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Innovation ecosystems (The Cambridge Judge Business Debate podcast series)

14 May 2019

The article at a glance

Innovation ecosystems – networks and places to exchange ideas – are helping to unlock value through collaboration across industries. In this episode, …

Innovation ecosystems – networks and places to exchange ideas – are helping to unlock value through collaboration across industries.

From left to right: Professor Shahzad Ansari, Belinda Bell, Dr Chris Coleridge and Michael Kitson
L-R: Professor Shahzad Ansari, Belinda Bell, Dr Chris Coleridge and Michael Kitson

In this episode, joining podcast host Michael Kitson, University Senior Lecturer in International Macroeconomics at Cambridge Judge Business School, are Shahzad Ansari, Professor of Strategy & Innovation at Cambridge Judge; Belinda Bell, Director of Cambridge Social Ventures at the business school’s Cambridge Centre for Social Innovation; and Dr Chris Coleridge, Senior Faculty in Management Practice at Cambridge Judge.

This is the 13th in a series of “Cambridge Judge Business Debate” podcasts featuring faculty and others associated with Cambridge Judge Business School and the broader Cambridge community.

This latest podcast focuses on innovation ecosystems – networks and anchor institutions that bring together people from different industries and organisations to foster the free exchange of ideas. This cross-industry collaboration means that new strategic management skills are needed that foster greater mutual support.

Here are some edited excerpts of some of the podcast discussion:

What are “innovation ecosystems”?

Michael Kitson: Innovation is essential for economic growth and corporate performance. But it’s increasingly recognised that innovation is not bound within a firm or organisation, but instead takes place within an ecosystem, often with multiple players. So what do innovation ecosystems do, and how can they be cultivated?

Shahzad Ansari: An innovation ecosystem is a group of companies, users or other kinds of players who create something new, create something novel, create something of value they can’t manage alone. At a time of resource constraints companies realise they can’t do it alone. So innovation ecosystems have replaced industries, because companies don’t operate in an industry anymore but across industries.”

In the beginning ….

Michael Kitson: How do these ecosystems begin: do they spontaneously emerge or do they develop?

Shahzad Ansari: Often there is a key player, a hub player around whom an ecosystem can bloom and who orchestrates this collective action or joint work within the ecosystem. At the very beginning they are based on forming relationships and need, knowing it’s something you can’t do alone.”

Chris Coleridge: Large companies realise they need to innovate continuously, so they need to refigure the way they work with their partners and their customers in new ways as well. So having a set of specialist players they can do that with – players they know and trust – is more efficient than starting from scratch every time you want to start an innovation project.”

Belinda Bell: In the social innovation sphere we start from a slightly different position in that social innovation addresses the fact that decades of economic development and changes haven’t led to equitable outcomes. So in addition to entrepreneurs and intrapreneurs, there has been the development of social ‘extrapreneurs’ who connect together the players in the social innovation ecosystem.”

New ecosystems = new skills

Chris Coleridge: “One of the exciting things about this from the perspective of the business school is that ecosystem management requires some new strategic management skills. Whereas in the past these hub players would have relied purely on their economic power – think of Microsoft 15 or 20 years ago – but now it’s seen as more of a repeating game in which you will rely on your partners in the future, and see your role as a stewardship role.”

Michael Kitson: “That creates a challenge, because you’re going to need to change organisational structure. Traditionally, you do things within the organisation of business, but now you’re reaching out and building more of a network of alliances, and that requires an element of cultural change.”

Location, location, location

Michael Kitson: “Is geography or proximity important?”

Shahzad Ansari: “In some cases, yes, because if you’re living in London you look at Uber’s network in London and not Uber’s network in New York. But for Airbnb you care about the Airbnb network outside your home city.”

Chris Coleridge: Historically we’ve looked at clusters from the perspective of talent – talent being able to move where it can add the most value – and being a focal point for investment. What the ecosystem is adding to that is a common sense of purpose. You see that in the Cambridge ecosystem, a general sense that we would all like Cambridge to succeed, and then there’s something about presence and credibility and trust, all of which are easier to build up in geographic co-location rather than through Skype.”

Belinda Bell: “It’s the density of people and relationships. What we find works in Cambridge rather than London is that it’s small enough that you can find someone who can answer your question. It all comes down to individuals at the end of the day.”

The role of “anchor institutions” like universities… or the corner pub

Chris Coleridge: “One thing we see in looking at the history of innovation and ideas is that it’s good to have in the mix some sort of non-commercial space, because you have a better interchange of ideas. Some studies say the rise of the British Empire is down to the coffee houses of London in the 17th Century, and the free exchange of ideas there. So anchor institutions can help the exchange of ideas where – after a period of fermenting – some innovator will pluck the idea when it’s ripe.”Michael Kitson: “It’s interesting to mention ideas fermenting, because one of the anchor institutions that has been very important for the Cambridge phenomenon is the public house, often a place where people met to exchange ideas – and they were often young entrepreneurs and young scientists who met others, including a receptive bank manager to fund these ideas. So these sorts of social spaces where people interact are very important to innovation.”