KTT Ecosystems

3.3 KTT Ecosystems

to four components: Technology Transfer Offices, Science Parks, Incubators and University Venture funds.

As the TT system resides at the heart of the Triple Helix model, a more balanced and multi-perspective yet directed approach to the study of TT ecosystems, as defined by Hayter (2016) and as conceptualized by Scaringella and Radziwon (2018) becomes necessary.

3.3.2 Early contributions by Moore (1993)

In predators and prey: a new ecology of competition Moore (1993) suggests that a company should be viewed not as a member of a single industry but as part of a business ecosystem that crosses a variety of industries. In a business ecosystem, companies co- evolve capabilities around a new innovation: they work cooperatively and competitively to support new products, satisfy customer needs, and eventually incorporate the next round of innovations.

A business ecosystem, like its biological counterpart, gradually moves from a random collection of elements to a more structured community. Business eco- systems condense out of the original swirl of capital, customer interest, and talent generated by a new innovation, just as successful species spring from the natural resources of sunlight, water, and soil nutrients.

Every business ecosystem develops in four distinct stages: birth, expansion, leadership, and self-renewal or, if not self-renewal, death. These evolutionary stages blur, and the managerial challenges of one stage often crop up in another.

During Stage 1 of a business ecosystem, entrepreneurs focus on defining what customers want, that is, the value of a proposed new product or service and the best form for delivering it.

Victory at the birth stage, in the short term, often goes to those who best define and implement this customer value proposition. Moreover, during Stage 1 of a business ecosystem, it often pays to cooperate. From the leader’s standpoint, in particular, business partners help fill out the full package of value for customers. And by attracting important “follower” companies, leaders may stop them from helping other emerging ecosystems.

In Stage 2, business ecosystems expand to conquer broad new territories. Just as grasses and weeds rapidly cover the bare, scorched ground left after a forest fire, some business expansions meet little resistance. But in other cases, rival ecosystems may be closely matched and choose to attack the same territory. Direct battles for market share break out. Fighting can get ugly as each ecosystem tries to exert pressure on suppliers and customers to join up. In the end, one business ecosystem may triumph, or rival ecosystems may reach semi-stable accommodations.

In general, two conditions are necessary for Stage 2 expansion: (1) a business concept that a large number of customers will value; and (2) the potential to scale up the concept to reach this broad market. During the expansion stage, established companies can exercise enormous power in marketing and sales, as well as in the management of large-scale production and distribution, literally crushing smaller ecosystems in the process.

In stage 3, the ecosystem must have strong enough growth and profitability to be considered worth fighting over. Second, the structure of the value-adding components and processes that are central to the business ecosystem must become reasonably stable. This stability allows suppliers to target particular elements of value and to compete in contributing them. It encourages members of the ecosystem to consider expanding by taking over activities from those closest to them in the value chain. Most of all, it diminishes the dependence of the whole ecosystem on the original leader. It’s in Stage 3 that companies become preoccupied with standards, interfaces,

“the modular organization,” and customer- supplier relations.

Stage 4 of a business ecosystem occurs when mature business communities are threatened by rising new ecosystems and innovations. Alternatively, a community might undergo the equivalent of an earthquake: sudden new environmental conditions that include changes in government regulations, customer buying patterns, or macroeconomic conditions. Moreover, these two factors reinforce each other. An altered environment is often more hospitable to new or formerly marginal business ecosystems (Moore, 1993). Companies can respond in several ways;

one is working with the innovators and or disruptors that bring new ideas to the existing ecosystem.

Another is the creation of high barriers to entry to prevent innovators from building alternative ecosystems. The latter can also be achieved via high customer switching costs in order to buy time to incorporate new ideas into new products and services. Alternatively, if self-renewal does not work, the company will eventually become uncompetitive and disappear from the ecosystem.

3.3.3 The proliferation of ecosystem models

Business ecosystems, as defined by Moore (1993, 1996), Iansiti and Levien (2004) and or Zhand and Liang (2011) refer to loose networks – of suppliers, distributors, outsourcing firms, makers of related products or services, technology providers, and a host of other organizations – affect, and are affected by, the creation and delivery of a company's own offerings. Like an individual species in a biological ecosystem, each member of a business ecosystem ultimately shares the fate of the network as a whole, regardless of that member's apparent strength.

Innovation ecosystems, as defined by Adner (2006) refer to the collaborative arrangements through which firms combine their individual offerings into a coherent, customer-facing solution.

Enabled by information technologies that have drastically reduced the costs of coordination, innovation ecosystems have become a core element in the growth strategies of firms in a wide range of industries.

Entrepreneurial ecosystems, as conceptualized by Prahalad (2005) refer to the market-based ecosystem allows private sector and social actors, often with different traditions and motivations, ad of different sizes and areas of influence, to act together and create wealth in symbiotic relationship. Such an ecosystem consists of wide variety of institutions coexisting and complementing each other.

Knowledge ecosystems finally, as conceptualized by Clarysse et al (2014) refer to the flow of tacit knowledge between companies and the mobility of personnel have been advanced as the main advantages of geographic colocation which characterize these hotspots. Such hotspots have been characterized as knowledge ecosystems where local universities and public research organizations play a central role in advancing technological innovation within the system.

3.3.4 The ecosystem model by Scaringella and Radziwon (2018)

Scaringella and Radziwon (2018) explore and present the terminology that management scholars use when referring to the various streams of research dedicated to ecosystems by systematically reviewing a wide range of papers from business, management, and economics; to list the invariants that appear unchanged despite the timing and framing of a literature stream; to link the ecosystems' growing stream of literature to the well-established and mature literature dealing with the territorial approach; and to build the framework that will be a base for further research.

In order to reach these objectives, they address the following research question: What are the conceptualizations of the ecosystem approach, its invariants, and its links with the territorial approach? In ten searches the authors identified 35 primary, 30 secondary, 117 peripheral, and 172 non-relevant records. Based on this analysis they created a conceptual model of the ecosystem,

based on the invariants that were retrieved during their analysis. The authors provide a list of the elements that all theories on ecosystems have in common. Overall the authors identify 7 common elements. 1. a given territory with a unique atmosphere, the anchoring of an industry, and varying sizes; 2. a set of common values, such as trust, belonging to a community, a mutual understanding built over time through common history, culture, and routine; 3. a set of various stakeholders, such as firms of different sizes, research institutes, universities, and policymakers, all positioned at different stages of the value chain; 4. a strong economics foundation based on localization economies, agglomeration economies, transaction cost theory, localized spillovers, and economies of scale; 5. a strong social foundation based on the coexistence of collaboration and competition, which focuses on the increasing importance of both social and human capital; 6. a central position of knowledge of a different nature (tacit versus explicit), which circulates well through transfer, is well-absorbed through intensive learning, and offers synergies; and 7. important outcomes, which are the catalysts of innovation, entrepreneurial initiatives, and competitiveness and lead to economic growth, long-term development, performance, and success.

The model shown in figure 1 shows the conceptual model that these authors developed on the basis of the invariants uncovered through their research. The framework highlights the interconnection of the three complementary layers: ecosystem, territorial ecosystem, and territorial.

The external layer (ecosystem) offers a broader view, the internal layer (territorial) offers an inner view, and the intermediate layer (territorial ecosystem) is the point of friction between the two complementary streams of literature. The authors believe that (a) there is a causality between the invariants at each layer, (b) there are virtuous circles at each layer where an interaction strengthens the next iteration, and (c) there is a high degree of porosity among the three layers and a certain influence between invariants: from the ecosystem to the territorial approaches (broad-inner dynamics) or from the territorial to the ecosystem approaches (inner broad dynamics).

Regarding the external layer (light grey color), entrepreneurial activities clustered in an entrepreneurial ecosystem offer the possibility for large firms to play the role of orchestration, which shapes knowledge sharing between the members, involves a form of coopetition, complementarity, and interdependence, determines the joint evolution and the co-creation of value, and finally, reinforces the entrepreneurial activities.

The internal layer, the territorial atmosphere supports the development of research centers and universities and the exchange of tacit knowledge, which consequently creates a certain path dependency; it shapes the collective learning, the development of a social capital, and the agglomeration of firms benefiting from localized knowledge spillovers, which strengthens the anchoring of knowledge; and finally, it reinforces the territorial atmosphere.

As for the intermediate layer (grey color), the interconnections and interdependencies between ecosystem stakeholders create a trusting atmosphere and a sense of belonging, which encourages various stakeholders to become involved in the value chain. Consequently, the stakeholders also engage in knowledge dynamics as purposive inflows and outflows of knowledge, and this creates an environment where there is a dual existence of collaboration and competition, which is needed to create synergies between closely connected actors and reduce initiative, interdependence, and integration risks, benefit from economies of scale/scope, and offer innovation as a social and iterative process, reinforcing the sense of belonging.

Figure 1. Ecosystem model by Scaringella & Radziwon (2018)

3.3.5 Concluding remarks on KTT ecosystems

Contemporary literature on KTT ecosystems can be summed by stating that KTT ecosystems are complex, multi-layered systems anchored in geographically delimited spaces. Within these surroundings these systems exhibit and require the existence of a number of constructs, heavily drawing from the triple helix knowledge base and integrating the knowledge, business and policy communities, thereby generating interaction between its actors through which relationships are purposefully oriented towards several objectives, of which the primary are: the strengthening of companies, the reduction of uncertainty, the generation of innovation and the fostering of learning.

Future research on the matter will need to address these ecosystems in a holistic, comparative and encompassing manner in order for researchers to distill lessons learned and best practices towards the design, development, implementation and improvement of these systems.

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3.4 Business Development and Commercialization in a University Context: scouting and