Ecosystems are the result of a delicate balance between centripetal forces that push economic activities toward integration, and centrifugal forces that pull economic activities out onto the market. Ecosystems evolve when these forces change. For example, technological complementarities—the main source of centripetal force—are dynamic and may be commoditized, generalized, or standardized over time. Management and coordination also change: for example, open innovation practices enable firms to move innovation activities from the in-house R&D lab out into the ecosystem. This article discusses how such dynamics in technologies and management lead to ecosystem evolution.
Published in California Management Review, Vol. 64, No. 3, pp. 5-23.