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Sustainable Growth Together

Most of us are getting ready to close the 2020 and setting targets for 2021 with glimpses of hope in sight with the COVID-19 vaccinations starting as we speak. The discussion on ecosystems has been vivid over the past weeks and months, and we are extremely happy to be part of that discussion. Here comes a brief overview of what’s up:

New Ecosystems Funded

While the motivation to write about ecosystem leadership had been in the air for ages, the idea for the Ecosystem Handbook moved to action when Business Finland launched its Veturi instrument in the beginning of this year.

Approaching the end of the year, there are six new corporation led ecosystems funded. In addition to the June edition of Veturi, i.e. Nokia’s industrial 5G, Metsä’s and Fortum’s ExpandFibre renewable fibre ecosystem and Neste initiative to replace crude oil, last week brought us three new Veturis: ABB‘s initiative to develop a platform to improve energy efficiency, KONE‘s initiative to develop sustainable people flow solutions for urban environments and Sandvik‘s initiative to develop digital solutions for heavy machinery. And that’s just the Veturi ecosystem funding, in addition there are myriad of initiatives in Finland and EU levels that have been funded or calls that are open as we speak.

The notable fact about these ecosystem initiatives is that they are not just business. Instead, they all seek significant environmental or broader socio-economic impact in addition to the business benefits for the participating companies. And that’s where the power of ecosystems comes in. When problems are too big to be solved by business measures only, ecosystem way of working have potential to show their power by solving bigger problems better and faster.

Organizing for impact in the era of ecosystems

However, funding is only the beginning. As best, it can help companies to innovate together with public organizations and renew their business models and build sustainable new business. And public funding surely helps with that. For example LUXTURRIM5G is a good example of such collaboration.

But the fact that ecosystems would actually develop sustainable business is not given. In every company led ecosystem initiative there is a risk of “doing things on the side” vs. doing real business. That’s why it is important to understand the following:

  • Ecosystems solve problems or develop solutions – they do not sell or deliver. That means that in order to commercialize solutions and meet customer needs for Service Level Agreements (SLAs) there is a need to either agree upon an integrator model where one of the ecosystem members assumes responsibility of the solution and deals with other partners to come up with acceptable commercial agreement – or establish a new entity (JV or like) to sell the ecosystem offering.
  • Start-up ecosystems based on open APIs are often more hype than impactful business. Opening up Application Development Interfaces (APIs) is not a sustainable ecosystem strategy without active partner engagement and focus on commercialization and scaling support. Having large number of developer partners on a platform that has not proven commercial viability may seem exciting at first, but without proper marketing and focus on building a joint sales channel they often remain marginal from the viewpoint of the mainstream business.

So what can be done to solve the problem? The good news is that there is a lot of action in the ecosystem arena. And even better is that we are actively documenting and sharing best practices. For example Finnish Research Institution launched their Ecosystem Guide (in Finnish) last week.

In fact, from personal point of view I find the topic interesting enough to study – and was last week accepted as a doctoral student to Turku School of Economics. The title of research is in fact the above: “Organizing for Impact in the Era of Ecosystems”. So if you want to know more about the latest and greatest related to the topic – please get in touch with me (Sari Kola). Let’s talk Ecosystem!

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