“Digital Ecosystems”:The Next Frontier for SMEs and European Local Regional Clusters?

EISCO’ 2005:EISCO’ 2005:

i2010 (eEurope): New Horizons, i2010 (eEurope): New Horizons,

New Tasks for Local New Tasks for Local

and Regional Governmentsand Regional Governments

EISCO’ 2005:EISCO’ 2005:

i2010 (eEurope): New Horizons, i2010 (eEurope): New Horizons,

New Tasks for Local New Tasks for Local

and Regional Governmentsand Regional Governments

Gérald Santucci

European Commission – DG Information Society and Media

Head of Unit “ICT for Enterprise Networking“

Gérald Santucci

European Commission – DG Information Society and Media

Head of Unit “ICT for Enterprise Networking“

Krakow, 2-4 June 2005

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Towards a Global Dynamic Competition

• More interrelations

• More specialised resources

• More R&D / innovation

• Accessing to global value chain

• Accessing to knowledge

Growth Node Business EcosystemIndustrial District

How to reach the critical mass of resources?

Virtual Cluster

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Different Views to Ecosystem Metaphor

•Biological EcosystemTightly knit into a global continuum of energy and nutrients and organisms – the biosphere. Dynamic, constantly remaking themselves, reacting to natural disturbances and to the competition among and between species.

•Industrial EcosystemFrosch and Gallopoulos, 1989To bring the principles of sustainable development into all kinds of industrial operations.

•Economy as an EcosystemRothschild, 1990.The basic mechanisms of economic change are remarkably similar with those found in nature – main difference is speed.Organisms and organisations are “nodes in networks of relationships”.

•Social EcosystemMitleton-Kelly, 2003.Organisations are co-evolving within a social ecosystem.

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J.F. Moore, 1993 & 1996Customers, lead producers, competitors, other stakeholders.“The keystone species” influence the co-evolutionary processes.Interaction (within a business ecosystem); decentralised decision-making and self-organisation.Core capabilities are exploited to produce the core product.

M. Iansiti and R. Levien, 2004A large number of loosely interconnected participants who depend on each other for their mutual effectiveness and survival.Fragmentation, interconnectedness, co-operation, competition.Three critical success factors: Productivity; Robustness; Nice creation.Four different roles: Keystones; Niche players; Dominators; Hub landlords.

T. Power and G. Jerjian, 2001 A system of websites (“organisms”) occupying the World Wide Web (habitat”), together with those aspects of the real world with which they interact.Becoming a networked business = changing everything that the company does.Four stakeholders: communities of shareholders; employees; businesses; customers.

Business Ecosystem

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Astley & Fombrun, 1983:“Collective strategy is a systematic response by a set of organisations that collaborate in order to absorb the variation present in their environment”

•Gueguen & Pellegrin-Boucher, 2004• Dialectics of competition strategies vs. co-operation strategies• Co-evolution: more co-operation yet maintaining a high level of

competition• Co-operation and competition are embedded in the “culture” of

business ecosystems

Inter-organisational and Collective Strategies in SMEs

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Game theoryMultipoint/multi-market competition

Pure & perfect competition

Homogeneous actorsHomogeneous actors

Imperfect competition

Heterogeneous actorsHeterogeneous actors

Business ecosystems

DDEEEEPPEENNIINNGG

Simpleinteractions

Complexinteractions

ENLARGEMENTENLARGEMENT

A New Concept to Understand Today’s Business “Collective Strategies”

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Increased complexity in Business Networking

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An approach promoted by DG INFSO-D/5A “digital environment” populated by “digital species”

software components, applications, services, knowledge, business models, training modules, contractual frameworks, laws, etc.

The environment enables species to behave like species in the natural world

InteractExpress an independent behaviourEvolve – or become extinct – following laws of market selection

Digital Ecosystem: the Vision

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ICTscatalyse

improve

improve

New organisational& business models

Policysupports

Digital Ecosystem: the Strategy

“Digital Ecosystem Infrastructure”

Growth

Competitiveness, market & internal

efficiency

Co-operation &innovation networks

improve

lead to

encourage

provideresources

Open SourceEvolutionary infrastructure

makeviable

shape& foster

supports

supportBiology

enhances

Economic growth in the knowledge based economy requires a broad deployment and use of ICT by enterprises and public institutions

A commercial environmentwhere s/w developers, service providers and service users can tradeprofitably and competitively on a new ‘Common Land’

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19 million enterprises in Europe 99.7% are SMEs, 93% are micro (< 10 employees) ICT skills usually from outsiders

Providing SMEs with customised ICT applications & services for improving their efficiency (through process and organisational integration) and for extending their business beyond local barriers

The Key Actors: SMEs

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System integrators Service providers Software component developers

Open source communitiesOpen systems developers

Enabling these organisations to keep and preserve their knowledge and the possibility to develop/integrate ICT-based applications

The Key Actors: ICT-related Organisations

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From traditional rural economy to e-economyConnectivity high-speed fibre-optic telecom network; wireless in areas where cable is uneconomicDigital literacy ICT-enabled social and entrepreneurial activities

Promoting regional economic growth, competitiveness and employment

Rejuvenating industrial areas through adoption of distributed, networked and open systemsNetworking of SMEs and experimenting with new services and new business models

Synergies with the Structural Funds

The Key Actors: Regions

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Technical Infrastructure

Legal Framework & FinancialConditions

Human Capital, Knowledge &

Practices

Governance&

IndustrialPolicy

Digital Ecosystem and Regions

Support of regional research-driven clustersassociating universities, research centres, enterprises and regional authorities

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Digital Ecosystem: the General Architecture

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Knowledge-Based Economy

DBE

Business Ecosystems and Regional EconomiesSocio-economicknowledge

Basic Models and Services Digital Ecosystem Structure

Digital Ecosystem

Open-source service-oriented architecture

NetworkInfrastructure

Semantics ofservices

Syntax of economicbehaviour

Business rules,Regulatory Framework

Formalisation ofKnowledge

(F.Languages)

Digital Ecosystem: the General Architecture

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IST-FP6 Call 5 “ICT for Networked Businesses”Digital business ecosystems for SMEs

Open-source distributed self-adaptive environment and models enabling SMEs to co-operate for design, development of flexible and adaptable components interoperable with proprietary systemsSupport of spontaneous composition, sharing distribution of business solutions and knowledge

IST in FP7Technology Pillar “Software, Grids, security and dependability”Application Pole “ICT supporting business and industry”

New forms of dynamic networked co-operative business processes, digital ecosystems

i2010Take-up of ICT an integrated policy on e-business giving special attention to SMEs

Looking Ahead

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i2010 – What is different from eEurope?

Convincing evidence of the positive effects of ICTe.g. SMEs to take up ICT, and more investment in R&D

ICT world is more mature and global => from a pilot phase to wide deployment

Covers the whole chain of EU Information Society and Media policiesRegulation, research and deployment

Emphasis on convergence, networking, content, public services and quality of life

New ways to implement

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The business environment tends to become truly “knowledge-centric” instead of “document-centric”

Clustering/networking of SMEs, CRM and SCM solutionsBusiness performance of SMEs throughout lifecycleEffecting collaborative content/knowledge creationIncreasing the effectiveness of SMEs’ valuable business asset – knowledge

Digital Business Ecosystem to become the Internet’s new ‘Common Land’

Knowledge is a ‘good’ augmented by its use and consumptionLike the Internet itself, no one owns or controls knowledge

The open road to the Lisbon goals through i2010

Conclusions