partners that accelerate innovation productivity is critical as not all innovation activity can be delivered in-house. Invite the right partners, and also, ensure they are recognised appropriately and rewarded accordingly. 

Physical Space  

A physical space helps nurture the culture of innovation and inspires through design. Ensure the space has a dedicated lab manager who facilitates activities aligned with the innovation ecosystem strategy. 

Technology 

Tools can be physical such as 3D printers for prototyping or digital tools from software, high-speed interest to platforms where members of the ecosystem can connect, share, seek help and support others. 

Connectivity  

Hyperlinked organisations produce higher rates of innovation productivity. Hold regular meetings, events, round-table discussions, accelerators, and incubators. Create a consistent programme of events that drive connectivity. 

Support  

Implement education programs on how to develop great ideas and how to transform great ideas into an actionable roadmap to bring those ideas to market. These programs must prioritise people who are developing professionals. 

Benefits of an ecosystem

The key benefits of an innovation ecosystem are; 

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Open innovation: Producing innovation outputs that can’t be achieved alone as an enterprise. 

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Keystone strategy: Creating a platform where people involved rely on this platform to operate their businesses. 

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Value networks: Creating a hyperlinked organisation where the exchange of knowledge, expertise and support creates innovation outputs.  

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Talent retention and development: Innovation ecosystem retains talent that are innovation leaders and future leaders who need constant new opportunities. 

Doing more for society: Innovation ecosystems create an impact on the neighbourhood economy and increase innovative productivity at a regional level.  

Creating these benefits are very relevant and powerful in the post COVID world for any organisation.  

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Monitor ecosystem performance

To ensure an innovation ecosystem is performing well, studying its impact every year helps monitor performance and implement improvements. Here are a few critical metrics to measure; 

• # people engaged in the ecosystem 

• # of qualified ideas generated

• # of events delivered 

• # of ideas established into valuable companies 

• $ of funds raised by new viable ideas 

• # of new target markets active 

• # of new jobs created 

• # top talent attracted and retained 

• # of new teams and divisions created 

• # of partnerships created and $ figure value created for partners 

• $ figure contributed to the neighbourhood economy 

• $ figure contributed to the innovation economy of the city  

• # of success stories created 

• # of initiatives contributed towards sustainability

• # of women empowered to join the innovation ecosystem 

• # of people of colour included in the ecosystem 

Managing ecosystem risks

Start with specifying the different categories of risk that innovation ecosystems present. Fundamentally, there are three types of risks to manage; project, interdependence, and integration risks. 

Innovation ecosystems are seductive, and its value creation can be overestimated, and its challenges underestimated. Managing expectations and measuring impact is critical to continue investment towards ecosystem activation. 

Innovation Ecosystem Implementation

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Now is the right opportunity to consider if implementing an innovation ecosystem for your enterprise is the right approach to activating your innovation strategy. 

Implementation can be done in parts. A great place to start is assessing if an innovation ecosystem already exists and if yes, conduct a health assessment understanding; functionality, effectiveness, fragility and efficiency. 

Most enterprises already have an operating innovation ecosystem. Now is the time to leverage it by improving it to unlock long-term growth. 

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Johnson Corner is building a high-value innovation ecosystem, a network of global physical environments in partnership with property developers and owners. It also provides custom build services for enterprises who are looking to build innovation spaces.