BCG Henderson Institute

One of the defining business changes of the dawn of the 21st century has been the meteoric rise in importance of business ecosystems. Enabled by digitization and the growth of modular technologies that have redefined the nature of possibility, such ecosystems have transformed sectors, redrawn the boundaries of markets, and challenged the existing industrial order. Ecosystems have fueled the ascent of many Big Tech firms, each of which draws on their own and others’ platforms to build collaborative ecosystems, transforming business strategy, and also potentially policy as well. With AI-enabled ecosystems being the latest manifestation of ecosystem power, the topic rightly remains hot.

As ever, though, excessive enthusiasm and hype cut two ways. On the one hand, they raise awareness, and help us focus on new possibilities. On the other hand, hype means hyperbole, and some of the would-be innovators are quick to adopt the label, without necessarily having a solid plan, much less capabilities and implementation skills that can back up the claims they make. Business ecosystems are no exception. Even firms that proudly speak of their ecosystem achievements have private worries about getting their strategy right, and even more so, getting organizational design and leadership right as well.

This should not be a surprise. Ecosystems are often misunderstood. They may have become a focus of academic work and practitioner excitement, but the way they add value is elusive and confusing to many, especially as firms are mired in delusions of grandeur, often wasting valuable resources in unrealistic attempts to become orchestrators rather than participate as partners.

  • Michael G. Jacobides

    Sir Donald Gordon Professor of Entrepreneurship and Innovation; Professor of Strategy and Entrepreneurship at London Business School

  • Ulrich Pidun

    Alum Fellow (2019-2022), Business Ecosystems

  • Martin Reeves

    Chairman, BCG Henderson Institute

Sources & Notes