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Business Ecosystem

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A business ecosystem is the network of organizations — including suppliers, distributors, customers, competitors, government agencies, and so on — involved in the delivery of a specific product or service through both competition and cooperation. The idea is that each entity in the ecosystem affects and is affected by the others, creating a constantly evolving relationship in which each entity must be flexible and adaptable in order to survive, as in a biological ecosystem.[1]

The Origins of the Business Ecosystem Concept[2]
The concept first appeared in Moore's May/June 1993 Harvard Business Review article, titled "Predators and Prey: A New Ecology of Competition", and won the McKinsey Award for article of the year.

Moore defined "business ecosystem" as: "An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world. The economic community produces goods and services of value to customers, who are themselves members of the ecosystem. The member organisms also include suppliers, lead producers, competitors, and other stakeholders. Over time, they coevolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments, and to find mutually supportive roles."

Moore used several ecological metaphors, suggesting that the firm is embedded in a (business) environment, that it needs to coevolve with other companies, and that “the particular niche a business occupies is challenged by newly arriving species.” This meant that companies need to become proactive in developing mutually beneficial ("symbiotic") relationships with customers, suppliers, and even competitors. Using ecological metaphors to describe business structure and operations is increasingly common especially within the field of information technology (IT). For example, J. Bradford DeLong, a professor of economics at the University of California, Berkeley, has written that "business ecosystems" describe “the pattern of launching new technologies that has emerged from Silicon Valley”. He defines business ecology as “a more productive set of processes for developing and commercializing new technologies” that is characterized by the “rapid prototyping, short product-development cycles, early test marketing, options-based compensation, venture funding, early corporate independence”. DeLong also has expressed that the new way is likely to endure “because it's a better business ecology than the legendarily lugubrious model refined at Xerox Parc—a more productive set of processes for rapidly developing and commercializing new technologies”.

Mangrove Software,The Montague Institute, Kenneth L. Kraemer, director of the University of California, Irvine’s Center for Research on Information Technology and Organizations and Stephen Abram, Vice President of Micromedia, Ltd., Tom Gruber, co-founder and CTO of Intraspect Software, Vinod K. Dar, Managing Director of Dar & Company, have all advocated this approach.


See Also

Business
Business-to-Business (B2B)
Business Application
Business-Driven Development (BDD)
Business-to-Business Gateway
Business-to-Consumer (B2C)
Business Accelerator
Business Activity Monitoring (BAM)
Business Analysis
Business Analytics
Business Application
Business Application Programming Interface (BAPI)
Business Architecture
Business Asset
Business Capability
Business Capability Modeling
Business Ethics
Business Case
Business Centric Methodology (BCM)
Business Continuity Management (BCM)
Business Continuity Plan (BCP)
Business Continuity Planning (BCP)
Business Cycle
Business Diversification
Business Driven Technology
Business Drivers
Business Ecosystem
Business Environment and Internal Control Factors (BEICF)
Business Excellence
Business Expansion
Business Function
Business Function Model
Business IT Alignment
Business Impact Analysis (BIA)
Business Incubator
Business Insurance
Business Integration
Business Intelligence
Business Interruption Insurance
Business Life Cycle
Business Logic
Business Management System (BMS)
Business Model Innovation (BMI)
Business Model for Information Security (BMIS)
Business Motivation Model (BMM)
Business Objects
Business Operations
Business Oriented Architecture (BOA)
Business Mission
Business Vision
Business Model
Business Goals
Business Objective
Corporate Structure
Corporate Social Responsibility (CSR)
Chief Executive Officer (CEO)
IT Strategy (Information Technology Strategy)
IT Governance
Enterprise Architecture
IT Sourcing (Information Technology Sourcing)
IT Operations (Information Technology Operations)


References

  1. Definition - What is a Business Ecosystem? Investopedia
  2. The Origins of the Business Ecosystem Concept Wikipedia