The important role of competition in successful ecosystems

By Marcus Holgersson

The innovation ecosystem concept has flourished during the last decade. Go to any conference with a business theme and you will hear presenters discuss their firms’ ecosystems, and how their businesses are part of these larger communities which jointly create value for customers. But what does the innovation ecosystem concept actually mean, and what are the critical components that need to be considered when building or surviving in an innovation ecosystem?

In a recent article that I wrote together with Prof. Ove Granstrand we review the academic literature and its definitions of innovation ecosystems. We find that there is an unbalanced focus on collaboration between actors and on complementarities between products and/or services, while the role of competition and substitution between actors and artifacts (such as products) is often left aside. This, we argue, is a critical flaw in the current discussion on innovation ecosystems. Let’s look at some examples to illustrate our point.

Apple is one of the most successful ecosystem builders of all time. Its ecosystem has successfully combined collaboration and complementarities, creating a superior and seamless customer experience while simultaneously introducing competition between application providers and their apps to ensure innovation and price pressure among complements. Apple struck the right balance between competition and collaboration in different parts of its ecosystem, and it did it at the right time.

There are much older examples as well. Remember those old video cassette recorders (VCRs)? The introduction of VCRs is by now a classic case, and it shows that both collaboration and competition is needed for the success of an ecosystem. JVC’s VHS standard, which eventually became dominant, was neither first nor technically superior when it was introduced. Instead, Sony was the first mover with its Betamax standard. So how could VHS outcompete Betamax? Part of the explanation lies in the fact that JVC allowed other firms to relatively cheaply use its standard. While this move meant that JVC had to compete against its own technology, it also led to a growing flora of complementary hardware and content and to healthy competition between the ecosystem members. In other words, JVC allowed competition for its ecosystem to be competitive.

We can even trace the concept back to its roots in biology and ecology to illustrate the importance of competition. In nature, competition is just as important as collaboration for the health of ecosystems. For example, when wolves were extirpated from Yellowstone National Park in the 1920s, other species such as elk grew rapidly, in turn leading to overgrazing and a negative spiral in the overall health of the ecosystem. The wolves’ competitive role was crucial for the ecosystem’s wellbeing, and since 1995 the wolves are reintroduced in the park. So if you are trying to build an innovation ecosystem, or if you are aiming at entering one, don’t forget to consider the competition within the ecosystem in order to succeed.

Licentiate thesis successfully defended

Yesterday was a big day when Sarah van Santen defended her Licentiate Thesis, with the title Understanding the Role of Intellectual Property in Digital Technology-based Startups: Decisions and Dynamics. She did a wonderful job. Prof. Pia Hurmelinna provided constructive feedback and led the discussion. The thesis is available here:
https://research.chalmers.se/publication/513863/file/513863_Fulltext.pdf?fbclid=IwAR2Sw13gBd8lPAxO2kGTWvr-yGW6Q0yFkewE7ehzY1Esvo1hpAQi6TOy5pg

Seminar by Ove Granstrand at Lund University

On November 8th, Professor Ove Granstrand held a seminar at Lund University School of Economics and Management, hosted by the Business Law centre ACLU, the IP forum FIF and the IP consultancy firm Valea. The seminar covered research from his book Evolving Properties of Intellectual Capitalism. Based on his two investigations, one national about Sweden and one international, about how patents could be better used to promote innovation for better ends, Granstrand outlines policy recommendations for strengthening innovativeness for economic growth and ultimately for social value creation. Furthermore, a discussion was held about the threat from global challenges, such as climate change and financial crises, and the implications for innovation and technology management.

Marcus Holgersson invited to present his research at Cambridge University

Marcus Holgersson is currently visiting Cambridge University, where he among other things has presented his joint work with Sarah van Santen on IP strategy and its mediator role in the digital business model. The presentation raised a lot of interest among the participants, leading to many new ideas on how to improve the presented paper and continue the research moving forward.

First large study of IP strategies now available online

One of the very first comprehensive empirical studies of IP strategies in large corporations is now available here. It was originally published as chapter 7 in Ove Granstrand’s widely recognized book from 1999: The Economics and Management of Intellectual Property. The study is based on the concept of a strategy ladder, enabling the integration of IP strategies laterally across main IPR types and vertically with technology and business strategies. After a survey of a number of advantages and disadvantages of patenting from a corporate perspective, the chapter reviews generic patent strategies and counterstrategies, litigation strategies, secrecy strategies and counterstrategies and other IPR strategies, that can be used jointly in multi-protection. The empirical survey and case studies mainly focus on IP strategies in large Japanese corporations and how they responded to US corporate patent and litigation strategies.

Check out the study to gain further insights into IP strategies that are still relevant today, not the least in light of the evolving IP strategy game between US and China.

Berkeley summer program

Our researcher Marcus Holgersson is currently hosting the 2019 Berkeley summer program at UC Berkeley. The program admits 35 of our high-performing students in Industrial Engineering and Management at Chalmers, and includes studies at UC Berkeley, visits to tech firms in Silicon Valley, and case projects with startups in the area. The program started a couple of weeks ago, and has already included visits to organizations such as Tesla Motors, Volvo Group, Stanford University, Nordic Innovation House, and ETC Labs, an accelerator for blockchain technologies and cryptocurrencies. Much more is to follow! A visit to the baseball game between Oakland A’s and Tampa Bay Rays made a relaxing break after an intense first week. The program runs until mid-August.

The students in front of Sproul Hall, UC Berkeley. Program manager Marcus Holgersson on the far right. Martin Luther King Jr. held a famous anti-war speech on these very same stairs on May 17, 1967.
Oakland A’s had no chance against Tampa Bay Rays, despite the unusual support from Swedish students

IP pharma challenges in 2019

In connection to the publication of a new issue of the Stockholm Intellectual Property Law Review, where our researcher Marcus Holgersson serves on the board of directors, a seminar on IP pharma challenges in 2019 was held in Stockholm on June 4, 2019. The seminar covered several important topics, including the use of and uncertainty related to doctrines of equivalents, the opportunities and risks with CRISPR-Cas9 gene editing technologies, and branding and trademarking pharmaceuticals. Much more can be read about these topics in the latest issue of Stockholm Intellectual Property Law Review, available here.

The seminar was followed by a dinner, celebrating the recent graduates of the IP Law master program of Stockholm University. We wish the students best of luck with their future careers in the IP Law field.


Thomas Hedner from IMIT giving a thought-provoking talk on the opportunities and risks with CRISPR-Cas9
Kristina Björnerstedt from Skriptor Zigila talking about the structured process of naming your business, product, or pharmaceutical

John Hornby from Lambert Hornby Ltd talking about the doctrine of equivalents from a UK perspective

Bengt Domeij from Uppsala University giving a Swedish perspective, also on the doctrine of equivalents
Students celebrated by parts of the Swedish IP community

Recent talks delivered by Ove Granstrand

Professor Ove Granstrand has during the spring held several fascinating talks on the theme: ”Do patents and innovations contribute to growth and welfare?”

Following up on his first Leverhulme Trust Lecture held in December on the Nobel Laureates in Economics’ work on Technology, IP, Innovation and Growth, Granstrand focused his second talk on presenting some of his own research from his recently published book within the area. The talk covered topics such as the innovation spiral and the links between its variables, the critiques of and motives behind the patent system and some global challenges with the needs for institutional innovations to manage them. Astra’s medical drug Losec and the role of patenting and evergreening strategy in its success was discussed, among other case studies within the medical and telecommunications industries. 

Another talk was delivered by Professor Granstrand at Freie Universität in Berlin on May 28. 

The invitation to Professor Granstrand’s second Leverhulme Trust Lecture, delivered at the Department of Engineering at University of Cambridge on May 2.

Glossary available

The glossary from Ove Granstrand’s book Evolving Properties of Intellectual Capitalism: Patents and Innovations for Growth and Welfare is now available here. This glossary contains many of the key concepts from the book as well as several other publications from the research group. Make sure to check it out if you are interested to learn more about the field of innovation and intellectual property management!

Seminar on IP strategy in ecosystems

On May 29 we were happy to host Mingjin Guo from University of Cambridge for a seminar on IP strategy. More specifically, Mingjin presented her PhD research on the coevolution of IP strategy and innovation ecosystems, a topic that is of much interest for our research group (see for example our Long Range Planning publication on this topic here). We thank Mingjin for a very interesting seminar and wish her best of luck with finishing her PhD, before joining Boston Consulting Group in Beijing later this year.

Mingjin Guo, University of Cambridge