Organizing Ecologies of Complex Innovation

Abstract

For many sectors like health care, financial services, or renewable energy, new products and services are generated by an ecology of business firms, nonprofit foundations, public institutions, and other agents. Knowledge to innovate is dispersed across ecologies, so no single firm or small group of firms can innovate alone. Moreover, many new products and services in ecologies such as health care or energy are complex or comprise many parts with unknown interactions. New products, knowledge, business models, and applications all emerge unpredictably over considerable time periods, as various agents in the ecologies of innovation interact with and react to the actions of others. However, the existing organizing structure in these ecologies stifles emergence and precludes much innovation, simply because theory and practice do not adequately address how to organize for complex innovation. We develop a preliminary model for organizing ecologies of complex innovation. We suggest that innovations can continually emerge productively if people work locally in ecologies to set and solve problems of orchestrating knowledge capabilities across the ecology, strategizing across the ecology to create new businesses and applications, and developing public policies to embrace ambiguity. Using examples from biopharmaceuticals and alternative energy, we develop specific organizing ideas that can be examined and elaborated upon. This new direction for organization science integrates existing ideas around a new kind of organizing and shows how organization science can add real value in addressing major challenges of public welfare and safety in the 21st century.

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