3.3 Previous work on innovation ecosystems
A large body of research into innovation ecosystems already exists.Chesbrough et al.contrast open innovation with traditional vertically integrated closed innovation where internal R＆D leads to products that are produced and distributed by the firm.They define open innovation as“the use of purposive inflows and outflows of knowledge to accelerate internal innovation，and expand the markets for external use of innovation”.
Dhanaraj and Parkhe emphasize the importance of proactive ecosystem orchestration，“Innovation networks can often be viewed as loosely coupled systems of autonomous firms.We propose that hub firms orchestrate network activities to ensure the creation and extraction of value，without the benefit of hierarchical authority.”
Quinn goes farther，advocating a strategy of outsourcing innovation，“Strategically outsourcing innovation-using the most current technologies and management techniques can put a company in a sustainable leadership position.Strategic management of outsourcing is perhaps the most powerful tool in management，and outsourcing of innovation is its frontier.In today's stormy markets，high-level technical，market scanning，sensing and responsiveness skills and a well-designed platform for continual innovation are key.”
Other researchers have focused on the internal dynamics of innovation ecosystems.The important dynamics include convergence on dominant standards and designs，amplification of variations in market demand，and the evolution of ecosystem architectures.This research emphasizes supplier-customer relationships，recognizing that embedded in ecosystems are supply chains and systems of value creation and capture.
Barabba et al.describe the role of ecosystems in establishing technical standards and dominant platforms.“We believed that three positive feedback processes were important in the telematics industry：（1）building up a large portfolio of apps on the platform；（2）building up 3rd party sales；（3）extending the platform to other vehicle manufacturers.Establishing a widely accepted interface standard was critical to enabling these positive feedbacks.”
Croson et al.analyze why variations in demand are amplified within ecosystems.This often is referred to as the bullwhip effect.“The bullwhip effect describes the tendency for the variance of orders in supply chains to increase as one moves upstream from consumer demand.We propose a new behavioral cause of the bullwhip，coordination risk，that arises when players place excessive orders to address the perceived risk that others will not behave optimally.”
Fine differentiates between modular and integral architectures.“Modular supply chains consist of relatively flexible and interchangeable relationships among suppliers，customers，and partners.By contrast，integral architectures typically link subsystems with tightly coordinated relationships and distinctive or unique features that cannot be easily connected to other systems.”
Pipenbrock builds on Fine's work.He presents a dynamic model of the evolution of business ecosystems，i.e.，supply chains and their associated value systems.“Enterprise architectures early in the Industry's evolution are integral，for radical product innovation.They then dis-integrate for speed to build a fast-growing market，and for greater cost-leadership and more modest product innovation.As the ecosystem begins to mature，integral enterprise architectures are required for radical process innovation.”
The existing body of research concludes that a major paradigm shift has occurred.As Chesbrough et al.observed，“At its root，open innovation assumes that useful knowledge is widely distributed and that even the most capable R＆D organizations must identify，connect to，and leverage external knowledge sources as a core process in innovation.”It recognizes that innovation ecosystems have complex dynamics that result from the combination of their structure，the behaviors of their components，and changes in their industry.
These analyses are quite valuable but incomplete.First，they focus primarily on the inner workings of ecosystems and less on the dynamics of the environment in which the ecosystems exist.Second，to the extent they consider the environment contexts the paths of cause and effect tend to be unidirectional，i.e.，the environment affects the ecosystem.In reality the interactions are bidirectional.The ecosystem can have significant effects on the environment，e.g.，through the establishment of innovation.Third，we should do the research in a dynamic way.Therefore，the book will provide systematic and dynamic approach and research cases on innovation ecosystem.