Innovation efforts in respect of alliances and networks are rapidly gaining popularity. However, there is also a downside: as many parties are involved, it is difficult to get a grip on such an innovation ecosystem. This complexity is experienced in particular by governments and network organisations that wish to stimulate the ecosystem. The key for them is possessing in-depth knowledge of both the landscape and the mutual strategic dependencies. The ‘Ecosystem Canvas’, developed by consultancy firm KplusV, offers a solution in that respect.
Innovation is becoming more and more important for organisations in order to stand out and be able to compete. This means increasing R&D expenses and innovation management that must be brought to the next level. In addition to this, the nature of innovation is changing. Trends such as technological disruption, the rise of corporate venturing and the forging of alliances lead to innovation increasingly taking place inside chains or networks, rather than just inside a single organisation. Because of these developments, the term ‘innovation ecosystem’ has become increasingly popular: many companies, governments and knowledge institutes consider it to be the place for open innovation and, for this reason, are part of it or help shape it.
Easier access to knowledge and stakeholders
An ecosystem offers the participants a number of benefits, such as easier access to relevant knowledge and stakeholders and cross-pollination of knowledge, as well joint development of innovation and – because of this – joint ownership. However, working in broader networks also has disadvantages. Some critics argue that this fragments the ownership, or that it becomes more difficult for the organisation to focus on its own ambitions. And if an alliance is forged at an early stage, it may later prove be less efficient for the eventual innovation output.
One of the biggest challenges for the Netherlands is that the country has countless innovation ecosystems. According to recent research by Het Financieele Dagblad, a Dutch financial newspaper, over 220 innovation hotspots are active in the Netherlands alone. Add to these all of the various networks, venture groups and government initiatives, and it quickly becomes difficult to see the wood for the trees. ‘In the Netherlands there are countless initiatives to stimulate entrepreneurship and innovation. But they do not all serve the same target group’, says Lennard Nellestein, consultant at KplusV, who adds that the initiators also often differ: ‘Both companies and knowledge institutes focus on entrepreneurship and innovation.’ Semi-public organisations and governments often act as a facilitator in order to stimulate innovation and entrepreneurship within the ecosystem.
Help in innovation landscape with Ecosystem Canvas
In order to help government institutions and network organisations to find their way in the landscape of innovation and ecosystems, KplusV – a consultancy firm specialising in public-private cooperation – has developed a special model, together with dr. ir. Maarten van Gils: the ‘Ecosystem Canvas’. Governments and network organisations can use this model to improve their knowledge of both the innovation landscape and the strategic dependencies between market players. This enables them to have entrepreneurs better understand which innovation ecosystems there are, how these can be beneficial to their organisations, and how cooperation with other players inside the ecosystem can result in win-win propositions. ‘With the Ecosystem Canvas they can show entrepreneurs where they should go with which issue in which innovation stage. And thereby boost innovation and entrepreneurship’, Nellestein explains.
The Ecosystem Canvas comprises two dimensions. First, it distinguishes between six stages of an innovation process. The other dimension considers four different building blocks that are necessary to develop a technological idea into an innovation.
Stages and building blocks explained
An innovation process comprises six stages, in which a technological invention ‘matures’ over time into a product portfolio. These are the idea, pre-seed, start, develop, growth and consolidate stages. However, it is not just the invention that goes through the various stages. The so-called habitat (read: business case) surrounding the idea should also continue to develop during each stage in order to make the technological idea a commercial success. This habitat is composed of four building blocks: the (skills and role of the) innovator, business development, facilities and funding.
Together, the innovation stages and the building blocks form the complete Ecosystem Canvas. The specifics of the model are, however, sector-specific, since each sector has its own issues. By using the model, governments and network organisations can make it clear to the entrepreneurs, in a concrete manner, which initiatives there are and where geographic or thematic clusters can be formed. ‘It is important to consider them in relation to each other. This allows a comparison of the areas of focus’, Nellestein tells, adding: ‘This way duplications (initiatives that pursue the same thing) in the innovation system become visible, synergies (initiatives that should be linked) become clear and blank spots (initiatives that are still missing) become easier to notice in the innovation ecosystems.’
The model also charts the quality of innovation ecosystems. ‘Open innovation and innovation ecosystems have become popular terms, but in practice there are a lot of quality and activity differences’, Nellestein states. The quality is measured by looking at such things as the instruments used to support innovators, or the results achieved in the initiatives.
‘The Ecosystem Canvas is a useful tool for governments or network organisations that wish to maximise the quality of their own innovation landscape’, Nellestein summarises. ‘The use of the canvas allows them to get a grip on their innovation ecosystems.’ According to the KplusV consultant, the solution lies in looking for a ‘natural focal point – and, in connection with that, focus’ – in the ecosystem. ‘The understanding of the landscape offers a guideline for policymakers to boost innovation and entrepreneurship in a targeted manner. And a more detailed view of the initiatives provides ideas for optimisation.’