9781839107184 - Handbook on Digital Business Ecosystems 2022

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©SabineBaumann2022Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystemortransmittedinanyformorbyanymeans,electronic,mechanicalorphotocopying,recording,orotherwisewithoutthepriorpermissionofthepublisher.PublishedbyEdwardElgarPublishingLimitedTheLypiatts15LansdownRoadCheltenhamGlosGL502JAUKEdwardElgarPublishing,Inc.WilliamPrattHouse9DeweyCourtNorthamptonMassachusetts01060USAAcataloguerecordforthisbookisavailablefromtheBritishLibraryLibraryofCongressControlNumber:2022931714ThisbookisavailableelectronicallyintheBusinesssubjectcollectionhttp://dx.doi.org/10.4337/9781839107191ISBN9781839107184(cased)ISBN9781839107191(eBook)SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:38AMviaColumbiaUniversityLibrary

1ContentsListofcontributorsix1IntroductiontotheHandbookonDigitalBusinessEcosystems:Strategies,Platforms,Technologies,GovernanceandSocietalChallenges1SabineBaumannPARTISTRATEGIESANDPERSPECTIVES2Networks,platforms,anddigitalbusinessecosystems:mappingthedevelopmentofafield11SabineBaumannandMarcelLeerhoff3Strategiesforbridgingtraditionalanddigitalecosystems25DavidR.King4Disentanglingtheimportanceofdigitalplatformsandabsorptivecapacityindigitalbusinessecosystems40AntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenney5Digitalbusinessecosystemsanddynamiccapabilities50PäiviMaijanen6Dealingwithstrategictensionsindigitalbusinessecosystems63SabineReisingerandJohannesM.Lehner7Organizationsasecosystems:thecaseoftelevisionproduction80GillianDoylePARTIIENTREPRENEURSHIP8Navigatingdigitalwaters:entrepreneurialambiguitiesandthetriadofpurposeindigitalbusinessmodeling94StephanieBirknerandMartinaWeifenbach9Therelevanceofentrepreneurshipecosystemsforstart-upsuccess:aventurecapitalperspective109NinaSchumacher10Valuecreationthroughstart-upintegration126ChristianHorneber11Femaleentrepreneurs’innovativenessindigitalbusinessecosystems143NgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndtvSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:43AMviaColumbiaUniversityLibrary

2viHandbookondigitalbusinessecosystemsPARTIIIVALUECREATIONANDBUSINESSMODELS12Designknowledgefordigitalbusinessecosystems:towardsdesignprinciplesfordigitalengagementplatforms161SimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz13Digitalplatformsintheindustrialsphere:valuecreationlogicsandplatformtypes177PhilippMoschandRobertObermaier14Customerrolesindigitalbusinessecosystems:differentformsofcustomercontributioninvaluecreation194KarolinaBähr15Digitalplatformsandtradingcompanies:theevolutionoftraditionalbusinessecosystemsintointegrateddigitalbusinessecosystems212ReinhardSchütteandTobiasWulfert16Thedigitalconsultingecosystembusinessmodel232VolkerNissenPARTIVGOVERNANCEANDMANAGEMENT17Theroleoflocationfornon-focalfirmsinemergingdigitalbusinessecosystems:relevanceofagglomerationfactorsintheGermanXRindustry250ChristianZabelandVerenaTelkmann18Adigitalbusinessecosystemmaturitymodelforpersonalservicefirms269RicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon19Businessecosystemsindigitaljournalism:cross-bordercollaborativeinvestigationsasanovelorganizationalform292ChristopherBuschowandMaikeSuhr20Improveddecisionsfordigitalizationprojectsindigitalbusinessecosystems307VinzenzJeglinskyandHerwigWinkler21Meta-studyofsuccess-relatedfactorsofSaaSprovidersbasedonacloudcomputingecosystemperspective327SebastianFloereckeandFranzLehnerPARTVDATAANDTECHNOLOGIES22Data(r)evolution:theeconomicsofalgorithmicsearchandrecommenderservices349OliverBudzinski,SophiaGaenssle,andNadineLindstädt-DreusickeSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:43AMviaColumbiaUniversityLibrary

3Contentsvii23Blockchaintechnologyinthesupplychain:learningfromemergingecosystemsandindustryconsortia367WafaaA.H.AhmedandBartL.MacCarthy24Blockchain-basedsupplychainarchitectureadaptedtodigitalbusinessecosystems387YuCuiandPrakashJ.Singh25Blockchainecosystemsinthecreativeindustries:bigdreamsformicro-payments405IvanaKostovska26Artificialintelligencemeetsonto-epistemologies:distinctivesociomaterialperspectivesfororganizationalresearchattheintersectionofdigitalbusinessecosystemsandrobotics424W.G.WillZhaoandYiminYangPARTVISOCIETALCHALLENGESANDSUSTAINABILITY27Havingaplatformtostandon:examiningmodernchallengesfacedbyworkersinplatform-facilitatedmulti-sidedmarkets439TraciM.BrickaandAmberN.Schroeder28Betterdata,betterbusiness,betterlives:towardsasymbioticreportingframeworkforsustainabledigitalbusinessecosystems457PatrickPeterandWillRitzrau29Conceptualizingsmart-circularproduct-serviceecosystemsforthephotovoltaicpowerindustry475VerenaLuisaAufderheide,LauraMontag,andMarionSteven30Thedigitalbusinessecosystemsustainabilitycube:aninstrumentenablingsystematiccollaborationdecisions492TimoKlünderandMarionSteven31Bigdataanalyticsfordevelopingsustainablecapabilitiesofdigitalbusinessecosystems510RaissaPershinaPARTVIIINDUSTRYAPPLICATIONSANDCASESTUDIES32Digitalbusinessecosystems:acomparisonofdifferentindustries530FranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl33Doingdigitalnews:acomparisonofthreebusinessmodelsfromanecosystemsperspective549CindyPriceSchultzSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:43AMviaColumbiaUniversityLibrary

4viiiHandbookondigitalbusinessecosystems34Digitalbusinessecosystemsinthemedia:VRtechnologyimplementationmodels564AnnaJupowicz-GinalskaandKrzysztofSokół35ThedigitalinnovationecosystemofeSports:astructuralperspective582KatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert36Valueco-creationineSportsfromaserviceecosystemperspective596ReinhardE.KunzandAlexanderRoth37Entrepreneurialresponsestothecoronaviruspandemic:digitizationoftheUSrestaurantbusiness614GeoffreyM.GraybealandBenjaminLawrence38Drivingautomation:anevolvingdigitalbusinessecosystemtale630SaminaHusainandAnaTrigo39CasestudyofthecustomeracceptanceofPersonalDataTrustBankinJapan:aquestionnairesurvey647MasaharuTsujimotoandSoichiroTanaka40Potentialsofdigitalbusinessecosystemsinthehealthcaremarket662FranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl41Digitaltwinsinrealestate:drivingvaluethroughoutthebuildinglifecycle680AdrianToschka42Developingbigdataanalyticscapabilityinafocalfirmofadigitalbusinessecosystem:thecaseoftheNorwegianswinebreedingindustry697VictoriaKonovalenkoSlettli43Evolvinginternaldigitalbusinessecosystemsfororderfulfillment714JuliaFeldtandHenningKontny44Digitalecosystemsinmanufacturing:emergingmodelsforIndustry4.0727GiovannaCulotIndex743SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:43AMviaColumbiaUniversityLibrary

5ContributorsWafaaA.H.AhmedisaDoctoralResearcherofBusinessandManagementintheDepartmentofOperationsManagementandInformationSystems,NottinghamUniversityBusinessSchool,UK.WafaaholdsaMaster’sdegreeinIndustrialEngineeringandOperationsManagementandaBachelor’sdegreeinElectricalandElectronicsEngineering.PriortojoiningthePhDprogram,Wafaaworkedasamanufacturingprojectmanagerinthefoodsectorimplementingbothcapitalandimprovementprojects.Hercurrentresearchassessesblockchaintechnologyapplicationswithindifferentsupplynetworkconfigurations.FelixArndtistheJohnF.WoodChairinEntrepreneurshipattheGordonS.LangSchoolofBusinessandEconomicsattheUniversityofGuelph,Canada.Priortohiscurrentposition,hewasaffiliatedtotheLeicesterCastleBusinessSchool,UK;theWhartonSchool,USA;andtheUniversityofNottinghamNingboChina.Felixhaspublishedwidelyintheareaofentrepre-neurship,strategy,andinternationalbusinessrelatedtoovercomingbarriersandchallengesoftechnological,institutional,andorganizationalnature.VerenaLuisaAufderheideisadoctoralstudentandresearchassistantattheChairofProductionManagementatRuhrUniversityBochum,Germany.ShecompletedherBachelor’sdegreeinManagementandMathematicsandherMaster’sdegreeinManagementatRuhrUniversityBochum.Since2019,shehasbeenconductingresearchinvariousareasofsustainabilityanddigitalization.Herfocusisonservicesystemsanddigitalizationofsupplychainsespeciallyclosingloopmanagement.KarolinaBährisaResearchandTeachingAssistantattheChairofInnovationManagementattheUniversityofBamberg,Germany.SheholdsaMaster’sdegreeinManagementfromFriedrich-Alexander-Universität(FAU)Erlangen-Nürnberg,Germany.Herresearchinterestsaredigitalbusinessecosystems,digitalinnovationsinthecontextofsustainability,andstake-holdersinecosystems.ShehaspresentedresearchinleadingmanagementconferencessuchastheAcademyofManagementSpecializedConferenceonBigDataandManaginginaDigitalEconomy.SabineBaumannisProfessorforBusinessAdministrationatJadeUniversity,Germany,andScientificDirectoratOFFISInstituteforInformationTechnology,Germany.BeforerejoiningacademiasheworkedinseniormanagementpositionsforBertelsmann,Germany’slargestmediaconglomerate.Dr.BaumannhaseditedseveralbooksandaspecialissueonStrategicMediaManagementfortheJournalofMediaBusinessStudies.Herresearchareasareallinterdisciplinary,involvingeitherchangesinbusinessmodelsduetonewtechnologiesorthestrategicexploitationofnetworkstructures.Herworkhasbeenpublishedininfluentialjournalsandhandbooks.StephanieBirknerholdsadoctorateinthefieldofconsultingresearch.AsChiefVisionaryOfficer(CVO)ofZUKUNFT.unternehmengGmbHshepromotesandsupportsentrepre-neurialecosystemsthatfostersocietaltransformationforthecommongood.HerresearchandixSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

6xHandbookondigitalbusinessecosystemsteachingasAdjunctProfessorattheCarlvonOssietzkyUniversityofOldenburgfocusesonentrepreneurialdiversity.TraciM.BrickaisaPhDstudentintheExperimentalPsychologyprogramattheUniversityofTexasatArlington,USA,specializinginindustrial-organizationalpsychology.Herresearchinterestsincludenonstandardemploymentinthegigeconomy,investigatingtopicssuchasmotivationandworkdesignamongridesharedriversandAmazonMechanicalTurkplatformworkers.HerworkhasbeenpublishedinjournalssuchasHumanResourceManagementReviewandIndustrialandOrganizationalPsychology:PerspectivesonScienceandPractice.ChristophBuckisadepartmentheadoftheFraunhoferProjectGroupBusinessandInformationSystemsEngineering(Germany)andanadjunctassociateprofessorattheQueenslandUniversityofTechnology(Australia).AftergraduatinginBusinessAdministrationattheUniversityofBayreuth,hecompletedhisDoctorateattheuniversity’sFacultyofLawandEconomics.Christophhaslednumeroustransformationprojectswithasset-intensiveincumbentsintheareasofdigitalizationandinnovation.Hisresearchinterestsincludedigitaltransformation,innovationsystems,digitalecosystems,andinformationprivacy.OliverBudzinskiisProfessorofEconomicTheoryandHeadoftheInstituteofEconomicsatIlmenauUniversityofTechnology,Germany.HegraduatedfromHanoverUniversity,Germany,andservedonpostdoctoral/professorpositionsatPhilipps-UniversityMarburg,Germany;NewYorkUniversity,USA;andtheUniversityofSouthernDenmark,CampusEsbjerg.Hisresearchinterestsincludecompetitioneconomicsandmedia,culturalandsportseconomics.Hehaspublishedthreebooks,morethan60articlesinpeer-reviewedacademicjournals,andmorethan50chaptersinbooksandconferencevolumes.ChristopherBuschow(Dr)isAssistantProfessorofOrganizationandNetworkMediaintheMediaManagementDepartment,FacultyofMediaatBauhaus-UniversitätWeimar,Germany.Hisresearchandteachingfocusesoninnovationandentrepreneurshipinthemediabusiness,withaparticularfocusonthenewsindustry.Currentresearchprojectsincludeneworganiza-tionalformsofjournalisticwork,andwillingnesstopayfordigitaljournalism.HisworkhasbeenhonoredwiththeLowerSaxonyScienceAwardandtheGermanThesisAwardfromtheKörberFoundation.AntonioCrupiisAssistantProfessorattheUniversityofMessina,Italy.HeisalsoResearchAffiliatewiththeInstituteofManagementofSant’AnnaSchoolofAdvancedStudies,Italy;andwiththeStrategicandTechnologyInnovationManagement(STIM)attheInstituteofManufacturingoftheUniversityofCambridge,UK.Hisresearchconcernsinnovation,entre-preneurship,andintellectualproperty.Hiscurrentresearchfocusesonintellectualpropertyrightssystems,strategicuseofintellectualproperty,entrepreneurialdynamics,anduniversity‒industryinteractions.Antonio’sworkhasbeenpublishedinhigh-qualitypeer-reviewedjour-nalsandpresentedatinternationalconferences.YuCuiisanAssociateProfessorinGraduateSchoolofBusinessAdministrationandEconomicsatOtemonGakuinUniversity,Japan.Hisareaofexpertiseareinformationsystemsandoperationsmanagement.HeisalsoservingthereastheDirectorattheCenterofAustralianandAsianStudies.Hiscurrentresearchinterestsaresupplychainresilience,digitaltransfor-mation,andblockchaintechnology.HisresearchhasbeenpublishedinjournalssuchasIEEESabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

7ContributorsxiXploreandbookssuchasInnovationandEntrepreneurship(editedbyD.SamsonandM.Gloet,OxfordUniversityPress,2016).GiovannaCulot(PhD,MBA)isAssistantProfessoratthePolytechnicDepartmentofEngineeringandArchitectureattheUniversityofUdine,Italy.Priortoacademia,Culotworkedinmanagementconsultingandheldpositionsofresponsibilityatindustrialcompanies.HerresearchinterestsmainlyconcernIndustry4.0anddigitaltransformationinmanufac-turing,togetherwithissuesrelatedtointernationalstandards.HerworkhasbeenpublishedinInternationalJournalofProductionEconomics,TechnologicalForecastingandSocialChange,QualityManagementJournal,andtheTQMJournal.NicolaDelSartoisaPostdoctoralResearchFellowatScuolaSuperioreSant’AnnainPisa,Italy.HereceivedaPhDinManagementofInnovation,SustainabilityandHealthcarefromScuolaSuperioreSant’Annain2019.Nicola’sresearchinterestsfocusonsmallbusinessesandstart-upsandsupportmechanismssuchasincubators,accelerators,andcorporateacceleratorprograms.Moreover,heisinvestigatingtheprocessesofbusinesscreationundertheOpenInnovationparadigm.Nicola’sworkhasbeenpublishedinhigh-qualitypeer-reviewedjour-nalsandpresentedatinternationalconferences.AlbertoDiMininisFullProfessorofManagementatSant’AnnaSchoolofAdvancedStudies,Italy;andResearchFellowwiththeBerkeleyRoundtableontheInternationalEconomy(BRIE),UniversityofCalifornia–Berkeley,USA.Albertoteachesinnovationmanagementandinnovationpolicy,andheisCo-DirectoroftheConfuciusInstituteofPisa;andDirectoroftheGalileoGalileiItalianInstituteinChongqingUniversity,China.AlbertoisCo-EditorinChiefofR&DManagementJournal,andhisresearchdealswithopeninnovation,appropriationofinnovation,andscienceandtechnologypolicy.GillianDoyleisProfessorofMediaEconomicsattheUniversityofGlasgow,UKwhereshedirectstheMScinMediaManagement.AmemberoftheEuropeanExpertNetworkonCultureandAudiovisual,Gillianhasled,supervised,and/orcontributedtoresearchstudiesonmediaeconomicsandpolicyfundedbybodiesincludingtheUKResearchCouncils,theEuropeanCommission,theOrganisationforEconomicCo-operationandDevelopment(OECD)andtheCouncilofEurope.AformerPresidentoftheAssociationforCulturalEconomicsInternational,herresearchhasbeenpublishedinseverallanguages.TorstenEymannisProfessorofInformationSystemsManagementattheUniversityofBayreuth,Germany;andDeputyHeadoftheFraunhofer-ProjectGroupofBusinessandInformationSystemsEngineeringattheFraunhoferInstituteforAppliedInformationTechnology,Germany.Hisresearchandteachingfocusesonthedigitaltransformationineducation,healthcareandgovernmentalinstitutions,theapplicationandimplicationsofdigitaltechnologies(forexample,artificialintelligence,InternetofThings),aswellasentrepreneur-shipanddigitalbusinessmodels.JuliaFeldtisaPhDResearcherattheBusinessInnovationLabatHamburgUniversityofAppliedSciences,Germany.Priortore-enteringacademia,MsFeldtworkedinmanagementpositionsatglobalcompanies,suchasColgate-Palmolive,Philips,andTchibo.Herresearchconcentratesondigitalizationofoperationalprocessesandsimulation-basedsoftwaresolu-SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

8xiiHandbookondigitalbusinessecosystemstionsforautonomoussupplychains.Herworkhasbeenpublishedandpresentedatseveralinternationalconferences.SebastianFloerecke(Dr)isworkingasITSolutionManagerandEnterpriseArchitectatMunichAirport,Germany;andResearchAffiliateattheChairofInformationSystems(InformationandITServiceManagement)oftheUniversityofPassau,Germany.Beforethat,hewasaResearchAssociateanddoctoralcandidateinPassau.Hisresearchinterestsincludecloudcomputing,businessandecosystemmodels,InternetofThingsandITservicemanage-mentprocesses.SophiaGaenssle,PhD,isResearcherattheChairofEconomicTheoryatIlmenauUniversityofTechnology,Germany.Shespecializesinmediaandculturaleconomics,withparticularemphasisonindustrialorganizationanddigitalmarkets.FranziskaGötz(Dr)isaformerPhDstudentattheUniversityofBayreuth’sChairofInternationalManagement,Germany.Duringherstudiesininternational,financeandstrategicmanagement,shedeepenedheryearsofacademicandpracticalexperience(inthefinancialservicesindustry)throughinternationalassignmentsintheengineeringandenergysector,aswellasinmergersandacquisitions(M&A)andconsultingprojectsincountriessuchasGermany,China,France,India,andAustralia.HerDoctoralthesisfocusescross-sectorallyondigitalbusinessecosystemsandplatform-basedbusinessmodels.GeoffreyM.Graybeal,PhD,isaClinicalAssistantProfessorintheEntrepreneurshipandInnovationInstituteatGeorgiaStateUniversity,USA.DrGraybealisamediamanagementscholarandentrepreneurwhousesmanagementtheorytoexploreissuesofmediasustain-ability.HehaspublishedresearchinjournalssuchastheInternationalJournalonMediaManagement,EntrepreneurshipEducationandPedagogy,andJournalofMediaBusinessStudies.RicardoGuerreroisaResearchAssociateandPhDstudentattheJacobsUniversityBremen,Germany.Hisresearchencompassesthreemajortopics:digitalizationofpersonalservices,maturitymodels,anddesignthinking.HisresearchhasbeenpublishedinjournalssuchasDieUnternehmung,HMDPraxisderWirtschaftsinformatik,ManagementforProfessionals,andininternationalconferencesonInformationSystemssuchastheInternationalConferenceonWirtschaftsinformatik(WI).KatharinaHölzleisheadoftheResearchGroupIT-EntrepreneurshipattheHassoPlattnerInstitute,DigitalEngineeringFaculty,UniversityofPotsdam,Germany.SheisVice-ChairoftheExpertCommissiononResearchandInnovation(EFI)andamemberoftheGermangovernment’sHigh-TechForum.SheisVisitingProfessorattheUniversityofInternationalBusinessandEconomics(UIBE)inBeijing,ChinaandMacquarieUniversityinSydney,Australia.SheisEditor-in-ChiefofthejournalCreativityandInnovationManagement.Herresearchareasaredigitalentrepreneurship,digitaltransformationandinnovation,anddigitalecosystems.ChristianHorneberisProfessorofBusinessAdministrationintheCollegeofManagement,InformationandTechnologyatJadeUniversityofAppliedSciences,Germany.Beforere-enteringacademia,DrHorneberworkedinseniormanagementpositionsforthecorporateventurecapitalunitofaGermanmediacompany,managingstrategicaswellasfinancialSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

9Contributorsxiiiinvestmentsindigitalstart-ups.Hisinterdisciplinaryresearchaddressesthemechanismsandunderlyingrationalesofcorporateventurecapitalinvestmentaswellitsimplicationsfororganizationalchange.SaminaHusainreceivedherBachelorofElectricalEngineeringin1987fromConcordiaUniversity,Montreal,Canada;andherexecutiveMBAinManagementofTechnologyin2008fromUniversityofLausanne(EPFL),Switzerland.Shebrings25+yearsofindustryexperi-enceinvarioustechnologydomains:fromstandardsdevelopment,totelecominfrastructure,broadcastsolutions,andconsumerelectronics.Herinternationalindustryrolesvaryfromoperationstomanagement.SheisanInstituteofElectricalandElectronicsEngineer(IEEE)SeniorMemberandBroadcastTechnologySocietySecretary,andmemberofIEEEFutureDirectionsandWomeninEngineering.VinzenzJeglinsky,MBA&Eng.,studiedindustrialengineeringwithafocusonpurchasing,production,andlogisticsattheuniversitiesofHeilbronnandMunich,Germany.Hestartedhiscareerasanindustrialengineerinthecommercialvehicleindustry,andisnowemployedbyaconsultingcompanyinthefieldofproductionandmanagementinMunich.Inaddition,heisanexternalDoctoralstudentattheChairofProductionandOperationsManagementattheBrandenburgischeTechnischeUniversitätCottbus-Senftenberg(BTU).AnnaJupowicz-GinalskaisAssociateProfessorattheFacultyofJournalism,InformationandBookStudies,UniversityofWarsaw,Poland.Heracademicinterestsincludemediaman-agement,medialization,mediapolarization,FOMO,newtechnologies(virtualreality).Sheistheauthorofnumerousacademicpapers,andaspeakeratacademicconferences.Coordinatorofthefirst,highlyacclaimed,Polishnationwide/representativeresearchonfearofmissingout(FOMO).SheisaneditorialboardmemberoftheJournalofMediaBusinessStudy,andareviewerboardmemberofFutureInternetandSustainability.Sheisapractitionerwithalmost20yearsofexperienceinmarketingcommunication,gainedatmediacompaniesandpublicadministration.MartinF.KenneyisaDistinguishedProfessorofCommunityandRegionalDevelopmentattheUniversityofCalifornia,DavisandaCo-DirectorattheBerkeleyRoundtableontheInternationalEconomy,USA.HewastheArthurAndersenDistinguishedVisitorattheUniversityofCambridge,UK.Hisscholarlyinterestsareinunderstandingtheinterplaybetweendigitalplatforms,venturecapital,andcompetitionincapitalisteconomiesandChina.DavidR.KingreceivedhisPhDfromIndianaUniversity,USA,andheistheHigdonProfessorofManagementatFloridaStateUniversity,USA.Hisprimaryresearchinterestismergersandacquisitions(M&A)activity,integration,andperformance.TimoKlünderisapostdoctoralresearcherattheChairofProductionManagementatRuhrUniversityBochum,Germany.Afterstudyingmanagement,hefocusedhisPhDonthesignif-icanceandevaluationofsustainabilityinthecontextofIndustry4.0.Hisresearchareassincethenhavebeentheflexibilityofsupplychainsandthecirculareconomywiththeunifyingpurposeofsustainablevaluecreation.HenningKontnyisProfessorofLogisticsatHamburgUniversityofAppliedSciences(HAWHamburg),Germany.HeisamemberandinitiatoroftheBusinessInnovationLabatHAWHamburg.Hisworkhasbeenpresentedatconferencesandpublishedinrelevantjournals.SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

10xivHandbookondigitalbusinessecosystemsCurrentlyhisresearchfocusesontheimplementationofautonomouscooperationandcontrolsystemsinlogisticsandsupplychainmanagement.IvanaKostovskaisaPhDcandidateattheVrijeUniversiteitBrussel,Belgium,andamediaeconomicsandmanagementresearcheratimec-SMIT-VUB,Belgium.Herresearchisintheareasoffilmeconomics,strategicmanagementinaudio-visualindustries,audio-visualpolicy,andplatformgovernance.Shehasbeeninvolvedinresearchprojectsthatexplorethecompetitivelandscapeofplatformsandtraditionalplayersintheaudio-visualindustries.Herpublicationshaveappearedininternationaljournals,includingInnovation:TheEuropeanJournalofSocialScienceResearchandtheJournalofMediaBusinessStudies.OliverKullikisaResearchAssociateandPhDcandidateattheResearchGroupIT-EntrepreneurshipattheHassoPlattnerInstitute,DigitalEngineeringFaculty,UniversityofPotsdam,Germany.Priortothis,heworkedformanagementconsultanciesinthefieldofpublicmanagementwithafocusone-governmentandstrategicmanagement.Hisresearchinthefieldofcorporateentrepreneurshipfocusesonthedesign,management,andintegrationofcorporateinnovationentitieswithinentrepreneurialecosystemstowardsdigitalinnovation.ReinhardE.KunzisanAssociateProfessorofMediaandTechnologyManagementattheFacultyofManagement,EconomicsandSocialSciencesoftheUniversityofCologneinGermany.HisresearchhasbeenpublishedinleadingjournalsincludingEuropeanJournalofOperationalResearch,TechnologicalForecastingandSocialChange,JournalofMediaBusinessStudies,InternationalJournalonMediaManagement,andSport,BusinessandManagement:AnInternationalJournal.Currentresearchprojectsstudyconceptssuchasactorengagement,businessmodelinnovation,consumerinnovativenessandleaduserness,technologyacceptanceofmediainnovations,andproactivedecision-making,aswellastheirantecedentsandconsequences.VirtualrealityadoptionandeSportsserviceecosystemsaretwodomainsofhisresearch.ChristophLattemannisProfessorofBusinessAdministrationandInformationManagementatJacobsUniversityBremen,Germany.Hisresearchencompassestwomajorglobaltrends:digitaltransformationandglobalization.HisworkhasbeenpublishedinjournalssuchasJournalofWorldBusiness,RegionalStudiesandManagementInternationalReview.HeisthefounderoftheD-ForgeatJacobsUniversity,adesignthinkinglab.LattemannisSeniorEditoroftheInternationalJournalofEmergingMarkets.BenjaminLawrence,PhD,istheAzizHashimProfessorinFranchisingEntrepreneurshipandAssociateProfessorintheCecilB.DaySchoolofHospitalityatGeorgiaStateUniversity’sRobinsonCollegeofBusiness,USA.DrLawrence’sbroaddomainsofinterestincludefran-chiserelationships,co-creation,andserviceinnovation.HehaspublishedresearcharticlesinleadingbusinessjournalsincludingProductionandOperationsManagement,InternationalJournalofResearchinMarketing,JournalofAdvertising,JournalofOperationsManagement,JournalofRetailing,andJournalofBusinessEthics.MarcelLeerhoffisResearchAssociateatOFFISInstituteforInformationTechnology,Germany,andrecentlygraduatedfromtheJadeUniversityofAppliedScienceswithaMasterofEngineeringinIndustrialEngineering.Beforethat,hecompletedhisBachelorSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

11ContributorsxvofEngineeringinIndustrialEngineeringin2019.Hisfieldsofinterestaredigitalbusinessecosystems,digitalsparepartsandadditivemanufacturing.FranzLehnerisFullProfessorattheUniversityofPassau,Germany.HisacademiccareerstartedattheKoblenzSchoolofCorporateManagement(WHU),Germany,withaChairinthefieldofinformationmanagement.AfterashortperiodasfoundingPresidentoftheDanubeUniversityKrems,Austria,hebecameaFullProfessorforInformationSystemsin1996attheUniversityofRegensburg,Germany.In2004,heacceptedacalltotheUniversityofPassau.HisresearchisfocusingonITandknowledgemanagement.JohannesM.LehnerisProfessorofBusinessAdministrationatJohannesKeplerUniversity,Linz,Austria.Hisresearchinterestsarefocusedarounddecision-makingonthestrategiclevel,statusinorganization,andprojectmanagement,especiallyaspartofinnovationprocesses.Hehaspublishedintop-tierjournalssuchasManagementScienceandhehasauthoredandco-authoredseveralbooks.Besidehisacademicwork,heisengagedininternationalbusinessprojectswithafocusonexchangebetweenEuropeandLatinAmerica.NadineLindstädt-DreusickeisProfessorforMediaManagementandMarketingattheBusinessSchoolatPforzheimUniversity,Germany.ShecompletedherPhDattheUniversityofSouthernDenmarkwiththetitle“MediaMarketsGoingOnline:EffectsandConsequencesonCompetitionStructures.”NadineLindstädt-Dreusickeresearchesandpublishesinthefieldofmediaeconomics,mediamanagement,aswellasdataeconomics.Aparticularresearchinterestisondigitalbusinessmodelswithinthemediaenvironmentsuchasvideo-on-demandandpodcasts.LisaLohrenzisaResearchAssociateatTechnischeUniversitätBraunschweig,Germany,andhaspracticalexperienceasaninformationtechnology(IT)consultant.Herresearchfocusesonthedesignofdigitalplatformsanduserwell-being,andhasbeenpublishedinjournalssuchasHMDPraxisderWirtschaftsinformatik,WirtschaftsinformatikundManagement,andinterna-tionalconferencesoninformationsystemssuchastheAmericanandEuropeanConferenceonInformationSystems.BartL.MacCarthyisProfessorofOperationsManagementatNottinghamUniversityBusinessSchool,UK.Hisresearchencompassesdigitalization,cloudtechnologies,andplat-formsinsupplychainmanagement.HeisEuropeanEditorfortheInternationalJournalofProductionEconomicsandaConsultingEditorfortheInternationalJournalofOperationsandProductionManagement.HeisaFellowoftheInstituteofMathematics,theInstitutionofEngineeringandTechnology,andtheCharteredInstituteofLogisticsandTransport.HeisEuropeanVice-PresidentfortheDecisionSciencesInstitute.OluwasoyeP.Mafimisebi(Dr)isanAssociateProfessor/ReaderinManagement,Entrepreneurship,RiskandResilience,InstituteHeadofResearchStudentsatLeicesterCastleBusinessSchool,DeMontfortUniversity,UK;AcademicDirectorfortheFinTechInnovationNetwork,andco-founderofAfricanEntrepreneurshipCluster,CentreforEnterprise&Innovation(CEI).Hispublishedworksandrecentprojectsspanentrepreneurialecosystems,entrepreneurshipeducation,apprenticeship,ethicalevaporation,FinTech,risk/crisisman-agement,businesscontinuity,organizationalresilience,crisiscommunication,andstrategy,entrepreneurshipandinnovation.SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

12xviHandbookondigitalbusinessecosystemsPäiviMaijanenisAssociateProfessorattheSchoolofBusinessandManagement,LUTUniversity,Finland;andVisitingProfessorattheDepartmentofEconomicsandManagement,UniversityofTrento,Italy.ShehasbeenavisitingscholaratStanfordUniversity,USA;JönköpingUniversity,Sweden;andTallinnUniversity,Estonia.Herresearchfocusesonorganizationalrenewalandchangemanagement,especiallyindigitaltransformation.Shehaspublishedseveraljournalarticlesandbookchapters.Beforejoiningacademia,sheworkedasajournalistandmanagerattheFinnishBroadcastingCompany.ReinhardMecklholdstheChairofInternationalManagementattheUniversityofBayreuth,Germany.HeisDirectoroftheBavarianAcademicCenterforChina,andGuestProfessorattheBeijingInstituteofTechnology,China.HeisalsoViceChairmanoftheBoardoftheGermanAssociationforM&A,andCo-EditorofthejournalCorporateFinance.Thefocusofhisresearchisoncrossbordermergersandacquisitions(M&A)andtheinternationalizationofdigitalbusinessmodels.SimonMichalkeisaResearchAssociateandDesignThinkingCoachatJacobsUniversityBremen,Germany.Hisresearchaddressesthedesignofdigitalplatformsandtheapplica-tionofDesignThinkinginsmallandmedium-sizedorganizations.HisresearchhasbeenpublishedinjournalssuchasDieUnternehmung,HMDPraxisderWirtschaftinformatik,WirtschaftsinformatikundManagement,andinternationalconferencesoninformationsystemssuchastheEuropeanConferenceonInformationSystems.LauraMontagisadoctoralstudentandresearchassistantattheChairofProductionManagementatRuhrUniversityBochum,Germany.AfterherBachelor’sdegreeinManagementandEconomics,shecompletedherMaster’sdegreeinManagementatRuhrUniversityBochumwithanexchangesemesterattheNorwegianSchoolofEconomics(NHH)inBergen,Norway.Herdoctoralresearchfocusesontheinterrelationshipsbetweencirculareconomy,sustainability,andsupplychainmanagement.PhilippMoschisworkingasaStrategyConsultantatSiemensAdvantaConsultingandResearchAffiliateattheChairforBusinessEconomics,AccountingandControlattheUniversityofPassau.Beforethat,hewasadoctoralstudentandResearchAssociateatthesameChairandattheCenterforDigitalBusinessTransformation.Hisresearchfocusesondigitaltransformationstrategiesofincumbentfirmsandstart-upsandispublishedinpres-tigiousjournalssuchastheInternationalJournalofProductionEconomicsandIndustrialMarketingManagement.VolkerNissenisProfessorofBusinessInformaticsattheUniversityofTechnologyIlmenau,Germany.Previously,heworkedformorethan12yearsinmanagementconsulting.Hisresearchinterestsincludethedigitaltransformationoftheconsultingindustry,informationtechnology(IT)valueenhancement,metaheuristicoptimization,andprocessacceptanceresearch.Heisauthorandeditorof21booksandover200otherpublications,includingarti-clesinBusinessandInformationSystemsEngineering,InformationSystemsFrontiers,IEEETransactionsonEvolutionaryComputation,IEEETransactionsonNeuralNetworksandLearningSystems,andAnnalsofOperationsResearch.RobertObermaierholdstheChairofBusinessEconomics,AccountingandControlandisDirectoroftheCenterforDigitalBusinessTransformationattheUniversityofPassau,SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

13ContributorsxviiGermany.Hisfieldsofexpertiseareinmanagementaccountingandcontrol,businessvalua-tionandvalue-basedmanagement,corporateplanninganddecision-making,aswellaspro-ductionandIndustry4.0.Hiscurrentresearchfocusesontheeffectsofdigitalizationinthesefields,andhasbeenpublishedinnumerousprestigiousjournalsandhandbooks.NgozichukwukaM.EnehOjoisaDoctoralresearcherattheDepartmentofManagementandEntrepreneurship,LeicesterCastleBusinessSchool,DeMontfortUniversity,Leicester,UK.AmemberoftheCentreforEnterpriseandInnovation(CEI),currentlyresearchingtheresilienceoffemaleentrepreneursindevelopingcountries,herprofessionalexperiencespansfinancialservices,corporatecommunications,andmarketing.Ngozidrivesthedevelopmentofwomeninsub-SaharanAfricaandisakeyresourcepersonforyouthandwomenenterprisedevelopmentinitiativesfornon-governmentalorganizations(NGOs)andgovernmentsinAfrica.RaissaPershinaisaPostdoctoralResearchFellowinDigitalEntrepreneurshipandSustainabilityTransitionsattheDepartmentofInformatics,UniversityofOslo,Norway.Beforejoiningacademia,Raissaworkedasabusinessanalystandbusinessdeveloperinthedigitaltechnologysector.Herresearchinterestsmainlycenteronthecreationofdigitalinnovationanditstransformativeeffectsonorganizationsandindustries.HerworkhasbeenpublishedinjournalssuchasResearchPolicyandResearchintheSociologyofOrganizations.PatrickPeterisaDoctoralResearchAssociateatErasmusUniversityRotterdam,Netherlands,andaformerventurearchitectwith15yearsofexperienceindigitaltransformationandmobil-ity.HeisfounderandChiefExecutiveOfficer(CEO)ofCircunomics,aCircularityPlatformforBatteries,whichisoneofthetopfivecirculareconomystart-upsworldwideaccordingtoSAPandGoogle.CindyPriceSchultzisDepartmentHeadofCommunicationandJournalismattheUniversityofWyoming,USA.Herprofessionalexperienceisasaradionewsdirectorforacommercialradiostation,andapublicrelationsprofessionalforSouthDakotaStateUniversity.HerresearchhasbeenpublishedintheInternationalJournalofMediaManagement,JournalofMediaEconomics,andElectronicNews,amongothers.CarolineReelitzisamanagementconsultantinFrankfurt(Main),Germany.Beforestartinghercareerinconsultancy,sheworkedattheProcessLab,aresearchcenteroftheFrankfurtSchoolofFinanceandManagement.Herresearchaddressesdigitalecosystemsinthehealth-careindustryandthedigitaltransformationofthehealthcareindustrywithafocusonhealthinformationsystems.SabineReisingerisastrategistwithparallelacademicandbusinessconsultancybackgrounds.SheisaSeniorLecturerinStrategicManagementattheJohannesKeplerUniversityLinz,Austria.Herresearch,teaching,andconsultancyinterestsincludestrategyprocesses,changeprocesses,competitivestrategy,andthehumanfactorofstrategy.Inhermostrecentresearch,sheaddressescompetitivenessandcompetitivedynamicsinaglobalized,digital,andinter-connectedworld.WillRitzrauisProfessoratFreseniusUniversityofAppliedSciencesHeidelberg,Germany.After21yearsinvariouscustomerfacing,developmentandsustainabilityrolesatSAP,in2019SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

14xviiiHandbookondigitalbusinessecosystemsWillRitzrauacceptedaProfessorshipforDigitalBusinessManagementandSustainabilityfocusingondigitizationaskeyenablerforsustainablebusinesstransformations.SusanneRobra-BissantzisProfessorofInformationSystemsatTechnischeUniversitätBraunschweig,Germany.Herresearchfocusesondigitalservices,interaction,valueco-creation,andtheirdesignwithanemphasisonpersonalservices.Herinstituteregularlycollaborateswithpractitionersintrainingsandjointprojects,forexamplefundedbytheGermanFederalMinistryforEducationandResearch.HerresearchispresentedatnationalandinternationalconferencessuchastheEuropeanConferenceonInformationSystems(ECIS),InternationalConferenceonInformationSystems(ICIS),Americas’ConferenceonInformationSystems(AMCIS),GemeinschafteninNeuenMedien(GeNeMe)andtheInternationalConferenceonDesignScienceResearchinInformationSystemsandTechnology(DESRIST).ProfessorRobra-BissantzisEditorofHMD–PraxisderWirtschaftsinformatik.RobertRoseisaPostdoctoralResearcherattheResearchGroupIT-EntrepreneurshipattheHassoPlattnerInstitute,DigitalEngineeringFaculty,UniversityofPotsdam,Germany.Hisresearchinterestsconcerntheleadershipofinnovationteams,ecosystemsindigitalentre-preneurship,andtheapplicationofbibliometricsinmanagementstudies.HecompletedhisDoctorateaspartofaJointPhDprogramofMacquarieUniversity(Sydney),Australia,andtheUniversityofPotsdam.Robertworkedasaco-founderandcompletedtheadvancedtrackattheHPISchoolofDesignThinking,Germany.MichaelRosemannistheDirectoroftheCentreforFutureEnterpriseandProfessorattheBusinessSchool,QueenslandUniversityofTechnology,Australia.Hismainareasofresearchareinnovation,businessprocesses,andtrust.ProfessorRosemannhaspublishedmorethan350refereedpapers.Hiseightbooksareavailableinfivelanguages.Heisontheeditorialboardofteninternationaljournalsandhasgloballyconductedkeynotepresentationsatcon-ferences.ProfessorRosemannistheHonoraryConsulfortheFederalRepublicofGermanyinQueensland.AlexanderRoth,MSc,isaDoctoralstudentattheFacultyofManagement,EconomicsandSocialSciencesoftheUniversityofCologne,Germany.Hisdissertationprojectdealswithvalueco-creationamongdifferentactorsinthecontextofelectronicsports(eSports)serviceecosystems.Particularareasofinterestarenovelmediatechnologiessuchasaugmentedrealityandvirtualreality.HealsoworksasaResearchandTeachingAssistantattheMunich,GermanycampusoftheMacromediaUniversityofAppliedSciences.AmberN.Schroeder,PhD,isanAssistantProfessorintheDepartmentofPsychologyattheUniversityofTexasatArlington,USA.Herresearchaddressesnonstandardemploymentinthegigeconomy,andtheeffectsoftechnologyandsocialmediaontheworkplace.HerworkhasbeenpublishedinjournalssuchasComputersinHumanBehavior,HumanResourceManagementReview,andtheJournalofManagerialPsychology.ReinhardSchütteholdstheChairofBusinessInformaticsandIntegratedInformationSystemsattheUniversityofDuisburg-Essen,Germany.Hehasbeenworkingonretailinfor-mationsystems,informationmodeling,enterprisesystems,andtheoryofsciencefor25years.HeisauthorandeditorofmorethantenbooksandhaspublishedinnationalandinternationalSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

15Contributorsxixscientificjournals.Hehasbeenresponsibleforseverallargetransformationprojectsinretailcompaniesandhasdriventhedigitalizationofthesecompanies.NinaSchumacherisResearcherattheChairofStart-upManagementatLeuphanaUniversityLüneburg,Germany.Hercurrentresearchprojectiscalled“SuccessFactorsofDigitalEntrepreneurshipattheMacro-,Meso-,andMicro-Level.”Aresearcherandanentrepreneur,NinaSchumacherhasfoundedseveralstart-upsandworkedasamentorforyoungstart-upsandstudentseagertofoundtheirownbusinessesandtobuildcareersasentrepreneurs.DominikSiemonisAssociateProfessorintheSchoolofEngineeringScienceatLUTUniversity(Lappeenranta-LahtiUniversityofTechnology),Finland.Hismainlydesign-orientedresearchinthefieldofinformationsystemsaddresseshuman‒ArtificialIntelligence(AI)collaboration,innovationmanagement,collaborationtechnologyandcreativity.HisworkhasbeenpublishedinleadingconferencessuchastheInternationalConferenceonInformationSystemsandinjournalssuchasEducationandInformationTechnologies,AISTransactionsonHuman‒ComputerInteractionandInternationalJournalofe-Collaboration.PrakashJ.SinghisaProfessorofManagementintheDepartmentofManagementandMarketingattheUniversityofMelbourne,Australia.Hisexpertiseisinoperationsandsupplychainmanagementfields.Hisstudieshavebeenbasedinanumberofindustrysectorsinclud-ingtransportandlogistics,healthcare,manufacturing,professionalservices,andthepublicsectoraswellasthenot-for-profitandvoluntarysectors.Hisresearchhasbeenpublishedinmanyleadingjournals.VictoriaKonovalenkoSlettliisanAssociateProfessorinOrganizationandManagementattheInlandNorwaySchoolofBusinessandSocialSciences.Inherresearch,DrSlettliisespe-ciallyinterestedinsuchtopicsasorganizationalandindividuallearning,knowledgesharing,intellectualcapital,smartinnovation,andmanagementperspectivesonbigdata.VictoriahaspublishedherresearchinjournalssuchasElectronicJournalofKnowledgeManagement,JournalofEntrepreneurship,ManagementandInnovation,andScandinavianJournalofBusinessResearch.KrzysztofSokółgraduatedfromtheInterdisciplinaryIndividualStudiesintheHumanities,UniversityofWarsaw(UW),Poland,andisaPhDstudent(DoctoralSchoolofSocialSciences,UW).Hisacademicinterestsincludeimmersivemedia,virtualreality,newsgames,memes,andnarrativesystems.HeteacheseditingcoursesattheFacultyofJournalism,InformationandBookStudies(UW).Heisco-authoroftwoacademicbooks,severalscientificpapers,andhasbeenaspeakeratvariousscientificconferences.Hehasbeenaprofessionalpractitionersince2012,collaboratingwithmanyproductionhouses(i.e.PolsatGroup,TVNGroup).MarionStevenisProfessorofProductionManagementintheFacultyofManagementandEconomicsatRuhrUniversityBochum,Germany.Herfieldsofresearchcomprise(smart)product‒servicesystems,productionplanningandcontrol,sustainabilitymanagement,circu-lareconomy,andIndustry4.0.Besidesseveraltextbooksandmonographs,herworkhasbeenpublishedinjournalssuchasControlling,Industry4.0Management,InternationalJournalofMarketsandBusinessSystems,Production,andJournalofBusinessEconomics.MaikeSuhr(MA)isaResearchAssociateintheDepartmentofMediaManagement,FacultyofMediaatBauhaus-UniversitätWeimar,Germany.HercurrentresearchfocusesondiversitySabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

16xxHandbookondigitalbusinessecosystemsinjournalisticstart-upsandnovelorganizationalformsinjournalism.Herresearchinterestsfurtherincludemediaandcultureinthepost-migrant,transnationalsociety.SoichiroTanakaisSeniorConsultantofSmartInfrastructureConsultingDepartment(2nd)ofHitachiConsultingCo.,Ltd.Hehassupportedpromotionofgovernmentdatautilizationpoliciesandplanningofprivatecompanies’datautilizationbusinesses.HeaccumulatesknowledgeaboutPersonalDataTrustBank(PDTB)throughtheexperienceofthePDTBProofofConcept(PoC)projectadoptedbyMinistryofInternalAffairsandCommunications.MatthiasTeichertiscurrentlypursuinghisMasterofScienceinManagementattheWHU‒OttoBeisheimSchoolofManagementinVallendar,Germany,focusingonbusinessanalyticsandinnovationmanagement.HealsohasaBachelor’sdegreeinBusinessAdministrationfromtheUniversityofPotsdam,Germany.Furthermore,Matthiasworkedasajuniorinformationtechnology(IT)consultantwithafocusonSAPlogisticsprojectsandcompletedseveralinternshipsinthestrategyfieldattheBigFour,DeutscheBahn,andAuto1.VerenaTelkmannisaResearchAssistantinthefieldofdigitalmediaandaPhDcandidateatJohannesGutenberg-UniversityMainzandTHKöln–UniversityofAppliedSciences,Germany.Inresearchshefocusesondigitalmediaproductionandeconomics.HerworkhasbeenpublishedintheJournalofMediaBusinessStudies.ShecompletedherBachelor’sdegreeinBusinessAdministrationin2014andherMaster’sdegreeinCommunication,Multimedia,andMarketManagementin2017.ShegainedpracticalexperienceinonlinemarketingatCHECK24.AdrianToschkaisaResearchAssociateattheChairofManagementintheBuiltEnvironmentatBauhaus-UniversityWeimar,Germany.AftergainingexperienceintheconstructionoflargeofficebuildingsandshoppingcentersasacommercialprojectmanageratEd.ZüblinAG,herejoinedacademia.Throughhisresearch,heexploresthevalueco-creationprocessofstakeholderintegrationinconstructionandrealestate.AnaTrigoreceivedherMasterofIndustrialElectronicsandComputersEngineeringin2014fromtheUniversityofMinho,Portugal.SheisaPhDcandidateatUniversityofMinhointheAdvancedEngineeringSystemsforIndustryprogramwithintheautomotiveindustry.SheistheVice-ChairofInstituteofElectricalandElectronicsEngineers(IEEE)Portugalsection,amemberofWomeninEngineeringandProfessionalandEducationalActivities.Overtheyearsshehasheldrolesrelatedtoscientificresearch,productmanagement,managementsystemsconsultingandauditing.Inadditionshehaspublishedpapersinthefieldsofautono-mousvehiclesandgenderstudies.MasaharuTsujimoto,Dr,isProfessoroftheDepartmentofInnovationScience/DepartmentofTechnologyandInnovationManagement,SchoolofEnvironmentandSociety,TokyoInstituteofTechnology,Japan.HewasVisitingResearcheratTechnischeUniversitätHamburg-Harburg(TUHH)in2014andalsoVisitingResearcheratEidgenössischeTechnischeHochschuleZürich(ETHZürich)in2017and2019‒2020.Hismainresearchtopicsareecosystemgovernanceandplatformmanagement.HehaspublishedacademicpapersinTechnologicalForecastingandSocialChangeandInternationalJournalofTechnologyManagement.SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

17ContributorsxxiMartinaWeifenbach(néeDopfer)completedherPhDattheInstituteofTechnologyManagement,UniversityofStGallen,SwitzerlandandtheAlexandervonHumboldtInstituteforInternetandSociety,Germany.Herresearchfocusesonbusinessmodeldevelopmentofentrepreneurialventures,businessmodelinnovationindigitalorganizations,andmindfulnessinorganizations.SheisthefounderandCo-ChiefExecutiveOfficer(CEO)ofmyndway.com,acompanythatoffersmindfulness-basedtrainingsforcompanies.HerwigWinklerisFullProfessorandholdstheChairofProductionandOperationsManagementattheBrandenburgischeTechnischeUniversitätCottbus-Senftenberg(BTU).Furthermore,heistheheadofthestudyprogram“IndustrialEngineeringandManagement.”Previously,hewasProfessorandHeadoftheInstituteofProductionManagement,BusinessLogistics,andEnvironmentalManagementattheUniversityofKlagenfurt,Austria.ProfessorWinkler’smainresearcharealiesintheplanning,organization,andcontrolofmodernvalue-addedmanagementsystems.Hefocusesonproductionandlogisticsmanagement,tech-nologyandinnovationmanagement,aswellasbusinessmodelmanagement.Hehasauthoredmorethan200publicationsinscientificjournals,books,andatinternationalconferences.TobiasWulfertisaResearchAssociateattheChairofBusinessInformaticsandIntegratedInformationSystems,UniversityofDuisburg-Essen,Germany.Since2018,heconductedresearchandtaughtattheUniversityofDuisburg-Essen.Hisresearchprojectsareconcernedwithdigitalplatformsandmarketplacesindigitaltransformationandelectroniccommerce.YiminYangisanAssistantProfessorinComputerScienceatLakeheadUniversity(Canada)andfacultyaffiliateattheVectorInstituteforArtificialIntelligence(Canada).DrYangearnedhisPhDinPatternRecognitionandIntelligentSystemsfromHunanUniversity(China),andwasapostdoctoralfellowattheUniversityofWindsor(Canada).DrYang’sresearchinterestsincludemachinelearning,neuralnetworks,andsignalprocessing.HisworkhasappearedinleadingartificialintelligencejournalssuchasIEEETransactionsonPatternAnalysisandMachineIntelligence.ChristianZabelhasbeenFullProfessorforInnovationandCorporateManagementatTechnischeHochschuleKöln,Germany,since2016.Hisresearchfocusesonproductionanddistributionprocesses/structuresindigitalmedia(especiallyonlinevideoandvirtual/augmentedreality)andthedigitaltransformationof(media)companies.HisworkhasbeenpublishedinjournalssuchasJournalofMediaBusinessStudies.Previously,heheadedtheproductmanagementoft-online.de,Germany’slargestonlinepublisher.From2008to2012,hewasExecutiveAssistanttoDeutscheTelekom’sChiefExecutiveOfficer(CEO)RenéObermann.W.G.WillZhaoisAssistantProfessorinManagementatLakeheadUniversity(Canada).HeearnedhisPhDinManagementfromEMLyonBusinessSchool(France)andcon-ductedhispostdoctoralresearchasaSCANCORscholaratStanfordUniversity(USA).Multidisciplinarilytrained,DrZhao’sresearchinterestsincludeorganizationtheory,entre-preneurship,andartificialintelligenceandsociety.HisworkonorganizationtheoryhasbeenpublishedinleadingoutletssuchasResearchintheSociologyofOrganizations.SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:28:48AMviaColumbiaUniversityLibrary

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191.IntroductiontotheHandbookonDigitalBusinessEcosystems:Strategies,Platforms,Technologies,GovernanceandSocietalChallengesSabineBaumannFROMNETWORKSTODIGITALBUSINESSECOSYSTEMSThepracticeoflookingtonatureforinspirationtosolvedesignproblemsisnotnew.Neitheristheimitationoffeatures,attributes,orbehaviorsofactorsinnaturalhabitats.Researchersandpractitionershavelongcopiedfromnatureanddevelopedneworenhancedtechnologythroughbiomimicry.Thus,itwasonlyamatteroftimebeforebusinessesandtheirenviron-mentswouldalsobedescribedandanalyzedthroughthelensofbiology,ormoreprecisely,asecosystems.Myfirstscientificcontactinvolvingbusinessorganizationsandnaturalecosystemscameinthe1990s,whenIwasresearchingsustainableprocessnetworks(Baumann,1999).Onediscussiontakingplaceatthattimewasabouthownaturalecosystems,despitebeingincon-stantflow,hadapointofequilibrium.Itwascalledecologicalbalance;theinfluxandlossofresources,actors,habitat,andsoon,wassufficientlybalancedthattheecosystemsurvivedinthelongrun.Inastateofecologicalbalance,ecosystemswereevenbelievedtowithstandcertainlevelsofpollutioncausedbyhumanactivities,providedthebalancewasnotupsettoomuch.Regardingbusinessorganizations,myprojectrevolvedaroundnetworksandtheiroperations.Itmodeledflowsofmaterialandenergyasnetworksratherthanlinearstreams.Isoondiscoveredecologicalbalancetobeamyth,butthenetworkapproachprovedtobeaninsightfulpathtofollow,albeitcomplicatedandhighlyinterdisciplinary.Theideaofcomparingbusinesssystemstobiologicalsystems,andregardingindustrialorganizationsaslivingorganismsthatrespondtochangesintheirenvironmentdatesbacktothe1950s(e.g.,Beer,1959)andhassincebecomeamainstreamconcept(Rothschild,1990).Moore(1993)iscreditedwithdefiningthebusinessecosystemasaloosenetworkofactorssuchassuppliers,distributorsandoutsourcingfirmsthatworkbothcooperativelyandcompetitivelytodevelopnewproductsandexploittheirinnovations.Inlaterworks,Moorealsoaddressestheco-evolutionofactors(species)inthebusinessecosystemthroughmutualinnovations(Moore,1996).Followingthisresearchtradition,adigitalbusinessecosystem(DBE)canbedefinedasanetworkoforganizationssuchasmanufacturers,suppliers,distributors,customers,competi-tors,andgovernmentagencies,thattogethercreateanddeliveraspecificproductorserviceinapartlyorfullydigitalenvironment.Theterm“businessecosystem”conveysthat,analogoustobiologicalecosystems,DBEactorsestablishanon-homogeneouscommunityofself-interestedentitiesthatneverthelessdependoneachotherfortheirsurvival.Thesystemconstantlyevolvesasactorsjoinordepart,astheDBEisaffectedbynecessarychangesininternal1SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202209:54:32AMviaColumbiaUniversityLibrary

202Handbookondigitalbusinessecosystemsstructuresinresponsetoexternalforces.Actorsalsoinfluenceeachotherastheycooperatetoachievecommonobjectiveswhilecompetingforscarceresources(Coralloetal.,2007;IansitiandLevien,2004;Kapoor,2018).DBEactorscommunicatethroughdigitalinformationandcommunicationtechnologies(ICTs)tocoordinatetasksandactivities.Consequently,informa-tionbecomesavaluableandoftenscarceresource(WunckandBaumann,2017).DBEstranscendtraditionalindustrialstructures,asfirmscanbeindifferentsectorsorlocationsbutbelongtothesameDBEwhileprovidinguniqueandcustomizedsolutionstoindividualcustomers.ThisideabecameveryprominentintheconceptofIndustry4.0in2011(Baumann,2018).Again,thisviewisnotnew.Theexploitationofgeographicaldifferencesincosts,accesstoresources,andsoon,hasledcompaniestodecentralizeactivitiesandcooperatewithexternalpartnersindistributed,modular,andincreasinglyvirtualstructures(Baumann,2013).Theemergingbusinessnetworkshavebeenstudiedunderavarietyofterms,suchasvaluecreationnetworks,valuecreationarchitectures(e.g.,KeenandWilliams,2013),orvalue-creatingwebs(e.g.,GretzingerandRoyer,2014).Oneprominentandintensivediscus-sionisabouttheroleofplatformsinDBEs(e.g.,Gawer,2011),broughtaboutbythegrowthofdigitalplatformplayerssuchasFacebook,Amazon,Apple,andGoogle.AlthoughmanyDBEsareplatform-based,aplatformisnotaprerequisiteforaDBEtobesuccessful.Duetotheirdigitalnature,DBEsarealsoofinterestinscientificareasotherthanman-agementandeconomics,suchasinformationsystemsandengineering.ThishascomeaboutthroughthediffusionofdigitaltechnologiessuchastheInternetofThings(IoT),artificialintelligence(AI),digitaltwins,andblockchains,thatallowedformoreflexibilityaswellassectorallyandgeographicallytranscendingvaluecreationstructures.WhileinformationsystemsandengineeringplaceastrongerfocusonthetechnologicalfeasibilityofDBEs,man-agementandeconomicshavebeeninvestigatingstrategiesandbusinessmodels,especiallytoexploitvaluefromthegrowingstreamsofdata.ThemappingstudybyBaumannandLeerhoffinChapter2ofthisHandbooktracesthesedevelopmentsandidentifiesdifferencesandsim-ilaritiesinthetopicsbeingdiscussedindiversescientificdisciplines.ItbecameevidentthatmanyDBEresearchstrandsareunconnected,evenwithinthesamediscipline.Whiletheorypapersareabundant,in-depthstudiesintoindustryapplicationsandrecommendationsonhowtodesignandmanageDBEsaremuchlesscommon.OBJECTIVESANDAPPROACHOFTHEHANDBOOKItisfromadiverseandinterdisciplinaryviewpointonDBEsthatthisHandbookapproachesthetheory,practice,andorganizationalphenomenathatconstituteandexistinDBEs.Aninterdisciplinaryapproachisvital,inordertocapturethescopeofsocial,economic,polit-ical,andtechnologicalfactorsthatinteractintheemergenceandevolutionofDBEsandtounderstandtheunderlyingprocesses.ByconcentratingondiversedisciplinaryperspectivesonDBEs,theHandbookmovesbeyonddiscipline-specificsilostopotentiallyfacilitatemoretransdisciplinaryconceptualandempiricalworkonDBEs,includingcross-sectoralindustryapplications.Thecallforchaptersspecificallyinvitedscholarsinavarietyoffields—business,economics,engineering,computerscience,andhumanities—tosharetheirideas,concepts,andperspectivesonDBEs.Thesubjectmatterincludes:understandingtechnologiesandtheirpotentialforDBEs(forexample,theIoT,AI,machinelearning,blockchain);marketsandbusinessmodels(forexample,valuecreationthroughcustomerintegration,data-drivenSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202209:54:32AMviaColumbiaUniversityLibrary

21Introduction3businessmodels,platforms,andmulti-sidedmarketplaces);governanceandmanagement(forexample,strategicpositioninginbusinessecosystems,inter-ecosystemcompetition,humanresourcesandcapabilitymanagement,ecosystemmaturity);societalchallenges(forexample,ethics,sustainability,corporatedigitalresponsibility);andbroaderindustryimplications.MyhopeisthattheHandbookonDigitalBusinessEcosystemswillassistinconnectingtheeclecticandactivecommunitiesofscholarsfromvariousdisciplinesinterestedinstudyingdiverseandmultifacetedaspectsofDBEs.ThisHandbookisintendedasguidancenotonlyforresearchersandstudentsunfamiliarwiththetopic,butalsoformanagerswhohavetodevelopandnavigateincreasinglycomplexDBEsfortheircompanies,inordertoremaincompetitive.Theinterdisciplinaryapproach,ideas,andconceptsdiscussedhereinshouldalsobeofmuchinteresttothoughtfulpractition-ers,asthecontributionsmayhelptorevealpotentiallinkagesbetweenfieldsalongwiththeirpracticalimplications,andsobroadenanddeepentheunderstandingofDBEperspectives.ORGANIZATIONOFTHEHANDBOOKTheobjectivefortheHandbookistobringtogetherperspectivesandapproachesthatrepre-sentthediversityofdisciplinesandthemanyfacetsofDBEdevelopmentinpractice.ThecallforchaptersfortheHandbookonDBEsthathadbeensharedindiverseinterdisciplinarycommunitiesmetwithoverwhelmingsuccess,anotherindicatorforthegrowingimportanceofthefield.SelectingthebestsubmissionswasnoeasytaskandmanyexcellentcontributionscouldnotbeincludedintheHandbook.SpecialthanksgotoAlanSturmerfromEdwardElgarPublishingwhosupportedtheextensionoftheHandbooktoincorporatemorechapters.ThefinalHandbooknowcomprises44chaptersfromover80internationalscholarsandpractition-erswhosharetheirresearchandexperiencesonandinDBEs.TheHandbookisorganizedintosevenparts,eachofwhichisfocusedonacommontheme.GiventhetransdisciplinarityofDBEsmanychaptersrelatetomorethanonetheme,butwereaddedtothethemewhichmostbroadlyrepresentstheircontribution.Althoughthereissomeoverlapamongstsomeofthechapters,eachoneprovidesauniqueperspective.Allchaptersarealsomeanttostandaloneastopicalreadings.ThefollowingoutlineprovidesanoverviewoftheHandbookthemesandasummaryofchapters.PartI(whichfollowsthisintroductorychapter)presents“StrategiesandPerspectives”ofDBEs.ContributionsconcentrateontheoriginsofDBEsindifferentdisciplines,thevarietyofperspectivesonDBEsandstrategiesofactorsinDBEs,aswellasinter-DBEcompetition.IntheirmappingstudyonDBEsSabineBaumannandMarcelLeerhoff(Chapter2)tracetheemergenceofDBEsinvariousdisciplinesandconnectthetopicsthatarebeingdiscussedintheoryandpractice.Theydemonstratethatseveraltopicssuchasplatforms,technologiesordata-drivenbusinessmodelsarebroadlyresearched.However,manyimportantDBEresearchstrandsarestillunconnectedandunderexplored.DavidR.King(Chapter3)usesorganizationallearningtodiscussstrategiesthatcompaniescanapplytosuccessfullyadapttheirtraditionalecosystemtoincorporatedigitalelements.Interestingly,heidentifiesseveralmismatchesbetweentheoreticalexpectationsandobservedfirmbehavior.InChapter4,AntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenneyprovideinsightsonnewdimensionsandstrategiesrelevantforfirmstohandlemoreeffectivelythedigitaltransformationinthelightofrecentadvancesintechnology,withaparticularemphasisonSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202209:54:32AMviaColumbiaUniversityLibrary

224Handbookondigitalbusinessecosystemstheroleofecosystems,digitalplatforms,andabsorptivecapacity.PäiviMaijanen(Chapter5)analyzestheroleandfeaturesofdynamiccapabilitiesindigitalplatform-basedecosystemswherecompaniesneedtosensenewbusinessopportunities,toseizethemproactivelywithnewbusinessmodeldesignsandinvestments,andtocontinuouslytransformtheirtangibleandespeciallyintangibleresourcestoachievestrategictargets.Chapter6bySabineReisingerandJohannesM.Lehnerexploresthestrategictrade-offbetweenexploitingexistingresourcesandinvestinginnewbusinessopportunities.TheauthorsdescribefouridealtypesforresolvingsuchstrategictensionsanddiscussstrategicoptionsoftherespectiveactorsintheDBEregard-ingtheirpositiononatwo-dimensionalframework.ConcludingPartI,GillianDoyle(Chapter7)arguesthatthegrowingscaleandcomplexityofsomedigitalorganizationsissuchthattheycanbeseenasecosystemsintheirownright.Sheexamineshowchangingtechnologieshaveencouragedtakeoversandconsolidationinthetelevisionproductionindustrywhichresultedinorganizationsthatcanberegardedasfunctioningecosystems.PartIIfocuseson“Entrepreneurship”indifferentfacets.AsSpigel(2020)pointsout,entrepreneurshipcanbeexploredasanactivityofentrepreneursinDBEs(entrepreneurshipinDBEs),orasatypeofDBE,thatis,entrepreneurialDBE.StephanieBirknerandMartinaWeifenbachinChapter8explorehowentrepreneurialpurposeactsasacompassthathelpsentrepreneurstonavigatethroughambiguouswatersofbusinessmodeldesignandtoseizebusinessopportunities.NinaSchumacher(Chapter9)studiesthefactorsinfluencingdigitalstart-upsuccessfromaventurecapitalinvestor’sperspective,andshowsthatonlythecontex-tualfactorsofhumancapitalandfinancesaredeemedtoberelevantforsuccess.InChapter10,ChristianHorneberexaminesthemotivationsandopportunitiesforvaluecreationandvalueappropriationarisingfromvariousformsofintegrationofdigitalstart-upsinestablishedcompanies.PartIIconcludeswithNgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndtdiscussingtheroleofDBEsforfemaleentrepreneurshipindevelopingecon-omies(Chapter11).TheyshowthatDBEscanprovidefemaleentrepreneurswithaccesstofinance,education,andbusinessnetworkssothattheycanthriveamidstuncertaintiesandseveregender-inducedchallenges.PartIIIoftheHandbookisorientedtowards“ValueCreationandBusinessModels”inDBEs.ContributionsfocusonDBEvaluecreationlogics,oftenthroughdifferenttypesofplatforms,andhighlightthespecificityofDBEbusinessmodelsinvariousindustrialdomains.InChapter12,SimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantzdemonstratethatthesuccessfuldevelopmentandmanagementofdigitalengagementplatformsreliesonthedesignofgovernancestructuresandmechanismsthatattractandbindacriticalmassofactors,balancetheirheterogeneousinterests,andensurefuturesuccessthroughcontinuousinnovation.Employingthedesignscienceresearchapproachtheyderiveprinciples,mechanisms,andenactorstodesignkeyfeaturesofengage-mentplatforms.PhilippMoschandRobertObermaierinChapter13explorethespecificsofvaluecreationlogicsandtypesofdigitalplatformsinindustrialsettings.Theyproposeacom-prehensiveclassificationframeworkforplatformsintheIndustrialInternetofThingsandderivepracticalrecommendationsforrelatedinvestmentdecisionsinindustry.InChapter14,KarolinaBährexpandstheunderstandingofco-creationinDBEsbydevelopingatypologyofdifferentcustomerrolesaccordingtotheirinteractionlevelandtheirintegrationofresources.Throughreal-worldcasessheillustratesthatco-creatingcustomersblurthedistinctionbetweenconsumptionandproductioninDBEs.ReinhardSchütteandTobiasWulfert(Chapter15)investigatethedigitaltransformationoftraditionalretailersastheyestablishonlinesalesSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202209:54:32AMviaColumbiaUniversityLibrary

23Introduction5channelsandincreasinglyintegratewithDBEsthatincludebothtraditional(offline)actorsandnewdigitalactors.Theirproposedframeworkisorganizedaroundinformationsystemsarchitecturelayersthatincludegenericretailservices,matchingservices,andadevelopmentenvironment.VolkerNissen(Chapter16)concludesPartIIIbydemonstratingthatdigitalplatformsandtheassociatedecosystemsofferexcellentopportunitiestoincreasethetradition-allybadscalingofconsultingservices,withpotentialimprovementsalsointhereach,speed,cost,flexibility,andevenqualityofserviceprovision.Chapter16analyzesexistingbusinessmodelsintheconsultingsectorandproposesthedigitalconsultingecosystemthattakescom-petitionfromthecompanytothenetworklevel.PartIVexploresissuesconcerningthe“GovernanceandManagement”ofDBEs.ContributionscoverorganizationalandmaturityframeworkssupportingDBEdesign,imple-mentation,andoperation.ChristianZabelandVerenaTelkmanninChapter17studyagglom-erationfactorsintheGermancrossreality(XR)industrytocapturetheroleoflocationfornon-focalfirmsinemergingDBEs.Theiranalysisshowsthatagglomerationeffectsarenotonlybasedontheagglomerationpropertiesofageographicallocationandindustrytype,butmayalsovarybetweenstrategicgroupsoffirmsandtheirrespectivepositioninginaDBE.InChapter18,RicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemonproposeaDBEmaturitymodelforpersonalservicefirms,forexampleeducation,retail,hospi-tality,andcraftsmanship.Thematuritymodel(MM)includesaseriesofdimensions,capabil-ities,andmaturitystagesindicatinganevolutionarypathtowardsdigitalmaturity,andoffersspecificguidanceforpersonalservicefirmstoachievethetransitionfromanalogtodigital.ChristopherBuschowandMaikeSuhr(Chapter19)studyobjectivesandmotivations,actorsandtheirpositions(particularlytheroleofkeystoneorganizations)incross-bordercollabora-tiveinvestigationsindigitaljournalism.TheybuildontheresultstocontrastDBEsasanovelorganizationalformwithconventionalbusinessecosystems.VinzenzJeglinskyandHerwigWinkler(Chapter20)identifyobstaclesofdigitizationprojectsinmanufacturingandproposeadecisionmodelinordertoimprovedecisionsinDBEs.Theyverifytheirmodelthroughanempiricalstudyandderivepracticalrecommendationstoensuremoresuccessfulandfasterdigitalprojectimplementations.IntheclosingchapterofPartIV,SebastianFloereckeandFranzLehnerinChapter21presentaholisticmeta-studyofsuccess-relatedfactorsofSoftwareasaService(SaaS)providers.BasedontherolesofthePassauCloudComputingEcosystem(PaCE)modeltheycomparestudiesonsuccess-relatedfactorsofSaaSproviderstosupportexecutivesofSaaSprovidersintheirdecision-makingprocesses.PartVfocuseson“DataandTechnologies”inDBEs.ContributorsaddresscentraldigitaltechnologiesthathavebeendrivingtheemergenceandprominenceofDBEs.OliverBudzinski,SophiaGaenssle,andNadineLindstädt-DreusickeinChapter22analyzetheeconomicsbehindalgorithmicsearchandrecommenderservices(SRSs)thatplayaparamountroleinDBEs.BasedonasystematicanalysisofSRSsasacommercialgoodandchangesbecauseofdigitization,theydiscussbenefitsandrisksforwelfarethatarisefromthewidespreademploymentofalgorithmicsearchandrecommendationsystems.InChapter23,WafaaA.H.AhmedandBartL.MacCarthyinvestigatetheroleofblockchaintechnologyinthesupplychain,learningfromemergingecosystemsandindustryconsortia.Theirstudyhighlightsconsiderationscentraltoablockchainconsortium’sformationandsustainability,includingitsgovernance,technicalandindustryfocus,andparticipationissues.InChapter24,YuCuiandPrakashJ.SinghadaptthesupplychainsystemarchitecturetoDBEsbyintegratingblockchainmechanismsinordertostrengthensupplychainresilience.TheyuseexamplesfromJapaneseSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202209:54:32AMviaColumbiaUniversityLibrary

246HandbookondigitalbusinessecosystemsindustrytodemonstratebenefitsandrisksoftheirDBE-basedarchitecturalmodelofasupplychain.IvanaKostovska(Chapter25)exploresthevaluecreationprocessesinblockchainecosystemsinthecreativeindustries.Sheshowshowblockchainentrepreneursattempttoattractalargepoolofmicro-investmentstoaddressmarketimperfectionsandbottlenecks.InPartV’sfinalchapter,W.G.WillZhaoandYiminYang(Chapter26)re-examinethreeonto-epistemologicallydistinctivesocio-materialperspectivesandillustratetheirimplicationsforstudyingartificialintelligence(AI)-driveninteractionsofhumansandrobotsinserviceDBEs.TheyusetheexampleofdeicingrobotstoderiveresearchdirectionsforstudyingAIserviceswhenapplyinganonto-epistemologicalpluralisticapproach.PartVIaddresses“SocietalChallengesandSustainability”ofDBEs.ContributionsexplorehowDBEscansupportmoresustainablebusinessmodels,butalsocapturesocietalchallengeswhenstakeholdergroupsbecomesidelinedinDBEstructures.TraciM.BrickaandAmberN.Schroeder(Chapter27)reviewchallengesofplatformwork,especiallyforplatformworkers,thathavearisenwithintheplatformeconomy.Theydiscusspotentialimplicationsforgovern-mententities,platformproviders,andindividualssuchaslegalemploymentclassificationsortheeconomicprecarityinherentinplatformwork,andmakepracticalrecommendationsforstakeholdersinvolvedinplatform-facilitatedDBEs.InChapter28,PatrickPeterandWillRitzrauelaboratehowcircularitycanbeimplementedinDBEsthroughasystemic,transpar-ent,andmutuallybeneficialinformationexchangeonsymbioticreportingplatforms.Studyingthephasesofthelifecycleofe-vehiclebatteriestheyidentifykeysuccessfactorsforbusinesstotransformfromlineartocircularvaluecreationinordertoimprovesustainabilityandmakeresponsibilitiesfortheenvironmentalimpactofDBEstransparent.VerenaLuisaAufderheide,LauraMontag,andMarionSteven(Chapter29)explorevaluecreationopportunitiesofproduct-servicesystemsforthephotovoltaic(PV)powerindustryfromanecosystemperspec-tive.Theyintroduceaninnovativebusinessmodelofsmart-circularproduct-serviceecosys-temsforPVpanels,andanalyzehowaDBEshouldbecharacterizedintermsofactors,roles,andvaluecontributiontosuccessfullyimplementsmart-circularproduct-services.InChapter30,TimoKlünderandMarionStevendevelopaninstrumenttoevaluatetheanticipatedsustainabilityperformanceofactorswithinaDBE.Basedonacomprehensivebibliometricanalysistheydistinguishchallenges,properties,andobjectivesofDBEsinordertoderiveperformancemeasuresthatarethenincorporatedintoabenchmarkinginstrument.RaissaPershina(Chapter31)concludesPartVIbystudyingtheroleofbigdataanalyticsinincreas-ingsustainablecapabilitiesintheonlinefooddeliveryindustry.Sheintroducestheconceptofcircularparticipationandilluminateshowdataanalyticssupporthumanandnon-humandecision-makersintheirefforttoincreasesustainablecapabilitiesoftheDBE.PartVIIintroducesavarietyofDBE“IndustryApplicationsandCaseStudies.”ContributorsdelveintoindustrialexamplestoillustrateorganizingprinciplesofDBEsandanalyzebenefitsandlimitationsofDBEsinpractice.FranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMecklinChapter32setthescenebycomparingDBEsintheGermanautomo-tive,finance,insurance,andsportinggoodsindustries.Theirstudyrevealsdifferentlevelsofdigitalmaturityandimplementationprogressfortheseindustries,specificchallengesandopportunities,aswellasgrowthpotentialsfortheirDBE.InChapter33,CindyPriceSchultzusestheecosystemsperspectivetocomparethreebusinessmodelsofdigitalnewsinthesamegeographicecosystem:anon-profit,anentrepreneurialmodel,andacorporate-ownedoutlet.Shecomparesplatforms,innovations,complementarities,interdependencies,andrevenuestreamstoexplorethefirms’adaptationstosustaintheirsuccesswithreaders,advertisers,andSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202209:54:32AMviaColumbiaUniversityLibrary

25Introduction7sponsors.AnnaJupowicz-GinalskaandKrzysztofSokół(Chapter34)presentamultiple-casestudyofvirtualreality(VR)applicationsinthemedia,inordertodefinethreemodelsofbuildingrelationsbetweenthemediaimplementingVRandtheexternalentities:thecoop-erative,theinternalplatform,andthepartnership-platformmodel.InChapter35,KatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichertdescribetheeSportsindustryanditsprincipalcharacteristicsfromastructuralecosystemperspective.TheyconceptualizeeSportsasadigitalinnovationecosystemandproposeablueprintoftheeSportsecosystemcomprisingitsmainactorsandactivities.ReinhardE.KunzandAlexanderRoth(Chapter36)developaconceptualframeworkofaneSportsserviceecosystemasadomain-specificDBEofincreasingrelevanceto(better)understandthedifferentroles,relationships,andinteractionsofactorsinvolvedinvalueco-creation.UsingacasestudyapproachtheydemonstratethedynamicinteractionsamongmultipleactorsineSportsandhowthescopeofvalueco-creationhasbeenextendedbeyondthefirm-and-customerdyadtoaserviceecosystem.InChapter37,GeoffreyM.GraybealandBenjaminLawrenceexplorehowtheUnitedStatesrestaurantindustryusedtheDBEapproachinresponsetothecoronaviruspandemic.Theyfindthatintherestaurantindustryplatform-baseddeliverymodelshaveemerged,aswellasanewwaveofpop-up“digital-only”brands,hostandghostkitchenmodels.SaminaHusainandAnaTrigoinChapter38deliverperspectivesaboutthefutureofmobilityandhowautonomoustechnologycanaffectthetraditionalautomotivebusinessecosystem.Theypresenttrendsrelatedtoautomotiveindustrystakeholders—namely,theincumbents,thestart-ups,thebigtechnologicalcompanies,thegovernmentalinstitutions,andthesociety—andvalidatethedescribedperspectivesbyinsightsobtainedfromautomotiveexperts.InChapter39,MasaharuTsujimotoandSoichiroTanakaintroducethecaseofthePersonalDataTrustBank(PDTB)inJapanthatintroducedanewplatform-baseddigitalecosystemtocreateandpromoteassortedservicesutilizingpersonaldata(forexample,healthmanagementinformation,powerandgasutilizationinformation,medicationhistory,householdinformation,andsettlementinforma-tion).Theirstudyanalyzesthedriversbehindcustomerintentionstousefutureservicesthatmayberealizedthroughpersonaldatasharing.FranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl(Chapter40)analyzepotentialsofDBEsintheGermanhealthcaremarket.Theirfindingsshowthatdigitalhealthcareecosystemsareapromisingmeanstosustainthequalityofhealthcarebyaddressingcurrentchallengesofanagingsociety,multi-morbidity,alowdegreeofdigitization,andfewinnovationsinthehealthcaresector.InChapter41,AdrianToschkaexplorestheuseofdigitaltwinsinrealestatetodrivevaluethroughoutthebuildinglifecycle,astheindustrymovestowardsDBEstructuresinwhichnewstakeholderscomplementthetraditionalincumbentsintheproductionandmanagementofbuildings,suchasarchitects,constructioncompanies,andbuildingmanagers.VictoriaKonovalenkoSlettli(Chapter42)addressesbigdataanalyticscapabilitybuildinginthecontextofDBEsforthecaseoftheNorwegianswinebreedingindustry.Sheexaminesthestepsofacquiringandaccumulatingbigdataresourcesandtherelatedcomplexmulti-stagehumantechnologicalprocessinvolvingallentitieswithinagivenDBE.InChapter43,JuliaFeldtandHenningKontnyexplorecasestudiesofautonomouslogisticssystemsasexamplesofinternalDBEsfororderfulfillment.Theyshowhowroboticsystemscanleadtoasubstan-tialincreaseinorderpickingspeedwhilestayingveryflexibleanddemandingsignificantlylesswarehousespace.GiovannaCulot(Chapter44)concludesPartVIIandtheHandbookwithherstudyonDBEsinmanufacturing.Drawingonresultsofaninternationalexpertstudytoidentifyevolutionarytrajectoriesandongoingdebates,sheanalyzesemergingmodelsforSabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202209:54:32AMviaColumbiaUniversityLibrary

268HandbookondigitalbusinessecosystemsIndustry4.0whicharethentestedbyaseriesofillustrativecasestudiesonmasscustomizationandmanufacturingservitization.CONCLUSIONThisHandbookprovidesacomprehensiveanddetailedexplorationoftheevolutionandcurrentstateofDBEs.TheHandbookbringstogetherscholarsandpractitionersfromvariousdisciplines(economics,management,sociology,communication,computerscience,andengineering)andinvestigatesamultitudeofperspectives(entrepreneurship,markets,manage-ment,businessmodels,technologies,andsocietalchallenges)onandindustrialapplicationsofDBEs.ThefieldofDBEsisnolongernascent,butiscurrentlygrowingatafastpaceasitmakesitswaytowardsbeingamainstreamconcept.ThisHandbookprovidesusefulfoundationsforfurthertheorybuildingandapplicationsinindustrialsectors.Italsooffersvariousavenuesforfutureresearch,inparticularthosethatcombinemultipledisciplinesandperspectives.Overall,IhopetheinterdisciplinaryworkcontainedinthisHandbookservesasanimportantstepofthisevolutionandinspiressignificantpursuitofadditionalresearchandindustryapplicationsinthefuture.ThisHandbookcouldnothavebeencompletedwithoutthesupportofnumerouspeople.Mydeepthanksgotoallthecontributorsfortheircontinuouseffortandtimelysubmissionsofdraftchapters,reviewsofeachother’schapters,andtheirexcellentfinalcontributions.Icouldsensetheircommitmentanddeepengagementinallstepsoftheprocess.JadeUniversityofAppliedSciencessupportedthebookprojectbyfundingaresearchassociate,MarcelLeerhoff,whoseassistanceinthemanyadministrativeandcommunicationprocesseswasinvaluable.IwouldalsoliketothanktheeditorialstaffatEdwardElgarPublishingfortheirguidanceincompletingthisimportantandmuch-neededHandbookonDigitalBusinessEcosystems.REFERENCESBaumann,S.(1999).UmweltschutzorientierteProzessnetzwerke:ModellierungundAnalyseproduktin-duzierterStoff-undEnergieströme.Wiesbaden:DeutscherUniversitätsverlag.Baumann,S.(2013).AdaptingtotheBraveNewWorld.InnovativeOrganisationalStrategiesforMediaCompanies.In:Storsul,T.andKrumsvik,A.H.(eds)MediaInnovations:AMultidisciplinaryStudyChange.Göteborg:Nordicom,pp.77–92.Baumann,S.(2018).ValuecreationnetworksforIndustry4.0:bestpracticesinGermanmanufacturingindustries.In:DecisionSciencesInstitute(ed.)Proceedingsofthe49thDSIConference“RoleofDataandDecisionAnalyticsinGlobalOperations”.Chicago,IL,pp.1647–1659.Beer,S.(1959).WhathasCyberneticstodowithOperationalResearch?JournaloftheOperationalResearchSociety,10(1),pp.1–21.doi:10.1057/jors.1959.1Corallo,A.,Passiante,G.andPrencipe,A.(2007).TheDigitalBusinessEcosystem.Cheltenham,UKandNorthampton,MA,USA:EdwardElgarPublishing.Gawer,A.(2011).Platforms,MarketsandInnovation:AnIntroduction.In:Gawer,A.(ed.)Platforms,MarketsandInnovation.Cheltenham,UKandNorthampton,MA,USA:EdwardElgarPublishing,pp.1–18.Gretzinger,S.andRoyer,S.(2014).RelationalResourcesinValueAddingWebs:TheCaseofaSouthernDanishFirmCluster.EuropeanManagementJournal,32(1),pp.117–131.SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202209:54:32AMviaColumbiaUniversityLibrary

27Introduction9Iansiti,M.andLevien,R.(2004).StrategyasEcology.HarvardBusinessReview,3,pp.68–78.Availableat:https://hbr.org/2004/03/strategy-as-ecology(accessed:4July2021).Kapoor,R.(2018).Ecosystems:BroadeningtheLocusofValueCreation.JournalofOrganizationDesign,7(12),pp.1–16.doi:10.1186/s41469-018-0035-4.Keen,P.andWilliams,R.(2013).ValueArchitecturesforDigitalBusiness:BeyondtheBusinessModel.MISQuarterly,37(2),pp.643–647.Moore,J.F.(1993).PredatorsandPrey:ANewEcologyofCompetition.HarvardBusinessReview,71(3),pp.75–86.Moore,J.F.(1996).TheDeathofCompetition.LeadershipandStrategyintheAgeofBusinessEcosystems.NewYork:HarperBusiness.Rothschild,M.(1990).Bionomics:EconomyasBusinessEcosystem.Washington,DC:BeardBooks.Spigel,B.(2020).EntrepreneurialEcosystems:Theory,PracticeandFutures(EntrepreneurshipFootprints).Cheltenham,UKandNorthampton,MA,USA:EdwardElgarPublishing.Wunck,C.andBaumann,S.(2017).TowardsaProcessReferenceModelfortheInformationValueChaininIoTApplications.In:“DigitalInnovationforAdvancedManufacturingManagingTechnologicalandEntrepreneurialChallenges”:Proceedingsofthe2017IEEEEuropeanTechnologyandEngineeringManagementSummit(E-TEMS):Oktober,2017.Munich,October17‒19.Piscataway,NJ:IEEE,pp.1–6.doi:10.1109/E-TEMS.2017.8244228.SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202209:54:32AMviaColumbiaUniversityLibrary

282.Networks,platforms,anddigitalbusinessecosystems:mappingthedevelopmentofafieldSabineBaumannandMarcelLeerhoffINTRODUCTIONHumanshavelongtakeninspirationfromnatureintheirendeavorstosolveproblems;notonlytechnicalissues,butalsowaysoforganizingsocialstructuresandinfluencingcollectivebehavior,suchasinvestigatingantcoloniesasself-organizingsystems.Itisnotsurprisingthattheterm“ecosystem”cametobeusedtodescribeconnectivityanddependencyinrela-tionshipsamongactors.Inthe1980s,Hawley(1986)explored“socialecosystems,”FroschandGallopoulos(1989)referredto“industrialecosystems,”andattheendofthedecadeRothschild(1990)consideredthe“economyasecosystem.”Moorehasbeencreditedwithbringingtheterm“businessecosystem”intomanagementresearch(Moore,1993,1996).Hedescribescompanies:aspartofabusinessecosystemthatcrossesavarietyofindustries.Inabusinessecosystem,com-paniesco-evolvecapabilitiesaroundaninnovation:theyworkcooperativelyandcompetitivelytosupportnewproducts,satisfycustomerneeds,andeventuallyincorporatethenextroundofinnova-tions(Moore,1993,p.76)Moore’sdefinitionwasdevelopedandextendedtoawiderconceptbyIansitiandLevien(2004).Attheturnofthecentury,“digital”wasaddedto“businessecosystems”toreflectthegrowingimportanceofdigitaltechnologiesinestablishingandorganizingecosystems(e.g.,Nachiraetal.,2002).Moore’spublications,andothers,inspiredadaptationsoftheconceptofdigitalbusinessecosystems(DBEs)tootherdisciplines,whichalsoreflectstheirinherentmultidisciplinarity.However,theemergenceanddevelopmentofDBEsinvariousdisciplineshasnotbeensynchronous.Whilesometopics,suchasplatforms,havegainedprominenceinseveralfields,othershavebeenofmoresingularinterest.AlthoughanumberofsystematicliteraturereviewshavedelvedintoDBEsinspecificdisciplines,across-disciplinaryperspectiveisstillabsent.TheobjectiveofthischapteristotracetheemergenceanddevelopmentofDBEsandrelatedtopicsandtheirinterconnectionsinandacrossthedisciplinesofmanagement,economics,informationsystems,computerscience,andindustrialengineering.Thiswillbedonebycon-ductingasystematicmappingstudyasdescribedbyPetersenetal.(2008,2015).ThisstudyprovidesacomprehensivereportonthedevelopmentandcurrentstateofresearchpertainingtoDBEs,specificallytheevolutionandinterconnectionsoftopicsinthisresearchfieldinvariousdisciplines.Theremainderofthischapterisorganizedasfollows.Thefollowingsectionpresentsthedesignofthemappingstudyandderivestheresearchquestions,inclusionandexclusion11SabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

2912Handbookondigitalbusinessecosystemscriteria,sourcesofstudies,searchstrategy,anddataextractionmethod.Thefindingsofthesystematicmappingstudyarethendescribedanddiscussed.Thefinalsectionconcludesthechapter,listssomelimitationsofthemappingstudy,andconsidersfutureresearchdirections.DESIGNOFTHEMAPPINGSTUDYThischaptertakesabroadapproachandseekstoidentify,trace,andclassifyemergingstrandsintheresearchfieldofplatformsandDBEsinvariousdisciplines.Forthatreason,asystem-aticmappingstudy(Petersenetal.,2008,2015)wasselectedastheresearchmethodology.Althoughasimilarmethodologytothatofsystematicliteraturereviews(SLRs)isused,thepurposeistoprovideanoverviewofaresearchfieldandtopicsratherthandeepresearchintoaspecifictopicorapplicationarea(O’Donovanetal.,2015).Thus,mappingstudiespresentthebroadestpossibleoverviewofliteratureonaparticularresearchfield.Thatbreadthrevealsorigins,developments,andconnectionsbetweentopicsintheresearcharea,acrossmultipledisciplineswithaninterestinthefield.AmappingstudyoftenservesasastartingpointforanSLRintotopicsofspecificinterestforparticulardisciplines.Nevertheless,amappingstudyisparticularlyusefulwhenexamininganevolvingandrapidlygrowingresearcharea(O’Donovanetal.,2015)suchasDBEs,toidentifyemergingthemes,pathways,andinterdis-ciplinaryconnections.AnotherdifferencebetweenSLRsandmappingstudiesconcernstheresearchquestions.WhiletheyaretypicallyspecificinSLRs,inordertoidentifytheappropriateprimarystudies,researchquestionsforamappingstudyareratherhigh-level(BarbosaandAlves,2011)andincludewhichdisciplineisconcerned,whatrelevanttopicsandphenomenahavebeeninves-tigated,orwhichmethodshavebeenapplied(Kitchenhametal.,2011).MappingstudiesandSLRsfurtherdifferinthatthelatterareusedtodetectcommunalitiesorinconsistenciesofresearchoutcomesofprimarystudies,whileamappingstudyidentifiestopicsandtheirdevel-opmentsandinterconnectionsforaresearchfield.Consequently,mappingstudiestypicallydonotexplicitlydeliberateonoraccumulatetheresultsoftheidentifiedliterature.Finally,theydifferinscope:mappingstudiesusuallycoverabroadresearchfield,whereasSLRstypicallyinvestigateamuchmorespecifictopicarea.Asaresult,mappingstudiesfrequentlyincorpo-rateamuchhighernumberofpublicationsthanSLRs(Kitchenhametal.,2011).AccordingtoPetersenetal.(2008,2015)amappingstudyhasfivesteps,eachwithspecificoutcomes:definitionoftheresearchquestions;aliteraturesearch;thescreeningofcontribu-tions;keywording,usingtheabstracts;anddataextractionandmapping.Theresearchquestionsdescribethegoalofthemappingstudyanddefineitsframework.Intheliteraturesearch,asystematicsearchforrelevantcontributionsisconducted.Definedsearchtermsserveasastartingpoint,fromwhichpublicationsrelevanttotheresearchques-tionaretobecollected.Whendefiningthesearchterms,caremustbetakentoensurethattheyareappropriatelyformulatedwithregardtotheresearchobjective.Forexample,iftheyaretoospecific,thedesiredbroadoverviewcannolongerbeachieved.Theliteraturesearchisthenperformedinselecteddatabases.Inthethirdprocessstep,thescreeningoftheliterature,theextractedcontributionsarefilteredaccordingtodefinedinclusionandexclusioncriteria.Thecontributionsthatremainareconsideredtoberelevanttotheresearchobjective;theyarethenexploredinmoredetail.SabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

30Networks,platforms,anddigitalbusinessecosystems13Classificationoftheliteratureisdonebykeywording,basedontheirabstracts(and,ifnec-essary,otherpartsofacontribution).Thedeterminationofthecategoriesisachievedthroughaniterativeprocess.Asmoreandmorecontributionsaresorted,newcategoriesarecreatedorexistingcategoriesaremerged.Attheendofthemappingstudy,theclassifiedcontributionsareextractedandprocessed.Figure2.1showsthefivestepsofthemappingstudy,andtheirresults.Source:BasedonPetersenetal.(2008).Figure2.1ProcessstepsandoutcomesofamappingstudyInthefirststepofourmappingstudywespecifiedtworesearchquestions(RQs)inordertocharacterizethefieldofDBEs:RQ1:WhichscientificdisciplineshavestudiedDBEs,andhowhavethenumberofpublica-tionsevolvedovertime?TherationaleforthisRQistoascertaininwhichscientificdisciplinesDBEsfirstemerged,andwhetherinitialresearchgrewintoacontinuousresearchstream.Thisassumesthatthepublicationratereflectsthelevelofinterestintheresearchfield.RQ2:WhattopicsarestudiedfromtheperspectiveofDBEs,andwhatprominentsubtopicsareunderinvestigation?TheintentionofthisRQistoidentifythetopicswhereresearchersfromdifferentdisciplinesareemployingDBEs.Answeringthisquestionshedslightonspecificresearchthemesandidentifiestopicsthatareconnectedacrossclassificationcategories.Inthenextstepofourmappingstudy,suitabletermswereextractedfromasetofarticlesonthetopicarea,topreparetheliteraturesearch.Sixsearchterms,“digitalbusinessecosystem,”“businessecosystemANDdigital,”“digitalPRE/2ecosystem,”“digitaltransformationANDecosystem,”“digitalbusinessmodel,”and“digitalbusinessenvironment”wereselectedasmostrelevant.Theindividualsearchtermswerelinkedby“OR”duringthesearch.Table2.1detailseachsearchterm,andtheintentionsbehindtheirselectionanduse.SabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

3114HandbookondigitalbusinessecosystemsTable2.1SearchtermsusedfortheliteraturesearchSearchtermIntentionALL(“digitalbusinessecosystem”)ORTheterm“digitalbusinessecosystem”wasusedtosearchforarticlesthatmentiontheALL(“digitalbusinesseco-system”)terminthemetadata,inordertodetectallcontributionsthatdistinctlyrefertothetopicofDBEs.TITLE-ABS-KEY(“businessecosystem”Abroadersearchwasconductedfortheoccurrenceofthesearchterms“businessOR“businesseco-system”)ANDecosystemANDdigital”and“digitalPRE/2ecosystem.”TheintentionwastocaptureTITLE-ABS-KEY(digital*)contributionsthatuserelatedtermssuchas“digitalplatformecosystem,”“digitalhealthTITLE-ABS-KEY(digitalPRE/2ecosystem,”and“businessecosystem.”Inordertominimizethenumberofirrelevant(ecosystemOReco-system))contributions,thissearchwaslimitedtothetitle,abstract,andkeywords.Inthecaseoftheterm“businessecosystem,”theadditionof“ANDdigital”followedtheobjectiveofincreasingthenumberofrelevantresults.TITLE-ABS-KEY(“digitalAnevenbroadersearchwasthenconductedwiththeterms“digitaltransformationtransformation”)ANDANDecosystem”and“digitalbusinessmodelORdigitalbusinessenvironment.”WhenTITLE-ABS-KEY(ecosystemORreviewingarticlesonDBEs,itwasfoundthatthesetermsoccurfrequently.Again,theeco-system)searchwaslimitedtooccurrenceinthetitle,abstract,andkeywords,tominimizetheTITLE-ABS-KEY(“digitalnumberofirrelevantcontributions.business”PRE/1model*)ORTITLE-ABS-KEY(“digitalbusinessenvironment”)Figure2.2SourcesandclassificationflowsofthemappingstudySabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

32Networks,platforms,anddigitalbusinessecosystems15Table2.2InclusionandexclusioncriteriausedforthescreeningofcontributionsInclusioncriteriaAcontributionisincludedif:●itisanarticle,conferencepaper,orbookchapter;●andifitestablishesaconnectiontothetopicareaofDBEsorarelatedtopic(digitalecosystems,businessecosystems,etc.);●andifitdealswithtechnologies,markets,businessmodels,management,orsocialchallengesoforforDBEs.ExclusioncriteriaAcontributionisexcludedif:●itisnotwritteninEnglish;●orconsistsonlyofanabstract;●orhasnotbeenpeer-reviewed.UsingthesearchstrategydescribedinTable2.1,anin-depthliteraturesearchwasconductedonFebruary9–12,2021forthepublicationyears2000–2020.Weselectedthisintervalbecauseabriefsearchrevealedthattherewereonlyafew(andwell-known)publicationsonDBEsbefore2000.Wesearchedinninedatabases:Scopus,ACMDigitalLibrary,IEEEXplore,WebofScience,EBSCO,ScienceDirect,WileyOnlineLibrary,ProQuest,andEmeraldInsight.Atotalof5252contributionsthatmetthesearchcriteriawereexported.Inthatsetofexportedcontributions,1778itemswereidentifiedasduplicatesandwereremoved,leaving3474contributionsforthefollowingstepoffilteringbyinclusionandexclusioncrite-ria(seeFigure2.2).Inthescreeningstep,inclusionandexclusioncriteriawereusedtoselectthestudiesthataddresstheRQsandtoexcludetheirrelevantones.ThesecriteriaensurethatselectedcontributionsrelatetotheresearchfieldofDBEsandwerenotfoundthroughtheaccidentalappearanceofsearchtermsintitles,abstracts,andkeywords.Selectedcontributionsmusthaveundergonepeerreview,toensurescientificquality.Wealsoworkedwithtext-basedcontribu-tionsofaspecificlanguagerealm.Table2.2setsouttheinclusionandexclusioncriteriaforourmappingstudyonDBEs.Afterremovingduplicates,3474contributionswerescreenedwiththecriteriainTable2.2.Whilemanycontributionswereclearlyrelevant,othersrequireddeeperinvestigation.Inordertobeincludedinthesetofrelevantcontributions,acontributionhadtoapplytheDBEconceptratherthanmerelymentiontheterminthekeywordsorabstract.Intotal,595contributionsweredeterminedasrelevantforansweringtheRQs.Theother2879contributionswereexcludedfromfurtherinvestigation(seeFigure2.2).ANALYSISANDFINDINGSTheretrievedcontributionsrelatingtoDBEswerepublishedbetween2000and2020.Whiletheearlyyearssawfewpublications,therewerespikesin2007and2009.Publicationfiguresthengraduallyfelluntilarallybeganin2015andcontinueduntiltheendofthestudyperiod(seeFigure2.3);and,asweknow,beyondthat.AsforthescientificdisciplinesthathavestudiedDBEs,andthedistributionofpublicationsovertime(RQ1),Figure2.4showsthatmostcontributionswereinbusinessadministrationandmanagement,andbusinessinformaticsandcomputerscience.AlthoughtheDBEconceptSabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

3316Handbookondigitalbusinessecosystemsisalsoestablishedineconomicsandindustrialengineering,thenumbersofpublicationsaremuchlower.Figure2.3PublishedcontributionsrelatedtoDBEs,2000–2020Figure2.4NumberofpublishedcontributionsrelatedtoDBEs,bydisciplineFigure2.5showsthedistributionsinthosefourdisciplinesovertime.TheDBEconceptfirstbecameprominentinbusinessinformaticsandcomputerscience,reachinghighsin2007and2009thathavenotbeenreachedagainuntilnow.Economicsandindustrialengineeringhaveeachseenrelativelyfewcontributionsthroughoutourinvestigationperiod,withincreasesSabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

34Networks,platforms,anddigitalbusinessecosystems17since2018.Contributionsfrombusinessadministrationandmanagementtookoffin2007,followedbyaspikyupwardtrend,endinginahugepublicationrallysince2017.Figure2.5DevelopmentofpublishedcontributionsrelatedtoDBEs,bydisciplineRQ2concernsthetopicsstudiedfromtheperspectiveofDBEsandtheprominentsub-topicsunderinvestigation,orintermsofthemappingstudyprocess,thekeywordingandclassification.ThetagcloudinFigure2.6showsthemost-usedkeywordslistedwiththerelevantcontribu-tionsaftereliminatingthesearchterms“ecosystem,”“ecosystems,”“digital,”and“business”(stopwords).Thelargeratermisdisplayedinthetagcloud,themoreoftenitoccurredinthecorpus.Termsoccurseparatelyifbothsingularandpluralformswereusedaskeywords.“Information,”“management,”and“systems”standoutasindividualterms,butkeywordscanbegroupedtodevelopaclassificationschemethatcanthenbeusedtomapthetopicsinmoredetailasafinalstep.ThecategoryofgovernanceandmanagementcaptureshowgovernancesystemsandrulesforDBEsarederivedandimplemented,andhowDBEsaremanaged.Thusitcoverstopicsaroundorganization,processmanagement,orinteractionsbetweendifferentecosystemactors.Trustisanimportantingredientforcoordinatingcomplexprojects,processes,andactornet-works.Otherimportanttopicsinthiscategoryarevaluecreation,networkmanagement,andinnovationmanagement,butalsorisksofnewventures(seeFigure2.7).ThecategoryofmarketsandbusinessmodelscapturestheapplicationoftheDBEconcepttoexploitmarketopportunitiesprovidedbydigitaltransformation(seeFigure2.8).Oneprominenttopicinthiscategoryisplatforms.Whiletheyarethebasisofmanynewdigitalbusinessmodels,theyalsopresentanumberofchallengessuchaspricingandincentiveregimes,orsocietalissuesofmarketdominance.SharingdataacrossboundarieswithotherSabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

3518HandbookondigitalbusinessecosystemsFigure2.6TopicsstudiedfromtheperspectiveofDBEsFigure2.7TopicsinthegovernanceandmanagementcategorySabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

36Networks,platforms,anddigitalbusinessecosystems19Figure2.8TopicsinthemarketsandbusinessmodelscategoryactorsinaDBEpermitsadditionalservices;thatis,data-drivenbusinessmodels.Thetopicsofinnovationandknowledgemanagementarecloselyrelated.Anothercategoryrelatestotechnologies.ItaggregatescontributionsthatconcentrateonstudyingthemultitudeofdigitaltechnologiesbeingappliedinDBEstocollectandanalyzedata,supportthecollaborationofactors,andimplementdata-drivenbusinessmodels.Figure2.9showsthemostprominentdigitaltechnologiesthatwereexploredinoursetofrelevantcontributions.Unsurprisingly,topicsincludespecifictechnologiessuchasblockchainandledgertechnologiesortheInternetofThings(IoT),aswellasbroadertopicssuchasdatamanagement,relevantinfrastructure,andtechnologyimplementation.AsthemostprominentapplicationareafordigitaltechnologiesinDBEs,supplychainsstandout.ThecategoryofstrategiesandperspectivescapturesstrategicaspectsinapplyingtheDBEconcept.Whiletopicsresonatewiththoseofothercategories,suchasplatformsorinnovation,thedistinctionforthiscategoryisthelong-termperspective,combinedwithquestionsofsensingandseizingopportunities,aswellasdevelopingdynamiccapabilitiesfortransformation.Societalchallengesareanextensiveandimportantcategory(seeFigure2.10).DBEscomewithvariouschallengessuchastechnologymalfunctions,misuseofdata,sustainabilityissues,potentialworkerexploitation–particularlyinconnectionwithplatformsandthegigeconomy–andmoregeneralhumanitarianconcerns.SeveralcontributionsaddressestablishingDBEsfordisastermanagementandprevention.ThecategoryofindustryapplicationsdepictscontributionswherethefocusisonapplyingtheDBEinacertainindustryinordertolearnaboutpracticalimplicationsandlimitationsoftheDBEconcept.Industriesrangefromhealthtomanufacturingandvariousservice-basedindustries.SabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

3720HandbookondigitalbusinessecosystemsFigure2.9TopicsinthetechnologycategoryFigure2.10TopicsinthesocialchallengescategorySabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

38Networks,platforms,anddigitalbusinessecosystems21Anemergingcategorythatwasunderrepresentedinourdatasetisentrepreneurship.Ithasbeengaininginimportancethroughstart-upsandstudiesoftheseentrepreneurialecosystems.Finally,wealsocreatedthecategoryofliteraturereview.Thesestudiesdidnotfullyfitwiththeothercategories,astheirfocusisonamethodologyratherthanaspecificapplicationoftheDBEconcept.Nevertheless,thesestudiesshowcasetheemergence,combination,differ-entiation,anddisappearanceoftopics.ItalsobecameevidentthatmanyDBEresearchstrandsareunconnected,evenwithinthesamediscipline.Whiletheorypapersareabundant,in-depthstudiesintoindustryapplicationsandrecommendationsonhowtodesignandmanageDBEaremuchlesscommon.DISCUSSIONThischapterpresentsamappingstudyonDBEs,theobjectivebeingtomaptheemergingresearchstreamstodiscoverthescientificdisciplinesinwhichDBEsarebeingstudied,aswellasrelevanttopicareas.Westudiedtworesearchquestions.ThefirstresearchquestionstrovetoascertainthescientificdisciplinesinwhichDBEsfirstemerged,andwhetherinitialresearchgrewintoacontinuousresearchstream,asrepresentedbythenumberofpublicationsovertime.ThescientificdisciplinesthatfirstproducedasignificantnumberofpublicationsonDBEswereinformationsystemsandcomputerscience.Thisisnotsurprising,asdigitaltechnologiesareatthecoreoftheimplementationoftheDBEconcept.EarlycontributionsfocusedonbuildingthenecessaryinfrastructureandprovidingrequiredsoftwaretoconnectdifferentDBEactorsandpermitdatasharing.Ineconomics,interestwasmainlydriventhroughplat-formapproacheswherethegeneralDBEconceptturnedouttobeoflesserinterest.Thisdif-fereddistinctlyinbusinessadministrationandmanagement,whereinterestinDBEssparkedwiththegrowingavailabilityandmaturityofdigitaltechnologies.Thisdisciplinelookssetforcontinuedgrowthofscholarlypublicationsandindustryapplications.InindustrialengineeringthelacklusterscholarlyinterestinDBEswassomewhatsurprising,especiallyasIndustry4.0reliesheavilyondigitaltechnologyandexploitingnewdata-drivenbusinessmodelsincooperativesettingsacrosscompanyboundaries.OneexplanationmaybethatalthoughideasfromtheDBEconceptarebeingappliedinindustrialengineering,theterm“DBE”isnotusedfrequentlyyet.Inthehumanities,“DBE”isusedasaterm,butoncloserinspectionofthecontributionsitwasmentionedasamarketingterm,ratherthantheconceptbeingusedinactualapplications.ThesecondresearchquestionaddressedthetopicsbeingstudiedfromtheperspectiveofDBEsandalsoofprominentsubtopicsunderinvestigation.Themappingstudyderivedcentraltopicsthroughaniterativeprocessandappliedthemascategories,toclassifycontributions:governanceandmanagement,marketsandbusinessmodels,strategiesandperspectives,tech-nologies,societalchallenges,entrepreneurship,andindustryapplications.Aseparatecategorywasproposedtocaptureliteraturereviews.Withinthecategoriesamultitudeoftopicswasdetected;somecommonthemesacrosscategoriescanbeidentified.Platformsarestudiedacrossscientificdisciplinesandcategories.Theyarediscussedasameanstorealizedata-drivenbusinessmodels,henceexploitingthedigitalinfrastructurestoconnectactorsonmulti-sidedmarkets.However,platformsarealsoSabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

3922Handbookondigitalbusinessecosystemsheavilycriticizedforthesocietalchallengestheymaybring,suchasexploitationsofmarketpositionorpoorconditionsforplatformworkers.Anotherprominenttopicisdata,asitprovidesopportunitiesfornewdata-drivenbusinessmodelswhereactorsinaDBEcometogethertoprovidenewandindividualproductsandservicestocustomers.Therefore,innovationmanagementandnecessarychangesandorgan-izationaltransformations,aswellascoordinatingcomplexprojects,processes,andactornetworks,areextensivelyexploredacrossallcategoriesandscientificdisciplines.Dataiscommonlyregardedasthesourceofadditionalvalue,thereforedataownershipandexploitationrightsareofcentralimportance.Inaddition,themannerinwhichthecreatedvalueisappropriatedamongactorsinaDBEmaycausesufficientfrictiontoharmitscom-petitiveness.SinceinDBEscontractualrelationshipsarereplacedbymultilateralalignmentofofferswithallrelevantpartnersinthebusinessecosystem,clearrulesmustbeimplementedtoensuresuccessfuljointvaluecreation(forexample,standardsofcooperation,rolesinbusinessmodels)andtheconsecutivevalueappropriationacrossthepartners,includingrulestoresolveconflict(Baumann,2018).Intermsofdigitaltechnologies,blockchainandIoTstandoutinthecurrentdebateonDBEs,oftenwithafocusonsupplychainandlogistics.Surprisingly,thetopicofartificialintelligence(AI)hasnotyetreachedhighprominenceinDBEpublications,althoughitcanbeexpectedtodoso.CONCLUSIONDBEsincurrentresearcharetypicallyunderstoodasanetworkoforganizationssuchasmanufacturers,suppliers,distributors,customers,competitors,governmentagencies,andsoon,thattogethercreateanddeliveraspecificproductorserviceinapartlyorfullydigitalenvironment(Kapoor,2018).Inananalogytobiologicalecosystems,businessecosystemsconstantlyevolve;theiractorsareinterdependent,andcooperatetoachievecommonobjec-tiveswhilecompetingforscarceresources.However,thetechnological,economic,andsocialfactorsrevolvingaroundthecreationofnewdigitalplatforms,complementoremergence,andinteractionscompetition,orsurvivalinDBEs,arenotyetwellunderstood.Inaddition,ittakesaninterdisciplinaryapproachtounderstandandultimatelymanageDBEs.ThepurposeofthischapterwastomaptheemergingresearchstreamsonDBEstodiscovertopicareasanddynamics.ThemappingstudycontributesacomprehensivereportonthedevelopmentandcurrentstateofresearchpertainingtoDBE,specificallytheevolutionandinterconnectionsoftopicsinthisresearchfieldinvariousdisciplines.Ourmappingstudyhaslimitations.Asamappingstudy,especiallyofaninterdisciplinaryresearchfieldsuchasDBEs,coversanextraordinarilylargenumberofcontributions,anomis-sionofarelevantcontributionoraninclusionofanirrelevantonecannotbefullyruledout.Inaddition,researcherbiasintheextractionofthedata,evenifminimizedthroughaconciseresearchprotocol,maystillhavebeenpresent.Inemergingandproductiveresearch,conceptsarenotfullyconcise,andhenceitisuptotheresearcherwhetheraborderlinecontributionisincludedornot.Wetriedtoensureweincludedonlycontributionsthatactuallyapplyoreval-uatetheconceptofDBEs,andexcludedworksthatmerelymentionecosystemsasametaphor,orusethetermasameanstopromotetheirworkinliteraturesearches.InthecaseofDBEs,theinherentinterdisciplinarityoftheresearchfieldmeansthatresearchersrequirein-depthSabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

40Networks,platforms,anddigitalbusinessecosystems23knowledgeofvariousscientificdisciplinesiftheyaretoassesscontributions,notjustintermsofbelongingtoaparticulardiscipline,butalsowhendevelopingcategoriesandassigningcontributionstocategories.Anotherlimitationliesinthelargenumberofcontributionsthatwereselectedasrelevant.Weinitiallyintendedtovisualizeinterconnectionsoftopicsacrossdisciplinesasamapwithanunderlyingtimeline.However,toplotalmost600contributionsintocategoriesandtopicswasnotpossible.Wearecurrentlyexploringothermediasettingstomakethefullscopeofourresultsinteractivelyaccessible.Despitetheselimitations,thismappingstudycanbeofsignificantbenefittoresearchersinestablishingstartingpointsforfurtherresearchactivitiesinDBEs(Kitchenhametal.,2011).Byidentifyingkeyelementsandconstructs,thechapteroffersaninterdisciplinaryDBEmapping.Thesystematicmappingofemergingtopics,paths,andinterdisciplinaryconnectionsalsoidentifiesunresolvedchallengesandgapsinourknowledge,andmayguidefuturestudiesandresearchdesignsonDBEs.REFERENCESBarbosa,O.andAlves,C.(2011).Asystematicmappingstudyonsoftwareecosystems.In:ProceedingsoftheThirdInternationalWorkshoponSoftwareEcosystems(IWSECO),Brussels,June7,pp.15–26.Availableat:http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.415.1416&rep=rep1&type=pdf(accessed:June24,2021).Baumann,S.(2018).ValuecreationnetworksforIndustry4.0:bestpracticesinGermanmanufacturingindustries.In:DecisionSciencesInstitute(ed.)Proceedingsofthe49thDSIConference“RoleofDataandDecisionAnalyticsinGlobalOperations”.Chicago,IL,pp.1647–1659.Frosch,R.A.andGallopoulos,N.E.(1989).Strategiesformanufacturing:wastesfromoneindustrialprocesscanserveastherawmaterialsforanother,therebyreducingtheimpactofindustryontheenvironment.ScientificAmerican,September,pp.144–152.Availableat:http://www.umich.edu/~nppcpub/resources/compendia/IEORpdfs/IEOR_Reading.pdf.Hawley,A.H.(1986).HumanEcology:ATheoreticalEssay.Chicago,IL:UniversityofChicagoPress.Availableat:http://www.loc.gov/catdir/enhancements/fy0608/86007077-d.html(accessed:24June2021).Iansiti,M.andLevien,R.(2004).Strategyasecology.HarvardBusinessReview,3,pp.68–78.Availableat:https://hbr.org/2004/03/strategy-as-ecology(accessed:4July2021).Kapoor,R.(2018).Ecosystems:broadeningthelocusofvaluecreation.JournalofOrganizationDesign,7(12),pp.1–16.doi:10.1186/s41469-018-0035-4.Kitchenham,B.A.,Budgen,D.andBrereton,O.P.(2011).Usingmappingstudiesasthebasisforfurtherresearch–aparticipant-observercasestudy,InformationandSoftwareTechnology,53(6),pp.638–651.doi:10.1016/j.infsof.2010.12.011.Moore,J.F.(1993).Predatorsandprey:anewecologyofcompetition.HarvardBusinessReview,71(3),pp.75–86.Availableat:https://hbr.org/1993/05/predators-and-prey-a-new-ecology-of-competition(accessed:24June2021).Moore,J.F.(1996).TheDeathofCompetition:LeadershipandStrategyintheAgeofBusinessEcosystems.NewYork:HarperBusiness.Nachira,F.,Chiozza,E.,Ihonen,H.,Manzoni,M.andCunningham,F.(2002).Towardsanetworkofdigitalbusinessecosystemsfosteringthelocaldevelopment.DiscussionPaper.O’Donovan,P.,Leahy,K.,Bruton,K.andO’Sullivan,D.(2015).Bigdatainmanufacturing:asystem-aticmappingstudy.JournalofBigData,2(1).doi:10.1186/s40537-015-0028-x.Petersen,K.,Feldt,R.,Mujtaba,S.andMattsson,M.(2008).Systematicmappingstudiesinsoft-wareengineering.In:12thInternationalConferenceonEvaluationandAssessmentinSoftwareEngineering(EASE)12,pp.1–10.SabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

4124HandbookondigitalbusinessecosystemsPetersen,K.,Vakkalanka,S.andKuzniarz,L.(2015).Guidelinesforconductingsystematicmappingstudiesinsoftwareengineering:anupdate.InformationandSoftwareTechnology,64,pp.1–18.doi:10.1016/j.infsof.2015.03.007.Rothschild,M.(1990).Bionomics:EconomyasBusinessEcosystem.Washington,DC:BeardBooks.SabineBaumannandMarcelLeerhoff-9781839107191DownloadedfromPubFactoryat05/28/202209:54:54AMviaColumbiaUniversityLibrary

423.StrategiesforbridgingtraditionalanddigitalecosystemsDavidR.KingINTRODUCTIONSincetheturnofthecentury,thedigitaleconomyhasgrownoverfourtimesfasterannuallythantheoverallUnitedStates(US)economy(BureauofEconomicAnalysis,2019),andtheCOVID-19pandemicprovidedanincreasedimpetusfordoingmoreremotelyandonline.Theresultingdigitaltransformationofworkandconsumptionconfrontsestablishedfirmswithpre-digitalconsumerinterfacing(traditional)ecosystemswithnewwaysofdoingbusiness.Notallfirmsrespondsuccessfullytoexternallydrivenchallenges.Oncenotablecompanies,suchasBlockbuster,Kodak,andSears,havelargelydisappeared,excepttoprovideexamplesofmistakestoavoid.Beforeitsbankruptcyin2010,Blockbustergrewtoover9000stores,anditturnedawayfrompurchasinganunprofitableNetflixin2000for$50million(Goh,2020).WhenitpassedonbuyingNetflix,Blockbuster’sbusinessmodelwhichdependedonlatefeesthatgenerated16percentofitsrevenue(Olito,2020)wasbecomingobsolete.Meanwhile,Kodakinventedthefirstdigitalcamerainthe1970s,butitfailedtoembracedigitalpho-tography(Deutsch,2008),resultinginKodakfilingforbankruptcyin2011,anditonlyexitedbankruptcyaftersellingitsdigitalimagingpatents(Martin,2012).Finally,aoncedominantretailer,Sears,continuestostruggleasshoppersmoveonline.Searshassoldassets,includingCraftsmantoolstoBlack&Decker(LaMonica,2017),filedforbankruptcyin2018,anditwasdelistedfromNASDAQin2019(Delventhal,2019).Theseexamplesshowthatfirmsinmultipleindustriescanhavetheirsurvivalthreatenedbychangesassociatedwithdigitaltransformation.However,thedemiseofestablishedfirmswithtraditionalecosystemsisfarfrominevitable.Forexample,Applehascomplementeditstraditionalecosystem(hardwareproducts)withadigitalecosystem(AppStore),Netflix’schiefexecutiveofficer(CEO),ReedHastings,alsopraisedDisney’smanagementafteritadded50millionsubscriberstoDisney+inlessthanayear,saying:“over20yearsofwatchingdifferentbusinesses…I’veneverseensuchagoodexecutionoftheincumbentlearningthenewwayandmasteringit”(Guzman,2020).PartoftheprogressmadebyDisneycamefromworkingwithNetflix,asalliancescansharefirmcapabilities(KingandNowack,2003).NeitherAppleorDisneyarealoneinadaptingtraditionalecosystems,andretailfirmshaveexpandeddigitally.Forexample,BestBuyandWalmarthaveevolvedtosuccessfullyleverageamixofphysicalandonlineretail(Ferris,2019;Nassauer,2020).Ecosystemsexhibitcomplementaryinterdependencebetweenactivitiesortechnology,andecosystemscanrestoneitheraproductoraplatform(Kapoor,2018).Platformecosystemsarecontrolledbyanownerthatsetstherulesforparticipation,suchasApple’siOSandAppStore(McIntyreandSrinivasan,2017).Meanwhile,aproductecosystemdependsontheinteractionbetweenaproductandauser(Baker,2020).Again,Appleprovidesanexample,25DavidR.King-9781839107191DownloadedfromPubFactoryat05/28/202209:55:33AMviaColumbiaUniversityLibrary

4326HandbookondigitalbusinessecosystemswiththeiPhoneintegratingmultipleproducts(forexample,phone,camera,GlobalPositioningSystem,clock,pager,handheldgame,flashlight),aswellasaninterfacewithotherproducts(forexample,AppleWatch,AirPods).Establishedfirmsoftenaresuccessfulforhavingtra-ditionalecosystemsthatdidnothaveadigitalcomponent.Specifically,in1957,WaltDisneyoutlinedasetofinterlockingbusinessesthatleverageditscorefilmbusiness(Benna,2015).Whilemaintainingitstraditionalecosystem,Disney’scontinuedsuccessreflectsitsexpandingexistingoperationsintothedigitaleconomy.Inconsideringhowfirmsadaptecosystemstoincorporatedigitalcomponents,thereisaneedtoconsiderorganizationallearningandambidexterity(Baumann,2013;Guptaetal.,2006;Meglioetal.,2015),includingecosystemdevelopment.Thepurposeofthischapteristoexamineorganizationallearningandambidexterityforinsightsintohowtraditionalbusinessescanadapttoexpandatraditionalecosystemtoadddigitalcomponents,usingcasestudies.Thisenablesaddressingthequestionofhowfirmsadaptecosystemstoincorporatedigitalcomponents.Thechapterisorganizedasfollows.First,theoryonorganizationallearningandambidexterityisreviewedtodevelopinsightsintostrategicoptionsforhowfirmscanadaptecosystemstoincludedigitalcomponents.Evidencesuggeststhatfirmstrategicoptionsdonotclearlyalignwiththeory,andtheoryfallsshortofexplaininghowbusinessesoperateandgen-eraterevenue.Second,thecasemethodusedinthecurrentstudyisbrieflydescribed.Third,examplesoffirmsthathavesuccessfullyadaptedarediscussedandexamined.Evidencesug-geststhatmanagersneedtoactivelymanageorganizationallearningforfirmstosuccessfullyadapt.Beforeconcluding,adiscussionofimplicationsformanagementresearchandpracticeisprovided.ORGANIZATIONALLEARNINGANDADAPTATIONAdaptationrequireslearning.Forfirms,organizationallearningdevelopsroutinesfromsimilarexperiencesthatguidebehavior(Herriottetal.,1985),butassociatedprocessesarecomplex,andMarch(1991)identifiedtwoindependentapproachestoorganizationallearning:(1)explo-rationofnewpossibilities;and(2)theexploitationofoldcertainties.Howfirmsbalancethedifferenttypesoflearninginordertoadaptandsurviveisthefocusofresearchonorganiza-tionalambidexterity(e.g.,O’ReillyandTushman,2011).Organizationalambidexterityviewscompetingdemandsforexplorationandexploitationaseithermutuallyexclusiveorcapableofco-existence(Guptaetal.,2006;Meglioetal.,2015).Regardless,managerialinterventionisneededtoachieveorganizationambidexterity(BirkinshawandGupta,2013;Lubatkinetal.,2006;Meglioetal.,2015).O’ReillyandTushman(2013)identifythreesolutionsforachievingorganizationalambidexterity:1.Astructuralsolutioninvolvesseparatingorganizationalunitswithdifferentlearningorien-tations(BennerandTushman,2003),suchasinternaldevelopmentwithinaseparateskunkworks.2.Atemporalsolutioninvolvesvacillatinganorganization’slearningorientationsequen-tiallyovertime(SiggelkowandLevinthal,2003;Simseketal.,2009).3.Acontextualsolutionassumesthatbothlearningorientationscanco-existwithsupportingorganizationalprocesses(GibsonandBirkinshaw,2004;KangandSnell,2009).DavidR.King-9781839107191DownloadedfromPubFactoryat05/28/202209:55:33AMviaColumbiaUniversityLibrary

44Strategiesforbridgingtraditionalanddigitalecosystems27Table3.1FirmalternativesforadaptingecosystemsStrategicoptionAdvantagesChallengesInternaldevelopmentProvidescontrol(e.g.,intellectualproperty,levelTakestimeandsignificantinvestmentofinvestment)HighfailureratesDevelopsrelevantcapabilitiesAlliancesSharescostandriskSharesknowledgewithpotentialcompetitorsMaintainscontrolConflictsofinterestLackofcontrolHighfailureratesAcquisitionsGreatercontrol(e.g.,intellectualproperty,levelofSignificantinvestmentinvestment)TransferringcapabilitiesacrossfirmsQuickaccesstoneededcapabilitiesHighfailureratesThefirsttwomethodsseparateexplorationandexploitationinanorganization’sstructure,orovertime,andassumethatlearningorientationsaremutuallyexclusive;andathirdoptionofcontextualambidexterityassumesthatdifferencescanbemanaged(Kingetal.,2018b).Whileresearchoftensuggestsstructuralseparation(Berghman,2012;Kauppila,2010),ameta-analysisfindsbetteroutcomesresultfromcontextualapproaches(Junnietal.,2013).Inexamininghowfirmsadapttobuildanecosystem,theycanemployavarietyofstra-tegicchoicesforinternalandexternaldevelopmentthatrelatetoorganizationallearning(Achtenhagenetal.,2017);seeTable3.1.Forexample,firmscanuseinternaldevelopmenttodevelopknowledgeandcapabilities,aswellastoprovideanabilitytorecognizeandexploitexternalopportunitiesbymakingacquisitions(King,2007;Kingetal.,2008).Additionally,firmscanusealliancestostructurallyseparateactivities,andusetimetoreduceambiguity(LavieandRosenkopf,2006).However,eachstrategicoptionhasatemporalcomponent,andtheycaninterrelate.Forexample,acquisitionsarefasterthaninternaldevelopmentandalli-ances,buttheycanbemoreresource-intensive.Whileresearchanddevelopment(R&D)forinternaldevelopmentisalsoresource-intensive,thecostsarespreadoutovertime.R&Dalsohashigherfailureratesthananacquisition(Kingetal.,2018a).Meanwhile,alliancesshareresources,buttheyriskfirmshelpingpotentialrivalstolearn,ortheirbecomingacquisitiontargets(e.g.,Porrini,2004).Thestrategicoptionscanalsooverlap,asalliancescanhelptoscanpartnerfirmsthatarestructurallyseparate,toacquirethemwhenthetimeisright(Kingetal.,2018b).Theapplicabilityofstrategicoptionsforadaptingtraditionalfirms’ecosystemsbyaddingdigitalcomponentsisexaminedusingthecasemethod.Howfirmsadaptremainsimportant,butispoorlyunderstood.Applyingthecasemethodtofirmsthathavesuccessfullyadaptedtheirecosystemsmeetsarecognizedresearchneed(Senyoetal.,2019)toexaminehowwelltheoreticalexpectationsarereflectedbyorganizationalphenomenon.Itcanalsoprovidearoadmapforotherfirmsconfrontingtheneedtoadaptecosystemstoincorporatedigitalcomponents.CASEMETHODTheresearchdesigninvolvesamultiplecasestudydesign(Yin,1994),tomatchpatternsbetweenobservedphenomenonandtheoreticalconcepts(Campbell,1975)tohelpanswerhowDavidR.King-9781839107191DownloadedfromPubFactoryat05/28/202209:55:33AMviaColumbiaUniversityLibrary

4528Handbookondigitalbusinessecosystemsfirmsadaptecosystemstoincorporatedigitalcomponents.Firmsaretheoreticallysampledtoincludefirmsrecognizedtoincorporatedigitalcomponentsintoatraditionalecosystem.Largepublicfirmswereselectedtofacilitateaccesstoinformationonfirmimplementationofstrategicoptions.Thisenablesexaminingwhatiscurrentlyknownwithananalysisofrelevantevidencethatconsidersalternateexplanations(Eisenhardt,1989;Yin,1994).Successfulexpansionsoftraditionalecosystemsintodigitalhybridsareconsidered,usingApple,BestBuy,Disney,andWalmart.Thesetraditionalfirmshaveblendedexisting,traditionalecosys-temstoincorporatedigitalcomponents,ortheyhavecreatedhybridecosystems.CASESUMMARIESANDANALYSISWhilethestrategicoptionsfororganizationstodisplayorganizationalambidexterityrestondifferentassumptions,theoptionsfirmshavetopursuedevelopmentofnewcapabilitiesfallintodifferentcategoriesthatdonotcleanlymapontotheoreticalcategories.Toadapt,firmscanuseinternaldevelopment,alliances,oracquisitions,witheachstrategicoptionhavingadvantagesanddisadvantages.Further,theadvantagesanddisadvantagesofavailablestra-tegicoptionsdonotcleanlyoverlapwiththeoreticalconstructsfromorganizationallearning,orexplorationandexploitation.Thefocusofthissectionisonhowfirmsthatsuccessfullydevelopedhybridecosystemsusedtheseoptions.Further,anobservedalternativetoadaptingafirm’secosysteminvolvingbusinessexit,thatisnotpartofexistingtheory,isreviewed.InternalDevelopmentInternaldevelopmentlargelyreflectsfirminvestmentinresearchanddevelopment(R&D).WhatfirmsinvestinwithR&Disnotgenerallyvisibletoexternalstakeholders.Inotherwords,theroleresearchplayedintheadaptationofexaminedfirmsisnotalwaysclear.Forexample,itisnotclearwhetherfirmsstructurallyseparateinternaldevelopmentintoskunkworks,orwhethertheyvacillatebetweenfocusingresearchonexploitationorexploration.However,itisclearthatinternaldevelopmentfacilitatedthedevelopmentofhybridecosys-temsforAppleandBestBuy.AppleApple’sdevelopmentofahybridecosystemoutlineshowafirm’sinternaldevelopmentinadaptation,asthefoundationforitscurrentecosystem,beganwithinternaldevelopmentoftheiPod(Murray,2007).However,theiPodasaproductdidnotbecomesuccessfuluntilitwaspairedwithiTunes(RothaermelandKing,2019a),andiTunesresultedfromanacquisitionofSoundJamin2000(Jade,2001).iTunessolvedacustomerproblemforhowtogetsongsontomediaplayerswithasimplifieduserinterface,anditalsoprovidedvaluebyallowingcustom-erstobuythesongstheywantedandnotentirealbums.Clearstrategicleadership,includingresearchanddevelopmentthatresultedinintroduc-ingtheiPhoneduringaneconomicrecessionin2008(Johnson,2009),resultedinahybridecosystemforAppleproductsandapplications.Theresultingecosystemreflectsproductsandcomplements(forexample,accessories),aswellasinterdependencieswithanextendednetwork(Senyoetal.,2019)ofapplicationdevelopersandcellphoneserviceproviders,tooffercustomersapremiumexperience.ThevalueoftheecosystemisreflectedinAppletakingDavidR.King-9781839107191DownloadedfromPubFactoryat05/28/202209:55:33AMviaColumbiaUniversityLibrary

46Strategiesforbridgingtraditionalanddigitalecosystems29a30percentcutofanyincomefromapplicationsales(Mackenzie,2012).However,thishascreatedtensionwithapplications,suchasFortnite,withdevelopersthatobjecttopoliciesforrevenuesharingneededtoaccessApple’secosystemanditscustomers(StattandPeters,2020).BestBuyTraditionally,BestBuydependedon“bigbox”storesthatofferedmultipleproductstogetherinasinglelocationwithexperiencedsalesstaff.However,itrecognizedthethreatofe-commerceanditusedinternaldevelopmentstartingin1998foronlinesales,whenitlaunchedBestBuy.com(FundingUniverse,2020).ThiswasarelativelyquickresponsetotheonlineretailerAmazonopeningtosellbooksin1995(History.com,2020).However,BestBuy.comdidnotreallyexpanduntilBrianDunntookoverasCEOin2009,andhebeganeffortstoleverageBestBuy’sphysicalstoreswithonlineofferings(BustilloandJarzemsky,2011).InternaldevelopmentenabledBestBuytoretainitsadvantageofincludingitssalesstaffinapplyingacustomer-centricapproachthatconsideredtheproblemscustomersarefacing(Gulati,2010).Additionally,whencustomerscomeintoastoretopickupanonlinepurchase,salesassociatescanusetheopportunitytotrytosellrelevantaccessoriesandservices,suchasprivatelabelproductsandinstallation.Havingamulti-channelapproachwithe-commercethatleveragesitsphysicalstoreshashelpedBestBuytosurviveandthrive,asotherretailersstrug-gle.Tofurtherleverageitsstores,BestBuypioneeredthe“storewithinastore”conceptinanalliancewithSamsungin2013,tohighlightmanufacturerproductswithinBestBuylocations(Hiiemaa,2020).WhilepotentiallydistortedbytheCOVID-19pandemic,BestBuy’sonlinesalesgrewtorepresent42percentofoverallsalesinthefirstquarterof2020(Dignan,2020).AlliancesDigitalecosystemsarebasedoninterconnections,soanobviousrouteforatraditionalfirmtoadapttoadigitalecosystemistojoinoneviaanalliance.Alliancesbetweentwoormorefirmscanbeusedbyfirmstosharecostsorleveragethecapabilitiesofpartnerfirms(King,2007;Kingetal.,2003).Alliancesarefrequent,andtheycaninvolveanon-equitycontractualagreement,oranequityinvestment(Kingetal.,2003),orajointventure.Whilealliancesshareresourcesacrossexistingfirms,jointventurestakeresources(forexample,financialandemployees)frompartnerstocreateaneworganization.Disneyoffersanexampleofasuccess-fuldigitaltransformationthroughtheapplicationofalliances.DisneyDisneyhasusedmultiplealliancestoadaptitsbusinessoperationstoincorporatedigitalcom-ponents.BeginningwithDisney’smovetodigitalanimation,itusedanalliancewithPixar.Beginningin1986,DisneyandPixarcollaboratedondevelopingcomputeranimation(Pixar,2021).However,a1991contractualalliancetookthenextstepinbenefitingbothfirms,withdistributionoffilmsforPixarandDisneygainingaccesstonewtechnologyandcharacters(Simoons,2012).DisneyalsobeganitsmoveintostreamingbybecominganequitypartnerwithHuluin2009,togainviewersofitscontentandshareinadvertisingrevenue(Nakashima,2009),afteritbeganasajointventurebetweenNBC,AOL,MSN,MySpaceandYahoo!in2007(Businesswire,2007).BeforeDisney+,DisneyalsoworkedwithNetflix,announcedin2012andstartingin2013(Forbes,2016),tostreamitsmoviesanddistributenewMarvelDavidR.King-9781839107191DownloadedfromPubFactoryat05/28/202209:55:33AMviaColumbiaUniversityLibrary

4730Handbookondigitalbusinessecosystemscontent(forexample,Daredevil,IronFist,JessicaJones,ThePunisher),likelyasaproofofconcept(cf.Kanwara,2020).Tofacilitateitsstreamingdevelopment,DisneymadeanequityinvestmentinBAMTechMediatoaccessvideostreamingtechnology(Businesswire,2016)thatwasimportanttodevelopingESPN+andDisney+.Finally,DisneyreliesonAmazonWebServicestohostDisney+(Businesswire,2017).However,forlargetraditionalfirms,simplyjoininganexistingdigitalecosystemislargelyastop-gapmeasure.Still,alliancesexhibithighfailurerates(SaxtonandDollinger,2004),astheyresolveuncer-taintytheywerecreatedtoaddress(Schilling,2015),andevensuccessfulalliancescancreatetensionsurroundingquestionsofcontrol.Asaresult,alliancesoftenresultinacquisitions(Porrini,2004;Stahletal.,2013),andDisney’sexperiencewithPixar,BAMTechMedia,andHulufollowsthispattern.BeginningwithPixar,Disneyendedupacquiringtheanimationstudioin2006(Simoons,2012).ForBAMTechMedia,Disneyincreaseditsownershipto75percenttoensureacontrollinginterestin2017(BarnesandKoblin,2017),andin2019,Hulubecamemajority-ownedbyDisney(Jarvey,2019).Anotheroutcomeforalliancesistheyarecancelledduetoconflictsofinterest.Forexample,asDisneymovedtocreateitsownservice,NetflixdidnotrenewitsMarvelshows(Jackson,2018).AcquisitionsAcquisitionshelptotransformafirm(Kingetal.,2018b),andacquiringneededcapabilitiesoffersafasteroptiontogainthemthananallianceorinternaldevelopment,aswellasgreatercontrolthanalliances.InadditiontoDisneyleveragingacquisitionsofalliancepartners,Walmart’ssuccessofitsdigitaltransformationlargelyrestsonitsuseofitsacquisitionofJet.com.WalmartIninitiallypursuingitsdigitaltransformation,WalmartappliedinternaldevelopmentwithitslaunchofWalmart.comin2000(Thomas,2017),butitwasunsuccessful,anditlostcustomerstoAmazon.comandothere-commercewebsites(RothaermelandKing,2019b).ChallengesWalmartfacedinmovingonlineincludedhavingfewerproductsavailable,withanabsenceofthird-partyproviders,andanawkwardwebsiteinterface(RothaermelandKing,2019b).RespondingtothesechallengeswasfurtherhamperedbyculturalclashesofWalmart’sonlinebusinesswithitstraditionalretailbusiness(Boyle,2019).Asaresult,WalmartdidnotmakesignificantprogressinmovingonlineuntilitacquiredJet.comin2016(Chapman,2017).Followingtheacquisition,Walmartputthefirm’sCEO,MarkLore,inchargeofitse-commerce(Nassauer,2016).MarcLorewasanexperiencedexecutivewhofoundeddiapers.com,thatwassoldtoAmazon,andhesubsequentlyworkedatAmazontolearnmoreaboute-commerce(Stone,2015).WhileWalmartclosedJet.comin2020(Mahaney,2020),theacquisitionhelpedWalmarttobuildamulti-channelbusiness(Nassauer,2020).ThisreflectsthatWalmartwrapsotherproductsandservicestomeetcustomerneedsinonelocation,andthisenablesittoaddthird-partyproviderstoitsmarketplace.Bycombiningitsinternallydevelopedphysicallocationswithonlinesales,Walmartisabletoofferincreasedconvenience.Forexample,whenacustomerplacesanorderonAmazon,theyarenotsurewhattimeofdayaproductwillcome.Withonlineorderandinstorepickup,customerscangetproductsfromWalmartthesameday.Further,itfacilitatescustomersDavidR.King-9781839107191DownloadedfromPubFactoryat05/28/202209:55:33AMviaColumbiaUniversityLibrary

48Strategiesforbridgingtraditionalanddigitalecosystems31gettingperishableorhigh-theftitems.Thisleveragesthat95percentoftheAmericanpopula-tioniswithin15milesofaWalmartstore(Spector,2012).Alternative:BusinessExitAstrategicoptionlargelynotconsideredbytheory,formanagersfindingthatafirmisill-preparedtoadapt,istosell.ThisoptionwaslikelyfollowedbyGillette,whenitwassoldtoProctor&Gamble(P&G)in2005for$57billion(Isidore,2005).By2019,P&GwrotedownthevalueofGilletteby$8billionduetoincreasedcompetitionfromonlineretailersDollarShaveClubandHarry’s(Lucas,2019).Byanyestimate,Gillettesolditselfattheheightofitsmarketvalue(Sharma,2014;StowellandGrogan,2017),asits70percentUSmarketsharefellto54percentby2016(Green,2017a).Inresponse,P&GlaunchedaGillettesubscriptionservicein2014,andreviseditin2017tomimicitsonlinerivals(Green,2017a;Ziobro,2014).Still,by2018,salesforthegroomingdivisionwithGillettewere26percentbelow2012levels(Chesto,2019),asnewonlineentrantstookmarketsharebyofferinglowerprices.Inresponse,P&Ghasattemptedtomimiccompetitorswiththeintroductionofasubscriptionserviceandcheaperrazors(Meyersohn,2017).P&GalsopurchasedBilliein2020,toextenditsdigitalofferingstoincludewomen(Cheng,2020).However,followingitsacquisitionofGillette,P&Ghasfallenbehinditsonlinecompetitors,makingGillette’smanagers’decisiontosellappearwise.DISCUSSIONAnincreasedrateofchangeisreflectedinthelengthoftimethatfirmsspendintheStandardandPoor’s500(S&P500)droppingfromanaverageof33to14years(Mochari,2020).Thissuggeststhatfirmsfaceachoicetoeitherdisruptthemselvesorwaittobedisrupted,similartoBlockbuster,Kodak,andSears.Thereviewoffirmsmakingsuccessfuladaptationsoftradi-tionalecosystems(forexample,Apple,BestBuy,Disney,andWalmart)identifiesshortcom-ingswiththeoryinmatchingoptionsavailabletofirmsandobservedfirmbehaviorinadaptingtraditionalecosystemstoexpanddigitallytodevelophybridecosystems.Knowingavailablestrategicoptions,andhavingexamplestoguidefirms,isnotenoughtoensuresuccessfortraditionalbusinessestransitioningtocompeteinadigitalmarketplace.Astheexaminedcasestudiessuggest,considerationsbeyondthetraditionalcontrastbetweenexploitationandexplorationareneeded.Further,evenfirmsthatweredisruptivewillstillneedtoadapt.Forexample,Netflixhadtotransitionfromamailordertoadigitalstreamingserviceastechnologyprogressed.Additionally,inaninterestingtwist,digitalfirmsarealsoaddingtraditionalcomponentstotheirecosystems,ascompetitionincreasinglycrossestraditionalanddigitalecosystems,con-tributingtohybridecosystems.Forexample,whileAmazonalreadyhadwarehouselocations,itacquiredWholeFoodsin2017,toenterthegrocerymarketandgiveitalocalpresenceforAmazononlineorderpickup(Berthene,2019).AmazonalsopurchasedKivarobotsin2012,totransformitswarehouseoperationsandtolowercosts(Putz,2018).Implicationsobservedfromsuccessfulfirmtransformationsoftraditionalecosystemstoincorporatedigitalcompo-nents,tomakeahybridecosystem,arediscussedbelow.DavidR.King-9781839107191DownloadedfromPubFactoryat05/28/202209:55:33AMviaColumbiaUniversityLibrary

4932HandbookondigitalbusinessecosystemsResearchImplicationsThediscussedcasesshowtwoimportantmismatchesbetweentheoreticalexpectationsfororganizationallearningandambidexteritywithobservedfirmbehavior.Specifically,firmstra-tegicoptionsdonotclearlymapontotheoreticalexpectations,andtheorydoesnotexplicitlyconsiderhowbusinessesoperateandgeneraterevenues.Inconsideringfirmstrategicoptions,evidencesuggeststhattheyarenotdiscrete.Indeed,firmscombinedifferentstrategicoptions,includinginternaldevelopment,alliances,andacquisitions(Achtenhagenetal.,2017),totransformtheirecosystems.Availableoptionsformanagingthisbalanceinvolveeitherstructuralortemporalseparationtomanagecompetingdemands(BennerandTushman,2003;Boumgardenetal.,2012;GibsonandBirkinshaw,2004).StructuralseparationreflectstheapproachtakenbyDougMcMillonatWalmarttoprotectMarcLoreanditse-commercedivisionfromitslargerretailoperations(Boyle,2019).Meanwhile,temporalseparationlikelyrelatestohowDisneyhasmadesequentialinvestmentsovertimeinofferingdigitalservices.Still,betteroutcomescanresultfrommanagingcom-petingdemandsconcurrentlyinanorganization’scontext(Junnietal.,2013),orblendingtra-ditionalanddigitalbusinesses.AppleandBestBuylikelyrepresentfirmsthathavemanagedtoembracechangewhilemaintainingtraditionalbusinesses.Thecombinedevidencesuggeststhattheoreticalexpectationsofstructuralortemporalseparationappeartobelessvalidthancontextuallymanagingexplorationandexploitationbyusingacombinationofstrategicalter-natives.Asaresult,managersneedplayanimportantroleinenablingtransformationoftradi-tionalbusinesses,andthislikelybeginsbyinvestinginR&Dtoprovidestrategicflexibility.Anotherlimitationisthattheorydoesnotaddressapracticalconcernthattransformationofanecosystemneedstobeconsistentwithafirm’sbusinessmodel.Gainingneededcapabilitiesisonlypartofthebattlefortraditionalbusinessestodigitallytransform.Effortswilllargelybewastedwithoutalsoupdatingafirm’sbusinessmodel.Abusinessmodeldescribeshowafirmintendstoprofitfromaproductorservicebyoutlininghowvalueiscreatedforacustomerandabusiness.Still,anappropriatebusinessmodelforanewmarketorproduct/serviceisrarelyobviousinadvance(Teece,2010).Forexample,Netflix’sgrowthdidnotoccuruntilitchangedtoasubscriptionbusinessmodel(Newman,2010),andFacebookwasnotprofitableforfiveyearsbeforeitfocusedonadvertising(Thompson,2009).Often,individualbusinessmodelsarecombined.Forexample,newspapersandmagazinescombinechargingcustomersasubscriptionwithadvertising.Thesameholdstrueine-commerceorthedigitalmarketplace,asHuluhasalowersubscriptioncostavailablewithadvertising(Gushue,2020).Overtime,firmbusinessmodelsevolveandbecomemorecomplex,makingitmoredifficultforcompet-itorstoimitate.ImplicationsforPracticeFirmfailure,suchasBlockbuster,Kodak,andSears,underscoresthatdigitaltransformationwillnottakeplacewithoutsubstantialandsustainedeffort.Instead,itbeginswithseniormanagersprovidingacompellingexplanationforwhychangeisnecessary,thatalsoalignswithbusinessgoals,tobeginmakingneededculturalchanges(Rudder,2019).Forexample,Walmart’sadaptationtodigitalcommercereallybeganwhenDougMcMillontookoverasCEOin2015,andheworkedtotransformWalmarttobecomeamulti-channelretailerthatofferedcustomersaseamlessexperience(Boyle,2019).SimilareffectsfromincreasedDavidR.King-9781839107191DownloadedfromPubFactoryat05/28/202209:55:33AMviaColumbiaUniversityLibrary

50Strategiesforbridgingtraditionalanddigitalecosystems33emphasisbyaCEOintransformingabusinessarealsoprovidedbyBrianDunnatBestBuy.Atransitionfromtraditionalbusinesstoe-commercerequiresthatseniormanagershelptoadaptwhathasworkedinthepast,torespondtochange.Expandingtraditionalecosystemstointegratedigitalcomponentshaschangedhowfirmscompetetoshiftperceptionsofpotentialcollaboratorsandcompetitors(Senyoetal.,2019).Asaresult,managersneedtoexaminetheirindustriesandwhatconventionalandunconven-tionalcompetitorsaredoing(Morgan,2019).Thisrelatestomimeticisomorphismtocopywhatisworkingfromothersunderuncertainty(DiMaggioandPowell,1983;GeletkanyczandHambrick,1997)broughtaboutbydigitaltransformation.BestBuydidagoodjobofthisinmodifyingitsoperationstomatchpriceswithAmazonin2013,tolimitlostsales(Brown,2013;Rothaermeletal.,2019),andreducingitsshippingcostsin2017,tobettercompetewithAmazon(Green,2017b).However,whilemimickingAmazon,BestBuykeptwhatitdidwellbyhavingtrainedstaffandprovidingcomplementaryservices,suchasrecyclingandinstalla-tion(Rothaermeletal.,2019).Further,copyingcompetitorsneedstobetimely,astheneedtoreactquicklyisreflectedinBlockbuster’sdemise.Havingadigitalpresencefortraditionalfirmsisbecomingarequirement.However,simplymimickingcompetitorswillnotbeenough.Afirm’sdigitalofferingsrequiremeetingcustomerneedsandprovidingcustomerswithvalue,andthisrequiresconsideringproblemsthatcustomersarefacingandhowafirmcanprovidesolutions.Forexample,byprovidingamultiple-channelretailexperience,BestBuyandWalmartareabletoretainafocusontheircustomersandleveragetheirphysicallocations.UnderstandingthecustomerexperienceisalsopartofApple’ssuccess,withiTunesprovidingafoundationforitsdigitalecosystembysimplifyingtheprocessoftransferringmediaontodevices.Additionally,anunderstandingofcustomersegmentsisbehindDisney’sseparationoffamily(Disney+),sports(ESPN+)andnon-kid-friendlycontent(Hulu)aspartofitsvideostreamingservices(Raab,2020).ResearchLimitationsandOpportunitiesThischapterhasrecognizedresearchlimitations.Thefirstistheabilitytohavevisibilityintohowfirmsadapt.Thiscontributedtotheselectionoflargefirmsthatgeneratemediacoverage,togaininsightintotheirapplicationofstrategicoptionsintransformingtraditionalecosystemsbyaddingdigitalcomponentstocreatehybridecosystems.Theoptionsavailabletosmallerfirmsmaybemoreresource-constrained(forexample,Herdonetal.,2012),andthisprobablyincreasestheuseofstrategicexit.Theprimarylimitationsofalliancesenablinglearningbypartnerfirms,andincreasedriskofacquisition,furtherreinforcetheneedtoconsidertheroleofstrategicexitinhowlargeandsmallfirmsadapt.Thissuggestsaneedforresearchtoexaminehowfirmsprotecttheirintellectualproperty(HeeleyandKing,2019).Existingresearchsupportsaroleforinternaldevelopment(Heeleyetal.,2006;Kingetal.,2003),buthowinternaldevelopmentinteractswithotherstrategicoptionsisnotcommonlyconsideredbyresearch(Achtenhagenetal.,2017).Inthecasestudies,AppleandBestBuyclearlyreliedoninternaldevelopment,buttheroleofinternaldevelopmentislessclearfordevel-opingdigitalcomponentsfortheirecosystemwithDisney,anditlargelyfailedforWalmart.However,thismaybereflectedinlimitedpublicinformationonfirms’internaldevelopmentactivities.Additionally,theabilityoffirmstoadapttheirecosystemmayalsobeeitherfacili-tatedorconstrainedbytheirnationalinstitutionalenvironment(Lenkenhoffetal.,2018),andtheselectedcasestudyfirmsareallheadquarteredintheUS.AddressingshortcomingsoftheDavidR.King-9781839107191DownloadedfromPubFactoryat05/28/202209:55:33AMviaColumbiaUniversityLibrary

5134Handbookondigitalbusinessecosystemscurrentchapterreinforcestheneedforfutureresearchtobetterunderstandhowfirmsadaptecosystemsbyapplyingavailablestrategicoptions.CONCLUSIONRapidgrowthindigitalplatformsmakesthemalargershareofnationaleconomies,andassociatedexternaltechnologyandsocietalchangeshaveincreaseddemandsontraditionalbusinessestotransform.ReflectingDarwinism,inagivenindustrythefirmthatsurviveswillbetheonebestable“toadaptandadjusttothechangingenvironmentinwhichitfindsitself”(Darwin,1909).Withthatsaid,increasedsuccesslikelyreflectshavingaccesstoneededresources,andleveragingthemappropriately.ThissuggeststhatfirmsneedtotradecurrentprofitsforfutureprofitsbyinvestinginR&Dtoincreasetheirstrategicflexibility.Adaptingafirm’sinternalorganizationalcontextrequiresstrategicleadershiptoconsiderafirm’sculturethatcanimpedetransformation.However,aninternalfocusrisksoverlookingcompeti-tors(e.g.,Cordingetal.,2008)thatoffercustomersnewdigitaloptions.Theimplicationisthatfirmsneedtoactivelymanageorganizationallearningwithinafirm’scontext,andcombinemultiplestrategicoptionstosuccessfullyadaptecosystems.Further,researchisneededtobetterunderstandassociatedprocessesandstrategicdecisions,tobetterinformmanagers.REFERENCESAchtenhagen,L.,Brunninge,O.,andMelin,L.(2017).Patternsofdynamicgrowthinmedium-sizedcompanies:beyondthedichotomyoforganicversusacquiredgrowth.LongRangePlanning,50,pp.457–471.Baker,K.(2020).Howtobuildaproductecosystembuyerswillwanttobein.HubSpot:https://blog.hubspot.com/marketing/product-ecosystem#:~:text=Example%20of%20a%20Product%20Ecosystem,needs%20of%20its%20target%20audience.Barnes,B.,andKoblin,J.(2017).Disney’sbigbetonstreamingreliesonlittle-knowntechcompany.NewYorkTimes:https://www.nytimes.com/2017/10/08/business/media/bamtech-disney-streaming.html.Baumann,S.(2013).AdaptingtotheBraveNewWorld.Innovativeorganisationalstrategiesformediacompanies.InMediaInnovations.AMultidisciplinaryStudyofChange.Storsul,T.,andKrumsvik,A.H.(eds).Nordicom:Gothenburg,SE,pp.77‒92.Benna,S.(2015).This1957drawingrevealsthebrilliantstrategybehindDisney’slastingsuccess.BusinessInsider:https://www.businessinsider.com/1957-drawing-walt-disney-brilliant-strategy-2015-7.Benner,M.,andTushman,M.(2003).Exploitation,exploration,andprocessmanagement:theproduc-tivitydilemmarevisited.AcademyofManagementReview,28,pp.238–256.Berghman,L.(2012).Strategicinnovationinestablishedcompanies:anempiricalstudyofappropriateambidexteritystrategies.InternationalJournalofInnovationManagement,16,pp.1–30.Berthene,A.(2019).HowAmazon'sWholeFoodsacquisitionchangedthegroceryindustry.DigitalCommerce360:https://www.digitalcommerce360.com/2019/06/21/how-amazons-whole-foods-acquisition-changed-the-grocery-industry/.Birkinshaw,J.,andGupta,K.(2013).Clarifyingthedistinctivecontributionofambidexteritytothefieldoforganizationstudies.AcademyofManagementPerspectives,27,pp.287–298.Boumgarden,P.,Nickerson,J.,andZenger,T.(2012).Sailingintothewind:exploringtherelationshipsamongambidexterity,vacillation,andorganizationalperformance.StrategicManagementJournal,33,pp.587–610.DavidR.King-9781839107191DownloadedfromPubFactoryat05/28/202209:55:33AMviaColumbiaUniversityLibrary

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574.DisentanglingtheimportanceofdigitalplatformsandabsorptivecapacityindigitalbusinessecosystemsAntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.KenneyINTRODUCTIONTheextensivediffusionofdigitaltechnologies(theInternetofThings,cloudcomputing,blockchains,bigdata,artificialintelligence,algorithms,andvirtualreality)andtheirimpactonbusinessesarebecomingcentraltoresearchinmanagement(Cusumano2020;DiMininetal.2019).Atastrategiclevel,studieshavefocusedontheeffectsofdigitaltransformationoncompetitionandexternaldecisionsforindividualindustries(KretschmerandClaussen2016).Inaddition,scholarshaveexploredhowdigitalizationaffectstheabilityoffirmstoachieveandsustainacompetitiveadvantageovertime(LanzollaandFrankort2016;MahoneyandPandian1992;MarkidesandSosa2013;SuarezandLanzolla2007).Atanorganizationallevel,researchershavestudiedtheimpactontheprocesses,routines,capabilities,andstruc-turesthroughwhichorganizationsadaptandinnovate(GeorgeandLin2017).Specifically,theypointedtoissuessuchastheneedforahigherlevelofbusinessmodelinnovation(BaldwinandvonHippel2011;Markides2013;MarkidesandSosa2013;MassaandTucci2014)andconsideredtheroleplayedbydigitalplatformsasavenuetohostinnovationdynamics(Cusumanoetal.2019;Cusumano2020).Finally,scholarshavefocusedonhowtheintroductionofnewtechnologieschallengescompanies’internalcapabilitiesandskills(Teece2012;Zahraetal.2009).Scientificproductionwithinthisstreamisquitebroadandhetero-geneous.Forthisreason,thereisaneedforawide-rangingdiscussiononhowdigitalizationprocessesinteractwithfirms’innovationstrategies.Thepurposeofthischapteristodevelopadiscussionaroundtheemergingtrendsregardingtheconceptof“entrepreneurship”inthelightofrecentadvancementsintechnology,withaspecialemphasisontheroleofdigitaltechnologiesanddigitalbusinessecosystemsonplatformsandabsorptivecapacity.Overall,thechapterisstructuredasfollows.Itfirststressesthetheoreticalbackgroundusedtogroundthediscussion.Thenextsectionexplorestheroleofdigitalizationonplatformizationandabsorptivecapacity.Finally,thechapterhighlightstheclosingremarkssuggestingtrendstodevelopfurtherstudies.BACKGROUNDTheriseofaplethoraofinnovativeandpowerfuldigitaltechnologiesisreframingtheideasofbothinnovationandentrepreneurship(CutoloandKenney2020;Cutoloetal.2021;Nambisanetal.2019a).Themassiveadoptionofthesetechnologiesisimpactingentrepreneurialpro-40AntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenney-9781839107191DownloadedfromPubFactoryat05/28/202209:55:42AMviaColumbiaUniversityLibrary

58Disentanglingtheimportanceofdigitalplatformsandabsorptivecapacity41cessesandproducts,offeringanewmeaningtotheideaofentrepreneurshipandthefunda-mentalchangesthatdigitizationbrings,particularlytheplatformizationofincreasingpartsoftheeconomy(Kenneyetal.2019).Theongoingdebateoninnovationandentrepreneurshipisdeepeningtheimplicationsofthedigitaltechnologies’implementationinseveraldimensions.Forinstance,scholarsareinvestigatingthenewfaceofinnovationandentrepreneurialdyna-mismtriggeredbydigitaltechnologiesinboththetraditionalandtheinnovativeindustrialsectors(FischerandReuber2011;Huangetal.2017;Lyytinenetal.2016;SrinivasanandVenkatraman2018;vonBrieletal.2018;YounkinandKashkooli2016).Likewise,scholarshaveinvestigatedhoworganizationsarerethinking,reshapingandadaptingtheirinternalprocesses,strategies,andprocedurestokeeppacewiththechallengesintroducedbythedigitaltechnologies(Nambisan2017;Nambisanetal.2017;Yooetal.2012).Thespreadofdigitaltechnologieshasimplicationsforentrepreneurshipattheregionalandnationallevel,astheyareredefiningindustrialsectors’boundariesandthereshapingoflocalandregionaleconomicinterests(KenneyandZysman2020)andpolicies(Reischauer2018).Forthesereasons,thischapteraimsatdevelopingadiscussionaroundtheemergingtrendsregardingtheconceptofentrepreneurshipinthelightofrecentadvancementsintechnology,withaparticularfocusonthebusinessecosystem,theplatformeconomy,andabsorptivecapacity.Therisingofdigitalplatformsshowedhowthenewtechnologiestransformedthenatureandprocessofinnovationandentrepreneurshipacrossindustriesandsectorstothepointwheresomehavearguedthatweareenteringaphasethatmightbetermedthe“platformeconomy”(KenneyandZysman2016).Muchofthisrevolvesaroundtwoimportantphenomena:theemergenceofplatform-basedecosystems(Adner2017;Jacobidesetal.2018),andplatformi-zation(Gawer2014).1Theinterestinecosystemsreferstothefactthatfirmoperationsareincreasinglybeingseeninacontextofotherfirmsthatformaninteractiveand,tosomedegree,symbioticenvironmentwithinwhichtheirpraxistakesplace(Autioetal.2018).Platformsconstituteasharedsetoftechnologies,components,services,architecture,andrelationshipsthatserveasacommonfoundationfordiversesetsofactorstoconvergeandcreatevalue.Bothecosystemsandplatformizationarebecomingofgreaterimportanceforbothresearchintoandpracticeofinnovationandentrepreneurship(CutoloandKenney2020).Theimplicationscanbeseenatthreedifferentlevels.Thefirstistheexaminationofhowuniqueaspectsofecosystemsandplatformizationchallengelinkingthemtosomeoftheassumptionsinreceivedtheoriesoninnovationandentrepreneurship;thesecondisthepropositionofhowtheoreticalperspectives,concepts,andconstructsdrawnfromplatforms/ecosystemsmayhelptoenhance/enrichourextantunderstandingofinnovationandentrepreneurship;andthethirdistheiden-tificationofsomeofthemostpromisingquestionsandissuesforfutureresearchinthisarea(Kenneyetal.2020).Regardingtheseconddimension,thechapterfocusesonproposinganarrative-infuseddesignapproachfordealingwiththecentralroleofafirm’sabsorptivecapacityinenablingitsstrategicchangeandsuccessfuladaptation.Avoluminousbodyofliteraturedocumentsthiseffectinmultipleindustries,showingthatabsorptivecapacityhassignificantconsequencesforthespeed,direction,andsuccessofthischange.Anissuethathasreceivedlittleattentionintheliteratureisthepossibilitythatabsorptivecapacitycanbecomeakeybarriertoadaptation,especiallyattimesoftrulyradicalenvironmentalshiftssuchastheadventofanewcategoryoftechnologies.Thistrajectoryaimsfirstlyatcontributingtotheliteraturehighlightingwhenandwhyabsorptivecapacitybecomesabarriertostrategicadaptation.Then,itaimsatidentifyingAntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenney-9781839107191DownloadedfromPubFactoryat05/28/202209:55:42AMviaColumbiaUniversityLibrary

5942Handbookondigitalbusinessecosystemsthestrategiestoreinforcethecurrencyandrelevanceofabsorptivecapacity,thechallengesthatcompaniesencountertoconverttheirabsorptivecapacityintoasourceofadvantage,andthenecessaryprocessestoachievethistransformation.Exploringthisaspectisparticularlyrelevantasgrowthandsuccessofstartupsisstrictlyconnectedtothedevelopmentofadigitalbusinessecosysteminwhichanumberofdifferentactorsinteracteachothertoshareknowl-edgeandcompetences.INNOVATIONANDENTREPRENEURSHIPINTHEDIGITALAGE:PLATFORMIZATIONANDABSORPTIVECAPACITYDigitaltechnologiesandtheirembeddednesshavesignificantlyattractedscholarlyattentionbeyondinformationsystems.Sincethe1990s,anincreasingnumberoforganizationsinalmostallindustrieshavegivengreatattentiontodigitaltransformation,asithasbecomemorecommon,necessary,andpresentinallbusinessfunctions.Thewideadoptionofdigitaltechnologieshasconfrontedthesecompanieswithgrowingchallenges,thusalsoattractingmanagementscholarswhohavetriedtoconceptualizeandcategorizetheimpactthatdigitaltransformationmayhaveonbusinesses.Accordingly,themainliteratureagreedinidentifyingtwomaintrajectoriesandtrendsinwhichthemainliteraturehasbranchedouttounderstandtheimpactofdigitaltechnologiesinentrepreneurshipandinnovation,namelyplatformization,absorptivecapacity.DigitalPlatformintheAgeofDigitizationThefirsttrendreferstoplatformization.Onlinedigitalplatforms,infact,aretransformingtheenvironmentinwhichfirmsandentireindustriesoperate.Inthelastfewyears,literatureonentrepreneurshipandbusinessstrategyhaspaidlittleattentiontotheimpactgeneratedbytheseplatformsonentrepreneurshipandbusinesses(Cusumano2020;CutoloandKenney2020;Nambisan2017;Nambisanetal.2019b).Morerecently,scholarshavebegunfocusingonwhatitmeanstobeanentrepreneurinmarketsorganizedbyplatforms(Curchodetal.2020;WenandZhu2019;ZhuandLiu2018;Zhu2019).Thisisleadingtoaninterrogationofwhathaschangedregardingourtraditionalnotionsofentrepreneurshipwhencontemporaryentre-preneursareoperatingincontextsstructuredbyplatforms(CutoloandKenney2020).Thisinterestisdrivenbytheenormousamountofnewopportunitiescreatedforentrepreneurship,evenwhileplatformfirmsexertpoweroverthem.Thisraisesevenlargerquestions,asfirmsinexistingindustriesarealsointegratedintoplatform-organizedmarkets(ecosystems),notvoluntarily,butratherduetothefacttheplat-formshaveintermediatedthemselvesbetweenthefirmanditscustomers.Toillustrate,intheUnitedStates,becausepotentialdiningcustomersnowconsultYelprankingspriortochoosingarestaurant,restaurantsfeelcompelledtoadvertiseontheplatform.Asaresult,therestaurantsinvoluntarilyhavebeenintegratedintoYelp’secosystem,andthusitisabletoextractadver-tisingrevenuesfromthem.Scholarsidentifiedacentralunitofanalysisforthedevelopmentofthestudiesregardingplatformizationecosystemsandindividualentrepreneurs.Ontheonehand,platformsaredependentuponattractingcomplementorstotheirecosystems(Autioetal.2018;Cusumanoetal.2019;Gawer2014;Jacobidesetal.2018;Parkeretal.2016).Ontheotherhand,astheAntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenney-9781839107191DownloadedfromPubFactoryat05/28/202209:55:42AMviaColumbiaUniversityLibrary

60Disentanglingtheimportanceofdigitalplatformsandabsorptivecapacity43platformachieveslock-in,anenormouspowerasymmetryemergesbetweentheplatformownerandplatform-dependentbusinesses,bothentrepreneurialandtraditional.Thus,busi-nessesdependentuponaplatformtoaccesscustomersexperienceanewtypeofKnightianuncertaintyastheplatformownerbecomesincreasinglypowerful(CutoloandKenney2020;Cutoloetal.2021).WhilefirstrecognizedbyscholarssuchasBoudreauandHagiu(2009),thedireimplicationsoftheplatformasaregulatorwasfirstflaggedinlegalstudiesbyKhan(2016).Therecognitionofthepowerofplatformshasresultedinincreasinginterest,notonlybyregulatorsintheEuropeanUnion,India,andincreasinglyinNorthAmerica(EuropeanCommission2020a,2020b;USDistrictCourt2020;USHouseofRepresentatives2020);mostrecently,theChinesegovernmenthaschargeditsantitrustauthoritieswithinvestigatingtheimpactofplatformssuchasAlibabaandTencentoncompetition(Liao2020).Theseinsightsopenenormousresearchopportunitiesforentrepreneurshipandstrategyscholars.Thedynamicsofinter-platform,inter-complementor,andplatformversustheircomplementorscompetitionwillattractattentionastheplatformshavebecomeevenmorepowerfulduringtheCovid-19pandemic(KenneyandZysman2020).Platformsandtheireco-systemsaregainingattentionbecausetheyboostentrepreneurialexperiencesbybothcreatingnewmarketsandexpandingexistingones(KretschmerandClaussen2016).TheemergenceofplatformssuchasAmazonMarketplace,Etsy,eBay,andothersmadeitpossibleforsmalllocalfirmstoaccessglobalmarkets.Theplatformsprovidedtechnicalandorganizationalresourcesthatsimplifiedmarketentry.Inthisrespect,theydemocratizedandfacilitatedmarketentry.Thus,platformscreatetheultimateparadox:theymakeentrepreneurshipeasierthanever,whilealsomakingthoseentrepreneursvulnerableanddependentupontheplatform(CutoloandKenney2020).Thisparadoxsuggeststhattheideologythatentrepreneurshipisaliberat-ingpraxis(Rindovaetal.2009)isproblematizedinaneconomythatisincreasinglyorganizedbyplatforms.AbsorptiveCapacityAbsorptivecapacityiscentraltomanagingstrategicchangeandsuccessfuladaptation.Infact,avoluminousbodyofliteraturedocumentsthiseffectinmultipleindustries,showingthatabsorptivecapacityhasimportantconsequencesforthespeed,direction,andsuccessofthischange.Themorecurrentandbroaderabsorptivecapacityis,themorelikelyfirmsareabletogainsignificantlyfromtheknowledgeacquiredfromoutsideandintegrateitwithinthecurrentknowledgebasefavoringadaptationtoenvironmentalchanges(ZahraandGeorge2015).Withinthisvein,theabsorptivecapacityconceptmayexplainheterogeneityacrossfirmsinhowtheyinteractwithandtrytothriveincomplex,dynamic,andcaptivatingknowledgeenvironments.Hencetheabsorptivecapacityliteratureisquiteextensive,andanissuethathasreceivedlittleattentionintheliteratureisthepossibilitythatabsorptivecapacitycanbecomeakeybarriertoadaptation,especiallyattimesoftrulyradicalenvironmentalshiftssuchastheadventofanewcategoryoftechnologies(AndersonandTushman1990;Engelenetal.2014;HendersonandClark1990).Digitaltechnologies,infact,arecreatingconstantturbulenceinthecompetitivelandscape.Inthissituation,businessesarerequiredtoupdateandrefinebothtechnologicalandinnova-tivecapabilitiestofacethedigitaltransformationandcompetesuccessfullyinthedynamicenvironment.Withinthisnewcontext,theverynatureofabsorptivecapacityisbecomingdifficulttounderstand.BusinessesarefindingthemselvesinreorganizedindustriesinwhichAntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenney-9781839107191DownloadedfromPubFactoryat05/28/202209:55:42AMviaColumbiaUniversityLibrary

6144Handbookondigitalbusinessecosystemstheboundariesarebecomingmoreandmoreblurred.Thisnewoperationalenvironmentmayhaveanimpactonbusinessstrategy,andithascompletelychangedthewayinwhichfirmsrespondtoentrantscomingfromanentirelydifferentworld.Forthisreason,identifyingwhatknowledgetoabsorbismoredifficultthanever,andincreasingtheabsorptivecapacitytopursueinnovationandcompetitiveadvantagemaybecrucialforfirms.Therefore,absorptivecapacityassumesacrucialroleinensuringcompanies’survivalintheemergenceanddiffu-sionofdigitaltechnologiesundermanyaspects.Absorptivecapacityhasdemonstratedinfluenceontechnologicalchangesandadaptations.Technologicalchanges,infact,createadaptationalchallengesforcompanieswithinanindus-tryastheypassfromoneeratoanother.Theincreasedspreadofdigitaltechnologies,thatcontributetocreatenewandmoreblurredformsofcollaborationwiththenewenvironmentrepresentedbythedigitalecosystem,challengesorganizationsingatheringthenewknowl-edgeandcapabilitiesrequired.Insuchcases,absorptivecapacityhasbeenrecognizedascrucialfortheadaptationoffirmstotechnologicalchangespreventingfirmsfromoutsidetheindustry,whohaveresourcesandcapabilitiessimilartothoserequiredforthenewtechnolog-icaldomain,fromerodingthecompetitiveadvantagegainedovertheyears(KingandTucci2002).Theknowledgecontainedinafirm’sabsorptivecapacityresultsfromalongprocessofaccumulationthatisderivedfromaccesstoexternalsourcesofknowledgeaswellasinternalknowledgecreation(CohenandLevinthal1990).Assuch,thisknowledgereflectshistoricalprocesseswithinthefirmaswellasthecompetitiverealitiesofitsindustry(ZahraandGeorge2002).Consequently,thisknowledgeisespeciallyusefulwhenindustrydynamicsarefairlypredictable.Nevertheless,digitaltechnologiesanddigitalecosystemsrequireorganizationstodevelopknowledgeandcapabilitiestoovercomeindustryboundaries.Organizationsarerequiredtobemalleableandcontinuouslyadapttoexternalenvironments(Crupietal.,2020).Inthefaceoftheemergenceofsuchcriticalchangesandtheexternalenvironment’sturbulence,itisnoteasytosensetherealnatureoftheabsorptivecapacity.Thehistoricalknowledgecontainedinabsorptivecapacitycouldbecomeabarriertotherecognitionofforth-comingchange,slowingandevenhinderingadaptationandacceptanceofthenewtechnology.Absorptivecapacityshapesmanagers’sphereofattentionandthescopeoftheirsearchandexperimentationprocesses.Italsoshapestheirinterpretationsofsignalsofincomingtechno-logicalchange.Asaresult,theycaninfluencethequalityandaccuracyofthejudgmentsman-agersmakeinanticipationof(orresponseto)changes.Itcanalsoinfluencethespeedatwhichfirmsadjusttheirresourcesandcapabilities,influencingthepotentialcompetitiveadvantagestheyarelikelytoachieve.Thequalityofmanagers’interpretationsofincomingtechnologicalchangesisofparticularinterestbecauseoftheuncertaintyandoftenthecontradictoryinforma-tionavailableaboutpotentialeffectsofchange.Managersarealsolikelytoespousedifferentbeliefsaboutthesepotentialeffects,influencingtheirwillingnesstoundertakenecessaryadjustmentsintheirfirms’resourcebases.Also,theshifttowardmalleableorganizationsthatoperateinamorecomplexenvironment,suchasthedigitalbusinessecosystem,requiresreshapingabsorptivecapacityandtherelatedprocesses.Indeed,asignificantchallengetotheabsorptivecapacityderivesfromtheemer-genceofmorecomplexbusinessenvironments,suchasthebusinessecosystemsthatreconcep-tualizedthemechanismsoforganizations’valuecreationandcapture,andtheyrepresentthenewenvironmentinwhichseveralpartnersinteractwitheachotherforthecreationofadefi-nitevalueproposition(Adner2017).Theimpactgeneratedbydigitaltechnologiesmovedthischallengetothenextlevelbyintroducinganewpanorama,thedigitalbusinessecosystem.ItAntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenney-9781839107191DownloadedfromPubFactoryat05/28/202209:55:42AMviaColumbiaUniversityLibrary

62Disentanglingtheimportanceofdigitalplatformsandabsorptivecapacity45nolongerappliesonlytoinformationtechnologyandsoftwareindustries,butalsoappliestoregularbusinessecosystems.Thedigitalbusinessecosystemisgainingimportanceineverysectorasdigitaltechnologiesdiffusethroughindustriesandsociety.Accordingly,therelation-shipbetweenabsorptivecapacityandthedigitalbusinessecosystemneedstoberedefined,primarilyconsideringoneofthemostrelevantdigitalbusinessecosystemcharacteristics:turbulence.Itdefinestheenvironment’sunpredictableconditionsduetotherapidchangesintechnologies,customers’needs,andcompetitivestrategies(PavlouandElSawy2010).Theseconditionsledtoacriticalnumberofindependentpartners,thecontinuouschangingincus-tomers’orientation,andtherisingofrelatedhabilitativetechnologies(Jacobidesetal.2018).Moreover,thegrowingturbulencegeneratedbydigitalbusinessecosystemsisredesigningtheclassicrules,offeringanalways-changingpanoramathatoperatesbyusingfluidtechnol-ogiesadaptabletoseveralscopes.Thiscreatesapanoramainwhichtheabilitytoadaptortorespondtotheunexpectedbecomescrucial,sincetheorganization’sroleintheecosystemiscontinuouslysubjecttochange.Interactionsvarywithanextensiverangeofpartners,whichareverydifferentthankstothelowentrybarriers.Theincreasingcentralityofdigitaltechnol-ogiestoeveryaspectofafirm’sorganizationsuggeststhatscholarshipmustdirectlyaddresshowtheyarechangingandwillchangenotjustafirm’sabsorptivecapacity,butperhapseventhewaysinwhichabsorptivecapacityworks.Thechallengethatturbulentenvironmentsoffertoorganizationistransformingabsorptivecapacityintoasourceofadvantage.Ensuringtheprominenceandrelevanceofabsorptivecapacityistheprerequisiteforitseffectiveexploitationforstrategicadvantage.Thisdemandsastrategicvisionthatincludesaninnovativeapproachtothedefinitionofabsorptivecapacity.CONCLUSIONThischaptercontributestothediscussionondigitalbusinessecosystemsbyconceptualizinghowtheadventofthedigitalrevolutionmayimpactonentrepreneurshipandecosystems,withaparticularfocusonplatformsandabsorptivecapacity.Atthesocietallevel,platformfirmshaveemergedasthemostvaluablefirmsintheworld,becausetheyareincreasinglythecentralactorsinmassivebusinesssystems,andincreasinglyabletoextractvalueatasocietalscale.Withinthiscontext,platformsandecosystemsdeeplychangethenatureofentrepreneurship,astheconceptsofuncertaintyandriskchangeanditisnotclearwhodrivesinnovation:whetheritistheplatformownerorthecomplementors.Inotherwords,thelinkbetweendigitalization,platform,andfirmsisverystrongandmustbecarefullyanalyzedatdifferentlevels.Inthisveinitisimportanttopointoutthattheconceptofdigitalizationcanbeinterpretedinmanyways,suchasconnectivity,cloudcomputing,andartificialintelligence,andthatthiscomplex-ityimpactsentrepreneurshipbybringingcompletelydifferentmechanismsandcontingencies.Ontheotherhand,thediffusionofdigitaltechnologiesandthecreationofdigitalbusinessecosystemsstresstheroleplayedbyabsorptivecapacityinfirms’digitalizationprocesses.Withinthistheoreticalframeworkitisimportanttounderlinethedifferencebetweenabsorp-tivecapacityandrealizedcapacity.Whenthegeneralconstructofabsorptivecapacityisusedinthedigitalcontext,thingschangebecausethespeedoftheprocesschangessignificantly,underpinningthetransformationofpotentialabsorptivecapacityintorealizedcapacity.Inthissense,toboostdigitaltransformation,firmsmustabsorbnewknowledgeandbeabletoexploitit,makingdigitaltransformationhappeninanefficient,effective,andfasterway.AntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenney-9781839107191DownloadedfromPubFactoryat05/28/202209:55:42AMviaColumbiaUniversityLibrary

6346HandbookondigitalbusinessecosystemsThesedimensionscanhelpustoanalyzethedigitalizationprocessfromdifferentperspec-tives.However,futureresearchneedstodefineinaclearermannertheboundariesoftheanalysis.Scholarsneedtoclarifywhethertheyaretalkingaboutdigitizationordigitalization.Inthecaseofdigitization,itisimportanttoclarifywhattechnologiesunderlinetheprocessandtounderstandwhetherthereisanythingnewinthesetechnologies.Suchtechnologiescanbeconsideredasgeneral-purposetechnologiesandcanbecomparedtothesteamenginethatfueledtheindustrialrevolution,asbothareaformofautomation.Otherwise,thediscussionondigitalizationanddigitizationmayappearconfused.Moreover,itisimportanttounderstandwhatnewmechanismsareunderpinnedbythedigitalizationprocess,assumingthatdigitaltechnologiesareanewcategoryoftechnologieswhichcannotbeinterpretedwiththeusualdimensions.Furthermore,itisnecessarytoconsiderthecaseofsmallandmedium-sizedenterprises(SMEs)throughthedimensionsidentified,investigatingfactorsthatcantriggertheadoptionofnewtechnologiesforthesefirms,whicharestillreluctantintheirintegration(Mülleretal.2017;Schröder2016).Nationalandregionalpoliciesarecalledtoaddresssuchchallenges,identifyingincentivesandappropriatestructuresandmechanisms.Thedigitaliza-tionprocessneedsastronginteractionamongfirms’capabilities,competencies,andbusinessmodelsinordertofacilitatethealignmentofdigitalizationanddigitizationstrategies.FUTURERESEARCHThischapterprovideinterestinginsightswhichmaybeusefulforfuturescholarsinterestedindevelopingthisemergingresearchfield.Inparticular,futureresearchinthisfieldmightaddressthefollowingpotentialtopics:first,howtraditionalnotionsofentrepreneurshipcanberethoughtinaneconomyorganizedbyplatformfirms;second,thetypesofstrategiesandresourcesentrepreneurscanmobilizetobuildsuccessfulorganizationsinacontextcreatedbyplatforms;third,managementandpersonnelstrategyinplatform-organizedmarkets;fourth,explorationofthefactorsthatdeterminesurvivalandsuccessinaplatformsetting;fifth,thedefinitionofthenewboundariesforthepublicregulatorypublicinstruments;andlastly,thedevelopmentofmeasuresoftheimpactofplatformsandecosystemsonlocalandregionaleconomicdevelopment(KenneyandZysman2020).Moreover,observationsinourchaptersuggestseveralresearchquestionsworthyoffuturestudy.Particularly,theyaddresstheroleofthefirm’sentrepreneurialcapabilityinabsorptivecapacity’supgradeandexploitation.Thismakesitessentialforfurtherresearchtoexplorethecontentofthiscapabilityandhowitisimplemented.Similarly,ZahraandGeorge(2002)suggestthatabsorptivecapacityisasetofinterrelateddynamiccapabilities.Thisindicatesaneedtoexploretheroleofthefirm’sentrepreneurialcapabilityintriggeringandsupportingthedynamismcharacterizingthosecapabilitiesthatconstituteabsorptivecapacity.Currently,wedonotknowagreatdealaboutthefactorsthatenablesomecompaniestoconverttheirabsorptivecapacityintocommerciallysuccessfulapplications.Studyingtheseprocessescanalsohelptoclarifyhowcompanieslearnfromexploitationviacommercializationorothermeansforupgradingtheirabsorptivecapacitytokeepitcurrent,relevant,andeffectivelydeployed.AntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenney-9781839107191DownloadedfromPubFactoryat05/28/202209:55:42AMviaColumbiaUniversityLibrary

64Disentanglingtheimportanceofdigitalplatformsandabsorptivecapacity47ACKNOWLEDGEMENTSTheauthorsarelistedinalphabeticalorder.Theycontributedequallytothestudy.WeareextremelygratefulforthevaluablecontributionthatwereceivedinsettingupthisstudybyChristopherTucci,FrancescaSpigarelli,LucaMarinelli,andDominiqueLepore.Moreover,wethank,fortheintellectualcontributionsreceived,ShakerZahra,SatishNambisan,andGianvitoLanzolla.NOTE1.Ofcourse,therehasbeenalonghistoryofscholarshiparoundecosystemsinindustrialclustersthatpredatesthediscussionofthosethathaveemergedaroundplatforms.Forareview,see,forexample,Jacobidesetal.(2018).REFERENCESAdner,R.(2017).Ecosystemasstructure.JournalofManagement,43(1),pp.39–58.https://doi.org/10.1177/0149206316678451.Anderson,P.,andTushman,M.L.(1990).Technologicaldiscontinuitiesanddominantdesigns:acyclicalmodeloftechnologicalchange.AdministrativeScienceQuarterly,35(4),p.604.https://doi.org/10.2307/2393511.Autio,E.,Nambisan,S.,Thomas,L.D.,andWright,M.(2018).Digitalaffordances,spatialaffordances,andthegenesisofentrepreneurialecosystems.StrategicEntrepreneurshipJournal,12(1),pp.72–95.Baldwin,C.,andvonHippel,E.(2011).Modelingaparadigmshift:fromproducerinnovationtouserandopencollaborativeinnovation.OrganizationScience,22(6),pp.1399–1417.Boudreau,K.J.,andHagiu,A.(2009).Platformrules:multi-sidedplatformsasregulators.Platforms,MarketsandInnovation,1,pp.163–191.Cohen,W.M.,andLevinthal,D.A.(1990).Absorptivecapacity:anewperspectiveonlearningandinnovation.AdministrativeScienceQuarterly,35(1),p.128.Crupi,A.,DelSarto,N.,DiMinin,A.,Gregori,G.L.,Lepore,D.,etal.(2020).Thedigitaltransforma-tionofSMEs—anewknowledgebrokercalledthedigitalinnovationhub.JournalofKnowledgeManagement,24(6),pp.1263–1288.https://doi.org/10.1108/JKM-11-2019-0623.Curchod,C.,Patriotta,G.,Cohen,L.,andNeysen,N.(2020).Workingforanalgorithm:powerasym-metriesandagencyinonlineworksettings.AdministrativeScienceQuarterly,65(3),pp.644–676.Cusumano,M.(2020).Guidepost:theevolutionofresearchonindustryplatforms.AcademyofManagementDiscoveries.https://doi.org/10.5465/amd.2020.0091.Cusumano,M.A,Gawer,A.,andYoffie,D.B.(2019).TheBusinessofPlatforms:StrategyintheAgeofDigitalCompetition,Innovation,andPower.NewYork:HarperCollins.Cutolo,D.,Hargadon,A.,andKenney,M.(2021).Competingonplatforms.SloanManagementReview.https://sloanreview.mit.edu/article/competing-on-platforms/(accessedMarch9,2021).Cutolo,D.,andKenney,M.(2020).Platform-dependententrepreneurs:powerasymmetries,risks,andstrategiesintheplatformeconomy.AcademyofManagementPerspectives.https://doi.org/10.5465/amp.2019.0103.DiMinin,A.,Gregori,G.L.,Spigarelli,F.,Kenney,M.,Lanzolla,G.,etal.(2019).Digitaltransfor-mationandfirms’innovativestrategies:capabilities,ecosystems,andbusinessmodels.AcademyofManagementProceedings,2019(1),p.14623.Engelen,A.,Kube,H.,Schmidt,S.,andFlatten,T.C.(2014).Entrepreneurialorientationinturbulentenvironments:themoderatingroleofabsorptivecapacity.ResearchPolicy,43(8),pp.1353–1369.EuropeanCommission(2020a).ProposalforaRegulationoftheEuropeanParliamentandoftheCouncilonContestableandFairMarketsintheDigitalSector(DigitalMarketsAct),December15,2020.AntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenney-9781839107191DownloadedfromPubFactoryat05/28/202209:55:42AMviaColumbiaUniversityLibrary

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66Disentanglingtheimportanceofdigitalplatformsandabsorptivecapacity49Nambisan,S.,Wright,M.,andFeldman,M.(2019a).Thedigitaltransformationofinnovationandentre-preneurship:progress,challengesandkeythemes.ResearchPolicy,48(8),pp.103773.Nambisan,S.,Zahra,S.A.,andLuo,Y.(2019b).Globalplatformsandecosystems:implicationsforinternationalbusinesstheories.JournalofInternationalBusinessStudies,50(9),pp.1464–1486.Parker,G.G.,VanAlstyne,M.W.,andChoudary,S.P.(2016).PlatformRevolution:HowNetworkedMarketsAreTransformingtheEconomyandHowtoMakeThemWorkforYou.NewYork:W.W.Norton&Company.Pavlou,P.A.,andElSawy,O.A.(2010).The“thirdhand”:IT-enabledcompetitiveadvantageinturbu-lencethroughimprovisationalcapabilities.InformationSystemsResearch,21(3),443–471.Reischauer,G.(2018).Industry4.0aspolicy-drivendiscoursetoinstitutionalizeinnovationsystemsinmanufacturing.TechnologicalForecastingandSocialChange,132,pp.26–33.Rindova,V.,Barry,D.,andKetchen,D.J.(2009).Entrepreneuringasemancipation.AcademyofManagementReview,34(3),pp.477–491.Schröder,C.(2016).TheChallengesofIndustry4.0forSmallandMedium-SizedEnterprises.Bonn:Friedrich-Ebert-Stiftung.https://library.fes.de/pdf-files/wiso/12683.pdf.Srinivasan,A.,andVenkatraman,N.(2018).Entrepreneurshipindigitalplatforms:anetwork-centricview.StrategicEntrepreneurshipJournal,12(1),pp.54–71.Suarez,F.F.,andLanzolla,G.(2007).Theroleofenvironmentaldynamicsinbuildingafirstmoveradvantagetheory.AcademyofManagementReview,32(2),pp.377–392.Teece,D.J.(2012).Dynamiccapabilities:routinesversusentrepreneurialaction.Journalofmanagementstudies,49(8),pp.1395–1401.USDistrictCourt(2020).Coloradoetal.v.GoogleLLC,1:20CV03715,December17,2020.USDistrictCourtfortheDistrictofColumbia.USHouseofRepresentatives(2020).Majoritystaffreportandrecommendations:investigationofcom-petitionindigitalmarkets.USHouseofRepresentatives,SubcommitteeonAntitrust,CommercialandAdministrativeLawoftheCommitteeofJudiciary.vonBriel,F.,Davidsson,P.,andRecker,J.(2018).DigitaltechnologiesasexternalenablersofnewventurecreationintheIThardwaresector.EntrepreneurshipTheoryandPractice,42(1),pp.47–69.Wen,W.,andZhu,F.(2019).Threatofplatform‐ownerentryandcomplementorresponses:evidencefromthemobileappmarket.StrategicManagementJournal,40(9),pp.1336–1367.Yoo,Y.,Boland,R.J.,Lyytinen,K.,andMajchrzak,A.(2012).Organizingforinnovationinthedigitizedworld.OrganizationScience,23(5),pp.1398–1408.Younkin,P.,andKashkooli,K.(2016).Whatproblemsdoescrowdfundingsolve?CaliforniaManagementReview,58(2),pp.20–43.Zahra,S.A.,Gedajlovic,E.,Neubaum,D.O.,andShulman,J.M.(2009).Atypologyofsocialentre-preneurs:motives,searchprocessesandethicalchallenges.JournalofBusinessVenturing,24(5),pp.519–532.Zahra,S.A.,andGeorge,G.(2002).Absorptivecapacity:areview,reconceptualization,andextension.AcademyofManagementReview,27(2),pp.185–203.Zahra,S.A.,andGeorge,G.(2015).Absorptivecapacityandtheentrepreneurialprocess.In:WileyEncyclopediaofManagement.Chichester:JohnWiley&Sons,pp.1–3.https://doi.org/10.1002/9781118785317.weom030001.Zhu,F.(2019).Friendsorfoes?Examiningplatformowners’entryintocomplementors’spaces.JournalofEconomicsandManagementStrategy,28(1),pp.23–28.Zhu,F.,andLiu,Q.(2018).Competingwithcomplementors:anempiricallookatamazon.com.StrategicManagementJournal,39(10),pp.2618–2642.AntonioCrupi,NicolaDelSarto,AlbertoDiMinin,andMartinF.Kenney-9781839107191DownloadedfromPubFactoryat05/28/202209:55:42AMviaColumbiaUniversityLibrary

675.DigitalbusinessecosystemsanddynamiccapabilitiesPäiviMaijanenINTRODUCTIONDigitalrevolution,or“digitalconvergence”asdescribedbyTeece(2018)tocharacterizetheongoingdevelopmentsinthebusinessenvironment,hasmadeitpossibletocreatedigitalplatform-basedecosystemsinwhichdifferentparties(individualsandfirms)co-createandco-contributetothejointvaluecreation.Thedigitalbusinessecosystems,or“multi-sidedplatform-basedecosystems”(HelfatandRaubitschek,2018),areorganizedaroundplatformsthatserveascentralfacilitatorsforotherpartiestojoinandinnovate.Thecurrentbusinessenvironmentoffersmultipleexamplesofplatform-baseddigitalecosystems.Forexample,inthetraditionalindustries,suchasbankingorhotelbusiness,theonlineserviceshavecom-pletelychangedbusinessmodelsandearninglogics.Inaddition,digitalizationhasgivenrisetomanynewindustriessuchasthegameindustrywherevaluecreationisbasedoninteractionsbetweensoftwaredevelopers,gamedevelopers,streamingserviceproviders,distributors,retailers,andconsumers.Thedigitalvaluecreationlogicisbasedonpositivenetworkexternalities:themoreusersthenetworkhas,themorevaluableitis(ShapiroandVarian,1998).Importantly,digitalizationandscalabilityalsodecreaseproductionanddistributioncosts:themoreunitsaresold,thelowertheaveragecostperunitis.Inmanycasesmarginalcostsarenil.Duetothedigitalvaluecreationlogic,thosewhomanagetoreachthecriticalmassamongtheusersendupbeingthewinnersandmarketleaders.Thedigitalbusinessesfavorfirstmoversandtheirabilitytoreachtheso-calledcriticalmassamongtheusers.Duetothevaluecreationbasedonnetworkexter-nalities,thefirmsthatareabletoreachthecriticalmassinthemarketobtaintheso-calledthewinner-takes-allequilibrium(Varian,2001).Someofthedigitalcompaniesarejustutilizinginteractivenetworksbetweenusers,suchasFacebookandInstagram,butmanyofthenewdigitalbusinessesproduceproductsandservices,suchasAmazon,Google,Airbnb,andUber.Becauseofthefirstmover’sadvantagetheyareabletodominatetheirmarketandmakeithard—ifnotimpossible—forotherstoenter(Teece,2018).Theplatform-centereddigitalbusinessenvironmentisverydifferentfromthetraditionalbusinesssetting.Inthetraditionalsetting,individualfirmscompetewiththeirspecificassetsandproducts,perhapsutilizingproduction-relatedeconomiesofscaleandscope;whereastheecosystemisbasedon“thealignmentstructureofthemultilateralsetofpartners”(Adner,2017,p.42)thatneedtointeractinorderforafocalvaluepropositiontomaterialize.Despitethecollaboration,alignedpartnerships,andjointvaluecreation,theindividualfirmstakingpartintheecosystemareaskingthesamefamousquestionof“Howtoprofitfrominnovation?”aslaunchedbyTeece(1986)inhispath-breakingarticle.Despitethefactthatintheplatforms-basedecosystemsfirmsneedeachothertoinnovateandcreatevalue,competitiongoesonintheecosystems,notonlybetweenrivalecosystemsbutalsobetween50PäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

68Digitalbusinessecosystemsanddynamiccapabilities51thedifferentactors(orcomplementors)withintheecosystems.Simultaneouslywiththejointpursuitsformulti-innovations,eachfirmneedstotakecareofitsownprofit-makingandcom-petitiveadvantage.Basedonthecoreideasoftheresource-basedview(Barney,1991)andthedynamiccapabilityview(Teeceetal.,1997),afirm’ssuccessandcompetitiveadvantageisbasedonunique(valuable,rare,inimitable,andnon-substitutable)assetsandcompetences.Inotherwords,despitesharingtheirexpertise,knowhow,andcreativityforthefocalinnovationoftheecosystem,thefirmsalsoneedtoprotecttheirmostvaluableanduniqueassets,compe-tences,andcapabilitiestoavoidlosingtheirvaluetoothercontributors.Firmsparticipatinginecosystemsneedtobothcollaborateandcompete:tocollaborateforthejointvaluecreation,butatthesametimetomakesurethattheygettheirsharefromtheearnedvalue(Adner,2017;Teece,2018).Thischapterislinkedtothediscussiononmanagingplatform-baseddigitalecosystemsbyrelatingtheanalysistothedynamiccapabilityapproachfromstrategicmanagement.Thechapteranalyzesthechallengeofprofitingfrominnovationinadigitalplatform-basedecosystem,usingtheideasofthedynamiccapabilityview(DCV),whichemphasizestheroleofdynamiccapabilitiesinsustainingcompetitiveadvantageintherapidlychangingbusinessenvironment.Thisanalysiscontributestothestudiesondynamiccapabilitiesbyanalyzingspecificrolesandfunctionsofdynamiccapabilitiesinthecontextofdigitalplatform-basedecosystems.Theanalysisisconceptual,basedontheliteratureondigitalplatform-basedeco-systemsanddynamiccapabilities.Asdynamiccapabilitiesarerequiredtocarryoutstrategicrenewal,thischapterprovidesinsightsonhowtomanagetherenewalprocessesintheecosystemcontext.Sofar,thestudiesofdynamiccapabilitieshavebeenmainlyanalyzedinthemoretraditionaland“closed”organ-izationalcontext,andquiteafewstudieshavelinkedthedynamiccapabilityapproachwiththebusinessecosystems(see,however,HelfatandRaubitschek,2018;KyläheikoandMaijanen,2020;RoundyandFayard,2019;Teece,2018).Theshiftinthebusinesscontexttowardmoreopenmultilateralbusinessenvironmentscanbeexpectedtosetnewrequirementsforfunctionsofdynamiccapabilities.Thisanalysisisfocusedespeciallyondigitalinnovationplatforms(Teece,2017)—suchasApple,Google,andAmazon—whereplatformownersandcomplementorscollaboratefornewinnovationsandbusinessmodels.AsTeece(2018,p.1376)states,theDCV“helpsexplainwhysomefirmssuccessfullycreateplatform-poweredecosystemsthatcombinemultiplebusinessmodels.”Dynamiccapabilitiesareneededtokeepboththeecosystemsandindividualfirmswithintheecosystemscompetitive,adaptive,andproactive(Teece,2018).Bydevelopinganddeployingdynamiccapabilities,firmsareabletoovercometheinherentrigiditiesoforganizationalbehaviorembeddedinthepathdependentroutines,processes,andcompetences(NelsonandWinter,1982).Theecosystemsneedtoconstantlyrenewthemselvestoaddressthechangingbusinessenvironment.Evenifallthefirmsinvolvedintheecosystemneeddynamiccapabilities,theyareparticularlyimportantfortheplatformleaders,whoareinthecenterandinchargeofthegeneralmanagementoftheecosystem(HelfatandRaubitschek,2018;Teece,2017).Inthefollowing,Ifirstbrieflyanalyzedigitalbusinessecosystemsfromtheperspectiveofstrategicmanagement.Thisisfollowedbytheanalysisofthespecialroleofdynamiccapabil-itiesinthecontextofbusinessecosystems.Thechapterendswithconclusionsanddiscussionontheanalysis.PäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

6952HandbookondigitalbusinessecosystemsTHENATUREOFPLATFORM-BASEDDIGITALECOSYSTEMSDigitalplatform-basedbusinessecosystemsarebasedonflexiblestructureswherefirmandindustryboundariesaremoreorlessvanishing,andphysicallocationhaslostitsmeaning.Theyenhanceentrepreneurship,risktaking,andinnovativeness,andarebasedoncollabora-tivevaluecreation(Nambisanetal.,2018).Typically,ininformationtechnology,thecreationofapplicationsforexampleisbasedoncollaborationbetweencomplementaryassetproviders.OnesuccessstoryofthegloballyfunctioningbusinessecosystemsisTaiwanSemiconductorManufacturingCompany(TSMC),thelargestchipmakermanufacturingchipsfortoptechcompanies,suchasHuaweiandApple(whichthemselvesareplatform-basedbusinesses).Itsproductionisbasedonthehigh-classcompositionofcomplementaryassetsproducedbydifferentcomplementors.Comparedtothetraditionalhierarchicalorganizationalstructures,inadigitalecosystemthereislesshierarchyandtop-downmanagement.Instead,thefirmsarenetworked,intercon-nected,andinterdependenthorizontally,enjoyingtheso-callednetworkeffects“inwhichthevaluetoapartyononesideoftheplatformdependsonthenumberandqualityofthepartiesontheotherside(s)oftheplatform”(HelfatandRaubitschek,2018,p.1392).Incontrasttotheflexibilityandopencollaborationbetweentheparticipatingmembers,thegovernanceofaplatformalsorequirescommonrulesandgeneralmanagement.Therefore,inplatform-basedecosystems,andespeciallyintheinnovationplatforms,thecapabilitiesandmanagerialroleoftheplatformleaderarecrucial,asemphasizedbyHelfatandRaubitschek(2018,p.1391):“Asthearchitectsoftheseecosystems,platformleadersmustdesign,manage,andalterecosystemsasconditionschange—extremelycomplextasksgiventhenumberofactorsinvolved,themulti-facetedcharacteristicsoftheseecosystems,andhighuncertainty.”Instrategicmanagementresearch,thereisagrowinginterestinunderstandingthenatureanddynamicsofdigitalbusinessecosystems.Someofthedefinitionsaptlyhighlighttheideaofecosystemsintermsofvaluecreationandcapture.AccordingtoAdner(2017,p.42),“theecosystemisdefinedbythealignmentstructureofthemultilateralsetofpartnersthatneedtointeractinorderforafocalvaluepropositiontomaterialize.”Thisdefinitionemphasizesthattherearemultiplepartnersthatareinterconnectedinacomplexway,which“arenotdecomposabletoanaggregationofbilateralinteractions”(Adner,2017,p.42).Inaddition,thedefinitionemphasizesthatthemultipleactorsareinteracting“forthefocalvalueproposition”oftheecosystem,butasAdneralsoemphasizes,atthesametimethedifferentactorsmayhavedifferentinterestsandperspectivesonthevalueproposition.Jacobidesetal.(2018,p.2264)suggestthat“anecosystemisasetofactorswithvaryingdegreesofmultilateral,nongenericcomplementaritiesthatarenotfullyhierarchicallycontrolled.”Thisdefinition,inturn,high-lightstheflexiblestructuresandimportanceofspecificcomplementaritiesthattheactorsbringintotheecosystemtocontributetothejointvaluecreation.Furthermore,Kretschmeretal.(2020,p.1)conceptualizeplatformecosystemsas“metaorganizations”or“organizationsoforganizations,”beinga“modularandinterdependentsystemofcoreandcomplementarycomponents.”Theauthorsemphasizethe“lessformalandlesshierarchicalstructures.”Thestructuralflexibilityofecosystems,inturn,requiresacertainlevelofcoordinationandgovernancebetweenmultiplemembersthatmayhaveconflictingorevenrivallinginterests.Theauthorshighlightthreespecialfeaturesthatcharacterizeplatformecosystemsincomparisontotraditionalfirms:authority;motivationandincentives;andgovernanceandcoordination.Asforauthority,itisnotbasedonownershipofassetsasinPäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

70Digitalbusinessecosystemsanddynamiccapabilities53thetraditionalorganizations,buton“controloverthetechnologicalarchitectureatthecenteroftheecosystem”(Kretschmeretal.,2020,p.4).Thiscontrolofthefocalplatformoverthecomplementorsispracticedbyrulesthatcoordinateparticipation.Thenatureofmotivationandincentivesisdistinctivelydifferentinecosystemscomparedtotraditionalorganizations.Intraditionalorganizations,incentivesarelow-poweredanddirect(forexample,wages);whereasintheplatformecosystemstheincentivesare“indirectandhigh-powered”(Kretschmeretal.,2020,p.4)basedonvaluecapturethroughtransactionsbetweentheparticipantsoftheecosystem.Kretschmeretal.emphasizetheimportanceofprovidingincentivesfortheparticipantstojoinandparticipate.Forexample,theplatformmayprovidesuchresourcesandknow-how(suchasoncustomerrelations,marketingservices,platformtechnology)thattheparticipantswouldnotbeabletoacquireeasilybythemselves(Nambisanetal.,2018).Importantly,theseincentivesshouldbecompetitiveincomparisonwithotherwaystomakeprofit.Furthermore,ecosystemsandtraditionalfirmsdifferintermsoftheirgovernanceandcoordinationstructuresthatregulatethedecision-makingbetweenplatformownersandotherparticipants.Intraditionalorganizations,decision-makingisdefinedhierarchically:thehigherthemanagerialposition,themoredecision-makingpoweritprovides.Intheplatforms,themembers(individualsandorganizations)canindependentlydecidetowhatextentandhowtheywanttocontribute“withintherulesandresourcesoftheplatform”(Kretschmeretal.,2020,p.5).Theplatformoperatesaccordingtoasetofstandardizedrules,butthememberscanfreelydecidehowtheywanttousetheircreativityandresources,addingtothefocalvaluecreation.Theideaofdelicateandsimultaneousco-existenceofcollaborationandcompetitionisencapsulatedaptlyinTeece’s(2018,p.1375)definitionofaplatform-basedecosystem:Aplatformisanycombinationofhardwareandsoftwarethatprovidesstandards,interfaces,andrulesthatenableandallowprovidersofcomplementstoaddvalueandinteractwitheachotherand/orusers.Collectively,theplatforminnovator(s)andthecomplementorsconstituteanecosystem,theviabilityofwhichdependsoncontinuedinnovationandmaintenanceoftheplatformbyitsowner(s)andadelicatebalanceofcooperationandcompetitionamongtheprovidersofcomplements.Inthelastpartofhisdefinition,Teecehighlightstheplatformowner’sroleinmanagingthe“delicate”relationshipbetweenthemembersoftheecosystem,astheyarerequiredbothtocollaborateincreatingthecommongoaland,atthesame,competingbetweeneachotherinsustainingtheircompetitivenessintheecosystem(forexample,byprotectingtheirvaluableanduniqueassets).Themanagerialchallengeistoorchestrateandrenewtheecosysteminordertofindthebestsolutionstotheneedsandstrategictargets(Nambisanetal.,2017).Theecosystemconsistsofinterdependentrelationshipsbetweentheplatformownerandthecomplementors.Eachmembercontributestothejointvaluecreationwithitsspecificassets.Inadditiontothecollaborationsbetweenthecomplementors,themembersoftheplatformalsoreactandactwithdifferentstakeholdersinthebusinessenvironmentoutsidetheecosystem(forexample,thecustomers,policy-makers,otherecosystems).Theplatformownercarriesthecrucialroleofmanagingthecomplexecosystem,forexamplebycoordinatingandaligningtheactivitiesofdifferentcomplementorstowardthecommongoalandvaluecreation.Eachmember,inturn,approachestheplatformwithitsowninterests,expectations,andresources.Thecrucialquestionistowhatextentthememberoftheplatformiswillingandmotivatedtoshareitsvaluableassetsandknowhowfortheplatformcollaboration,andtowhatextentitwantstoPäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

7154Handbookondigitalbusinessecosystemsprotectitsvaluableassetsfromcopyingbyothers(causingtheriskoflosingitsstrategicposi-tionandcompetitiveedge).Thischallengeraisestheimportantquestionoftheappropriabilityregime(Teece,1986,2018);thatis,howtomakeinnovationsinimitableoratleastdifficulttocopy.Forexample,patentsandotherlegalprotectionmeansprovideoneoption,butinthecaseofknowledge-basedassets(asistypicalfordigitalinnovations)theprotectionofvaluable,rare,andinimitableassetsismostlybasedontacitknowledgecumulatedthroughtheexperience-basedlearningembeddedintheorganizationalcapabilities,processes,andmind-sets(Barney,1991;NelsonandWinter,1982).Thecausallyambiguousnatureoftacitnessmakesithardforotherstoimitateorcopy.DYNAMICCAPABILITIESDEFINEDDynamiccapabilitiesarecapabilitiesthatfirmsneedanddeveloptosustaintheircompetitiveadvantageintheradicallychangingbusinessenvironment(Helfatetal.,2007;Teeceetal.,1997).TheDCVwaslaunchedinthe1990swhenbusinessbecamemorevolatileandstrategyresearchscholarsneededtodevelopnewconceptstocapturetherapidlychangingnatureofbusiness(TeeceandPisano,1994;Teeceetal.,1997).Accordingtothedynamiccapabilityview(DCV),dynamiccapabilitiesareso-calledhigher-ordercapabilitiesthatenhancestrategicrenewalandorganizationallearningtowardthestrategictargets.Theyarechange-enhancingcapabilities,differenttothe(existing)competence-enhancingordinarycapabilitiesthatorganizationsneedtosustainthestatusquoandearntheirlivingonaneverydaybasis(HelfatandWinter,2011;Winter,2003).Dynamiccapabilitiesareneededtochangethecurrentresources(forexampleassets,competences,rou-tinesundergirdingtheoperationalcapabilities)tosuccessfullyaddressthechangingbusinessenvironment(ZolloandWinter,2002).Asforthedefinitionofdynamiccapabilities,afocaldefinitionisgivenbyTeeceetal.(1997),whodefineadynamiccapabilityas“thefirm’sabilitytointegrate,build,andreconfig-ureinternalandexternalcompetencestoaddressrapidlychangingenvironments.”Itisworthnotingthatthisdefinitionhighlightsnotonlyinternalbutalso“external”competences,refer-ringtothefactthatfirmsdonothavetoownanddevelopcompetencesbythemselvesbuttheycanco-createthemwithexternalpartners.OneofthemostwidelyuseddefinitionsisbyHelfatetal.(2007,p.4):“Adynamiccapabilityisthecapacityofanorganizationtopurposefullycreate,extend,ormodifyitsresourcebase.”Withtheconcept“purposefully”thedefinitionemphasizesthestrategicintentionoftheactions.Inordertoknowwhatkindsofcapabilitiesareneededandhowtheycanbeexploited,themanagersneedtodefinetheorganization’sstrategicdirection(Teece,2014;Zahraetal.,2006).Tobetterunderstandhowdynamiccapabilitiesfunctionatamicrofoundationallevel,Teece(2007)developedtheframeworkfurthertointroduceaprocessmodelofdynamiccapabilities,whichhasbeenwidelyusedinthestudiesofdynamiccapabilities(Schilkeetal.,2018).Accordingtothismodel,dynamiccapabilitiesfunctionasprocessesofthethreedistinctivecapacitiesofsensing,seizing,andtransforming(reconfiguring)(Teece,2007;2014).Sensingreferstoscanningofthreats,andidentificationanddevelopmentofbusinessopportunities.Seizingmeansseizingtheopportunitieswith,forexample,decisionsoninvestments,acquisi-tions,andbusinessmodels;asTeece(2014,p.332)expressesit:“mobilizationofresourcestoaddressneedsandopportunities.”TransformingisaboutcontinuousrenewalandorchestrationPäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

72Digitalbusinessecosystemsanddynamiccapabilities55ofresourcestofulfillandimplementthestrategictargets.Dynamiccapabilitiesareorganiza-tionalcapabilities;theyarelearnedandpatternedorganizationalactivitiesaimedatenhancingchangeindifferentorganizationalareas(marketing,productinnovation,sales,andsoon).Evenifdynamiccapabilitiesareorganizationalandcarriedoutinallpartsandatalllevelsoftheorganization,theyareoftenlinkedespeciallytothemanageriallevel.TheDCVregardsmanagers’roleashighlyrelevant,because“managersarethekeyagentsofchange”(Zahraetal.,2006,p.922;seealsoAugierandTeece,2009;Helfatetal.,2007;Teece,2007;2014).Managersaretheoneswhomakestrategicdecisions,andthereforepersonalcapabilitiesareofgreatimportance.Especially,theircognitiveskillstosenseandinterpretthechangingbusi-nessenvironmentareseenasanimportantprerequisiteforsuccessfulstrategicchange(AdnerandHelfat,2003;HelfatandPeteraf,2015).Dynamiccapabilityliterature,andespeciallytheTeeceanapproach(Teece,2007,2012b),emphasizestheentrepreneurialmindsetofmanagersandtheirabilitytomakeproactiveandvisionarydecisions.Inlinewiththeresource-basedview,dynamiccapabilitiesfulfillthecriteriaofvaluable,rare,inimitable,andnon-substitutableresources(Barney,1991;Barneyetal.,2011).Theyarefirm-specific:eachfirmcreatesitsowndynamiccapabilitiesbasedonitsuniqueassetsandcompetencesandstrategicgoals.Theyaredevelopedthroughorganizationallearningviapastexperiencesandsuccesses.Therefore,dynamiccapabilitiesarebasedonorganization-specifictacitknowledge,whichmakesthemdifficultforotherstocopyandavaluablesourceofcom-petitiveadvantage.DYNAMICCAPABILITIESASDRIVERSOFPLATFORM-BASEDECOSYSTEMSTheDCVwaslaunchedinthe1990swhenthebusinessenvironmentstartedtobecomemorevolatileanduncertain(TeeceandPisano,1994;Teeceetal.,1997).Basedonthelargebodyofresearchondynamiccapabilities,Schilkeetal.(2018)statethattheDCVturnedouttobeausefulandinsightfulframeworktoanalyzehowfirmscansuccessfullycopewiththechallengesofthevolatilebusinessenvironment.Withdigitaltechnologyandtheemergenceofplatform-basedecosystems,thebusinessenvironmenthasbecomeevenmoreuncertainandvolatile,andthechallengesevenmoreamplified.Notsurprisingly,theDCVprovidesaninsightfulapproachtoanalyzehowfirmsareabletocopewiththechallengesarisingfromthecomplexecosystemenvironmentthatTeece(2012a)hasdescribedas“next-generationcom-petition”.AccordingtoTeece(2014,p.329),“nextgenerationcompetitionischaracterizedbymarketstructuresthatarefluid,clustersofknow-howandtechnologiesthataregloballydispersed,competitionthattakesplacebetweenbusinessecosystems,andinnovationsthataredependentoncombinationsoftechnologies.”Thefirmsneeddynamiccapabilitiestofacilitateadaptationtothecomplexandconstantlychangingecosystemenvironmentwherefirmsarenotisolatedunits,butpartofbiggerbusi-nessentitiesandenvironmentscollaboratingandcompetingwitheachother(Adner,2017;Kretschmeretal.,2020).Inadditiontothecompetitionbetweentheparticipatingfirmswithintheecosystems,theecosystemsthemselvesalsocompetewithotherecosystemsandfirmsintheexternalbusinessenvironment(Kretschmeretal.,2020).Tokeepthemselvesviableandcompetitive,theecosystemsneedtocontinuouslysenseandseizenewopportunitiesandinnovatenewservices,technologicalsolutions,andsoon(Teece,2007).CompanyhistoriesofPäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

7356Handbookondigitalbusinessecosystemssuccessanddeclineillustratethevolatileanduncertainnatureofdigitalbusinessecosystems.Forexample,Googlestartedasasearchengine,andisnowamultinationalcompanybasedondigitalecosystems,providingvariousinternet-relatedservices.ThedeclineoftheleadingsmartphonecompanyNokiaagainstApple’siPhonein2007isanexampleofthedramaticturnsofcompetitionbetweenecosystems.Inthefollowing,Iwillmorecloselyanalyzethesensing,seizing,andtransformingpro-cessesofdynamiccapabilitiesintheecosystemcontext.Sensing,seizing,andtransformingcanbeseenasasequenceofactions(HelfatandPeteraf,2009),intheprocesswherenewinformationaboutnewopportunitiesisfirstsensedandthenseizedand,finally,takenintotheorganizationbytransformingandorchestratingtheresources.Inorderfordynamiccapabilitiestofunctionsuccessfully,allpartsofthisprocessofsensing,seizing,andtransformingneedtooperateeffectivelyandsupporteachother.Anorganizationmaybegoodatsensingbutlesseffectiveatseizing;oritcanbegoodatbothsensingandseizingbutlesseffectiveattrans-formingitsresources,whichmeansthatthestrategictargetswillnotbeachievedinpractice(Teece,2007).Itcanbepresupposedthatthecomplexecosystemenvironmentimposesspecificdemandsonsuccessfulsensing,seizing,andtransformingcapacities.Furthermore,thesedemandsmayvarydependingonwhetherthefirmisthefocalplatformownerorwhetheritisoneofthecomplementors.Inaddition,italsomakesadifferencewhetherweanalyzedynamiccapa-bilitieswithinoroutsidetheecosystem(Kretschmeretal.,2020).Withintheecosystem,therelationshipsbetweenfirmsarebasedonbothcollaborationforthejointvaluecreationand,simultaneously,competitioncharacterizedbyconflictinggoalsarisingfromthefirms’strate-gies.Theenvironmentoutsidetheecosystemreferstothecompetitionwithexistingindividualcompaniesorwithotherecosystems.Competingwithotherecosystemscanbeseenascompe-titionbetween“metaorganizationalfeatures”(Kretschmeretal.,2020),suchasadvantagesofnetworkeffectsorarchitecturalfeaturesoftheplatform.Thecapacityofsensing,definedasactionsforscanningtheopportunities(andthreats)inthelocalandglobalmarketenvironment,isofhighimportancefortheplatformowners(HelfatandRaubitschek,2018).Theynotonlyneedtosensetheemergingopportunitiesandthreatsinthecompetitiveenvironment,buttheyalsoneedtoscanpossiblenewcomplementaryassetprovidersforthenewbusinessinnovationopportunities.Thesearchactivitiesofsensingoftentendtoremain“local,”thatis,basedonactivitiescarriedoutwithoperationalcapabilitiesfocusedonexploitationofthecurrentknowledgebaseclosetothecurrentfocalbusiness.This,ofcourse,isrelevantformoregradualbusinessdevelopment,butasthebusinessenvironmentischangingfastandcontinuously,thesearchactivitiesshouldbedistant,basedondynamiccapabilitiesforexploringnewknowledgecombinationsandreachingouttotheperipheriesoftheecosystemenvironmentinlookingfornewbusinessideasandcollaborators(Teece,2007).Therefore,managershavetoallocateresources(dataanalysis,bigdataexperts,andsoon)forcarryingoutdistantsearchprocessesamongcustomers,competitors,assetcomplementors,andsoon.Inadditiontotheorganizationalresourcesandprocesses,thesensingcapacityistiedwiththemanagerialcognitivecapabilitiestoperceiveandinterprettheweaksignalsintheenvironment(AdnerandHelfat,2003;HelfatandPeteraf,2015).Thecomplementorsoftheecosystem,inturn,needtoscanandidentifywhatpossiblebusinessopportunitiestheymayhaveoutsidetheecosystemthatwouldcompetewiththeircurrentprofitsandposition.Asforthesensingactivitieswithintheecosystem,theplatformownersarerequiredtoconstantlyscanandexploreinnovationopportunitiesamongtheexistingcomplementors.Thecomplementors,PäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

74Digitalbusinessecosystemsanddynamiccapabilities57inturn,trytoscannewideasandcollaborationopportunitieswithinthecurrentecosystem,andtoevaluatewhattheseopportunitiesimplyfortheiruniqueassetsandresources.Seizingcapacityisaboutseizingthesensedopportunities,forexamplebydesigningnewbusinessmodelsandmakinginvestments.Incompetingwithothercompaniesandecosystems,andcatchingnewmarkets,theplatformownerhastoconstantlydevelopanddesignnewbusinessideasandmakedecisionsonplatformarchitecture,valuecapturemechanisms,andrevenuemodels,andnewcomplementorstojointhecreationofthenewbusinessinnovationsfortheecosystem.Foreffectivedynamiccapabilities,timelydecision-makingonnewbusinessmodelsisimportant(Barreto,2010),asindigitalbusinessanearlyentry(afirstmover’sadvan-tage)isrelevantbecauseofthepositivenetworkexternalitiesandstrictlydecreasingaveragecosts.Asforthebusinessenvironmentoutsidethecurrentecosystem,thecomplementorshavetocomparethebusinessopportunitiesinsideandoutside,anddecidewhethertostayinthecurrentecosystemortoleaveitandjoinotherplatformswithmorepromisingbusinesspros-pects.Thismeansthattheyhavetoevaluateonwhich(forexampleprofit-making)termstheywouldbewillingstayintheecosystem.Withintheecosystem,themanagers(platformleaders)needtodeveloptheirgovernancestructuresandrules,andtocreateincentivesystemsformotivatingthecomplementorstoaligntheirassetsandprocessesforthejointvaluecreation.Withintheecosystem,complementorscarryoutseizingactivitiesbydesigninginnovationsincollaborationwithothercomplementors.Collaborationrequiresdecisionsonwithwhomtocollaborate,andtowhatextenttheywouldbewillingtosharetheirassets,competences,andcreativity,andtowhatextenttheyshouldprotecttheirvaluableanduniquebottleneckassets.Asforthetransformingofresources,thefocusoftheplatformownerisonorchestratingandrenewingtheassetsinsidetheecosystem,forexamplebycreatingprocessesandstructures,andenhancingcommunicationbetweenmembersoftheecosystemtofacilitatecollaboration.Transformingisalsoaboutmotivatingthecollaboratorswith,forexample,incentiverulestokeepthedelicatelinebetweencompetitionandcooperationinbalance,asKretschmeretal.(2020,p.12)state,basedontheirstudy:aplatformproviderhasthecomplexstrategictaskoforchestratingtheecosystemvaluecreationandthedistributionofthatvalueamongitsmembers.Itachievesthisbalancethroughvarioustradeoffsinvolvingthequantityandqualityofcomplements,competitionversuscooperationbetweencomple-mentors,andtheplatform’sowncooperationversuscompetitionwithcomplementors.Forthecomplementorsoftheecosystem,thecollaborativevaluecreationprovidesanoppor-tunitytointegrateandcombinenewknowledgeandotherresourceswiththeexistingresourcebase.Asforthebusinessenvironmentoutsidetheecosystem,thetransformationandcreationofnewbusinessmodelsmaychange(transform)thedynamicsofthewholebusinessenviron-ment.AccordingtoTeece(2007,p.1319),thisisparticularlythecasewithstrongdynamiccapabilities:“Enterpriseswithstrongdynamiccapabilitiesareintenselyentrepreneurial.Theynotonlyadapttobusinessecosystems,butalsoshapethemthroughinnovationandthroughcollaborationwithotherenterprises,entities,andinstitutions.”Thisappliestoecosystemswithstrongdynamiccapabilities(KyläheikoandMaijanen,2020).Wehavemanygoodexamplesofnewdigitalplatform-basedbusinessmodels,suchasAirbnb,Uber,orApple,whichhaveradicallytransformedandshapedthecompetitivebusinessenvironment.Theyhaveforcedthetraditionalcompaniestoadjusttothenewdigitalvaluecreationwithnewcompetencesandservices.Forthecomplementors,theco-creationofnewbusinessesinthecurrentecosystemmayupgradetheirownresourcebaseandincreasetheircompetitivenessandbusinessoppor-PäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

7558Handbookondigitalbusinessecosystemstunitiesinthemarketsoutsidetheecosystem.Thismayleadtothepossibilityanddesiretoleavethecurrentecosystem.Asmentioned,sensing,seizing,andtransformingarecapacitiesofdynamiccapabilities.Theyillustratehowdynamiccapabilitiesfunctionasaprocesswheretheopportunitiesarefirstsensed,thenseized,andfinallyimplementedbytransformingtheresourcestofulfillthesensedandseizedopportunities.Theorganizational(marketing,productdevelopment,sales,andsoon)andbusinesscontext,andthenatureofdynamiccapabilitiesrequiredinthespecificcontext,finallydeterminewhattheexactprocessesofsensing,seizing,andtransforminglooklike;thatis,howdynamiccapabilitiesoperateinpractice.HelfatandRaubitschek(2018)emphasizethreetypesofdynamiccapabilitiesnecessaryfortheplatformleaders:innovation,scanning/sensing,andintegrativecapabilities.Innovationcapabilitiesarerelevantforcontinuousdevelopmentofthecoreproductandintegrationofknowledgeandassetsofcomplementorstotheinnovationprocess.Scanning/sensingcapabil-ityisneededfortheproactivecontinuousscanningof“theexternalenvironmentstospotneworuntappedtechnologies,unexploitedmarketneedsandchangesincustomerpreferences,aswellasthethreatofinnovativeentrybynewandexistingplatforms”(HelfatandRaubitschek,2018,p.1395).Thiscapabilitycanexistattheorganizationallevel(inspecificunits)oramongthetopmanagement,whosecognitivecapabilitiestoperceiveandprocesstheinformationarerelevantforthesuccessfulstrategicrenewal.Asforintegrativecapabilities,HelfatandRaubitschek(2018,p.1396)regardthemascentralintheecosystems:“integrativecapabilitiesarefundamentaltothebusinessmodelsandcompetitivesuccessoffirmsatthecenterofthebusinessecosystemsbecausetheyenablefirmstobetterorchestratealignmentofactivitiesandproductswithandamongtheirpartners.”Integrativecapabilitiessupport,forexample,deci-sionsongovernmentstructures,andinteractions(communicationandcoordination)withintheecosystemandwiththeexternalpartners.Theprecedinganalysisofthesensing,seizing,andtransformingcapacitiesofdynamiccapa-bilitiesillustratesthechallengesofmanagingchangeinthecomplexecosystems.Theplatformownerhastosimultaneouslymanagetheinsideandoutsideenvironmentsoftheecosystem.Theyneedtokeepthecomplementorsmotivatedtocontributetothecommonvaluecreation,andtakeintoaccountthatthereisalwaysacertainlevelofcompetitionbetweenthecomple-mentors.Inaddition,theoutsidebusinessenvironmentsandemergingnewopportunitiesandthreatschallengethemanagementoftheecosystem.Theecosystemsneedtoinnovatecontin-uouslyinordertokeepthemselvesviable(Teece,2018),becauseofthecontinuous“threatofcompetitiveinnovation”(HelfatandRaubitschek,2018,p.1393).Thebusinessenvironmentisinconstantfluxandnoecosystemisinisolation.Therearemanyexamples.Oneinterestingcurrentcaseisthebattlebetweenthecompaniesprovidingon-demandstreamingservices.Netflixhasbeenthemarketleaderforsometimeandithaskepttheconsumersattractedbyincreasingitsownin-houseproduction.In2019,Disney+starteditsstreamingservices,andinashorttimeithasincreaseditsmarketsandchallengedthecompetitioninternationallybyofferingDisney-ownedcontentconsistingofmanywell-knownbrands,suchasStarWarsandNationalGeographic.Itwillbeinterestingtoseewhattheconsequencesareintermsofthecompetitionandnewinnovations.Table5.1summarizesthecorepurposesofthesensing,seizing,andtransformingcapacitiesoftheplatformownerandcomplementorsconcerningthebusinessenvironmentoutsideandwithintheecosystem.PäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

76Digitalbusinessecosystemsanddynamiccapabilities59Table5.1Thepurposeofsensing,seizing,andtransformingactivitiesconcerningthebusinessenvironmentoutsideandwithintheecosystemOutsidetheecosystemWithintheecosystemSensingPlatformowner:Platformowner:●Scanningbusinessopportunitiesinthebusiness●Scanningbusinessopportunitieswithintheenvironmentecosystem●ExploringvaluableanduniqueassetprovidersComplementors:Complementors:●Searchingcollaborationopportunitiesfornew●Scanningandexploringnewbusinessopportunitiesinnovationsanduniqueasset-combinationsoutsidetheecosystem(otherecosystems,newmarkets,newinnovations,newpartners)SeizingPlatformowner:Platformowner:●Designingnewfocalbusinessmodelsfortheecosys-●Decisionsonplatformdesignandarchitecturetemtocatchnewmarkets●Decisionsongovernancestructuresandrules●Decisionsondesirableassetcomplementors(from●Decisionsonincentivestructuresforcollaborationoutside)formulti-innovationsComplementors:Complementors:●Designingnewmulti-innovations●Decisionsonparticipationintheecosystem●DecisionsontheconditionsforinnovationsandassetcollaborationTransformingPlatformowner:Platformowner:●Entrepreneurialactions(implementingnewbusiness●Designingintegrationprocessesandpracticestomodels,etc.)oftheecosystemmaycausechangesinenhancecollaborationtheenvironmentoutside●EnhancingcommunicationforbetterComplementors:knowledge-sharinginsidetheecosystem●Co-creationofnewuniqueassetsandinnovationsComplementors:mayimprovethecomplementors’valueinthemarkets●TransformingtheresourcesincollaborationwithoutsidetheecosystemothercomplementorsforbettervaluecreationTheroleofthesensing,seizing,andtransformingcapabilitiesmayalsovarybetweendifferentstagesofecosystemlifecycles(Moore,1993).AccordingtoTeece(2017),strongsensingandseizingarerelevantintheearlystageoftheecosystem.Teeceemphasizesthe“generativesensing”fornewbusinessideasandtheselectionofbusinessmodels.Inthemorematurestagewhentheecosystemisexpandingandenjoysaleadershipposition,thefocusisonsensingnewbusinessopportunitiesandthreatsinthebusinessenvironment.Seizingistargetedatmodify-ingandextendingthebusinessmodels.Transformingcapabilityisrequiredforexecutionandlearning.Atsomepointtheecosystemmayradicallychangeandrequiremajorself-renewal,andthegenerativesensingmovestotheforefront.AsTeece(2017)emphasizes,renewalrequirestheabilitytosimultaneouslyexploitthecurrentbusinessmodelsandexplorenewbusinessopportunitiesandbusinessmodels(onexploitationversusexploration,seeMarch,1991).Thismayrequireamajortransformationoftheecosystemcompositionofassetcom-plementors(Parkeretal.,2017).CONCLUSIONSThischaptercontributestotheunderstandingoftheroleandfunctionsofdynamiccapabilitiesinthedigitalplatform-basedecosystem.Sofar,dynamiccapabilitieshavebeenstudiedmainlyinthecontextoftraditionalcompaniesinwhichthetraditionalhierarchicalpowerstructuresPäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

7760Handbookondigitalbusinessecosystemsandownershipdictatethedecision-makingandmanagerialpractices.Thesensing,seizing,andtransformingcapabilitiesenhancetheindividualfirm’sinterestsandstrategicrenewaltoaddressthechangingbusinessenvironment.However,indigitalecosystemsdynamiccapa-bilitiesneedtonotonlyfacilitatetheorchestrationandrenewalofthewholeecosystem,butalsoenhancetheinterestsofitsindividualparticipatingfirms.Themanagerialchallengeistokeeptheecosystemsandtheirmembersalignedforthefocalgoalbymanagingandbalancingbetweencompetitionandcollaborationwithinandoutsidetheecosystem.Inadditiontocontributingtotheliteratureondynamiccapabilities,thischapteraimsatpro-vidingaframeformanagerstoanalyzewhatkindsofdynamiccapabilitiesarerequiredtokeepthedigitalecosystemscompetitive.Themainmessageisthatthemoredynamicthebusinessenvironmentis,thestrongerdynamiccapabilitiesareneededtoenhanceentrepreneurialinno-vationsandfirms’adaptivity.Therefore,ecosystems,andespeciallytheplatformleaders,needtobuildstrongsensing,seizing,andtransformingprocessesinordertoinnovate.Theplatformleaders,aswellasthemembersoftheplatforms,needtoscanandidentifythebusinessoppor-tunities,toproactivelyseizetheopportunitieswithnewbusinessmodeldesigns,andtransformandaligntheirassetsandcompetencesforthejointvaluecreation.Thereisaconstantneedforrenewalandinnovation.Ihopethisanalysisofdynamiccapabilitiesinthecontextofdigitalbusinessecosystemsinspiresscholarstotacklethisquestionempiricallybyanalyzinghowdynamiccapabilitiesfunctioninthedigitalecosystemsmoreonamicro-foundationallevel.Forinstance,itwouldbeinterestingtoexploreempirically(forexample,asamultiplecasestudy),howthesensing,seizing,andtransformingcapacitiesoperateindifferentkindsofplatforms(innovation,service,contentproduction,marketing),howexactlythecapabilitiesofplatformownersandothermembersoftheecosystemdiffer,orhowthemanagerialcognitivecapabilitiesinfluencethestrategicrenewalinecosystems.Asthebusinessenvironmentcontinuestobecomeevenmoreecosystem-centric,itwillinevitablyprovideanexcitingcontextforcapabilityresearch-erstostudythemanyunexploredquestionsrelatedtodynamiccapabilitiesanddigitalbusinessecosystems.REFERENCESAdner,R.(2017).Ecosystemasstructure:anactionableconstructforstrategy.JournalofManagement,43(1),pp.39–58.Adner,R.andHelfat,C.E.(2003).Corporateeffectsanddynamicmanagerialcapabilities.StrategicManagementJournal,24(10),pp.1011–1025.Augier,M.andTeece,D.J.(2009).Dynamiccapabilitiesandtheroleofmanagersinbusinessstrategyandeconomicperformance.OrganizationScience,20(2),pp.410–421.Barney,J.(1991).Firmresourcesandsustainedcompetitiveadvantage.JournalofManagement,17(1),pp.99–120.Barney,J.B.,KetchenJr,D.J.andWright,M.(2011).Thefutureofresource-basedtheory:revitalizationordecline?JournalofManagement,37(5),1299–1315.Barreto,I.(2010).Dynamiccapabilities:areviewofpastresearchandanagendaforthefuture.JournalofManagement,36(1),pp.256–280.Helfat,C.E.,Finkelstein,S.,Mitchell,W.,Peteraf,M.A.,SinghH.,etal.(2007).DynamicCapabilities:UnderstandingStrategicChangeinOrganizations.Malden,MA:BlackwellPublishing.Helfat,C.E.andPeteraf,M.A.(2009).Understandingdynamiccapabilities:progressalongadevelop-mentalpath.StrategicOrganization,7(1),pp.91–102.PäiviMaijanen-9781839107191DownloadedfromPubFactoryat05/28/202209:55:57AMviaColumbiaUniversityLibrary

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807.Organizationsasecosystems:thecaseoftelevisionproductionGillianDoyleINTRODUCTIONTheconceptofecosystemsisoftendeployedinanalysisofpatternsandmodesofinterdepend-encebetweenarangeofactorsacrossthedigitalbusinessenvironment(Coralloetal.,2007;Valdez-De-Leon,2019).However,asthischapterargues,thegrowingscaleandcomplexityofsomedigitalorganizationsissuchthattheycanbeseenasecosystemsintheirownright.Asthespreadofdigitaltechnologieshastransformedmarketsandbusinessmodels,oneformofevolutionaryresponseamongstorganizationsseekingtosustaintheircompetitivenesshasbeentodevelopacomplexofin-housesubsidiarycomponentsthatoperatecooperativelyandinterdependentlywithinanoverarchingcorporatestructureor“ecosystem.”DrawingonoriginalempiricalresearchfundedbytheUnitedKingdom(UK)EconomicandSocialResearchCouncilintorecenttransformationsacrossthetelevisionindustry,thischapterexamineshowchangingdigitaldistributiontechnologieshaveencouragedconsol-idationandstrategiesofhorizontal,vertical,andtransnationalexpansionintheproductionsector.Throughtakeoversandconsolidation,theemergenceofenlargedproductionentitiescharacterizedbymyriadsofinterdependentin-houseoperatingsubsidiarieshasresultedinbusinessorganizationsthatcanbeseenasfunctioningecosystems.Thischapterarguesthat,whiletheemergenceofconsolidatedbusinessentitiesthatfacilitatesymbiosisbetweenmul-tiplein-housecomponentstotheadvantageofallrepresentsalogicalstrategicresponsetodigitizationandglobalization,italsoraisespotentialconcernaboutthefuturesustainabilityandcompetitivenessofan“independent”productionsector.Thefocusinthischapterisonthreequestions.Whatmotiveshavedrivenrecentstrategiesofacquisitionandreconfigurationsofownershipinthetelevisionproductionsector?Towhatextentdoemergentorganizationsconformwiththeconceptofecosystems?Doesthedominanceofso-called“super-indies”intheproductionsectorposeathreatto“independent”production?MethodsofresearchconsistedofanalysisofcompanystatementsandfinancialaccountsforasampleofleadingUK-basedproductioncompaniesoveran11-yearperiodfrom2006to2017,plusinterviewswitharangeofproducersandindustryexperts.Interviewswerecarriedoutin2018and2019withseniorexecutivesatleadingLondon-basedproductioncom-panies,andwithmanagersatproductionsubsidiariesaswellaswithexperiencedcorporatefinancierswhohavespecializedintakeoversintheUKandinternationaltelevisionproductionindustry.Televisionproductioncompaniescomeinmanyshapesandsizes(Paterson,2017)andareoftendefinedbythegenreofcontenttheymake.IntheUK,thesectoriscomprisedofmanylargeentitiesbutisalsohometoanabundanceofverysmallindependentproductioncompaniesor“indies”(Mediatique,2015;Oliver&Ohlbaum,2018).Theterm“independ-ent”generallydistinguishescompaniesthatareautonomousfromproductionoperations80GillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

81Organizationsasecosystems:thecaseoftelevisionproduction81thatareintegratedwithinorcross-ownedbybroadcastorganizations.Anotherprominentcorporateownershipconfigurationinthetelevisionproductionsectoristheconglomerateor“super-indie”(Chalaby,2010;Esser,2016).Super-indiesareeffectivelyclustersofindepend-entproductionbusinessesorsubsidiarylabelsoperating,withlevelsofautonomythatvaryfromonegrouptoanother,underthecollectiveownershipofconsolidatedparentcompanies(Doyleetal.,2021).Thescaleofrevenuesearnedbysomesuper-indiesnowexceedsthatofmajorbroadcastorganizationsandmanyhavewell-developedin-houseinternationaldistribu-tionbusinesses,makingtheseverypowerfulplayersinthetelevisionlandscape(Lee,2018).Theresearchpresentedinthischapter,whichseekstobuildunderstandingofthenatureofrelationshipbetweenacquisitionstrategies,corporatereconfigurationandenhancedbusinessperformanceonthepartofenlarged,diversifiedtransnationaltelevisionproductioncompa-nies,ispartofawiderprojectwhichinvolvedamultiplecasestudy-basedresearchdesign.Thecasestudycompanieswefocusedonincludedsomeindies(HartswoodFilm,HatTrickProductions,andKeoFilms)someverticallyintegratedentities(suchasbroadcasterITVanditssubsidiaryMammothScreen;andpay-TVoperatorSkyVisionanditssubsidiariesBlast!FilmsandLoveProductions)plussomeconsolidatedclustersandsuper-indiesandtheirsub-sidiaries(forexample,EndemolShineanditssubsidiaryKudos;All3MediaanditssubsidiaryLion;TinopolisanditssubsidiaryFirecracker;andSonyPicturesTelevisionanditssubsidiaryLeftBank).Inthischapterparticularattentionispaidtosuper-indiessuchasAll3MediaandEndemolShinewhoseinterconnectedandcomplexorganizationalforms,throughprovidingarangeofadvantagesthatcontributetothesustainabilityoftheentityasawhole,havecon-tributedtoaperceptionthatsuchentitiesnowrepresentsuccessfullyfunctioningcorporateecosystems(Graboff,citedinClarke,2017).FindingsofthewiderUKEconomicandSocialResearchCouncil-fundedstudyofwhichthisisapart,whichareconcernedwithrecenttransformationsinownershipacrossthetel-evisionproductionindustryandimplicationsforbusiness,content,andpolicy-making,arereportedinfullelsewhere(Doyle,2019;DoyleandBarr,2019;Doyleetal.,2021).Inthischapter,thespecificfocusisonhow,aspartofadaptingtothechallengesofamorecompeti-tiveandglobalizedbusinessenvironment,firmsinthetelevisionproductionsectorareincreas-inglyadoptingformsbasedaroundownershipofportfoliosofproductionlabels,internationalnetworksofsubsidiaries,andof(vertically)complementarycompetencieswhichfacilitatemutuallybeneficialexchangeandcanbereconfiguredaroundemergentneeds.Throughtakeoversandconsolidation,theemergenceofenlargedproductionentitiescharacterizedbynumerousinterdependentin-houseoperatingsubsidiarieshasresultedinbusinessorganiza-tionsthat,tosomeextentatleast,canbeseenasecosystemsintheirownright.Tothatextent,itwillbearguedthatthebiologicalmetaphorofecosystemshasbecomeincreasinglypertinenttoorganizationsthatpredominateinthissector.ECOSYSTEMS:ANEXPEDIENTMETAPHORTheterm“ecosystems”hasbeenusedwithincreasingregularityinrecentyearsinreferencetobusinessenvironments,inparticularthedigitalbusinessenvironment(Coralloetal.,2007).Ecosystemsusuallyconnotesystemsorcommunitiesofactorsorstakeholdersthatoperateinwaysthatareinterconnected,cooperativeandinterdependent.ThenotionofaninterconnectedbusinessenvironmenthasbecomemorerelevantbecauseoftheriseofdigitalGillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

8282Handbookondigitalbusinessecosystemsnetworks(Valdez-De-Leon,2019).Somestudieshavehighlightedhowtheecosystemconceptisespeciallyrelevantincreativeindustrieswherecollaborationandco-creationareroutineaspectsoftheenvironment(GalateanuandAvasilcai,2017).Othershaveanalyzeduseoftheconceptinthecontextofmedia,notinghowtheideaofecosystemsisoftencloselyassociatedwithfast-changingenvironmentsandwithplatformizationofmarkets(Kostovskaetal.,2021).Althoughtheconceptofanecosystemhasbeenaroundformanyyears,itlacksacleardefinition.AsKostovskaetal.(2021)argue,itis“awidespreadyetambiguousconcept.”Foroneofthepioneersofanalysisofbusinessasecosystems,JamesMoore,theterm“businessecosystem”refersto“intentionalcommunitiesofeconomicactorswhoseindividualbusinessactivitiesshareinsomelargemeasurethefateofthewholecommunity”(Moore,2006,p.37).IansitiandLevien(2004,p.35)placeemphasisonfragmentation,interconnectedness,coop-eration,andcompetitionasfeaturesofbusinessecosystems.ForPeltoniemiandVuori(2004,p.2),typicalfeaturesinclude“self-organization,emergence,co-evolution,emergence,andadaptation.”Inshort,businessecosystemsaregenerallythoughttoinvolvemultipleinterde-pendentactors,interactingandcooperatinginwaysthatsustainthecommonwhole.Asfarasindividualorganizationsareconcerned,IansitiandLevien(2004)identifyanumberofdifferentsortsofrolesthatcompaniescanplaywithinbusinessecosystems,forexampleas“keystones”orelseasnicheplayers.However,thischapterarguesthat,becauseoftheincreasingscaleandcomplexityofsomeemergentorganizations,themetaphoroftheecosystemcanusefullybeappliedtotheorganizationitselfasanentity,ratherthanmerelytotheenvironmentwithinwhichitisastakeholder.Thischapterthereforebuildsonearlierresearchwhichhashighlightedhowecosystem(asopposedtomoretraditionalhierarchical)organizationalformshavebecomemorefittingasfirmsseektomasterthechallengesofthedigitalbusinessenvironment(Moore,2006,p.34).Theecosystemmetaphordoesnotinallwaysstretcheasilytoorganizations.Organizations,unlikebiologicalecosystems,donotform“naturally”orspontaneously.Thegeneralassumption,basedonsystemstheoryandcomplexity,thatecosystemsareself-organizing(Mitleton-Kelly,2003)clearlydoesnotapplysincetypicallyorganizationsarepurposivelydirectedandmanaged,oftenwithcentralizedstructures.Ontheotherhand,totheextentthatsomeemergentorganizationsarecomplex,adaptivesystemsmadeupofamyriadofintercon-nectedoperatingsubsidiaries,interdependentandco-evolving,thentheuseoftheecosystemconceptmaypotentiallyoffervaluablemanagerialinsights.RECONFIGURINGTHROUGHMERGERANDACQUISITION(M&A)ACTIVITYTherelevanceoftheecosystemconcept,whenitcomestothetelevisionproductionsector,stemsfromtherelationshipbetweenacquisitionstrategies,corporatereconfiguration,andenhancedbusinessperformanceonthepartofenlarged,diversifiedcompanieswithmultiplesubsidiariesacrossarangeofinternationalterritories,suchas,forexample,EndemolShineandAll3Media.AsKünghasargued,recentchangesinorganizationalformsinthemediaunderlinelinksbetween“theenvironment,strategyandstructure”(Küng,2017,p.173).WhenthespecificmotivesthathaveencouragedrecentwavesofM&Aactivityinthetelevisionproductionsectorareexamined,whatemergesisthatownershipofacollectionofsubsidiaryoperations—operationsthat,insomewaysatleast,exchange,interact,and/orfunctioninter-GillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

83Organizationsasecosystems:thecaseoftelevisionproduction83dependentlyasanecosystem—reducesrisksandstrengthensthebusinessperformanceandeconomicsustainabilityofparentorganizationsinthetelevisionproductionsector.Evidencegatheredthroughinterviewswithleadingexecutivesacrossthetelevisionproductionindustryconfirmsthattheconfigurationofaproductioncompany—thatis,itsscale,verticalstructure,andform,andwhetheritsactivitiesaredomesticortransnational—exertsamajorinfluenceoveritsbusinessperformance.Scale,Diversification,andRiskManagementThebenefitsofreconfiguringtheorganizationthroughmakingcorporateacquisitions—forexample,buyingupadditionalproductionsubsidiariesthataddtothemix—oftenrelatetothescaleofoperationsoflargetelevisionproductioncompanies.Largerproductionfirmsandcon-solidatedsuper-indiestendtobenefitfromeconomiesofscaleinproduction,greaterfinancialclout,andtheirabilitytospreadrisk.Itiswidelyrecognizedthattelevisionproductionisariskyandunpredictablebusiness,andthereforeoneofthemainadvantagesofexpansionthroughmakingacquisitionsisriskmitigation.Owningseveralcompaniesallowsforcross-subsidizationandsmoothingoutoftheoverallfinancialperformanceofthegroupovertime,allowingforbetterplanning.AsthegroupcreativedirectoratparentcompanyTinopolis(aninternationalproductionanddistri-butiongroupwithaportfoliospanning13contentproductionsubsidiaries)putit,asignificantadvantageofgreaterscalethroughcross-ownershipofseveralproductionssubsidiariesisthatthe:peaksandtroughswhichareinevitableinTVproductioncanbeevenedoutsothatifoneofthemajorcompaniesishavingabadtime…someoneelseisdoingwell…itenablesyoutonotpanicaboutit,inashorttermway,butactuallytakeaslightlylongerview.(Willis,Interview,London,May2018)Amajoradvantageofcross-owningaportfolioofseveraldifferentproductioncompaniesorlabelsisclearlythatithelpstospreadrisk.Owningarangeofproductioncompaniesthatspe-cializeindifferinggenresofoutput(forexample,drama,factualentertainment)helpstoguardagainsttheriskofunexpecteddownturnsinthepopularityofoneoranothertypeofprogram.AccordingtotheChiefExecutiveOfficer(CEO)atAll3Media(asuper-indiecomprising24productioncompaniesintheUKandaroundtheworld,plusdistributioninterests)havingabalancedmixintermsofgenresis“ahugepositive”andsohercompany’sstrategyoverrecentyearshasbeentobuyupadditional“verygoodscriptedbusinesses”toensureasuitablebalance“betweenscriptedandnon-scripted”(ornon-fiction)intheparentcompany’sportfolio(Turton,Interview,London,July2018).Anotherreasonwhyparentcompaniesarekeentoreconfigurethroughbuyingupnumerousproductionsubsidiariesisbecauseamixedportfolioisconducivetocreativereplenishment.Owningarangeofproductioncompanieshelpstoensureaccess,somewherewithintheorgan-ization,tothebesttalentacrosseachgenre.AccordingtotheManagingDirector(MD)ofAvalon,oneofthefewremainingsizeableandsuccessfulindependentproductioncompaniesintheUK,creativerenewalhasbeenakeymotivedrivingacquisitions:“bigentertainmentorganizationsfindithardtohaveinterestingideas.Andsotheypaywhatappeartobehighmultiplesbecausetheybelievethey’rebuyingafutureideathatwillturntheirbusiness”(Thoday,Interview,London,March2019)GillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

8484HandbookondigitalbusinessecosystemsLikewise,fortheco-CEOofExpectationEntertainmentandformerchiefexecutiveofEndemolUK(nowpartofEndemolShinewhich,inturn,isnowownedbyBanijay),con-solidatedcross-ownershipofalargeportfolioofproductionsubsidiarieshelpstodefendthecompanyagainstriskand,throughsupportingcreativerenewalandreplenishingintellectualpropertyrights(IPRs),itincreasesthe“chancesofthenexthitcomingfromyourcompany”(Hincks,Interview,London,July2018).TheformerChiefExecutiveofdramaproducerKudos,asubsidiaryofEndemolShine,arguesthat,because“thereisalimit”tohowmuchanyindividualproductionsubsidiaryorlabelcangrow,ownershipofawholeportfolioistheonlywaytoachievesustainedgrowthfortheorganizationasawhole(Featherstone,Interview,London,April2019).AstheCEOofAll3Mediaputit,buildingscalethroughownershipofabroadandbalancedportfolioofoutputsandproductionsubsidiariesiscentraltothestrengthandsustainabilityofanytelevisionproductionbusiness:[Scale]makesyoumoreresilient.YourbroaderportfoliowhichyouwilltendtohaveinabiggerbusinessmeansthatifyouloseapieceofIP[intellectualproperty]oracommissionorapieceoftalent,youcanbouncebackbecauseyouhaveotherthingsthatpaythebills.So,toanextentitisaboutriskmanagementspreadoverabroaderportfolioofpeopleandprograms.Anditisdefinitelyhelpfulbeingbiggerinthatrespect.Itjustsimplymakesyoumoreresilient.(Turton,Interview,London,July2018)Oneoftheprincipalsourcesofadvantageforaconsolidatedsuper-indieisthat,thankstoitssecurefinancialposition,itcanprovideeachofitsproductionsubsidiarieswithfundingtofinancedevelopmentofnewshows.AccordingtotheMDofproductioncompanyWonderhoodStudios—whopreviouslyworkedincorporatefinanceatGrantThorntonandwasafoundingmemberoftheinvestmentbankAboutCorporateFinance(ACF),advisinginnumerousM&Atransactionsintheproductionsector—becauseaccesstofinancingisrelativelydifficultforsmallerindependentproductioncompanies,theabilitytodeficitfinancedevelopmentandproductionisanimportantbenefitforcompaniesthatformpartofanenlargedorganizationalentity(Dosani,Interview,London,January2019).Theviewthatinabusinessenvironmentcharacterizedbyuncertainty,productionlabelsbenefitfromthefinancialsecurityofhavingawell-resourcedparentandthishelpswithmakingmoreambitiouscontent,iswidelycorrob-oratedbyproducers.TheHeadofBusinessAffairsatdramaproductioncompanyMammothScreen,whichisownedbyITV,saysthat“oneofthebigattractionstohavinganacquirer…washavingapotofmoneytodevelopourownprojects”(Penny,Interview,London,January2019).AccordingtotheSeniorBusinessandLegalAffairsManageratdramaproducerLeftBankPictures,whichwasboughtbySonyPicturesTVInternational,when“youhavethebackingofalargecorporationthatgivesyouabitmoreclout[and]security.Itgivesyoutheabilitytorunatsomebigprojectswithouttoomuchconcern”(Goldberg,Interview,London,November2018).FortheformerPresidentoftheacquisitiveEndemolShineGroup,aggre-gatedownershipfosterssuccessbyfacilitatingthepositionofindividualsubsidiariesthrough:“providingacushion,becauseultimatelyyou’renotlookingatsurvivalonadailybasis…[and]youmightgetsomeleveragethroughexistingrelationships…Youwillgetmoreinvest-mentandbeabletotakemorerisksinyourideas’(Hincks,Interview,London,July2018).Theconfigurationadoptedbylargerproductionfirmsandconsolidatedsuper-indieswhotypicallyownseveralsubsidiariesmeansthattheyenjoyarangeofadvantageswhichstemnotonlyfromeconomiesofscale,risk-spreading,knowledge-sharing,andopportunitiesforGillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

85Organizationsasecosystems:thecaseoftelevisionproduction85creativerenewalbutalsofrombeingabletodeficit-financeproduction,buildupsubstantiallibraryofIPRs,andacquirethestatusofbeingimportantsuppliersinthetelevisionindustrywithassociatednegotiatingleverage(Doyleetal.,2021).VerticalIntegrationSettingasideadvantagesrelatedtoscale,acquisitionsinthetelevisionproductionsectorarefrequentlymotivatedbystrategicmotivesrelatedtothedesirabilityofaverticallyintegratedstructure.Contentserviceprovidersanddistributorsneedsecureaccesstogoodcontent,whilecontent-makersneedaccesstomarkets.Forbroadcasterswhicharefacedwithincreasingcompetitionfromdigitalrivalsandfromsubscriptionvideo-on-demand(SVoD)servicessuchasNetflix,verticalexpansionupstreamintotelevisioncontentcreationmakesgreatstrategicsense(Esser,2016).Consequently,many,includingthemajorUnitedStatesnetworks,havebecome“laserfocused”ontheneedtoacquireownershipofcontentproductionandIPRsinordertosustain“maximumcontrolovermultiplatformdistribution”(Littleton,2016,p.42).Broadcastersaregenerallykeentoincreaselevelsofcontroloversuppliesofcontent,andintheUKthathasmotivatedfree-to-airbroadcasterITVandUK-basedpay-TVplatformSkytoacquirenumerousindependentproductioncompaniesoverrecentyears(Davies,2016).Controlovercontentproductionisneedednotjusttoservicetheneedsoftheirownchannels,butalsotokeepthatcontentawayfromrivalssuchasNetflix,asdirectoroftelevisionatITVexplains:thewaywelookedatitwas,inaperfectworld…youwanttoownthecontentthatyou’recommis-sioning.Andfromthemomentyoucommissionthisprogrammethroughtotheendofitslifeyouwanttobecontinuingtoearnoffthatintellectualproperty…AndfortheparentcompanyITV,almostasimportantasthemoney—thoughprobablynotasimportant—isthecontrolthatyouhaveoverit.Sothebroadcastercansay,“Right,Idon’twantthisappearingonanotherchannelforxyears.”Whereasifyou’redealingwithanindependent,that’sanegotiation.(Lygo,Interview,London,December2018)WhileITV’sstrategyofacquiringindependentproductioncompanieshasbeendrivenatleastpartlybyawishtodiversifyrevenuesawayfromtelevisionadvertising,whichisindecline,andpartlybyconcernsaboutensuringfutureaccesstoapipelineofcontentforitsownchannels,averydifferentsetofmotiveshasguidedacquisitionsofindiesatUKpay-TVrivalSky.TheManagingDirectoratSky’sinternationaldistributionbusinessSkyVision,whichhasconductedaseriesofacquisitions,explainsthattheaimhasbeentodevelopabusinessmodelbasedonownershipandexploitationofcontentrights(Millichip,Interview,London,December2018).InvestmentinanumberofIPR-generatingproductioncompaniessuchasLoveProductionsandBlast!FilmshasenabledSkytobuildthesuccessofitsinternationaldistributionbusiness.Theneedforcontentthatcanbefedintothedistributionarmofthebusinessisfrequentlythemainmotiveunderlyingacquisitionsofindependentproductioncompaniesbyconsoli-datedsuper-indiesorlargertelevisiongroups.Acquisitionshavebeendrivenbytheambitionofverticallyintegrateddistributor-producers“tryingtomoveupthevaluechainsothatyoukeepasmuchofthevalueoftheintellectualproperty(IP)thathasbeencreatedasyoupos-siblycan”(Hincks,Interview,London,July2018).AnexperiencedcorporatefinanciersumsGillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

8686Handbookondigitalbusinessecosystemsupthestrategiccoherenceofcross-ownershipofdistributionplusarangeofIPR-generatingproductioncompanies,asfollows:Thebiggroups,theconsolidators,havecertainlyseen[acquisitionsofindies]asstrategicbecausethewaytheyhavetypicallyoperatedisthattheyhaveadistributionbusinessinthemiddle.Like,All3MediahassomethingcalledAll3MediaInternational.AndthejobofAll3MediaInternationalistotakethecontentortheIPwhichisownedbythatgroupandsellitaroundtheworld.Andsoifyou’vegotthatinthemiddle—ifyoucanbuyindependentcompanieswhoareeffectivelyfeedingcontenttothecentreandthenthecentreissellingallaroundtheworld—that’swheretheyseeitasasortofa“2plus2makes5.”(Dosani,Interview,London,January2019)TheCEOofsuper-indieAll3Mediaalsoconfirmsthatakeymotiveforbuildingscalethroughacquisitionofnewproductionsubsidiariesisto“replenishtheIPcatalogue”whichfeedsthroughtotheinternationaldistributionbusiness(Turton,Interview,London,July2018).AccordingtotheHeadofAcquisitionsatEndemolShineInternational,“thefreemarketforIP…isverysmall”and,since“youneedalargeamountofcontenttodriveyourdistributionmachine,”ownershipofproductioncompaniesisveryhelpful:“Youneedtoownthatsupplychainandthat’swhatit’sabout.Owningthosecompaniesisjustfillingyour[distribution]pipelineatlowerrisk”(Cox,Interview,London,May2018).InternationalizationOneofthemajorforcespropellingrecentM&AactivityinthetelevisionindustryhasbeenthepursuitofvaluethroughmarryingIPRgenerationwithincreasingopportunitiesfordistributionacrossinternationalterritories.Thishasfueledstrategiesofverticalandhorizontalexpansionatatransnationallevelamongstleadingsuper-indiesinrecentyears(Esser,2016).“Havingaready-madenetwork”in-housewhichfacilitatesinternationaldistributionofhitshowsisamajorsourceofadvantage,accordingtotheformerCEOofEndemolUKandproducerofmanyinternationallysuccessfulformatsincludingBigBrother(Bazalgette,Interview,London,April2019).ThestrategiccomplementaritybetweenIPRgenerationandinternationaldistributionexplainswhy,attheBBC,ithasbeenthecorporation’sinternationaldistributionarmwhichhasledonacquisitionsofindependenttelevisionproductioncompaniesoverrecentyears.AccordingtotheCEOofinvestmentbankACF,whichspecializesinbuyingandsellingproductioncompanies,therearemajorbusinessadvantagesfortelevisionproductionconglomeratesthatconsistofbothaclusterofproductionsubsidiariesplusawell-developedin-houseinternationaldistributionarm:Ifyou’venowgotabiginternationaldistributionteam,you’regoingtobeinvitedalongtothefairs;you’regoingtogotoMIPCOMandMIPTV;they’regoingtopushyourcontentintointernationalmarketsandhopefullyyou’regoingtogetaccesstomoreinternationalmarketsthroughthe[group’s]network.So[forproductionsubsidiaries]there’sdefinitelygoingtobeanincreaseinexposureontheinternationalfront.(Dey,Interview,Edinburgh/LosAngeles,February2019)Clearly,averticallyintegratedstructurefacilitatesmoreeffectiveexploitationofIPRs,butanorganizationalformthatpromotescooperationandexchangebetweeninternationalsubsidiar-iesbringsadditionaladvantagesthrough,forexample,sharingmarketintelligenceacrosswhatDeyreferstoasthegroup’s“network.”Beingpartofaglobalproductionentitybringsusefulinsightsandmarketintelligence;forexample,aboutwhatsortofcontentisindevelopmentGillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

87Organizationsasecosystems:thecaseoftelevisionproduction87andindemandacrosstheglobe.Thefindingsofourresearchunderlinethesignificanceofknowledgeasasourceofcompetitiveadvantageformediaorganizations.Theyalsocorrobo-rateotherrecentstudieswhichsuggestthattheformationoftransnationalconglomeratesinthetelevisionproductionsectorispropelledbypursuitof“profitable,reproduciblepracticesandIPRs”(VanKeulenetal.,2020,p.749).FROMORGANZATIONALCONFIGURATIONTOECOSYSTEMWhen,in2017,super-indieAll3MediaannouncedtheacquisitionoftwonewproductionsubsidiariesfromDiscovery,thelatter’sHeadofGlobalBusinessandLegalAffairswentontosaythatthedealmadesensebecauseAll3Media’s“dynamicandcreativeecosystem”was“thebestenvironmentinwhichtonurturefurthergrowthandsuccess”forthetwonewlyacquiredcompanies,RawandBetty(Graboff,citedinClarke,2017).Hisuseofthismetaphorunderlineshow,onaccountoftheirgrowingscaleandcomplexity,someconsolidatedtelevi-sionproductiongroupsorsuper-indiesarenowregardedasecosystems,andtheircapacitytofunctionasecosystemshelpstosustaintheirsuccessandcompetitiveness.Astheevidencepresentedbrieflyinthischaptershows,themotiveswhichhavedrivenstrategiesofacquisitionandreconfigurationsofownershipinthetelevisionproductionsectoroverrecentyearsarecenteredaroundthreepotentialsourcesofstrategicandeconomicadvan-tage:scale,verticalstructure,andinternationalreach.Thesefindingsareanalyzedinfurtherdepthanddetailelsewhere(Doyleetal.,2021).Butthekeypointhereisthatrecentacquisitionstrategieshavebeenpredicatedonageneralunderstandingacrossthesectorandamongstinvestmentspecialiststhat,inthedigitalera,organizationalformswhich,akintoecosystems,offerenvironmentsthatfosterinteraction,co-dependence,coopetition,andexchangebetweensubsidiariesandacrossnetworksareasourceofcompetitiveadvantage.ManytakeoversofUKindependentcompanieshavebeendrivenbytheaspirationsofambi-tiousproductionentitieswhoseaimistobecomeconsolidatedsuper-indiesthatcanharnessandexploitadvantagesofscalewhile,atthesame,offeringanenvironmentinwhichinterac-tionamongstandbetweendifferinglabelsandthewidercommissioningenvironmentenablessuchadvantagesasinformation-sharingandthespreadingofrisks.Inanumberofcasesthechiefmotiveformakingacquisitionshasbeenverticalintegration,bringingtogetherwithintheecosystemoftheenlargedgroupsubsidiaryoperations(forexample,incontent-makingplusbroadcasting,orcontent-makingplusdistribution)thatarenotonlycomplementarybutalsohighlyinterdependent.Takeoversinthetelevisionproductionsectorhavealsobeendrivenbythestrategicaimofbringingtogethernetworksofsubsidiariesacrossarangeofinternationalterritories,extendingbothverticalandglobalreach.Somemanagementtheoristshavearguedthat,withtheemergenceofdigitalplatformsandbusinessessuchasAlibabawhoseaim,veryexplicitly,istobeanecosystem,theframeworkforunderstandingvaluecreationinthemodernindustrialeraoughttomove“fromvaluechainstodigitalecosystems”(Valdez-de-Leon,2019,p.43).Fewifanytelevisioncompa-nieshavecorporatemissionstatementsthatexplicitlyspecifytheambitionofbecominganecosystem.However,asthefindingspresentedaboveshow,itremainsthatrecentstrategiesofacquisitionandofreconfigurationofownershipinthetelevisionproductionsectorhaveresultedintheformationoforganizationalentitieswhichexhibitfeaturescommonlyassoci-atedwithecosystems.GillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

8888HandbookondigitalbusinessecosystemsManyconsolidatedsuper-indies—forexampleAll3Media,EndemolShine,andTinopolis—arecomprisedofacomplexnetworkofsubsidiarycompanieswhoseconnectionstooneanotherandtotheirwiderenvironment,andwhosepropensitiestointeractandexchange,providearangeofbenefitstotheoverallcorporateentitythatpromotecompetitiveness,success,andeconomicsustainability.Thereasonwhytelevisionproductionentitiesarerecon-figuringisatleastpartlyexplainedbytheinsight,firstformalizedbyeconomistRonaldCoase(1937),thatintegratingtransactionswithinthefirmcanbelesscostlyandriskythanleavingthemtothemarketplace.So,althoughtheexplanatorypoweroftraditionaltheoriesgoverningpropensitiestowardsacquisitionandconsolidation—suchas,ineconomics,inthedomainofindustrialorganization(Coase,1937;McEachern,2010;WilliamsonandWinter,1993),orinmediaanalysis,globalvaluechains(Chalaby,2016,2019;EvensandDonders,2018)—isstillasimportantaseverinunderstandingmediacorporatestrategies,notionsofthe“ecosystem”oforganizationalconfigurations,thatentailinterconnectedandinterdependentnetworksoperatingcomponents,alsoofferaframeworkwhichispotentiallyofvalueinthedigitalerainunderstandinghowmediacompaniesviefordominance.Kostovskaetal.arguethat“comparedtobusinessecosystems,mediaecosystemsoftenaremuchmoredeeplyembeddedinnationalboundariesandaffectedbygovernments’regula-tionsandinterventions”(Kostovskaetal.,2021).However,thisisnottrueforthetelevisionproductionsector,whereecosystemstypicallyextendbeyondnationalboundariesandindeed,amajorpartoftheirraisond’êtreistofacilitatecross-borderexchangesofknowledgeandstrategiesofglobalizeddistribution.Historically,theorizationaroundmultinationalenterprisestendedtofocusontransactioncosts(McManus,1972;BuckleyandCasson,1976),butmorerecenttheoreticalworkhasemphasizedtheroleofnetworksandglobalvaluechains.Inthecontextoftelevisionproduction,consolidatedproductiongroupswhoformintointernationalnetworksthatenablecomponentstowork“closelytogether”andfosterinterdependenciesandknowledgeflowswillenjoyenhancedcreativityandprofitability(vanKeulenetal.,2020).Findingspresentedherepointtothemanywaysthatexpansioniststrategiescanstrengthenthebusinessperformanceofenlargedtelevisionproductionentities.Oneinevitablecorollaryisthatcompaniesthatchoosetoremainassmallstand-aloneorindependentoperations,andthatforegothebenefitsenjoyedbyrivalsthatareintegratedwithinconsolidatedsuper-groups,arelikelytofindthemselvesatadisadvantage.Atatimewhentheperformanceofcreativeenterprisesissomethingthatmostgovernmentsaroundtheglobeareverysensitivelyattunedto,anypotentialimpedimenttothedevelopmentofindependentcreativeproducersisliabletowarrantattention(CBI,2019).ForexampleintheUKarecentreportbytheDepartmentofTradeandInvestment(UKTI)highlightedasaproblemthefactthatcreativebusinesseswhichachieveearlysuccessarefrequentlyboughtupbyinternationalplayers,andthatlocalcompa-niesfinditdifficulttoscaleupandremainindependent(CreateUK,2014).Aretheadvantagesthataccruetoenlargedgroupsinthetelevisionproductionsectorsogreatastosuggestthat,outsideoftheecosystemsprovidedbyentitiessuchasAll3MediaandEndemolShine,survivalforindependentproducersisimpossible?Ourempiricalfindings,inlinewithearlierstudies(Oliver&Ohlbaum,2015,p.59),clearlysuggestthatconsolidatedconglomeratesorso-calledsuper-indiesenjoysubstantialadvan-tages.However,itcannotbeassumedthatscaleintheproductionsectoralwaysconfersadvan-tages(Bourreauetal.,2002).NorthandOliverhavearguedthat,whereasbothlarger-sizedsuper-indieswhichhave“scaleandfinancialresources”andsmallnicheplayerswhoare“streamlinedenough”toekeoutalivingfromahandfulofcommissionsarewellplacedforGillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

89Organizationsasecosystems:thecaseoftelevisionproduction89survival,itismedium-sizedtelevisionproductioncompaniesintheUKthatarelikelytostruggleforalivinginanincreasinglycompetitivelandscape(NorthandOliver,2010,p.35).Mostproductionexecutiveswhoparticipatedinourresearchtooktheviewthat,despitethemanyadvantagesassociatedwithbeingpartofalargergroup,televisionproductionisanactiv-ityinwhichsmallnicheplayerscansurvivewell.TheconceptofaminimumefficientscaleorMES(thelowestoutputlevelnecessaryinanygivensectortoachievealltheeconomiesofscalerequiredinordertooperateefficiently)doesnotapplytothetelevisionproductionsector(Doyleetal.,2021),andsurvivaloutsideofacorporateecosystemforproducerswhoaregenuinelyindependentisentirelyfeasible.Thisispartlybecause,asearlierresearchaboutcreativeindustrieshasnoted,“thecon-ceptionstageoftextsremainssmallscaleandrelativelyinexpensive”thisfacilitatesthecontinuedpresenceofsmallcompanies,evenaslargecorporationsbecomemoredominant(Hesmondhalgh,2013,p.209).AstheHeadofBusinessAffairsatMammothScreenpointsout,whenitcomestotelevisionproduction,“thebarrierstoentryarenotthathighand,whilesomecompaniesdisappearorwither,you’reconstantlykeptonyourfeet[bythearrivalofnewstart-ups]”(Penny,Interview,London,January2019).ThePresidentofInternationalProductionatSonyPicturesTelevision(SPTV),observesthatthereisacontrastbetweensmall“lifestyle”productioncompanieswhoaredeterminedtoremainindependentandwanttodo“oneortwoprojectsayear”versus“business”-orientatedcompanieswhichare“ambitiousforscale”andthriveonbeingpartofabiggergroup,butsaysthatbothapproacheswork“abso-lutelyfine”(Garvie,Interview,London,May2018).TheSeniorBusinessandLegalAffairsManageratSonysubsidiaryLeftBankPicturesagreesthatitisfeasibleforsmallandlow-cost“productioncompaniesthatconsistofahandfulofpeople”tooperatesuccessfullyonacom-mercialbasis(Goldberg,Interview,London,November2018).Despitethemanyadvantagesenjoyedbylarge-scaleconsolidatedtelevisionproductionentities,thereisplentifulevidencethatthissectorremainsopentomarketentrybynewfirms(Ofcom,2019;Oliver&Ohlbaum,2019),andthereforetonewvoicesandtocreativerenewal.However,asLeehasobserved,settingaside“high-profilecommercialsuccessstoriesamongthe‘super-indies’and‘mega-indies’”(Lee,2018,p.43),itremainsthatmanysmallerindiesstruggleforfinancialsurvival.Whatisclearisthatanunlevelplayingfieldexistsbetweenproductioncompaniesthat,aspartofenlargedentities,enjoyadvantageswhenitcomestofinancing,distribution,accesstointernationalmarkets,information,andsoon,versussmallindies.Forexample,forindies,itismuchmorechallengingthanitisforcompet-itorswhoarepartofasizeable,well-connectednetworkofcompaniestoacquireknowledgeaboutthepricingofcontentthatcaninformandstrengthentheirnegotiatingpositionsincommissioningdeals.Soproductioncompaniesthat,asaresultofbeingacquired,becomepartofasymbioticin-houseecosystemarelikelytobenefitthroughinformationalasymmetriesstemmingfromtheirsuperiormarketknowledgeaswellasahostofotherbenefits(Doyleetal.,2021).Thisfindingisinlinewithearlierresearchwhichhaspointedtothegrowingsignificanceofinformation,knowledge,andcapacityforlearningassourcesoforganizationaladvantage(Barney,2000;Namada,2018).AssuggestedbyKostovskaetal.,“theecosystemconceptisofincreasinginterestamongmediamanagementandmediaeconomics”researchers(Kostovskaetal.,2021).Whereasearliertheorizationintherealmofdigitalbusinessecosystemsisgenerallybasedontheideaofthebusinessenvironmentasanecosystem,andoftheecosystemencompassingasetofexternalactorsthatcontributetothefocalfirm’svalueproposition(Kapoor,2018),thisGillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

9090Handbookondigitalbusinessecosystemschapterarguesthattheecosystemconceptmayalsobeusefullyappliedtotheindividualmediafirmandtothesetofactorsencompassedwithinthefirm.Throughtakeoversandconsoli-dation,theemergenceofenlargedandcomplextelevisionproductionentitiescharacterizedbymyriadsofinterdependentin-houseoperatingsubsidiarieshasresultedinorganizationsthatcanbeseenasecosystemsintheirownright.Inmuchthesamewaysasdigitalplatformecosystemsconstituting“meta-organizations”operatewithinmuchwiderdigitalecosystems(RietveldandSchilling,2020),soenlargedproductionentitiesmayalsobeconceivedofas,inasense,ecosystemswithinecosystems.Consolidatedproductiongroups,parentcompanies,andconstituentsubsidiariesalikeattesttoimportantadvantagesconferredbybeingpartofanenlargedandconnectedwhole,particularlyinthecontextofadigitalmulti-platformdistribu-tionenvironment.Theimplicationisthatoneofthereasonswhyownershipconfigurationisaninfluentialdeterminantofperformanceisbecausethestrategies,cost-efficiencies,exchanges,andinteractionsmadepossiblethroughbeingpartofaninternalorganizationalecosystemarehighlyconducivetobusinesssuccessinthedigitalera.ACKNOWLEDGEMENTSThesupportoftheUKEconomicandSocialResearchCouncil(ES/N015258/1)isgratefullyacknowledged.Wealsothankallintervieweeswhoparticipatedinthisresearch.The“TelevisionProductioninTransition:Independence,ScaleandSustainability”projectteamconsistedofProfessorGillianDoyle(PrincipalInvestigator),RichardPaterson(Co-Investigator),DrKennyBarr(ResearchAssociate)andDrMichaelO’Neill(ResearchAssociate).REFERENCESBarney,J.(2000).Firmresourcesandsustainedcompetitiveadvantage.InJ.BaumandF.Dobbin(eds),EconomicsMeetsSociologyinStrategicManagement.Bingley:EmeraldGroupPublishing,pp.203–227.Bourreau,M.,Gensollen,M.andPerani,J.(2002).Economiesofscaleinthemediaindustry.WorkingPaper.Paris:ENST.Buckley,P.andCasson,M.(1976).TheFutureoftheMultinationalEnterprise.London:Macmillan.CBI(2019).CentreStage,KeepingtheUK’sCreativeIndustriesintheSpotlight.Report12527.London:ConfederationofBritishIndustry.Chalaby,J.(2010).TheriseofBritain’ssuper-indies:policy-makingintheageoftheglobalmediamarket.InternationalCommunicationGazette,72(8):675–693.Chalaby,J.(2016).Televisionandglobalization:theTVcontentglobalvaluechain.JournalofCommunication,66(1):35–59.Chalaby,J.(2019).OutsourcingintheUKtelevisionindustry:aglobalvaluechainanalysis.CommunicationTheory,29(2):169–190.Clarke,S.(2017).BettyandRawjoinAll3Mediastable.TelevisionBusinessInternational,May3.https://tbivision.com/2017/05/03/betty-raw-join-all3media-stable/.Coase,R.(1937).Thenatureofthefirm.ReprintedinO.WilliamsonandS.Winter(eds),TheNatureoftheFirm:Origins,EvolutionandDevelopment.Oxford:OxfordUniversityPress,pp.18–74.Corallo,A.,Passiante,G.andPrencipe,A.(2007).TheDigitalBusinessEcosystem.Cheltenham,UKandNorthampton,MA,USA:EdwardElgarPublishing.CreateUK(2014).CreativeIndustriesStrategy.London:CreativeIndustriesCouncilUK.www.thecreativeindustries.co.uk/media/243587/cic_report_final-hi-res-.pdf(accessedApril1,2021).GillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

91Organizationsasecosystems:thecaseoftelevisionproduction91Davies,R.(2016).AdamCrozierpursuesinternationalvisionforITVwithacquisitions.Guardian,.https://www.theguardian.com/media/2016/aug/10/crozier-pursues-international-vision-for-itv-with-acquisitions(accessedApril1,2021).Doyle,G.(2019).Publicpolicy,independenttelevisionproductionandthedigitalchallenge.JournalofDigitalMediaandPolicy,10(2):145–162.Doyle,G.andBarr,K.(2019).Afterthegoldrush:industrialre-configurationinthetelevisionproduc-tionsectorandcontent.Media,CultureandSociety,40(2):285–295.Doyle,G.,Paterson,R.andBarr,K.(2021).TelevisionProductioninTransitionIndependence,Scale,SustainabilityandtheDigitalChallenge.PalgraveGlobalMediaPolicyandBusiness.Cham:Springer.Esser,A.(2016).ChallengingU.S.leadershipinentertainmenttelevision?TheriseandsaleofEurope’sinternationalTVproductiongroups.InternationalJournalofCommunication,10:3585–3614.Evens,T.andDonders,K.(2018).PlatformPowerandPolicyinTransformingTelevisionMarkets.London:PalgraveMacmillan.Galateanu,E.andAvasilcai,S.(2017),Emergingcreativeecosystems:platformdevelopmentprocess.FascicleofManagementandTechnologicalEngineering,3:5–10.Hesmondhalgh,D.(2013).TheCreativeIndustries,3rdedn.London:SAGEPublications.Iansiti,M.andLevien,R.(2004).TheKeystoneAdvantage:WhattheNewDynamicsofBusinessEcosystemsMeanforStrategy,Innovation,andSustainability.Cambridge,MA:HarvardBusinessSchoolPress.Kapoor,R.(2018),Ecosystems:broadeningthelocusofvaluecreation.JournalofOrganisationalDesign,7(12):1–16.Kostovska,I.,Raats,T.,Donders,K.andBallon,P.(2021).Goingbeyondthehype:conceptualising“mediaecosystem”formediamanagementresearch.JournalofMediaBusinessStudies,18(1):6–26.Küng,L.(2017).StrategicManagementintheMedia,2ndedn.London:SAGE.Lee,D.(2018).IndependentTelevisionProductionintheUK:FromCottageIndustrytoBigBusiness.Cham:PalgraveMacmillan.Littleton,C.(2016).InsideEndemol-ShinesambitiousplantoconquerglobalTV.Variety,March29,pp.42–43.McEachern,W.(2010).Economics:AContemporaryIntroduction.Andover:CengageLearning.McManus,J.(1972).Thetheoryoftheinternationalfirm.InG.Paquet(ed.),TheMultinationalFirmandtheNationState.DonMillsOntario:Collier-Macmillan,pp.66–93.Mediatique(2015).TVProductionSectorEvolutionandImpactonPSBs.London:Mediatique.Mitleton-Kelly,E.(2003).Tenprinciplesofcomplexityandenablinginfrastructures.InE.Mitleton-Kelly(ed.),ComplexSystemsandEvolutionaryPerspectivesofOrganisations:TheApplicationofComplexityTheorytoOrganisations.Oxford:ElsevierScience,pp.23–50.Moore,J.(2006).Businessecosystemsandtheviewfromthefirm.AntitrustBulletin,51(1):31–75.Namada,J.(2018),Organisationallearningandcompetitiveadvantage.InA.Malheiro,F.Ribeiro,G.Jamil,G.RascaoandO.Mealha(eds),HandbookofResearchonKnowledgeManagementforContemporaryBusinessEnvironments.Hershey,PA:IGIGlobal,pp.86–104.North,S.andOliver,J.(2010).ManagerperceptionsoftheimpactofconsolidationontheUKindepend-enttelevisionproductionindustry.JournalofMediaBusinessStudies,7(2):21–38.Ofcom(2019).MediaNations:UK2019.August7.London:Ofcom.Oliver&Ohlbaum(2015).TrendsinTVProduction.December.London:Oliver&OhlbaumAssociates.Oliver&Ohlbaum(2018).TheImpactoftheTermsofTradeontheUK’stelevisioncontentproductionsector:AReportfortheCanadianMediaProducersAssociation(CMPA).December.London:Oliver&OhlbaumAssociates.OliverandOhlbaum(2019).UKTelevisionProductionSurvey:FinancialCensus2019.London:Oliver&OhlbaumAssociates.Paterson,R.(2017).EarlyindependentproductionentrepreneursinUKtelevision:pioneeringagentsofneoliberalintervention.InternationalJournalofEntrepreneurialVenturing,9(3):280–298.Peltoniemi,M.andVuori,E.(2004).Businessecosystemasthenewapproachtocomplexadaptivebusinessenvironments.ProceedingsofeBusinessResearchForum,2(22):267–281.GillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

9292HandbookondigitalbusinessecosystemsRietveld,J.andSchilling,M.(2020).Platformcompetition:asystematicandinterdisciplinaryreviewoftheliterature.JournalofManagement.https://onlinelibrary.wiley.com/doi/pdf/10.1002/smj.3250(accessedApril1,2021).Valdez-De-Leon,O.(2019).Howtodevelopadigitalecosystem:apracticalframework.TechnologyInnovationManagementReview,9(8):43–54.vanKeulen,J.,Bauwens,J.andKrijnen,T.(2020).“Everyoneworkingalittlemorecloselytogether”:transnationalizationofcreativeproductioninTVproductionconglomerates.TelevisionandNewMedia,21(7):749–767.Williamson,O.andWinter,S.(1993).TheNatureoftheFirm:Origins,EvolutionandDevelopment.Oxford:OxfordUniversityPress.GillianDoyle-9781839107191DownloadedfromPubFactoryat05/28/202209:56:04AMviaColumbiaUniversityLibrary

936.DealingwithstrategictensionsindigitalbusinessecosystemsSabineReisingerandJohannesM.LehnerINTRODUCTIONANDPURPOSELikeinbiology,digitalbusinessecosystemsbothnurtureandarethreatening.Theyprovideresourcesbyattractingcustomersandenablingrelationshipswithotherfirms,whichgivesrisetothetransferofknowledgeandpersonnel.Simultaneously,ecosystemsareplacesofconstantrivalryamongtheirpopulationsandareexposedtoattacksfromoutside(e.g.,Hoffmannetal.,2018;Kretschmeretal.,2021).Allofthisputsfirmsandbusinessmodelsintoamultidimensionalspaceofstrategictensions.Whiletheexistenceoftensionsbetweencooperationandcompetitioninecosystemshasfoundconsiderableattentionintheliterature(e.g.,BrandenburgerandNalebuff,1996;HannahandEisenhardt,2018;Jonesetal.,2021),theecosystemmetaphorsuggestsalignmentofindividualfirms(Adner,2017;Moore,1996)andadaptationtothesameenvironmentalniche.Therefore,firmsinsuchecosystemsmightbeexpectedtoberathersimilarregardingtheirstrategiesandstructures.Accordingly,apartfromdistinguishingthefirm’sroleinthevaluenetwork(AdnerandKapoor,2010),studiesonthepotentialdifferentstrategicmodesarelacking.Inthischapter,weaimatexploringsuchdifferencesconcerningthefirm’sstrategicmodes.Moreover,ifsuchdifferencesoccur,weaskwhetherdifferentroleswithinanecosystemaresystematicallyrelatedtospecificwaysinregardtodealingwithsuchtensions.Inthefollowingsection,wefirstdiscussthetensionbetweentheimperativetoexercisestrategicchoiceversustheurgetofollowexistingpathsforwhichthefirmdevelopeditsresourcesandwhichprovidedfor(sustainable)competitiveadvantage.Thesecondtensiondirectlyreferstothepossiblemodesofinteractionwithitsenvironment,eitherfocusedonrivalryorcooperation.Aswewillargue,notonlydofirmsandbusinessmodelsdifferinregardtotheirresolvingthesetensions,buttheoriesofstrategicmanagementalsostartbyassumingaspecificfocuseitherinthedirectionofrivalryorrelationshipbuilding.Accordingly,specificstrategicmanagementinstrumentsbasedonparticulartheoriesaresuitablefordifferentactorsinabusinessecosystem.Next,wedescribethesetensionsspecificallyforthedigitaldomain,beforehighlightingdif-ferentactorsinadigitalbusinessecosystemanddiscussingtheirpositionwithintheaddressedtensions.Thus,eachfirmorbusinessmodelisplacedintoalocationwithinatwo-dimensionalspace,representingauniquestrategicmode,andthuscallsforspecificinstrumentsandframe-worksfromthetoolsetofstrategicmanagement.ThecaseofAmazonMarketplaceexemplifiesthis.Wedescribefouridealtypesofresolvingstrategictensions.Asformanyotherplatforms,theplatformowner,ontheonehand,ispartofanecosystem,thusproducingrivalry;andontheotherhandisthemaindesignerofitsenvironmentalconditions,thuscallingforstrategicchoice.Buyersandsellerswithinthisecosystemalsofaceintenserivalrybutcansurviveonlybyexploitingtheirexistingcompetencies,thuscallingforcontinuity.Also,inanyecosystem,63SabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

9464Handbookondigitalbusinessecosystemsbusinessmodelsmaysearchforincompleteness,providinginnovationsforimprovingtheecosystemitself,whichrequiresstrategicchoiceandmostoftenreliesmoreonrelationshipbuildinginsteadofrivalry.Thesameispossibleforestablishedfirmsthattrytoutilizeexistingbusinessmodelswiththedigitaldomain,whichweexemplifythroughtheexampleoflogisticsfirms.Bydiscussingtheseexamplesoffourdifferentwaystodealwithstrategictensions,weshowthat,generally,thereisno“grandtheory”ofstrategicmanagement(e.g.,Durandetal.,2017;Makadoketal.,2018)explainingallfirms’strategicmodes.Especiallyindigitalbusinessecosystems,suchanassumptionleadstofutileanalysis.Instead,weproposefirstanalyzingthesestrategictensionsandthen,dependingonthefirm’sorthebusinessmodel’slocation,derivingtoolsandtheoriesmeaningfulfortheparticularsituation.STRATEGICTENSIONSEcosystems,firms,andbusinessmodelsfaceamultitudeoftensionsordilemmas,surfacingastrade-offsbetweenconflictinggoalsinducedbyopposinginternalrequirements,orenviron-mentalimperativestowhichtheorganizationshalladapt,orbytheurgetosacrificelong-termneedsinreactingtoshort-termcalls.Wedescribethesetensionsontwodimensionsthatwearguecapturethefundamentalopposingforcesregardingstrategicmanagementingeneral,andwithindigitalbusinessecosystemsinparticular.ChoiceversusDeterminismStrategicmanagementimplicitlyassumesthatfirmscanchoosetheircoursesofactionfreely.Inasimplifiedversion,thisimpliesthattheyanalyzetheirsituationandexplicitlyformulateastrategytoachieveanattractiveposition.However,thisideaoffreestrategicchoiceiscounteredbysevererestrictionsinsideandoutsidethefirm,duetoafirm’simprints,pathdependencies,andpolitical,technological,andsocietaldependencies.Forexample,societal,political,andregulatorydevelopments(HambrickandAbrahamson,1995),togetherwithfiercelycompetingfirms(PfefferandSalancik,1978;Porter,1985),willstronglyrestrictthechoiceset.Stronghostilityrestrictsevenmoresoifbusinessunitsareownedbyastrongcor-poration(SengulandGimeno,2013).Additionalmobilitybarriersarisebypositioningthefirmintoastrategicgroup,shapingthetop-managementteam(Pegelsetal.,2000),therebyaligningstrategicchoicetoothergroupmembers(Porter,1980).Themoremembersthegrouphas,themoreintensecompetitionwithinthegroup,theharderitseemstoovercomesuchstructuralinertia(Ruef,1997).Thetensionofchoiceanddeterminismcameintosightrelativelylateinthehistoryofstrategicmanagement.Intheearlystages,thestrategicmanagementfieldwascharacterizedbyconceptsthatemphasizemicroeconomicanalysis,largelydeterminingthechoiceofstrategies,mostprominentlyformulatedinthe“structure‒conduct‒performanceparadigm.”Lateron,degreesofstrategicchoicecameincreasinglyintothefocusoftheories.Amongthem,theresourcedependencytheory(PfefferandSalancik,1978)considersthefirmtobeacoalition(CyertandMarch,1963)ratherthanaclosedentity.Itviewsthefirm’sbehaviorasconstrainedwithinaninstitutionalnetworkofotherfirms,whichcouldbeformed,butstillinaratherlimitedfashion.Thepopulationecologyview(HannanandFreeman,1977)suggestsestablishinganewfirmastheonlystrategicchoice.The“redqueen”theoryopensthisuptoSabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

95Dealingwithstrategictensionsindigitalbusinessecosystems65somedegreeforindividualadaptationoffirmsbydrawingonorganizationallearningandpop-ulationecologythinking(BarnettandHansen,1996).Further,conceptionsofpathdependency(Arthur,1994)andnetworkeffects(CennamoandSantalo,2013)alsoimplythatfirmsandtheirdecision-makershavesomewhatlimitedleewayoncetheyfindthemselvescaughtona“path”oradaptedtoa“niche”whichexcludesotherchoices.Evenundertheassumptionoffreestrategicchoices,decisionsdeterminingfuturepathsmayhappenearlyinthefirm’shistory,thusestablishingimprints.Intheearlystages,thefirm’sveryfoundingideapredeterminesfundamentalconditionsforlaterstrategicdecisions(RomanelliandTushman,1986,p.609),andsignificantlyshapessubsequentstrategicaction(Boeker,1989;MarquisandTilcsik,2013;Simseketal.,2015;Stinchcombe,1965).Lateron,commitmentstosignificantinvestmentsintoinfrastructure(Ghemawat,1991;HamelandPrahalad,1994;NystromandStarbuck,1984)or,moregenerally,intoorganizational,psychological,andsocio-economicconditions,produceirreversibility(Barnesetal.,2004;McGrathetal.,1998).Availableresourcesandcapabilitieslimittherangeofstrategicoptions(HutzschenreuterandIsrael,2009),andthedominantlogicblockslearninganddevelopmentprocessesfornewstrategicpaths(Boeker,1989;EisenhardtandSchoonhoven,1996;PrahaladandBettis,1986).Allofthis,pathandresourcedependence,nicheadaptation,andchancemodels(Denrelletal.,2015)suggestratherlittlelatitudeforstrategicchoice.Thefirmseemstobecaughtinanexusofinternalandexternalforces,whichprescribehowitcompetesagainstitsneighborswithinthisfield,andwherefirmsfindthemselvesactinginazoneofzeromarginalreturns,leavingnoleewayforanystrategicchoice.Despitesuchfiercerestrictions,asignificantfractionofthestrategicmanagementliteraturecanbeinterpretedasemancipationovertheaboveassumptionbyimplicitlyintroducingthealternativeassumptionofstrategyasdeliberateselection(e.g.,Ansoff,1979)amongabroadsetofmoreorlessaggressivefirmbehaviors.Whiletheliteratureonstrategicmanagementprovideslittleevidenceforfullstrategicdiscretion,diversestreamsofliteraturediscusscontingentdegreesofstrategicdiscretionandchoice.Onthefirmlevel,HrebiniakandJoyce(1985)initiatedthisdiscussionmorethan30yearsagobyproposingstrategicchoiceandenvironmentaldeterminismastwoindependentdimensions.Despiteitsconceptualmerit,supplementedthroughfurthertheoreticalarguments(GopalakrishnanandDugal,1998),empiricalsupportforthisframeworkislimited(LawlessandFinch,1989).Thisledtoseveralsuggestionsforitsmodification,especiallyconsideringtheeffectsofdevelopmentsovertime,suchasmovinginandoutofhigh-orlow-choiceenvironments(Bedeian,1990;LawlessandFinch,1989,p.360).Strategicactionmayreducedependencies,andtherebyexpandstrategicoptions,whichisattheheartofresourcedependencytheory(PfefferandSalancik,1978)andrealoptionsperspectives(Hillmanetal.,2009).Judgeetal.(2015,p.523)concludeintheirstudythatstra-tegicchoiceinfluencestheorganization’scapacityforchange,highlightingthecriticalroleofstrategicleaders.Inthisregard,arecentstudybyZhuetal.(2020)pointstothepositiveimpactofpriorboardexperienceatotherfirms.Somefirmsmanageatransitionfromsomewhatpathdependentevolutiontostrategicchoiceactionatlaterstages(Thietart,2016),whichsuggestsreducingthetwo-dimensionalspaceproposedbyHrebiniakandJoyce(1985)toanempirical,identifiableone-dimensionalconstructbetweenhighchoiceversushighdeterminism.Newconceptionsofpathdependencyalsosupportthis(Sydowetal.,2009,2020).Inthisview,however,therelationshipbetweenchoiceandpathdependencyisacontinuumwithdecreasingSabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

9666Handbookondigitalbusinessecosystemsdecision-makingdegreesovertime.Insummary,thedebateonthecontinuumbetweenfreechoiceandpathdependencyindicatesachoicespacerangingfromampletonarroworzero.RivalryversusCooperationThesecondtensionarisesfromtheequivocalnatureofcompetition,andhighlightsthetensionbetweenrivalryandcooperation(ChenandMiller,2015;Hoffmannetal.,2018).Inthisrespect,strategicmanagement’sbeginningsshowaclearprioritizationofrivalry,representingdominantnotionssuchascompetitiveadvantagesandcompetitivestrategies(Porter,1980).Particularinterestwasinitiallyshownintheeffectsofcompetitiveintensityonspecificstrategies,especiallyoninnovation(Gilbert,2006).First,underverylowrivalry(thatis,monopoly),firmshavelittleincentiveforinvestingintoresearchanddevelopment(R&D)(Arrow,1962),ortoengageinstrategicmovesotherthantodefendthemonopoly,forexample,bypre-emptingR&Dcompetition(GilbertandNewbery,1982).Second,underhighdegreesofrivalryandstabilityfirmsfindthemselvesinamicroeconomicenvironment,basicallycharacterizedbyPorter’s(1980)fiveforces.Focusingmoreontheenvironmentaldynamics,thishasbeensupplementedthroughconceptssuchasstrategicmaneuveringinhyper-competition(D’Aveni,1994),creatinguncontestedmarketspace(blueoceans)tomakecompetitionirrelevant(KimandMauborgne,2005),investingindynamiccapabilities(Teeceetal.,1997)inordertostaycompetitiveandmaintainprofitabilityoverthelongterm(Teece,2012),includingtheabilitytodesignandadjustbusinessmodels(Teece,2018).Researchoncooperationhasevolvedindependentlyfromresearchoncompetition(Hoffmannetal.,2018).RelationshipbuildingasastrategicmodehasalreadybeenproposedbyPfefferandSalancik(1978).Intheirreviewofresearchintotheresourcedependencyper-spective,Hillmanetal.(2009)describemodesofstrategicactiontoexpandthefirm’schoiceset,ofwhichthemajority(fouroutoffive)areessentiallyrelationalinsteadofrivalrous.Ina“situationinwhichsurvivalandcontinuedsuccessareuncertain…organizationstakeactionstomanageexternalinterdependencies”(Hillmanetal.,2009,p.1405).Forexample,mergersandjointventuresprimarilyaimatreducingdependenciesbetweenfirmsandreducingcom-petitivepressure.Onanetworklevel,amongthebest-researchedphenomenaareinterlocksbetweenfirmsthroughmutualboardmemberships,whichindeedaimmoreatcooperationthancompetition.Firms,however,arenotnecessarilyeitherincompetitionwithrivalsorincooperativerelationshipswithotherfirms,buttheyfrequentlycompeteandcooperatewiththesamefirms,whichissometimeslabeledascoopetition(BrandenburgerandNalebuff,1996).Besidesdirectrelationships,firmsmanagerivalrythroughindustrystructuringbymeansofcollusion,exclu-sivecontracts,orproductdifferentiation,whichrestrictscompetitionbyassigningbuyerstosellersexclusively(MakadokandRoss,2013,p.510).Aslongasincumbentsenjoysuperiorreturns,thereisnoincentivetomoveawayfromthisequilibriumbyengaginginanyrivalrousbehavior.Strategicgroupsareparticularlyinterestinginthiscontext.Ontheonehand,firmswithinastrategicgroupaimatthesamesetofresources,especiallycustomers,whichsuggestsincreasedcompetition(McNamaraetal.,2003).Ontheotherhand,theysharecommoninter-ests,thusgivingrisetojointactionconcerningpoliticalaction,legitimizingtheirfield,orevenbyexchangingspecificresources(personnel),sharingknowledge,andcollectivelythreateningawaypotentialnewentrantsbyincreasingentrybarriers(HattenandHatten,1987).Despitethis,strategicgroupmembersmayevenencouragenewentrantsandmayrefrainfrompriceSabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

97Dealingwithstrategictensionsindigitalbusinessecosystems67competition,andinsteadfocusonjointlyenhancingthestrategicgroup’sstatus,ashasbeenshownforgourmetfoodtrucks(Sonensheinetal.,2017).Whilefoodtrucksmightbeeasilyidentifiedasastrategicgroup,industryboundariesandcategoriesareincreasinglyblurredinotherareas(Cattanietal.,2017),whichaccordinglymakesithardertodistinguishbetweencompetitorsandcooperatingfirms.Forexample,alongthesupplychain,SamsungisbothanupstreamsupplierofcomponentsforfirmssuchasApple,andadownstreammarketerofcellphones,puttingitinafiercerivalrywiththelatter.Evenwithinacorporation,suchtensionsarehardtomanage.⁠Insummary,despitethepossibilityofsimultaneouscooperationandrivalry,theessentialtensionremainsbecausecompetitionandcooperationcallforopposingbehaviors.Partialres-olutionofthistensionprovidesthepossibilityofseparationofactivitiesindifferentbusinessunits,ortemporalseparation,butpotentialnegativeconsequencesprevail,suchasknowledgeleakage,opportunisticbehavior,lackofcommitment,andinstability(Hoffmannetal.,2018).STRATEGICTENSIONSINDIGITALBUSINESSECOSYSTEMSDigitalbusinessecosystemsarecollaborativeenvironmentsinwhichdifferentactorsco-createvalue(Senyoetal.,2019).Thus,theabove-describedtensionsurfaceshereinaspecificfashionbysimultaneouscooperationtoachievecommongoals,andcompetitionforscarceresources.Besidesthat,thefundamentaltensionbetweenexploitingexistingresourcesandinvestinginnewstrategicoptionshastobedealtwithbyeachmemberofadigitalbusinessecosystemandthedigitalbusinessecosystemitself,whichweexplaininthefollowing.Thedigitaldomainischaracterizedbyanovelmixtureofstrongcouplingandweakcoupling,exposingplayerstobothrivalryandtheneedtocooperate.First,start-ups,newentrants,andlargeincumbentscompetebyintroducingnewofferingsforthesameexistingmarkets,therebyrivalingoneanotherforacustomerbasewithrestrictedattentionandbudget.Simultaneously,whilelooselycoupled,thesefirmscooperatetoestablishstandards,legitimizeproducts,andcreatemarketsthatpreviouslydidnotexist.Second,tightcouplings,especiallybetweensmallerfirmsandlargerincumbents,oftenactingasbottlenecks(HannahandEisenhardt,2018),producebothrivalryandcooperation.Forexample,ontheonehand,Apple’siTunesstoreorSpotify’sstreamingservicecompeteagainsttraditionalCDs,whichartistsandmusiclabelstrytoselldirectly.Ontheotherhand,musiciansandtheiragentsaredependentoniTunesandSpotifyasdistributionchannels,andthereforeneedtocooperate.Technologyingeneral,anddigitalinfrastructureinparticular,demandhighinvestments,whichlikelycommitthefirmtoaparticularpathforyears,thusinducingrestrictionstostra-tegicchoice.Simultaneously,however,thehighvelocityofdevelopmentsinthedigitalrealmproducesamajorpreconditionforventuringintonewdomains.Thus,digitalecosystemsimplytensionsinregardtothechoice-determinismbeyondthoseintraditionalbusinessmodels.Theemergenceofecosystemsinthisdomainisatleastpartlyaresponsetothisdilemma.Incumbents,notonlyinthedigitalareabutalsointraditionalindustries,needtoprotecttheirexistingbusinessmodel,whichprovidestheirresourcebaseandrestrictstheiroptionspacearoundasomewhatlimitedhistoricalpath.Explorationsofnewoptionswithintheirorganiza-tionmightexposethefirmtounintendedvulnerabilityandthreatenitsclearfocusandmomen-tum.Toavoidthis,especiallyincumbentsdevoteconsiderablebudgetstocorporateventurecapitaland,eventually,toacquisitionsofsmallentrepreneurialcompaniesasstrategicoptions.SabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

9868HandbookondigitalbusinessecosystemsThisallowsthemto“keepafootinthedoor”ofnewdevelopmentswithoutcompromisingthefirm’sexistingstrategicpath.Also,firmsencourageindividualdeveloperstoparticipateinopensourcedevelopmenttolearnbycontributing(Nagle,2018),preservingstrategicoptions.Inaddition,strategicchoiceisexercisednotonlyatthefirmlevelbutalsoatthelevelofbusi-nessmodels,whichincorporatebothrivalryandcooperationinmultipleways.Forplatformowners,suchasAmazon,Facebook,andAirbnb,theonlystrategicoptionmaybecapturedthroughthe“growfast”mantra(Eisenmann,2006),withremainingstrategicoptionsonthecorporatelevelinregardtodiversificationandacquisition.Incontrast,theplat-formasabusinessmodel,includingallpotentialpartiesparticipatingintheplatform,changescoursemorefrequentlythantraditionalbusinessesbyincludingcomplementaryofferingsandrivalingproductsandservices.Thisispartlybecausestrategictensionshavereceivedanewmeaninginsuchbusinessmodels,describedintheprevioussection.Whereasintraditionalviewsonmarketsandmarketstrategies,competitionandrivalryareintheforeground,leadingto“competitivestrategies”withcooperationremainingasanadditionaloptionintheback-ground,platformsrepresentaforeground‒backgroundreversion.⁠⁠⁠Generally,multi-sidedplatformsarebuiltascooperativeeffortsbetweenaplatformownerandcomplementors,providingproductsorservicesviatheplatform.Simultaneously,however,thesetwopartiesarerivalsforappropriatingrentsfromtheplatform,surfacingasastruggleforhighversuslowfeesforparticipatingintheplatform,forexploitingdatageneratingontheplatform,andattimeswhentheplatformownerentersmarketswhereplatformcomplementorsshowatrackrecordofextraordinaryreturns(Zhu,2019).Theliteraturereportsnumerousinstancesofplatformownersallowingoreveninvitingfirmswithrivalingofferingsontotheirplatforms,suchasApple,Salesforce,orIntuit(Hagiuetal.,2020).Further,therelationshipbetweentheplatformanditscustomersisnolongerrestrictedtoseller‒buyertransactions,butincludesincreasingaspectsofcooperativeefforts.Usersprovidedata,postcommentsontheir“status,”rateorevenwritereviewsonproductsandservices,andthroughtheirmerepresenceattractmoreuserstotheplatform,thusproducingtheintendednetworkeffects.Allofthisandtheassumed“winner-takes-all”logic,however,donotguaranteepersistence.Rivalryamongplatformsremains.Also,returnstomarketingcampaigns,traditionallyseenasanecessaryingredienttoattractmoreusersthantherivals,decreasebeyondacertainlevel(Eisenmann,2006).Again,tobesuccessfulamongitsrivals,theplatformisdependentonitscooperatingpartners:thenetworkofusersandthecomplementingofferingsontheplatform(McIntyreetal.,2020).Inaddition,thevalueofanetworkincreaseswithcompatibilitybetweenitselfandotherproductsthatmightbeusedtogether(KatzandShapiro,1985).Evenifrivalrous,cooperationregardingsettingindustrystandardsorgivingawayinterfaceprotocols(applica-tionProgrammingInterfaces,APIs)isofpositivevalueforallparties,butcreatesatensionbetweenvalueco-creationandvaluecapture(PanicoandCennamo,2020).RelatedtothisisthesomewhatsurprisingfindingintheEuropeantelecomindustrythatswitchingcostsnega-tivelyinfluencenetworkvalue(Fuentelsazetal.,2015).Becauseareductionofswitchingcostisacooperativeeffort,thisalsosuggestsrivals’cooperationtobebeneficial.Anothersurfacingofthetensionbetweenrivalryandcooperationindigitalbusinessecosys-temsisrepresentedthroughopensourcedevelopment,openinnovation,oropencollaboration.Whilemanycontributorsto,forexample,opensoftwaresuchasLinux,aremotivatedotherthanbyfinancialinterests,andwhileproductsaredistributedaspublicgoods,suchdevelop-mentsareincreasinglypartoflargerbusinessmodels.Itisshownthatopencollaborationeventhrivesifresources,suchasdevelopers,comefromrivalingsourcesoriftherearerivalingSabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

99Dealingwithstrategictensionsindigitalbusinessecosystems69goods(LevineandPrietula,2014).Forexample,theLinuxFoundationtakespartindevelop-ingblockchainapplications,whicharealsodrivenbylargebankingcorporations.Ingeneral,suchdigitaltechnologiesalwaysthreatenthevalueofexistingtechnologiesandassociatedmarkets,placingfirmsinadilemmaofeithermissingpotentiallyrevolutionarytrendsorcan-nibalizingtheircurrentstrategicposition,whichhasbeenmentionedabove.Whilesomeofthismaysuggestthatthetensionbetweenrivalryandcooperationisresolvedintomutuallysupportingrelationships,conflictsremainubiquitous.Thepositioningofthebusinessmodelinthedigitalecosystemontherivalry‒cooperationcontinuumremainsafundamentalquestion⁠.Besides,thetensionbetweenbuildingonandexploitingwhathasbeencreatedsofar,andbuildingsomethingpotentiallynew,isparticularlyevidentindigitalbusinessecosystems,aswewillshowinthefollowing.THEACTORSINDIGITALBUSINESSECOSYSTEMSThediverseactorsindigitalbusinessecosystemsresolvethestrategictensionsdescribedaboveindifferentways.Asaresult,theyfindthemselvesindifferentcompetitivepositions,asweexplainbyapplyingthecreatingcompetitivenessframework(“CC-framework”).Thismatrixdistinguishesfourarenasforstrategicmodes,distinguishedfirstlythroughhighrivalryversushighcooperation,andsecondlythroughhighexercisingofstrategicchoiceversusanemphasisofcontinuity(Figure6.1).Thissectionexplainsanddiscussestheactors’positionwithinthisframeworkwiththeexampleofthedigitalbusinessecosystemaroundAmazonMarketplaceasatradingplatform.TheCC-frameworkcandescribeandexplainthedifferentstrategicmodesoffirmsandbusinessmodelswithinthisecosystemandhowtheycomplementeachothertocreatethevaluethatisotherwiseattributedtoasinglebusinessinanoverlysim-plisticmanner.Toconstantlyandprimarilyengageinrivalrousbehavior,wedistinguishtwopossibilities:eithertobeabletodeliberatelychooseamongdifferentstrategicoptions(Arena1)orbyfullyexploitingthepotentialoftheexistentstrategicpathinawaythatissuperiortoafirm’srivals(Arena2).Parallelpossibilities(Arena3and4)focusingoncooperationratherthanrivalrywillbeexplainedanddiscussedinthefollowing.ThediscussionofthespecificsofthefourcompetitivearenasbasedondifferentactorsinAmazon’sMarketplaceecosystemservestohighlighttheirdistinctivefeaturesandchallenges.Arena1:DominateInitsecosystem,Amazon,astheplatformowner,clearlydominates.Itdefinesthegamerules,collectsalldataontransactionsonitsplatform,andretainsearningsfromitsoperationstoamassslackforexercisingstrategicchoice.EvenasAmazonisalreadyhighlyprofitable,itschiefexecutiveofficerandmajorshareholder,JeffBezos,refrainsfrompayingdividendstoshareholders.First,withhighslackthroughretainedearnings,acorporationsuchasAmazoncandevotesuperiorbudgetsforresearchanddevelopment,resultinginstrategicoptions(DixitandPindyck,1995),whichsecurethepotentialforfuturechoices.Outcomesrangefromsupe-riortechnologiesalongitssupplychain,toartificialintelligenceforitscustomerinteraction,toroboticsforitslogistics.Second,itenablesAmazontodiversifyintorelateddomainstoexpandandmaintainitsdominatingposition.Third,Amazonsupportsitsbusinessmodelthroughnewofferings,suchasAmazonPrimeandWebServices,whicharepartofitsdiver-SabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

10070Handbookondigitalbusinessecosystemssificationstrategy(forexample,intomovies,cloudcomputing),butwhichalsosupplementitstradingplatform.Ifnotdevelopedinternally,suchdiversificationisimplementedthroughacquisition,asinthecaseofhealthcareproductsandrelatedservices(Bhagtnagar,2019).Asadominatingforceinitsdomain,Amazoncreatesandcontrolsenvironmentaldynamism,apreconditionforexercisingstrategicchoice.Turbulenceanddynamicsincreaseinternaluncertaintyofthefirm,constantlyexposingthebusinessmodeltothreats,andthusincreasingthepressureforinnovationandpotentialstrategicchange,generallyexpandingthescopeformanagerialdiscretion(FinkelsteinandBoyd,1998;HambrickandAbrahamson,1995;HambrickandFinkelstein,1987).Figure6.1TheecosystemofAmazonMarketplaceshowninthecompetitivenessframeworkAstheplatformowner,Amazonmaintainsthousandsofrelationswithsmallandmedium-sizedfirms.Whilethisisofutmostimportanceinoperationalterms,itsdominantstrategicmodeisclearlyorientedtowardsitsexistingorpotentialrivals.Itsaggressivestrategyofgrowthener-gizedthroughrefrainingfrompayingoutdividendsismotivatednotonlybymaintainingitsdominationasaplatformbutalsobykeepingoutcompetitionfromnewentrants.Beyondtradi-tionalrationalesofmarketpower,dominatingpositionsindigitalecosystemsareadditionallymotivatedbymaintainingcontrolofnetworkeffects.Whenacriticalmassofcomplementorsandusershasbeenreached,strategiesarefocusedonacquiringmoreusersandcomplementorsandpreventingotherplatformsfromtakingovershares.Forthis,theplatformownerforcesitscomplementorstoaligntheirfunctionalitiesofmostlymodularcomponents(BrousseauandPenard,2007),theiroperationsandlogistics,toitsspecifications.Thisincreasesswitchingcosts,asitdoesforcustomers,becauseofidiosyncraticinterfacesbetweenproductsandinadditiontoprogramssuchasAmazonPrime.SabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

101Dealingwithstrategictensionsindigitalbusinessecosystems71Arena2:PersistAmazonhoststhousandsofdealersonitsplatform,whicharefrequentlylabeledascomple-mentors.DespitetheirdependenceonAmazon,virtuallyallofthesedealersareexposedtoextremelevelsofrivalry.Byoperatinginthedigitalspace,theirofferingsaretransparent,easytocompareforcustomers,andaidedthroughautomatizedcomparisonplatforms,thuscreat-ingconditionsthatappearclosetotextbookdescriptionsofanidealmarketanditsvariants(Spulber,2019).However,togainattentionwithinthisglobalmarket,dealersneedtoplaynovelgamesindigitalmarkets,whicharedifferentfromtraditionalmarkets.Examplesforthisaresearchengineoptimization,managementofcustomerratings,adaptingofferingsthroughtransactiondata,andAmazon’sSellingCoach,whichtranslatebackintoconcretewaystooperationalizeitsmodeofdealingwithrivalry.Further,whenAmazonisspottingsuperioropportunities,suchasinpharmaceuticals(Bhagtnagar,2019),itisenteringthemarketitself,therebyincreasingrivalryforitsincumbentcomplementorsofferingsuchproducts(Baojunetal.,2011;Zhu,2019).Intheabsenceofthepossibilitiesforexercisingstrategicchoice,asdescribedforAmazon,theoptionspaceforsuchdealersisrestrictedtoeitherbeingacostleaderorofferingveryspecializednicheproducts,asdescribedalreadybyPorter(1980).Inaddition,andevenasecosystemsaredefinedbytheabsenceofhierarchicalcontrol(Jacobidesetal.,2018),theabove-describedtoolsformanagingrivalryinthedigitalecosystemandthegovernancemechanismsoftheplatformownertoprovidenetworkeffects(HelfatandRaubitschek,2018)restrictthestrategicpathofcomplementorsevenmore.Thesetoolsandgovernancemecha-nismsessentiallycreateahard-to-transferreputationifthefirmchoosestochangeitsstrategy.Bybeingexposedtohighrivalryand,simultaneously,lackingtheslackofacorporationsuchasAmazon,itscomplementorsusuallydonotinvestmuchinresearchanddevelopmentorinotherwaystoexpandtheirscopeofoptions.MostdealersusingAmazon’smarketplacerelyontheirexperiencedevelopedthroughouttheirhistorywithaspecificandverylimitedrangeofproductsandmarketsegments.Besides,manyofAmazon’sinnovations,suchasprovidingabettercustomerexperience,directlyaffectitsdealers’operations(Bolumoleetal.,2020),thusfurtherrestrictingtheiroptionspace.Detachingfromthedigitalbusinesseco-systemis,forbigsuppliers,onewaytoexpandthescopefordecision-making.Forexample,in2019,NikepulledbackitsofferingsfromAmazonMarketplace(JohnandNaidu,2020)toretainitsstrategicoptions.Nevertheless,evenafterNike’sexit,itsproductscanstillbefoundonAmazonMarketplace,asnumerousdealersofferNikeproductsviatheplatform.Arena3:DriveWhiledealersareexposedtohighrivalryandarelimitedintheirstrategicchoiceset,someofAmazon’scomplementorsarecharacterizedthroughoppositemodesonbothdimensions.Munich-basedIsarlendGmbHdefinesitselfasaFinTech,specializing(underthelabel“fulfin”)infinancialservices(loans)forGermandealersprimarilyonAmazonMarketplace.Therefore,itsdominantstrategicmodeisrelational,establishinglong-termcooperationwithdealers,therebycreatinguniquecomplementaritiesforservices(Jacobidesetal.,2018).Forthis,itengagesinnetworkexpansion(Powelletal.,2005),assumingacentralpositionthatresultsinasignificantshareofnewties.Simultaneously,itutilizesdatacreatedonthedigitalmarketplace,makingitdependentoncloserelationstoAmazonitself.AsinotherplatformSabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

10272Handbookondigitalbusinessecosystemsecosystems(Zhangetal.,2020),theplatformowneractsasagatekeeperandgoverningforceforacomplementorsuchasIsarlend.AsaFinTechprovidingauniqueservice,therearenodirectrivals,ratheritiscompetingagainsttraditionalwaysoffinancing.Thistypeofcom-petitionisweakbecauseIsarlend’sfoundingideain2018isbasedonidentifyingamarketgapandpotentialcomplementarities,withlittleexposuretorivalry.Theecosystem’suniqueconditionsnurturethesepossibilitiesandenableIsarlendtobecomeafinancepartnerfore-commercebusinessinEurope.InthecaseofsmalldealersinAmazonMarketplace,goodcustomerrankingsareessential.Alackoffinancingtoprovideenoughstockforcontinuoussupplymightthreatentheserankings.Traditionalbanksarehardlyawareofsuchproblems,ordonotvaluethemarketgaphighlyenoughtomove,openingupopportunitiesforFinTechssuchasIsarlend.Asatypicalstart-up,Isarlendlacks“bigpockets.”Also,likeatypicalstart-up,itrathertriestoexplorestrategicoptionsthroughitsyoungandhighlyeducatedhumanresourcebase,whichistherequirementtoacquiredynamiccapabilities,ofwhichespeciallyinnovationandsensingareessentialindigitalecosystems(HelfatandRaubitschek,2018).Therefore,competitionandrivalrysurfaceinthemarketforlaborandtalentratherthanwithinitsservicemarket.Still,evenso,orsometimesevenmoreso,smallfirmssuchasIsarlendcantakeadvantageofhighdynamism,especiallywithinadigitalecosystem.There,transactionscreateterabytesofdatadaily.Whileonlymassiveserverresourcescanexploitthefullpotentialofsuchdata,smallfirmsandevenindividualsregularlydevelopspecializedandnovelalgorithmstoanalyzedataandproviderecommendationsbasedonartificialintelligenceandexistingsoftwaremodulesfreelyavailableonanopen-sourcebasis.Openinnovationandopencollaborationingeneral(LevineandPrietula,2014)provideopportunitiestosupplementorevensubstituteownresearchanddevelopment,especiallywithindigitalecosystems.AsHilbollingetal.(2020)show,thisrequiresclosecoordinationandcooperationwithmanypartners,involvingcomplexwaysofrelation-building,involvingbothreal-worldinteractionsanddigitaltoolssuchasspecializedsoftwareandapplicationprograminterfaces(APIs).Ithasalsobeenshownthatvoluntarydisclosureofstandard-settingisbeneficialforfirmsinecosystemsbyfacilitatingcoordination(MillerandToh,2020).Arena4:NetworkLogisticswithinadigitalbusinessecosystemprovidethelinkbetweenthedigitalandthereal-worlddomain.Thislinkingfunctiondefinesthedominantstrategicmode.EvenasfirmssuchasUPS,DHL,andHermesareexposedtointensecompetition,notonlyfromotherspecializeddeliveryfirmsbutalsofromAmazonitself,whenitexpandsitsdeliveryservicesincertainareas,proposinginnovationssuchasdronedeliveryorautonomousvehiclesforthe“lastmile,”asolefocusonrivalrywillnotdo.ForanincumbentlogisticsfirmsuchasDHL,suchasituationcanbedescribedas“coopetition”(BrandenburgerandNalebuff,1996),frequentlyobservedinthedigitaldomain(Ritalaetal.,2014).HannahandEisenhardt(2018)describe“bottleneckstrategies”forotherecosystems,whichcombinecooperationandcompetition.Therecomplementorsmigratebetweenbottlenecksandshiftingcooperation‒competitionbalance,dependingonbottleneckcrowdedness.Somewhatdifferently,Amazonisdefiningtheconditionsforcoopetitioninthelogisticsarea,forexamplethroughitsDeliveryServicePartnerProgram(Berman,2020).ThisespeciallyrendersarivalrousstrategicmodefutileordoomedtofailinthefaceofAmazon’spowertowipeoutsmallercompetitors.SabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

103Dealingwithstrategictensionsindigitalbusinessecosystems73Instead,logisticsfirmscanmaintainaspecificpositiononlybyestablishingrelationstotheplatformowneranditscomplementorsbutalsocreatinganetworkof“postoffices,”thatareplacesofdeliverywhenthefinalcustomerisnotavailable,orofprovidingotheropportunitiesonthe“lastmile.”Beyondexpandingthisnetwork,strategicoptionsarefew,becausethesefirmsareboundedbothbytheconditionsdefinedbytheplatformandthereal-worldrestrictionsincitiesandruralareas.Therefore,businessmodelsconcentrateonexploitingexistingresourcesandoptimizingtheiruse,byemployingbothtraditionaloptimizationalgorithmsandmorenovelartificialintelligence.Forallofthis,involvingcompetitorsandbuildingrelationsisthedominantstrategicmodeforincreasingthefirm’svaluecapturepotential(Ritalaetal.,2014).DHL,forexample,closelycooperateswithtechnologyprovidersinroboticsandinteractivedisplays,suchasConvoy,Turvo,Ubimax,andVuzix,forimprovingitemhandlingatitsstorageloca-tions(Trebilcock,2020).Onlythroughcooperationwithotherscanthelogisticcompanyfullyexploitthepotentialofitsbusinessmodel.DISCUSSIONEcosystemsingeneral,anddigitalbusinessecosystemsinparticular,arenotonlypopulatedbydifferentproducers,traders,andserviceprovidersbutalsorequireadaptedstrategicmodesfortheactors’specificlocationinthespaceoftensions,rendering“one-size-fits-all”strategicmanagementinstrumentsasfutile.Wecontributetothedescriptionofecosystemsbyshowingthatfirmsdifferregardingtheirrolesalongthevaluechainandtheirmodeofresolvingstra-tegictensions.Aswehaveshown,eachofthefourarenasrepresentsaspecificcombinationofdealingwiththestrategictensionsbetweenrivalryandcooperationontheonehand,andbetweenexercisingstrategicchoiceandfollowingexistingpathsontheotherhand.Wecontributetotheongoingdiscussionconcerningthecompetition‒cooperationcontin-uum(e.g.,ChenandMiller,2015)withthefirstdimension.Weshowforthecaseofdigitalplatformsthatfirmslocateonthiscontinuum,dependentontheirroleintheecosystem.Thesecond,muchlessattendeddimensionchallengesthewidelyheldimplicitassumptionthatallfirmsareabletochoosefreelyamongthewholesetofstrategicoptions.Weshowthatespeciallyindigitalecosystemsaconsiderablegroupoffirmscanexistonlybyratherrigidlyadheringtotheirexistinghistoricalpath.Thechapterdescribesconsequencesforstrategicbehavior,distinguishingfirmsfromthosethatdominatetheecosystem,orpromoteitsreten-tion,orchangetheecosystemthroughinnovation.Whilethetensionsdescribedinthischapterarepresentinvirtuallyalldomainsoftheeconomy,theyhaveidiosyncraticconsequencesindigitalecosystems,andthustheframeworkhasspecialexplanatorypower.Whereasgenerallywedonotseeareasonwhyeacharenashouldnecessarilybepopulatedbyfirms,inecosystemsarounddigitalplatforms,itseemsthatfirmswillbefoundinallarenas.Thecasespresentedinthisstudy,however,areindeednotsufficientevidenceforthis.Therefore,thisshouldbetheorizedandempiricallyexaminedinfuturestudies.Especiallyforempiricalinquiry,theframeworkdevelopedheresuggestsexaminingentiredigitalecosystems,somewhatdeviatingfromthetraditionoffocusingonspecialized,andthereforehomogenous,subpopulations.SabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

10474HandbookondigitalbusinessecosystemsCONCLUSIONSANDMANAGERIALIMPLICATIONSGivenourresults,andbeyondourtheoreticalinterest,weproposeformanagerstodiagnosebusinessmodels’idiosyncraticnaturebasedonthetwofundamentaltensionsbetweencoop-erationandrivalry,andcontinuityandstrategicchoice.Forthis,wedevelopedatool(called“CC-finder,”availableonline1)whichallowsaquickfirstdiagnosistoplacethebusinessmodelintothetwo-dimensionalCC-framework.Theonlineassessmenttoolisafirststep,whichneedstobefollowedbymorein-depthanalysis,possiblysupportingorcorrectingthefirstlocationononeofthefourarenas.Therebystrategistscandevelopathoroughunderstand-ingoftheinitialsituationandevaluatepossibleopportunitiesandchallengesforthebusinessunitunderconsideration.Astructureddiscussionofstrategicalternativesandtheirimplica-tionsregardingresources,managementstyle,andcompetitivedynamicsarefacilitatedthroughtheCC-framework.Eachofthefourcompetitivearenasrequiresaspecificsetofmanagementapproachesbasedonstrategicmanagementtheoriesoutlinedintheabovedescriptions.Somebusinessmodelscanalsobelocatedattheboundariesbetweentwoormorecompetitivearenasindigitalbusinessecosystems.Evenifadifferentiatedexaminationofthemiddleisnotpossibleinthecontextofthischapter,itshouldbepointedoutherethatresearchresultsonambidexterity(O’ReillyandTushman,2013)andcoopetition(BrandenburgerandNalebuff,1996;Ritalaetal.,2014)inparticularprovidevaluableimpulsesforthesebusinessmodels.WhileweillustratedthefourdifferentarenaswiththeexampleoftheecosystemaroundAmazonMarketplace,suchcharacterizationshouldnotbegeneralizedtootherecosystemsorevenplatformsindiscriminately.Forexample,therewillbeplatformownerswhichdonottakeadominatingpositionregardingtheirstrategicmode(BennerandWaldfogel,2020;CennamoandSantalo,2013).Again,abusinessmodel’sspecialconditionsshouldbediagnosedbeforederivingstrategicmoves,becauseeacharenarequiresdifferentstrategy-makingapproaches,takingtheopposingpositionswithinthestrategictensionsintoaccount.Somegeneraldiscus-sionandconclusionfordigitalecosystemswillbeaddedinthefollowing,becausestrategistsindigitalbusinessecosystemsshouldrefrainfromindiscriminatelyrelyingontraditionaltoolsofstrategy-making,whichhasbeenwarnedagainstevenformoretraditionalindustries(BarneyandMackey,2018;Belletal.,2018).Firstofall,mostestablishedtheoriesregardingcompetitiveness,managementmethods,andstrategytoolsweredevelopedwhendigitalbusinessecosystemswerenotyetinsight.Second,manyconceptsrefertoratherstablebusinessenvironments,andthefirmasareferencepointofthestrategicdiscussion.Byopeninguptodynamicenvironmentsandabandoningthefirmastheprimaryunitofanalysis,theCC-frameworkallowsadifferentiatedapproachfordifferentbusinessmodelswithinadigitalbusinessecosystem.Third,andmostimportantly,someprin-ciplesprevalentintraditionalenvironmentsaregainingprimaryimportanceindigitalbusinessecosystems,whichweproposetohaveanincreasedimpactonthetensionsdescribedhere.Anexampleisprovidedthroughtheimportanceofnetworkeffects.Ontheonehand,networkeffectsarisefrompuresizeandscaleeconomies,callingforaggressivebehavioragainstrivalsandgrowthstrategies.Ontheotherhand,theyrequirecomplementingresourcesandproductsoutsideofasinglefirm’sdomain,thuscallingforrelationship-building.Thus,buildingupandsustainingnetworkeffectsrequiresthemanagementofthistension.Aswehaveshownabove,thiscannotbeachievedbymeremixingofrivalrousandrelationalbehaviororwithasuperficialconceptof“coopetition,”butbypurposefullylocatingthefirmwithinoneoftheabove-describedarenas.Inaddition,networkeffectscanonlybecreatedandmaintainedbySabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

105Dealingwithstrategictensionsindigitalbusinessecosystems75eitherconstructingandfollowingaspecificstrategicpath,whichisobservedandvaluedbyanaudience,thuscallingforcontinuity;orbyconstantlydevelopingnewandinnovativeformsoftakingadvantageofnetworkseffects,whicharepreviouslyneitherobservedbytheaudiencenorenactedbycompetitors,thusgivingleewayforexercisingstrategicchoice.Especially,theabundanceofdataandthepossibilityofapplyingnewalgorithmslikelysurfacesnewformsofbusinessmodelsbasedonnetworkeffects.Again,weareconvincedthattryingtodobothsimultaneously‒buildingoncontinuityanddeliberatelyexercisingastrategicpath‒woulddestroyabusinessmodelgenerally,butespeciallyindynamiccontextssuchasindigitalbusinessecosystems.Finally,thelocationwithintheframeworkpresentedinthischaptercallsforspecificimple-mentationmeasures,especiallyconcerningorganizationaldesign,whichwealsoimplicitlymentionedintheabovedescriptions.Forexample,amajorpreconditionforstrategicchoiceisresearchanddevelopment,whichneedsanappropriatespaceintheorganizationalstructure(Arenas1and3).Incontrast,rivalryinthedigitaldomainrequirestopresponsibilitiesfordatascienceregardingcompetitiveintelligence(especiallyArenas1and2),whereasfirmswithinArenas3and4willrequireamoreprominentroleofsalesandotherpersonnelforestablishingrelations.Whileweemphasizedthelinkofthedigitaldomainwiththe“realworld,”especiallyforArena4(Network),suchdepartmentswillgenerallycomprisebothspecialistsforthedigitalandforthetraditional“brickandmortar”domain.Insummary,basedontheanalysisofstrategictensionsdescribedinthischapter,weproposeaveryselectiveusageofstrategicmanagementtoolsandappropriateimplementationtools,whichcombinedigitalcompetenciesand“real-world”expertise.Inotherwords:beingholisticbybeingselective.NOTE1.Theonlinetool“CC-finder”allowsafirstquickdiagnosisofabusinessmodel.Theresultingreportfacilitatesastructureddiscussionofstrategicalternativesandtheirconsequencesregardingresources,competitivedynamics,andsustainablesuccess.Formoredetails,seehttps://www.creating-competitiveness.at/english/competitiveness-finder/.REFERENCESAdner,R.(2017).Ecosystemasstructure.JournalofManagement,43(1),39‒58.https://doi.org/10.1177/0149206316678451.Adner,R.,andKapoor,R.(2010).Valuecreationininnovationecosystems:howthestructureoftechnologicalinterdependenceaffectsfirmperformanceinnewtechnologygenerations.StrategicManagementJournal,31(3),306‒333.https://doi.org/10.1002/smj.821.Ansoff,H.I.(1979).StrategicManagement.NewYork:JohnWiley.Arrow,K.J.(1962).Theeconomicimplicationsoflearningbydoing.ReviewofEconomicStudies,29(3),155‒173.Arthur,W.B.(1994).IncreasingReturnsandPathDependenceintheEconomy.AnnArbor,MI:UniversityofMichiganPress.Baojun,J.,Kinshuk,J.,andKannan,S.(2011).Firmstrategiesinthe“midtail”ofplatform-basedretail-ing.MarketingScience,30(5),757‒775.https://doi.org/10.1287/mksc.1110.0656.Barnes,W.,Gartland,M.,andStack,M.(2004).Oldhabitsdiehard:pathdependencyandbehaviorallock-in.JournalofEconomicIssues,38(2),371‒377.SabineReisingerandJohannesM.Lehner-9781839107191DownloadedfromPubFactoryat05/28/202209:56:00AMviaColumbiaUniversityLibrary

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1108.Navigatingdigitalwaters:entrepreneurialambiguitiesandthetriadofpurposeindigitalbusinessmodelingStephanieBirknerandMartinaWeifenbachINTRODUCTIONForalongtime,entrepreneurialpracticehasbeencharacterizedbyconceptualconsidera-tionsthatplacerationalprinciplesintheforegroundandaimforthemostprecisepossibleapproachestofosterinnovation.However,thenarrativesofentrepreneursconstitutestartingupanewventureasanythingbutpredictable.Especially,thephaseofbusinessmodelingischaracterizedasajourneythroughchoppywatersofunknownmarkets,unpredictablechallengestodistinguishfriendfromfoe,orsupporterfromcompetitor.Besides,itisoftenchallengingtoformulateavaluepropositionbasedonscatteredfuturecustomergainsandpains.Provokedbythisempiricalpointofview,anincreasingnumberofresearchersstartedtoregarddecision-makinginentrepreneurshipasbeinghamperedandstimulatedbyboundedrationality—anapproachbroughtforthanddiscussedthroughoutseveralpublicationsbyHerbertSimoninthe1950s.WhiledifferentfieldsofinterestinorganizationandmanagementstudiesutilizedSimon’sapproach(foranoverview,see,e.g.,Puranametal.,2015;Cristofaro,2017),ittookentrepreneurshiptheorysometimetodoso.ItwasSimonhimselfwhoprovidedthedecisiveimpulse.Underhismentorship,Sarasvathy(2003)surveyedthedecision-makingprocessofexpertentrepreneurs.Basedonherwork,scientistsandpractitionersjoinedtoestablishadiscourseoneffectualprinciplesthataimtodealwithandtackleentrepreneurialuncertainties.Aboutthesametime,asecondstreamofresearchstartedtoarisethatisquestioningrational-ityinentrepreneurshipfromanotherperspective.Inreferencetodiscoursestakingplacewithinthefieldofstrategicmanagement,ambiguityenteredthestageofentrepreneurshipresearch.Anincreasingnumberofscholarsshedlightonthedouble-edgedswordofchallengesandopportunitiesthatambiguitiesentail(e.g.,Rigottietal.,2003;Rigottietal.,2011;Andersén,2017;vanderSandtandMauer,2019;BonillaandCubillos,2020;Chliovaetal.,2020).Ontheonehand,questioningthegivenrolesofactors,staticfunctionsofsystems,andsupposedlycausalrelationshipsinmarkets,canpavethewayfordisruptiveinnovationthroughnovelbusinessmodels.Ontheotherhand,openinguptoambiguousmeaningsandinterpretationsregardingentrepreneurialopportunities,structuralconstraints,andcontinuousneedsofiden-tity(re-)creationcanhinderbusinessmodeling.Intheirownway,bothapproachesenrichresearchers’andpractitioners’rationalattemptsatstartingaventure.Theyalsogivemeaningtovariouspossiblewaysofentrepreneurialthinkingandacting.Inthisvein,theyalsocontributetotheheterogeneityofbusinessmodeling.Theyopenupnewspaceformovingpasteconomicdesignfundamentalssuchashumanresources,financialcapital,ornetworks,andexplorenewperspectivesandpaths.Itwill,however,94StephanieBirknerandMartinaWeifenbach-9781839107191DownloadedfromPubFactoryat05/28/202209:56:25AMviaColumbiaUniversityLibrary

111Navigatingdigitalwaters95remainapureplayofideasifattemptstodealwithentrepreneurialuncertaintyandambiguitydonotservetocreateandcapturevalue.Onlyinthiswaywilltheycontributetoadistinctpurposebybothaddressingcustomerneedsandcreatingcustomervalue.Whereasentrepreneurialuncertaintyhasalreadybecomeanestablishedfieldofscientificandpracticalinterestinentrepreneurship,theunderstandingofentrepreneurialambiguitiesisstillinitsadolescence.Therefore,thischapteraimstofurthertheconceptualdebateonentre-preneurialambiguitybyapplyingittodigitalentrepreneurship,whichisstillanadolescentfieldintheventureworld.Theauthorsthereforeconsiderthefieldofdigitalentrepreneurshipasofparticularinteresttodiscussentrepreneurialambiguities,duetoitsuptonowblurry“ventureplayground.”Thisplaygroundcurrentlyprovokeschangingmarketstructures,variousformsofinterlinkedproductionandconsumptionprocesses,anditpromotesthediver-sificationoffunctionsandroles.Whilealothasbeensaidaboutdesigningbusinessmodels,theaimsandpurposesofsuchmodelshaveyettobeconsideredmoredeeplyindigitalcontexts.Creatingauniquecustomervaluebasedontheleverageofdigitaltechnologiesanddistributionchannelsusuallyaffectsthevalidityandreliabilityofestablishedbusinessmodelconcepts.Here,ambiguitiescomeintoplayinpresentandpastexperiencesalike,bothofwhichalsoaffectthedigitalbusinessmodeldesign.Digitalbusinessmodelsalsobringnewentrepreneurialentitiesintoplay.Forinstance,animportantquestionthatneedstoberaisedinthiscontextistowhatextent“digitalbeings”—forexample,artificialintelligence(AI)orchatbots/mailbots—togetherwithhumanbeingswillformthegroupof“entrepreneurialcreatures”inthefuture.Itisnotsurprisingthat,withinadigitalcontext,human‒machineinteractionscomeintosight.Suchnewaspectsofentrepreneurialambiguityhavetobeconsideredinthecontextofdigitalbusinessmodeldesign,too.Withthischapter,theauthorsaimatopeningupimplicationsforresearchandpracticeonhowtobenefitfromentrepreneurialambiguitiesinthepromotion,design,anddevelopmentofdigitalbusinessmodels.Theybuildupontheassumptionthatintroducingtheattemptofentre-preneurialpurposetothedebatemaygivewaytoacontext-specificperspectiveforhandlingambiguityeffectivelyinthefieldofdigitalentrepreneurship.Moreprecisely,theyarguethatentrepreneurialpurposecanactasacompassthathelpstonavigatethroughambiguouswatersanddeveloparespectiveframework.Thechapterisstructuredasfollows.Theresearchobjectofdigitalbusinessmodeldesignisnarroweddowntoderivedistinctivecharacteristicsthatfosterandhinderambiguity.Buildingonthis,thechapterbringsforthaconceptualapproachthataddressesambiguousaspectsandquestionsofpurposeinthecontextofdigitalbusinessdevelopmentfromthreeperspectives:micro,meso,macro.Onamicro-levelperspective,thischapteradvancesdigitalentrepreneurshipbyconsideringhowentrepreneurscanbenefitfromextendingtheirviewonthediversityofrolesandfunc-tionsindigitalarenas(forexample,artificialintelligence,creaturessuchasavatars,orchat-bots).Doingsoallowstheentrepreneurstoaligntheirpurposewithpossibleroleambiguities.Thismayhelpthemtoemploydigitalbeingsasdesignmediators,andtoovercomealackofintentionality.Lookingatthemeso-levelperspective,theauthorsconsiderambiguityasalackofcausality.Debatingthemeaningofcontent-relatedpurposemayhelptheentrepreneurdealwithentre-preneurialambiguityastheydesigntheirdigitalbusinessmodel.Thus,entrepreneursmayovercomeboundedrationalityhurdles,whichoftenbecomealimitingfactortoinnovation.StephanieBirknerandMartinaWeifenbach-9781839107191DownloadedfromPubFactoryat05/28/202209:56:25AMviaColumbiaUniversityLibrary

11296HandbookondigitalbusinessecosystemsInrespectofamacro-levelperspective,theauthorsshedlightontheextenttowhichdigitalcontentprovidesvaryingpointsofreferenceforthedevelopmentandthescalingofbusinessmodels.Thismayenableentrepreneurstodealwithcontextambiguitiesasanopportunity,andhelpthemtocircumventthreats.Inthisvein,theauthorsaddressaspectsoftheextendedcontextualconsiderationsofentrepreneurialpurposeconcerningentrepreneurialambiguities,thatis,digitalbusinessdevelopmentecosystems.Thechapterconcludeswithimplicationsforresearchandpracticeonhowentrepreneurscanusetheaforementionedlevelstobeawareofandutilizeambiguitiesfortheproductivedevelopmentoftheirdigitalbusinessmodel.Todoso,thischapterclosesbysuggestingthatentrepreneursmaypromoteandemployentrepreneurialpurposeasavaluedimensiontoseizingbusinessopportunities.BUSINESSMODELSASANINTEGRATIVEFRAMEWORKOFSEIZINGENTREPRENEURIALOPPORTUNITIESBusinessmodelsaregenerallyunderstoodasanintegrativeframeworkbasedonwhichentrepreneurscanfindandexploitnewopportunities(AmitandZott,2001).Earlyon,authorsdefinedthebusinessmodelasanactivitysystemthathelpstocreateanddelivervalue(e.g.,AmitandZott,2001;ZottandAmit,2009).Yet,itisneverstatic,andchangesandevolvesdynamically(e.g.,DemilandLecocq,2010).Itcanthereforeserveasastartingpointforinno-vation(Santosetal.,2009;Spiethetal.,2014).Inthisvein,thebusinessmodelcontributestotheunderstandingofhowacompanydoesbusinessbydescribingcentralbusinessmodelelements.Thisincludestherevenuemodel,thecustomerunderstanding,thevalueproposition,andtheentirevaluechain(Gassmannetal.,2016;Zottetal.,2011).Accordingly,businessmodelscholarshipreferstodifferentschoolsofthought,includingtheactivitysystemschool,whichtheauthorsofthischapterwilldrawupon.Theactivityschooldescribesthebusinessmodelasasystemofinterdependentactivitiesthatdrivevaluecreation(AmitandZott,2001;ZottandAmit,2009).FollowingAmitandZott,thebusinessmodelisdefinedby“structure,content,andgovernanceoftransactions”(ZottandAmit,2009,p.217).Activitiesalsoformalinkbetweendesignandbusinessmodelelements(ZottandAmit,2010).Notsurprisingly,theyareessentialinformantstothebusinessmodel’sdesign(Zottetal.,2011).Basedontheseunderstandings,thebusinessmodelhasevolvedtoaninformativeunitofanalysis(Zottetal.,2011;Wirtzetal.,2016).Adifferentschoolofthoughthasinvestigatedthemoderatingeffectsofmanagerialcogni-tioninthefieldofbusinessmodeling(Baden-FullerandMorgan,2010;TripsasandGavetti,2000;ZottandAmit,2015).Thisschooldescribesbusinessmodelsasmentalmodels,whichprovideframesofreferencetobusinessmodeldesigns(Baden-FullerandMorgan,2010;ZottandAmit,2010).Theyare,hence,consideredasbusinessmodelschemas.Attributesandrelationsinformthoseschemasandunderlinemanagerialunderstandingsofthebusinessmodeldesign(Baden-FullerandMangematin,2013;Martinsetal.,2015).Beingdescribedassimpletoabstractrepresentations,schemashelptointerpretinformationbysimplifyingandfilteringit(PoracandTschang,2013).Inotherwords,businessmodelschemasfacilitatetheassessmentofnewanduncertainbusinessopportunities(BaronandHannan,2002;Baron,StephanieBirknerandMartinaWeifenbach-9781839107191DownloadedfromPubFactoryat05/28/202209:56:25AMviaColumbiaUniversityLibrary

113Navigatingdigitalwaters972007;DewaldandBowen,2010).Theycanalsohelpentrepreneursinthedesignprocessoftheirbusinessmodels(Baden-FullerandMangematin,2013).Aventurefounderorentrepreneurinitiatesthefirstbusinessmodeldesignoftheirfirm(Cavalcanteetal.,2011)afterhavingconceivedtheearlybusinessidea.Pickingupontheconceptofbusinessmodelsasschemas,ColomboandGrilli(2005)arguethatpreviouslygatheredexperiencesimpacthowtheentrepreneurapproachestheirventure’sbusinessmodeldesignprocess.Inotherwords,everyentrepreneurhasaparticularmentalmodel,whichcru-ciallyshapeshowvalueisproposedthroughthefirstbusinessmodeldesigns(e.g.,Cavalcanteetal.,2011).Theaforementionedmentalmodelsorschemasarecharacterizedandmoldedbymentalstructures(BaronandHannan,2002;Martinsetal.,2015).Thosementalstructures,orcogni-tivemaps,cangiveadirectiontotheoverallbusinessmodeljourneyoftheentrepreneurandtheirventure(Teece,2012).Thosejourneysareneveruni-directionalbutinvolvedynamicalexplorationandexploitationphases,ortrial-and-erroranditeration(Wirtzetal.,2016).However,entrepreneurstendtoremainattachedtoschemastheyarefamiliarwith(DewaldandBowen,2010;DozandKosonen,2010).Thisstickymechanismcancauseaninertialrejectionofunknownschemas(Baden-FullerandMangematin,2013;Chesbrough,2010)andcanhinderbusinessmodeldesigns(Baden-FullerandMangematin,2013;OsiyevskyyandDewald,2014).Asarguedpreviously,theleadentrepreneuractsasanessentialshaperanddrivingforceduringtheearlybusinessmodeldesign(Cavalcanteetal.,2011;MalmströmandJohansson,2015;ZottandAmit,2015).Hence,thebusinessmodelandtheentrepreneurialjourneyareinmanywaysdependentontheentrepreneur’sabilitytoassessandquestiontheirmentalmodelsandschemas(Asparaetal.,2011).Putdifferently,thisentrepreneurialjourneyemergesatthecrossroadsofcontingencyandpurpose(SeldenandFletcher,2015).Forexample,agrowingawarenessofsocietalchallengesshapestherangeofvaluepropositionsaddressinggainsandpains(e.g.,Spiethetal.,2019;BidmonandKnab,2018).Also,accesstocapitalandinfrastructuredeterminesthemarketsthattheentrepreneursfocuson(Guoetal.,2017;Gerasymenkoetal.,2015).Abovethat,theincreasingpervasivenessofdigitaltechnologies(NadkarniandPrügl,2021)fostersthedynamicsandinterconnectionsofeconomicenvironments.Sofar,however,littleisknownaboutthedisruptionsoftechnologiesoninnovativenessingeneral,andonbusinessprocessesandstructuresmorespecifically(ElSawyandPereira,2013).Weknowevenlessabouttheimpactofdigitalcreatures(e.g.,Birtchnelletal.,2020;Fujita,2001)orartificialintelligence(e.g.,Leeetal.,2019;Valteretal.,2018)onbusinessmodels,andtheirroleasactorsandmediatorswithinthese.Inthefieldofdigitalentrepreneur-ship,thereisalsoalackofunderstandingofhowopportunitiesareidentifiedandconceptual-izedasbusinessmodels(StandingandMattson,2018).Generally,thereareindicationsthatthecompetitivelandscapeofnewventuresinthedigitalagebringsforthnewchallengesandopportunities;especiallyinrespectofbusinessmodeling(Krausetal.,2019).Ontheonehand,traditionalindustriesarecalledouttodiscovernewdigitalconfigurationsoftheentrenchedtaxonomyoftheirproductandservices(see,forasystematicapproach,Remaneetal.,2017).Ontheotherhand,newtypesofentrepreneurshipecosystemsariseandserveasamultisidedplatform(SussanandAcs,2017).Thoseplatformsarededi-catedtothemultifacetedphenomenonofdigitalventures.Bothofthoseaspectsillustratethe(infra)structuralshiftofdigitalbusinessmodelingfromtangible,customertransaction-drivenStephanieBirknerandMartinaWeifenbach-9781839107191DownloadedfromPubFactoryat05/28/202209:56:25AMviaColumbiaUniversityLibrary

11498Handbookondigitalbusinessecosystemsapproaches(physicalworldof“place”)tointangible,customerexperience-dedicatedattempts(digitalworldof“space”)(WeillandWoerner,2013).Thisshiftisthenascenthourofentrepreneurialambiguities.Onlyafewauthorshavededi-catedthemselvestotheambiguitiesthatentrepreneursexperienceastheyintentionallycreatetheirbusinessmodels(Dopferetal.,2017;seeBonillaandCubillos,2020foradiscussionofambiguityundertheconceptofKnightianuncertainty;andAndersén,2017forinsightsonroleambiguity).Finally,andtotheauthors’knowledge,theacademicunderstandingofbusinessmodeldesignsfocusingonentrepreneurialambiguitiesasaprevalentcognitiveperceptioninthedigitalageisonlyjustemerging.ENTREPRENEURIALAMBIGUITIESINTHEDIGITALAGEWhileitappearschallengingtoframeanentrepreneur’smentalmodelorschema,DenckerandGruber(2014)approacheditbyassessingentrepreneurs’priorandmostprofessionalexpe-rienceandbackground.Theirargumentation,expertise,andknowledgecanshapehowthebusinessmodeldesign’sentrepreneurialjourneybegins.Furtherresearchacknowledgedthatanentrepreneur’smentalmodelandcognitiondirectshowtheydetectandseizeopportunitiesduringbusinessmodeldesign(GeorgeandBock,2011).Ambiguitiesariseasacognitivephe-nomenonduetolackofclarityofcausality(Szulanskietal..2004;ReedandDeFillippi,1990;Powelletal.,2006;King,2007;Mosakowski,1997)orroles(Petersonetal.,1995;DierdorffandRubin,2007;KalbersandCenker,2008;TubreandCollins,2000;Wright,2009).Entrepreneurialambiguitymightariseindomain-specificfieldsorworkaswellasintheentrepreneurialecosystem.Itmightthereforebefurtherenforcedwhenroutinesandrulesdifferfromeachotherduetoalteredstructures,processes,androlesatthecrossroadsofhuman‒machineinteractionwithindigitalentrepreneurship.Asrevealedinthefollowing,theauthorsconsiderambiguitiesasadouble-edgedswordregardingentrepreneurshipandbusinessmodeling.Ontheonehand,entrepreneurscanmakeuseofthevarietyofoperationalizationsofferedbyambiguousconstructs(AstleyandZammuto,1992,p.446)andtheircapabilitytomakespaceformaneuvering(Kelemen,2000,p.492);evenmoresointhemultifacetedworldofthedigitalage.Ontheotherhand,theyhavetopreventmultiplemeaningsandinterestsfromproliferatedbyambiguityobscureaction(Jarzabkowskietal.,2010,p.221).Thismightevenhinderthemindefiningtheirroleintheentrepreneurialecosystemandinpositioningtheirbusinessmodel.Althoughthereisagapinentrepreneurshipresearch,theinfluenceofcausalandroleambi-guityhasfrequentlybeenanalyzedinmanagementandorganizationstudies.Forinstance,LippmanandRumelt(1982)revealedthatambiguityconcerningthecausalconnectionsbetweenactionsandresultsprotectsthefirm’scompetencefrombeingimitatedbycompetitors(King,2007;Mosakowski,1997).Giventherelativelyundevelopeddigitalentrepreneurshipecosystem,firstmoveradvantagesarepossible.However,theystilldependonthemoderationeffectofthe(un)controllableforces(Kerinetal.,1992;SuarezandLanzolla,2007).Furthermore,causalambiguitycanalsonegativelyaffecttheintrafirmtransferofcompeten-cies(see,fordifferentiationofintrafirmandinterfirmcausalambiguity,King,2007)becausefirmsdonotunderstandhowtheycreatetheirvaluableresources(AmbrosiniandBowman,2005;Powelletal.,2006).Transferredtothecaseofdigitalbusinessmodels,neithertheentre-StephanieBirknerandMartinaWeifenbach-9781839107191DownloadedfromPubFactoryat05/28/202209:56:25AMviaColumbiaUniversityLibrary

115Navigatingdigitalwaters99preneur(s)oftheventurenorcompetitorscandetectthecausalitiesofseizingentrepreneurialopportunities.Duetodigitaltechnologiesreshapingtheentrepreneurialprocess,manyentrepreneursfaceadditionalchallengesinexploitingopportunitiesfully,andinderivingsuccessfulbusinessmodels(Eliaetal.,2020;seeforthe(in)dependentroleofdigitaltechnologies,thespecialissueintheJournalofBusinessResearcheditedbyBergeretal.,2019).Withinmanagementandorganizationstudies,theconceptofambiguityhasreceivedparticularattentioninthecontextofknowledge-intensiveservicefirms(KIFs)(see,e.g.,Alvesson,1993,2001;deBurgundy,1995;RobertsonandSwan,2003).Researchindicatesthattheaforementionedservicefirmsstrugglewithambiguityinparticularbecauseoftheambiguousroleofknowledge(Alvesson,1993).Forinstance,Alvesson(2001,p.869)arguedthat“thedistinctivenessofknowledge-intensivefirmsliesintheambiguitiescharacterizing(a)theirclaimedcoreproduct/service(knowledge);(b)whattheyaredoing(workingwith‘knowledge’comparedtobehavinginwaysthatarelooselyconnectedtothisquality);and(c)theresultsoftheirwork.”Inlinewiththis,researchondigitalentrepreneurshipempha-sizesthatentrepreneurialprocessesandoutcomesarelessbounded,andthatthelocusoftheentrepreneurialagencyislesspredefined(Nambisan,2017),thatis,causalambiguity.Thechallengeofentrepreneurialventuresistoclearlydefineandattributetherolesintheteam(NambisanandBaron,2019).WhereasAlvesson’sstatementhastobeaffirmedinitsprimaryintentions,wemustacknowledgethatentrepreneurialambiguitydiffersfromKIFs’ambiguity.Forexample,thetacitness,complexity,andspecificityofthebusinessmodelofadigitalproductorserviceareregulatedbygovernmentalandindustrynormsofconductandinstruction.Incontrast,KIFs’ambiguitiesarecharacterizedbyinstitutionalandtransactionalvagueness.Nevertheless,entrepreneurialambiguity,likeKIFambiguity,isinfluencedbycustomerinteractionintangi-bility,whichstressestheimportanceoflanguage.Thevaryinginterpretationcontextsemanatefromthefactthatindividuals“espousetheirowntheoriesaboutthewaytheirworldworks.Moreover,theconceptuallanguagetheyuseestablishesacontextwithinwhichorganizationallifeisconstructedandreconstructed”(AstleyandZammuto,1992,p.449).Thereforelanguage,andconsequentlycommunication,isgenerallysusceptibletoambiguity,asthesenderandthereceivermostlydonotsharethesameinterpretationcontext.Likecausalambiguity,theambiguityoflanguagecanhaveneg-ativeandpositiveeffects.Communicationaffectedbyambiguitycanleadtomisunderstand-ings,conflicts,andmalpractice.Yet,ambiguouslanguagemightalsocatalyzeinnovationandcreativity(Meyer,1984,p.15).Giventhecentralroleofcommunicationinentrepreneurship(forexample,ideation,pitching),thehandlingofdiverseinterpretationcontextsbecomesaprimarytasktodetectentrepreneurialambiguitiesinthedigitalage,andtoexploittheminbusinessopportunities.Weseethatambiguitiesareacentralpartoftheentrepreneurialprocess.Linkingthisstreamofresearchandtheinsightsonbusinessmodelschemas,theauthorsdiscussinthefollowinghowentrepreneurialpurposeaidsdigitalbusinessmodelingtoturnambiguitiesintoopportunities.StephanieBirknerandMartinaWeifenbach-9781839107191DownloadedfromPubFactoryat05/28/202209:56:25AMviaColumbiaUniversityLibrary

116100HandbookondigitalbusinessecosystemsTHETRIADOFENTREPRENEURIALPURPOSEASANAPPROACHTOUTILIZEAMBIGUITIESFORDIGITALBUSINESSMODELINGAttheendofthe1990s,Slaughter(1996)broughtforththeneedtoestablishentrepreneurialspiritor,ashecoinsit,a“purpose-drivenattitude”.Entrepreneurialpurposehasindeedbecomeatopicofincreasinginterestinentrepreneurshipresearch.However,thedominanceofperspectiveonthelevelofpurposeisevident.Generally,purpose-drivenattitudesarelocatedonthemicrolevelofentrepreneurialintention.Theymightfosterorhinderentrepreneurialbehavior;asconcluded,forexample,byIskamto(2020,p.486):“Anawarenessofentrepreneurialpurposemayrepresentthepropensityofapersontohaveentrepreneurialintentionsandstartuparealcompany.”Recentdebatesanddiscoursesprimarilyfocusonthemesolevelandthecausalityofentrepreneurialpurposes.Inthisregard,Muff(2017)addressestheneedofentrepreneurialuniversitiesascustodiansofsocietytoemploypurposeasanorientationfortheiractions.Yet,besidesthis,entrepreneurialpracticeisdominatedbyperspectivesonsustainableandsocialneedsandchallenges.Forexample,ZeyenandBeckmann(2018)bringtogetherinsightsonsocialentrepreneurshipandbusinessethicstobetterunderstandandmanagethepotentialofpurpose-drivenentrepreneurship.Inlinewiththis,Munozetal.(2018)discusspurpose-drivenbehaviorinsustainableentrepreneurship.Theiranalysisrevealsthreeimprintingsequencesandcriticalsensitivewindowsforpurpose-drivenventuring:(1)scopeofpurpose;(2)timingofpurposeformalization;and(3)shiftsinthesourceoffeedback.AmoregeneralapproachhasbeentakenbyOsterwalderandPigneur(2011).Theychal-lengetheassumptionthatprofitandpurposecomeateachother’sexpenseandcanhardlybealigned(foraliteraturereviewonnon-profitentrepreneurialorientation,seeLacerdaetal.,2020;ontheentirearrayofpurpose-drivenorganizations,seeDahanetal.,2010).Indepth,OsterwalderandPigneurdiscussexplanatorycasesofcreativebusinessmodels,whichshowthatprofitandpurposearenotmutuallyexclusive(forfurtherinsights,seeThompsonandMacMillian,2010).Insum,researchersattempttodesignandimplementbusinessmodelswherebyprofit-seekingactivitiesareamplifiedbypurposeandnotatthecostofanysacrifices.Similarly,BrandtandZnotka(2019)stressthatadheringtotheirentrepreneurialpurposeisbeneficialforentrepreneurialdecision-makersandentrepreneurs,sincetheyaremoresensitivetotherelevanceofinnovation.Inthis,theauthorspointtoadependencybetweenpurpose-drivenbusinessmodelingapproachesandimpact.Evenmoreso,therelianceonthesocialandeconomicenvironmentofagivenentrepreneurialecosystembecomesapparent.Tosumup,theliteratureprovidesinsightsthatpurposeiswovenintobusinessmodeling’sentrepreneurialjourneyonthreelevels.Meanwhile,allofthoselevelsareshapedbyambi-guity.Thissectiondiscusseshowthedigitaleraimpactsthosetwostrandsofentrepreneurialbusinessmodeling.MicroLevelHorstetal.(2020)seemtobethefirsttoconsidertheimpactofroleambiguityonthedigitalera’sentrepreneurialself.Havingstudiedentrepreneurs’socialmediaactivities,theyhavecomeupwithnarrativesofthreeentrepreneurialidentities.First,theauthorsdelineatesolution-andlifestyle-drivennarrativeslinkedtoentrepreneurialstrategiesofdesigningtheirStephanieBirknerandMartinaWeifenbach-9781839107191DownloadedfromPubFactoryat05/28/202209:56:25AMviaColumbiaUniversityLibrary

117Navigatingdigitalwaters101businessmodel.Second,someentrepreneurscommunicatewiththeirsocialmediaaudiencesinawaythatseemstohelptheminshapingtheir“purpose-drivenentrepreneurialidentity.”Thisapproachisoftenlinkedtoabusinessobjectivethatfocusesonbothtacklingsocietalproblemsandfindingwaystoimprovesocietythroughsustainableproductsandservices(Horstetal.,2020,p.101).Here,theentrepreneursusedigitalcommunityaccesstodevelopanentrepreneurialidentityandtodealwiththeirroleambiguity.Inthisvein,purposeorientationmightalsoassistentrepreneursinreframingpreconceivedbusinessmodelideasandmentalmodels.MesoLevelAsdiscussedpreviously,causalambiguitychallengesentrepreneursconcerningthetacitnessofskillsandcompetenciesthattheyshouldbeabletodetectanddeveloptheirbusinessmodels.Thestereotypedapproachesofwhatisconsidered“good”or“successful”entrepreneurship,respectively,enhancetheblurrinessofwhichexpertiseprofileisrequiredforbusinessmode-lingandcontinuousbusinessmodelinnovation.Addingtothat,thedigitalerarequiresdigitalliteracyitselftoevolve.Inotherwords,digitalliteracyplaysacrucialroleintheidentificationandtrainingofentrepreneurialtalentsinthedigitalage(Youngetal.,2020;Dudinetal.,2020).Toprovethispoint,White(2019,p.261)emphasizes:”Market-responsivebusinessschoolsarestartingtoshiftfromatraditionalfocusontransactionalskillseducationtoamorepurpose-drivenvalues-basedleadershiplabora-torydesignedtoincubateinnovationacrosstheboard.”Hence,aligningbothdiscourses,apurpose-drivenapproachtoaccomplishingdigitalliteracyforbusinessmodelingislessaboutaddingcontext;itismuchmoreaboutreflectiveandvalue-centricapproachestofostertheentrepreneuriallearningjourneytoutilizecausalambiguity.Causalambiguityinitselfbecomesabridgetodesigningbusinessmodelsthatarebothpurpose-orientedanddigitallydriven.Thisaddsanentirelynewperspectivetoenhancingentrepreneurialmentalmodels.MacroLevelFollowingMazzarolandReboud(2020),therealityofentrepreneurshipisbroaderthanthecommonideaofself-directed,profit-maximizingopportunism,thatis,employingthebusinessmodelasmeanstocreatepersonalwealthforemost.Mazzaroletal.(2018),forinstance,provideexamplesofbusinessmodelscontrastingthisnotionbydescribinghowco-operativeenterprisesact.BuildingonLimniosetal.(2018)theyputforthanadditionalbusinessmodeltypebydescribing“communitiesofpurpose”:“communityofpurposethathasbeenformedtosolveeconomicand/orsocialproblemsthatcannotbesolvedaseffectivelybyanyoftheotherbusinessforms(forexample,IOFs[investorownedfirms],not-for-profit,state-ownedenterprises)”(Mazzaroletal.2017,p.486).Here,insightsonthedynamicsofdigitalentre-preneurship—forexample,Beliaevaetal.(2019)—providehelpfulperspectivesonthevaguenessofdigitalmarketseparationsandinvolvedparties,processes,andstructures(seealsoEliaetal.,2020).Theirfindingsprovideevidence“thatdigitalentrepreneurshipdoesnotdevelopindependently,butisratherembeddedinandfacilitatedbyitsinnovationecosystem,theroleofwhichdiffersatdifferentstagesofcompanydevelopmenttowardgreaterdigitali-zation”(Beliaevaetal.,2019,p.275).Cultivatinganonlineorvirtualcommunityofpurpose,asdiscussedbyBhattacharyyaetal.(2020),mightsupportmitigatingmarketseparationandStephanieBirknerandMartinaWeifenbach-9781839107191DownloadedfromPubFactoryat05/28/202209:56:25AMviaColumbiaUniversityLibrary

118102Handbookondigitalbusinessecosystemsknowledgeasymmetry,whichareoutcomesofcontextambiguitywithintheentrepreneurshipecosystemindigitalarenas.CONCLUDINGREMARKSThischapterdiscussestheextenttowhichcurrentresearchonentrepreneurialpurposeoffersinsightsonthechallengesandopportunitiesofdigitalbusinessmodeling.Moreprecisely,itsuggestsacontext-specificperspectiveforhandlingambiguityeffectivelyinthefieldofdigitalentrepreneurship.Itisthroughtheconceptofambiguitythattheauthorsidentifychallengesandchangesintheentrepreneurialjourneyofdesigningandimplementingdigitalbusinessmodels.Theauthorsarguethatentrepreneurialpurposecanactasacompassthataidsnav-igationthroughambiguouswaters.Tothisend,thecontributionofthechapterisasfollows.Theresearchobjectofdigitalbusinessmodeldesignisnarroweddowntoderivedistinc-tivecharacteristicsthatfosterandhinderambiguity.Thischapterbringsforthaconceptualapproachthataddressesambiguousaspectsandquestionsofpurposeindigitalbusinessdevel-opment,fromthreeperspectives.Fromamicroperspective,thechapterdiscusseshow—inthecontextofdigitalentre-preneurship—anextensionoftheentrepreneur’sviewtospacesofactionof“digitalbeings”istakenintoaccount.Thisisespeciallyvitalwhendebatingvaryingformsofentrepreneurialpurposethatmayhelpentrepreneurstonavigateambiguity.Ontheonehand,ambiguityisconsideredanobstaclewhentheentrepreneurslackintentionality.Ontheotherhand,itcanalsobecomeanopportunityfordevelopingaroleidentitywhentheentrepreneurhastodealwiththeirroleambiguity.Onamesolevel,theauthorsconsiderambiguityasalackofcausalitymoreclosely.Indeed,itisamatterofdebatingthemeaningofcontent-relatedpurposeasaformofdealingwithentrepreneurialambiguityconcerningdigitalbusinessmodeling.Thisalsohelpstoovercomethehurdlesofmentalmodels,thatis,boundedrationality,whichoftenbecomesalimitingfactortobusinessmodeldesignandbusinessmodelinnovation.Thechapterdiscussestowhatextentdigitalcontenthasdifferentreferencepointsfordevelopingandscalingbusinessmodels.Thosebusinessmodelsbothfosterambiguityasanopportunityandcircumventthreat.Thechapteralsoaddressestheextendedcontextualconsiderationsofentrepreneurialpurposeundertheperspectiveofentrepreneurialambiguitiesfromthemacroperspective,thatis,digitalbusinessdevelopmentecosystems.Inaddition,itshowsthatso-calledcommunitiesofpurposecanleadtomanyadvantages,includingloweringknowledgeasymmetriesandmitigatingmarketseparations.Indoingso,thechapteraddsamorestrategicandentrepreneurialnotion.Itacknowledgesambiguitiesthatcomewithdesigningandrealizinganewbusinessmodelasastrategicpartoftheentrepreneurialjourney.Yet,italsoshowsthattherealizationofabusinessopportunityisaccompanied,framed,andsupportedbyentrepreneurialpurposeastheguidingprincipletodealwithentrepreneurialambiguities.Allinall,theconceptualresearchathandleadstothefollowingimplicationsforfutureresearchandpractice.StephanieBirknerandMartinaWeifenbach-9781839107191DownloadedfromPubFactoryat05/28/202209:56:25AMviaColumbiaUniversityLibrary

119Navigatingdigitalwaters103IMPLICATIONSFORFUTURERESEARCHThestrandsofresearchonentrepreneurialambiguityandentrepreneurialpurposearereceiv-ingincreasinglymoreacademicconsideration.However,aresearchgappersistsconcerninghowambiguityandpurposecaninformeachother.Asarguedinthischapter,ambiguityandpurposearemutualinformants,whichsupportthedesignofdigitalbusinessmodels.Toinvestigatethisfurther,futureresearchmightconsiderathreefoldapproachconcerningtheaforementionedlevels.Lookingatthemicro-levelperspective,adeeperinvestigationcouldlookintohowentrepre-neursconceiveapurpose-drivenbusinessmodelperspective.Ofparticularinterestcouldbeaninvestigationofthemoderatingeffectsofthecommunicationofdigitalandhumanbeingswhoareinsearchofentrepreneurialpurpose.Regardingthemesolevel,theauthorsrecommendfuturestudiestoaddresshowtodefineandrealizethevalueproposition.Todoso,theycouldincludethequestionof“why?”tothebusinessmodel:acenterpiece,whichtheauthorscallapurposestatementorpurposeproposi-tion.Here,itmightbeofparticularinteresttoputaresearchemphasison(unconscious)biasesandhowthoseaffectthescopeofthepurposepursued.Besides,onecouldconsiderwhethertheutilizationofdigitaltechnologiesshapesbias,howitdoesso,andhowitcanbeusedtodefinepurpose.Finally,concerningthemacro-levelperspective,futureacademiamaywanttoadvancethecurrentapproachestobusinessmodeldesign—business-to-business(B2B)andbusiness-to-customer(B2C)—byconsideringabusinesstosociety,whichtheauthorsdefineasB2US.Aresearchgaparounddigitalarenasasdistinctentrepreneurialecosystemsisopeningup.Inthis,onecouldparticularlylookathowthosearenashelptodetectandestablishB2USbusinessmodels.PRACTICALIMPLICATIONSBasedonadeepenedunderstandingofentrepreneurialpurpose,entrepreneurscouldusetheirpurposestatementasastartingpointtoformulatetheirventure’smissionandvision.Thus,theygainaclearerpictureofroleambiguitiesandtheirentrepreneurialjourney;thatis,theirshort-,mid-,andlong-termgoalsandstrategy.Havingsuchaclearunderstandingoftheventure’spurpose,mission,andvisioncouldincreasetheventure’sfocusedactionandfacilitatetheentrepreneurialsearchforinvestment.Giventhatventuresusuallyactunderresourceconstraints,theconcentratedeffortcaneasethealignmentofactions.Inthemeantime,itcanhelptoapproachentrepreneurialambiguitiesandsupportthedesignofthebusinessmodelwithsensitivitytoresourcesandpurpose.Theclarityoftheirpurpose,asmentionedearlier,mightservetheentrepreneurtopresenttheirventurepitchbeforeprospectiveinvestors.Inthis,theentrepreneurialpurposeservesasabaselineofcausalambiguitiesand,assuch,foreffectivecommunicationtoprospectiveshareholders.Finally,partofaventure’sjourneymaybetheneedtochangeorpivotitsbusinessmodelsduetocontextambiguities.Whileshort-termgoals,aswellasthefundamentalbusinessmodelelements,canthuschange,asharedpurposesupportstheentrepreneur(s)andtheirteamtomaintainacommonoutlook.StephanieBirknerandMartinaWeifenbach-9781839107191DownloadedfromPubFactoryat05/28/202209:56:25AMviaColumbiaUniversityLibrary

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1259.Therelevanceofentrepreneurshipecosystemsforstart-upsuccess:aventurecapitalperspectiveNinaSchumacherINTRODUCTIONDuetotheirincreasingeconomicimportance,entrepreneurshipandstart-upshavereceivedconsiderableattentionbypolicy-makers,themedia,andthepublicinthelastdecade(Hahn,2014).Itisgenerallyassumedthatentrepreneurshipandsuccessfulstart-upsareprerequisitesforanddriversofsmart,sustainable,andinnovativeeconomicgrowth(OECD,2010).Asaresult,considerableattentionhasbeenpaidtopoliciesandinitiativescreatingfavorableconditionsforstart-ups,forexampleartificialentrepreneurshipecosystemssuchasincubatorsorinnovationclusters.Inlightofthesedevelopments,itisnotsurprisingthatresearchonentrepreneurialeco-systemshasgarneredincreasingattentioninthelastdecade(Zahraetal.,2014;MasonandBrown,2014;TheodorakiandMesseghem,2017).Mostoftheliteratureoncontextualfactors(AlvedalenandBoschma,2017;Malecki,2018;Cavalloetal.,2019)andrelatedexplanationswhystart-upssucceedorfailis,however,stilllargelyinformedbytraditionalapproachestoentrepreneurshipfocusingonmicro-levelfactors(thatis,personalityfactors).FollowingZahraetal.(2014),onecanidentifyatleasttwoparadigmaticallydifferentfieldsinentrepreneurshipresearch,witheachofferingdifferentperspectivesontheeconomicagentandthesocio-economiccontext.Thefirstisthegeneralentrepreneurshipliteraturefocusingonbusiness-specificcharacteristicsatthemesolevel(firmlevel)and/oronentrepreneurialbehav-iorandpersonalitytraits(microlevel).Thesecondone,contextualresearch,examinestheentrepreneurialframework,includingspatialinteraction(networkeffects)ofentrepreneurs,companies,andinstitutionsinregionalecosystems,theeffectsofmacroeconomicfactors,orothermacro-levelfactors.Amicro‒macrodualismcanalsobeidentifiedincontextualentrepreneurshipresearch.Forexample,researchontheemergenceofentrepreneurialecosystemsdistinguishesbetweenabottom-up(growthwithoutavisiblehand)andatop-down(governedbyavisiblehand)approach(ScaringellaandRadziwon,2018).Othercontextualresearchaddressestheques-tionofwhetherinnovativeentrepreneurshiprequiresartificialecosystemsatall(FerraryandGranovetter,2009).Shepherdetal.(2019)haveproposeda“meta-framework”andcallonentrepreneurshipresearchtomovebeyondthesekindsofdualismstoofferadifferent,tri-dimensionalapproachconsideringcontextualfactors,entrepreneurialpersonalityfactors,andentrepreneurialbehavior.Thepresentstudyfollowsthispropositionbyexaminingtherelevanceofsuccessfactorsatallthreelevelsfordigitalstart-upsfromtheperspectiveofventurecapital(VC)investors.Alsodrawingonoriginalempiricalresearch,thischapteraddressestworesearchquestions109NinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

126110Handbookondigitalbusinessecosystems(RQs).First,whatistheeffectofcontextualfactorsontheentrepreneurialperformanceofdigitalstart-ups?Second,towhatextentdocontextualfactors(macro-levelfactors)affectentrepreneurialsuccesscomparedtomeso-levelfactors(digitalstart-upbusinessmodel)andmicro-levelfactors(entrepreneurialpersonalitytraits)?ToanswerthesetwoRQs,thischapterfirstreviewsthecurrentdebateondifferentcontex-tualresearchapproaches.Inadditiontotraditionalmonism,whichexploresoneperspectiveofentrepreneurialsuccess,anddualism,whichintegratestwoperspectives,anextendedperspectivereceiveslittleattention(Shepherdetal.,2019).Followinganintegratedapproach,thisstudyoffersnewinsightsfromboththeoreticalandempiricalperspectives.TheresultsofthisempiricalinvestigationshowthatfromtheperspectiveofVCinvestors,onlytwoofthesixcontextfactorgroups,namelyhumancapitalandfinance,areconsideredrelevantforstart-upsuccess.Moreover,theoverallinfluenceofcontextualfactorsonthesuccessofadigitalstart-upisassessedhereascomparativelylow.Thischapterconcludesthatartificialentrepreneurialecosystemssuchasregionalclustersmightnotbeasrelevantasotherfactorsinsupportingentrepreneurship.Thisisallthemoretrueinthedigitalage,whichsupportsdecentralized,cross-borderactivitiesatcomparativelylowercost.THEORETICALPERSPECTIVESResearchadoptingacontextualperspectiveexaminestheinteractionbetweenstart-uploca-tion,thecontextualfactors,andentrepreneurship.Despiterapiddevelopmentsininformationandcommunicationtechnology(ICT),start-upsarestilllocatedinspecificareas,creatingregionalclusters.Entrepreneurship,evenofthedigitalkind,remainsalocalizableandlocal-izedphenomenon(BrownandMason,2017;Kollmannetal.,2018).Non-localinteractions,however,mustbeconsideredaswellbythoseseekingtoexplainentrepreneurshipandstart-upsuccess(Spigel,2017).Incontextualresearch,therearetwoapproachesexplainingtheemergenceofentrepreneur-ialecosystems(ScaringellaandRadziwon,2018).Thebottom-upapproachexplainsecosys-tememergenceandgrowthwithoutavisiblehand.Thefocusisonevolutionarydynamics:differentinstitutionsandindividualsinteractwitheachother,drivenbytheirself-interest.Multi-actornetworksemerge(Isenberg,2014;Colomboetal.,2017;AuerswaldandDani,2017;BrownandMason,2017;BelitskiandGodly,2020).Ideally,suchaspontaneousorder-ingprocesscreatescumulativeself-perpetuatingeffectsthatinfluencenotonlythesuccessrateofstart-ups,butalsothefuturelevelofentrepreneurship(BrownandMason,2017).Incontrast,thetop-downapproachassumesthatentrepreneurialecosystemsdonotemergespon-taneously,butneedtobegovernedbyavisiblehandsuchaspolicy-makersorgovernmentalorganizationsprovidingresourcesandacertainformofgovernance(Stam,2015;Spigel,2016;Colomboetal.,2017).However,bothapproachesregardentrepreneurshipandentrepre-neurialresourceprovidersasthekeysuccessfactorsofentrepreneurialecosystems(Acsetal.,2014;BrownandMason,2017;Acsetal.,2017b).Anecosystem—fromtheoriginalperspectiveoftheterm—isacomplex,dynamicsystemoflivingorganismsandemerging,self-organizeddevelopment(Ohetal.,2016;ScaringellaandRadziwon,2018;Cavalloetal.,2019).Anentrepreneurshipecosystemcanbeunderstoodinthesamemanner,althoughthisanalogyiswidelycriticizedasflawed(Ohetal.,2016).Thestart-up(founder)ecosystemiscomparabletoanaturalsystem,althoughthedynamicswithinNinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

127Therelevanceofentrepreneurshipecosystemsforstart-upsuccess111thisecosystemaredeterminedbysocialinteraction(StamandSpigel,2016;Cavalloetal.,2019).Insuchasystem,theentrepreneurialindividualfunctionsasacatalystofresourcesandtheirrecombination,whichtheycandevelopbetterininteractionwithotherindividualactorsinthestart-upandinnovationprocessingeographicalproximitytousableresources,thaninisolation(AlvedalenandBoschma,2017;Eliaetal.,2020).Thesedistance-sensitivecontactnetworksleadtoaself-reinforcinginteractionandspatialconcentrationofstart-ups(Cavalloetal.,2019).SiliconValleyisregardedasaprimeexampleorarchetypeofsuchanentrepreneurshipecosystem.AlthoughSiliconValleyhasevolvedoverdecadesinseveralmorphogeneticstepsinaself-emergingandself-enforcingprocess(FerraryandGranovetter,2009;Eliaetal.,2020),economicandpoliticalexpectationsfortheestablishmentofartificialentrepreneurshipecosystemshaveneverthelessbeentriggered(e.g.,Engel,2015).Inrecentyears,however,onecanobservethefailureofseveralprojects(innovationclusters)thataimedtorecreateSiliconValley’ssuccess(FerraryandGranovetter,2009).Thisraisesthequestionofwhetherinnovativeentrepreneurshipneedsartificialecosystems,orwhethersuchanapproachisratherwishfulthinkingonthepartofregionaleconomicpolicy-makersandstate-centriceconomicplanning,especiallyinthecontextofincreasingdelocalizationduetodigitaltransformation(Riasanowetal.,2021).Sinceentrepreneurialecosystemresearchcanbedescribedasarelativelyrecentdevel-opment,noconsistentinteractionperspectivehasyetbeendeveloped(Cavalloetal.,2019).Thus,aliteraturereviewonentrepreneurialecosystemsinitiallyfacestheproblemofnounam-biguousdefinitionofcontextualfactors(Ohetal.,2016;ScaringellaandRadziwon,2018;Cavalloetal.,2019).Thecontextualfactorperspectiveonentrepreneurshiphasbeenderivedfromthemacroeconomiclocationtheory(Boutillieretal.,2016).Porterthenfurtherdevelopedthelocationtheoryatthefirmlevel.Hestatedthat,contrarytothethesisofadevaluationoftheglobaleconomy’slocationthroughdigitization,small-scale,location-basednetworkingcontinuestobeanimportantsuccessfactor,especiallyforsmallandmedium-sizedenterprises(Porter,2000).Microeconomicmodelsandtheoriesexplaintheimportanceofspatialconcen-trationintermsoflowerinformationcostsandothertransactioncosts.Thus,followingtheseapproaches,spatialconcentrationleadstothepossibilityofincreasedcross-companydivisionoflaborandthuscorrespondingoptionsforspecializationasabasisforfirmgrowth(Porter,2000;Delgadoetal.,2014).Researchfromthespatialcontextperspectivethereforereferstotheself-reinforcingnetworkeffectsandperformanceleversfromclustering.Thus,ratherthanlookingatindividualentrepreneurs,thisperspectivelooksattheeffectofthesumofdifferentactorsandtheeffectsresultingfromspatialconcentration(Delgadoetal.,2014).SomestudiesthathaveexaminedsingleorseveraloftheentrepreneurialecosystemfactorsdefinedbyIsenberg(Table9.1)findsomeevidencefortherelevanceofsingle-factorgroupsorseveralsubfactorstosuccess.Regardingthefactorgroup“HumanCapital,”Ungeretal.(2011),JainandAli(2013),Richteretal.(2016)findevidenceforthesuccessrelevanceoftheavailabilityofflexible,multi-skilledmembersofthefounderteam.Theseentrepreneurial-mindedandhighlyqual-ifiedemployeesareeasiertofindinregionalentrepreneurialecosystems.SchweerandSahl(2017)showthatemployeeswithadvancedtechnologicalskillsinparticularcontributetostart-upsuccess.Regardingthefactorgroup“Markets,”Richteretal.(2016)findthatmarketswithalargerpoolofearlyadoptersandcustomersinterestedininnovationgivestart-upsmoreopportuni-NinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

128112HandbookondigitalbusinessecosystemsTable9.1Isenberg’secosystemfactordimensionsFactorgroupsComponentsPolicy1.Government,institutionalandlegislativesupport(taxlaws,facilitationofbusinessstart-ups,researchinfrastructure)2.RecognitionandpublicsupportofentrepreneurshipFinance3.Diversityoffundingopportunitiesthroughbanksandprivateequity(PE)orventurecapitalCulture4.Entrepreneurshipculture:highreputationofentrepreneurshipandtheexistenceofexemplaryentrepreneurs5.Cultureofrisk-taking,innovationandgeneraloptimismBusinessServices6.Non-governmentalorganizationswithdiverseservicessuchasbusinessplancompetitions,entrepreneur-shipconferences,andothers7.Infrastructure(accesstotechnicalservices)8.Accesstobusiness-relatedservices(e.g.,consultantsintechnology,law,investment,businessadministration)HumanCapital9.Qualificationlevelofthelabormarket10.EducationalinstitutionswithtertiaryeducationandentrepreneurshipeducationMarkets11.Corporateandforeignnetworksandaccesstomultinationals12.Homemarketwithsufficientvolumeforthefirstgrowthphasetiesforproofofconcept.SchweerandSahl(2017),Delgadoetal.(2014),SullivanandFord(2014),andEliaetal.(2020)showthatlocalentrepreneurialnetworkstendtofacilitatetheexchangeofknowledge(knowledgespillover)andtoeliminatestart-upresourcedeficits.Regardingthefactorgroup“Finance,”Richteretal.(2016)andLeeetal.(2015)providesomeevidencethatregionalecosystemsimprovetheVCaccess.Schwarzkopf(2016),aswellasAngereretal.(2017),stressnotonlythediversityintheformoffinancingbutalsotheinstitutionalstructureoffundingsuchastheavailabilityofbusinessangelsprovidingnotonlyequitycapitalordebtcapitalbutalsospecificcoachingandcommitment.Regardingthefactorgroup“Supports,”Richteretal.(2016)stressthatacceleratorpro-grams,start-upconsultants,andotherinstitutionsprovidingspecializedstart-upservicescontributetothesuccessofemergingbusinesses,particularlybyprovidinginformationonbusinessadministrationandtechnologies(Acsetal.,2014).Schwarzkopf(2016)findsthatnon-governmentalinstitutionssuchasuniversity-affiliatedassociationsorentrepreneurialeducationprogramsalsohaveapositiveeffectonstart-ups.Moreover,SchweerandSahl(2017)considerahigh-levelICTinfrastructureinparticularasrelevantforsuccess,andnotonlyfordigitalstart-ups.Regardingthefactorgroup“Policy,”Richteretal.(2016),RichterandSchildhauer(2016),andSchwarzkopf(2016)notethatatransparentbureaucracyaswellaslowtaxesarethemostsuccess-relevantfactorsinthisgroup,particularlyattheearlystages,butalsoatthegrowthstage.Overall,itremains,thatthenetwork-centricentrepreneurshipapproachconsidersknowl-edgespilloversandnetworkeffectsresultingfromspatialconcentrationofentrepreneurshipinentrepreneurialecosystemsasthebasisforinnovationdynamicsandregionaldevelopmentandgrowth(HugginsandThompson,2015).Otherapproachesdisputetherelevanceofclustersuccess.Kroiß(2003)assumedthatthelocationdecisionisirrelevanttoadigitalstart-upcompany’ssuccess.Richteretal.(2016)identifyabout175publicationsexaminingtheentrepreneurialecosystemintheperiod2000NinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

129Therelevanceofentrepreneurshipecosystemsforstart-upsuccess113to2015,butfindlittleevidenceforcontextualfactorsassuccess-relevantcomparedtothepersonalcharacteristicsofentrepreneursorthefoundingmanagementteam.Fueglistalleretal.(2008),forexample,defineentrepreneurshipasaprocessinitiatedandcarriedoutbyindividuals,consistingofthreemainactivities:(1)identifying;(2)evaluating;and(3)usingbusinessopportunities.Acsetal.(2017b),incontrast,defineentrepreneurshipintermsoftheresultsoftheentrepreneur’sactivities:entrepreneursfoundbusinesseswiththegoalofdevelopingscalable,high-growthcompanies.Boththedefinitionreferringtoactivitiesandthedefinitionreferringtointentionsandresultsmarkthegeneraldifferenceintheacademicunderstandingofentrepreneurship.WhiletheentrepreneurofFueglistalleretal.(2008)seemstobebestrepresentedbythebusinessownerwhoonlyreplicatesexistingbusinessmodelstoearnaliving,theentrepreneurofAcsetal.(2017b)seemstobethecreativedestroyer.BothconceptsarealreadyprovidedbySchumpeter’sdichotomyoftheentrepreneurcreatingnewproductsandbusinessesmodelsandthusdestroyingoldmarketsandbusinessmodels,versusthelandlordentrepreneurwaitingonlyforopportunitiestoearnaliving(Schumpeter,1912).However,bothentrepreneurshipparadigmsemphasizeindividualbehaviorandintentionsratherthanthecontextualfactorsthatsupportorenhanceentrepreneurialbehaviorandstart-upsuccess.Despitetheincreasingnumberofpositivefindingsattestingtotheimportanceofindividualcontextualfactors,Shepherdetal.(2019)concludethatthefocusintheliteratureandrelatedfindingsconfirmthatmicro-levelfactors(characteristicsoftheentrepreneur/foundingteam)seemtohavethemostsignificanteffectonstart-upsuccess.Thisconsensus,however,mayalsohavemethodologicalreasons.Boththeecosystemapproachandtheentrepreneurshipapproachcanessentiallybecharacterizedbytheirspecificresearchfocus,whichisolateseitherthecontextualfactorsofsuccessfulentrepreneurshiporthemicro-levelfactors.However,theentrepreneurialprocessmustbeconsideredasconsistingofseveralstagescharacterizedbytheinteractionofindividual,organizational,andcontextualfactors(Shepherdetal.,2019).RESEARCHDESIGNAsystematicliteraturereviewbyKöhn(2017),whichalsoconsiders58articlesonstart-upvaluationdeterminants,findsthatbusinessmodelcharacteristics,founderandteamcharac-teristics,andfinancialinformationarethecoreinformationcollectedandevaluatedintheassessmentprocess.ThisfindingsuggeststhatVCinvestmentmanagersarehighlyinformedexpertsandthatVCinvestmentpracticesalsoseemtobebasedonmultidimensionalmodelsofentrepreneurialsuccess.Thischapterdrawsonoriginalresearchusingamulti-perspectiveapproachtoexaminethethreedimensionsofentrepreneurshipresearchfromtheperspectiveofVCinvestmentman-agersinanexplorativemanner.Theresearchaimstoexploretherelativeimportanceofandinteractionbetweenspecificfactorgroupsandsubfactorsacrossdimensionswithregardtodigitalentrepreneurship.Tothisend,onereferencemodelforeachmainresearchperspectivewasoperationalizedandusedasabasisfordatacollectionthroughguidedexpertinterviews:first,theIsenbergmodelasareferencemodelforcontextualfactors;second,theOsterwalder‒Pigneurbusinessmodelapproachasamodelforbusinessmodelcomponents(OsterwalderandPigneur,2005);third,theGiessen‒Amsterdammodelasapersonalityfactormodel(RauchNinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

130114HandbookondigitalbusinessecosystemsandFrese,2000;RauchandFrese,2008).However,thefocusofthischapterisspecificallytopresenttheexploratoryresearchatthemacrolevel.ThisisreflectedinthetwoRQsdefined.TheIsenbergentrepreneurshipecosystemmodel(Isenberg,2010,2011)usedtooperational-izethiscontextualfactordimensioniscommonlyusedinentrepreneurshipecosystemresearch(Bernardinoetal.,2019).Isenberg(2011)includessixfactordimensions(factorgroups)thataffectstart-upactivityandperformanceintheregionalecosystemset-uporatthenationallevel,allofwhicharemeasurableandthusmanageable(Mcquaid,2002;BröckerandFritsch,2012;Laschetal.,2013).Thesixfactorgroupsinclude12subfactors,whichcanbecatego-rizedasfollows(Table9.1).Nevertheless,empiricalresearchbasedontheentrepreneurshipecosystemmodelhasyettoprovideconclusiveevidencefortheinfluenceofindividualfactorsoftheIsenbergmodelortheinteractionsbetweenthesefactorsandstart-upentrepreneursonnewventures’emergenceandperformance(RoundyandFayard,2019).Forexample,Feld(2012),Carayannisetal.(2016),andSpigel(2017)findthatvitalentrepreneurialclustersshowhigherconcentrationsofventuresandnewproducts,andahigherdegreeofinnovativeness.Therefore,recentstudieshavequestionedtherelevanceofecosystemgovernanceandregionalpolicy.FutureresearchshouldfocusmoreonthespecificeffectsoftheIsenbergmodel’sfactorgroupsonentrepreneurialactivitiesandperformance(RoundyandFayard,2019;KanshebaandWald,2020).Thus,thischaptercontributestofillingthisresearchgapbyusingtheopera-tionalizedIsenbergfactorstostructurethefirstpartoftheexpertinterviewguide.RegardingRQ1,theexpertswerefirstaskedaboutthesuccessrelevanceofeachfactorgroupincludedintheIsenbergmodel.Avisualrenderingofthemodelandadditionalexplan-atorynoteswereprovidedonahandoutforinterviewees.Second,theexpertswerethenaskedtoselectamaximumofthreefactorgroupsthattheybelievedhadthegreatestinfluenceonthesuccessofadigitalstart-upandtoweightthemsothatthesumaddedupto100percent.Inthefinalstepofthefirstpart,expertswereaskedtoexplainthereasonsforinmoredetail.RQ2asksaboutthesuccessrelevanceofeachofthethreefactordimensionsasapercentageofoverallentrepreneurialsuccess.ThedataforansweringRQ2werecollectedinthesecondpartoftheinterview.Again,visualrenderingsofthethreerelevantmodels(theIsenbergmodel,theOsterwalder‒PigneurbusinessmodelandtheGiessen‒Amsterdammodel)andadditionalexplanatorynoteswereprovidedonahandoutforinterviewees.Thequestionsontheweightingofthesuccessfactorgroupsandthefactordimensionsserveasintroductoryquestionsinbothinterviewparts.Thesequantitativefactorweightingswererepresentedbydescriptivestatistics.Thequalitativedataobtainedineachcasesubsequentlyfollowsthequalitativecontentanalysis.ExpertswereidentifiedusingthememberlistoftheGermanFederalAssociationoftheDigitalEconomy(BVDW),whichalsolistsstart-upinvestorsfocusingondigitalventures.Basedonthislistof725potentialexpertsandaninitialmailingbye-mailormessagingviatheprofessionalonlinebusinessnetworkLinkedIn,77expertswererecruitedandinterviewedmainlyeitherface-to-face,overthephone,orinvideoconferencesbetweenAugust2018andFebruary2019.Atotalof731statementswerecollected,andfollowingthequalitativecontentanalysisofMayringandgroundedtheorymethodology,categorizedinathree-stage-procedure(open,theoretical,andselectivecoding).Codingwasbasedonthemodel-theoreticalref-erencesprovidedbythefactormodelsforeachresearchperspective.However,sincetheresearchquestionstobeansweredhererefertothecontextperspective,onlythestatementsonthecontextualfactorswereconsideredandanalyzedinthecontextofthisstudy.NinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

131Therelevanceofentrepreneurshipecosystemsforstart-upsuccess115Finally,itisimportanttonotethatpriortothestartoftheinterview,afilterquestionwasusedtoconfirmthattheintervieweewasindeedanactiveprofessionalinvestmentmanagermakingdecisionsonthefundingofdigitalstart-ups.SAMPLEDESCRIPTIONAll77VCmanagerssurveyedmakeinvestmentdecisionsinthecontextofdigitalstart-upsaccordingtotheintroductoryfilterquestion.Thirty-fiveofthemhavebeenworkinginthisfieldformorethanfiveyears(45.5percent),and24.7percentoftheexpertssurveyedhavetenormoreyearsofprofessionalexperiencetodrawon.Forty-twooftheexpertssurveyed(54.5percent)haveuptofiveyearsofexperienceasinvestmentdecision-makers.Themeanvalueissevenyearsofprofessionalexperience,themedianisfiveyears.Regardingthejobdescription,5.2percentoftheinterviewedexpertsareanalysts,11.7percentarechiefexecutiveofficers(CEOs)ofaVCcompany,another11.7percentaredepartmentheadsinaVCcompany,almost17percentaremanagingpartners,22.1percentaremanagingdirectors,and27.3percentconsiderthemselvesangelinvestors.Theremaining5.2percenthaveotherprofessionalrolesandresponsibilities.Intermsofassetsundermanagementonathree-yearaverage,58.2percentoftheinter-viewedinvestmentmanagerssurveyedhaveassetsofupto€10millionundermanagement;9percentmanagemorethan€100million.Theassetsundermanagement,thatis,thesumofcash,deposits,andshareholdings’marketvalue,rangefrom€40000to€1billion.Thus,notonlydotheexpertsinterviewedrepresentlong-termprofessionalexperienceininvestingandfinancinginthefieldofdigitalstart-ups,butitcanalsobeassumedthattheirinvestmentexperiencegivesthemsufficientempiricalknowledgetoassessthefinancialrisksoffutureinvestmentsindigitalstart-ups.Fifty-fivepercentofthemanagersestimatethattheirinvestmentdecisionsuccessrateiscloseto60percent,45percentclaimthatitismorethan60percent,and11.3percentestimatetheirinvestmentdecisionsuccessrateaslessthan20percent,wherebythelocationparametersindicatenearlyanormaldistributionoftheself-assessmentsofinvestmentdecisionsuccessrates(mean=56.1percent,median=60percent).Consequently,itcanbeassumedthattheinterviewedexpertsarenotcharacterizedbyoverconfidenceconcerningtheirinvestmentskills.Tosumup,thissampleincludesVCmanagersasexpertsfordigitalstart-ups,whoseper-formanceandexperienceininvestinglargeramountsoffundcapitalindigitalstart-upshasapositiveimpactontheirassessmentoftheassociatedrisk.Whileallthreesuccessfactorgroups(thepersonalityofentrepreneursandfoundingteams,thestart-upbusinessmodel,andecosystemfactors)haveaninfluenceontheassessmentofinvestmentrisk,thisstudyfocusesonlyonthecontextualfactorsinthefollowing.EFFECTSOFCONTEXTUALFACTORSONSTART-UPENTREPRENEURSHIPPERFORMANCEInthesecondpartoftheinterview,andafteranintroductiontothemodels,theinvestmentmanagersareaskedtoweightthesuccessrelevanceoftheIsenbergfactors,representativeofNinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

132116Handbookondigitalbusinessecosystemsthecontextualfactorsdimension,andthatofotherfactordimensions.Thegroupofcontextualfactorswasweightedbytheintervieweesastheleastrelevanttosuccess,withanaverageof21percentsuccessrelevance(seeFigure9.2inthe‘KeyFindings’section).Itcanthusbenotedthatcontextualfactorsareconsideredbytheinterviewedmanagersasthefactordimensionwiththelowestexplanatorypowerforthesuccessofastart-up.Amongthecontextualfactors,theinterviewedexpertssuggestedthatpoliticalsupport,anentrepreneurialcultureinsociety,theavailabilityofstart-up-specificconsultingservicesandinfrastructure,andadomesticmarketwithanaffinityforinnovation,havelittleornorelevance(Figure9.1).Incontrast,theavailabilityofwell-trainedemployeesandVCorseedcapitalisconsideredhighlysuccess-relevant(Figure9.1).Figure9.1Successrelevanceweightingmeansofcontextualfactors(%)(N=77)Inthelaststepofthefirstpartoftheinterview,expertswereaskedtoexplaintheirreasoningbehindtheirIsenbergfactorweightings,resultingin231statementsreferringtothesesixcontextualfactors.Thefactorsidentifiedashavingthehighestweightingare:(1)theavailabilityofVCandseedcapital;and(2)theavailabilityofwell-trainedemployees(Figure9.1).Sixty-twostate-mentswerecodedreferringtotherelevanceofwell-trainedemployees,and69tothetopicofavailabilityofVCorseedcapital,withbothprovidingthebasisforthequalitativeanalysis,asthesefactorsshowthehighestweighting(Figure9.1).Expert9(Ex9)noteswhatfirstappearstobeapplicableforcompaniesingeneral,regard-lessoffirmage:theavailabilityofwell-trainedemployees.However,thespecificationinthesecondpartofthestatementsindicatesthedifferencetomaturecompanies:theissueofacquiringspecialists,asstart-upcompaniesonlyhavelimitedresourcesattheirdisposaltohirehighlyqualifiedpersonnel(seeEx44inTable9.2).Thedifferencebetweenstart-upsandmaturecompaniesisalsoaddressedbyEx26,Ex32,andEx42(Table9.2).Theyallemphasizetheneedforwell-trainedemployees,especiallyNinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

133Therelevanceofentrepreneurshipecosystemsforstart-upsuccess117Table9.2Selectedstatementsontheavailabilityofwell-trainedemployeesIDStatementEx4“So,theentrepreneururgentlyneedstofindgoodemployeestocompensateformyownmissingskills.”Ex5“Developersandmarketingexpertsareofparticularimportancewithintheframeworkofwell-trainedemployees.”Ex7“Thecriticalmassofwell-trainedpeople,therightpeople,theymustbethere.”Ex8“IfIwanttosetupabigeCommercebusiness,IgotoBerlinorwhereverIthinktherearegoodpeoplewiththerightprofessionalbackground.”Ex9“Well-trainedemployeesarealsoimportant,becausetheyaredifficulttoget,difficulttoreplaceandaredifficulttohire.”Ex10“Employeesarethemostimportantthing.Well-trainedissimilartobeingabletolearn.”Ex12“Employees:therearehardlyanystart-upswherethefoundingteamcandoeverythingontheirown.Ifyougobeyondacertainpoint,youcannolongerimplementeverythingonyourown.Buttheconditionshavechanged.Atthemoment,therearehardlyanyqualifiedemployees.”Ex13“Employeesareimportant,ifyoucan’trecruitagoodteam,thenyoucan’tmakeanideaasuccess.”Ex25“However,ifyouhavewell-trainedemployees,the‘domesticmarket’factorcanbeeasilyneglected.”“Theavailabilityofcapableemployeescancompensateformanypersonalweaknesses.”Ex26“Well-trainedemployeesareimportantsothatapowerfulteamisatthestartrightfromthestart.Inthecourseofthestart-up,Icanfallbackonother,‘worse’employees,whoseperformanceisinthegoodmidfield.ButespeciallyinthebeginningIneedthesespearheads.”Ex32“Employeesareimportant,andIneedtoseethem.ItisveryimportanttostartinanenvironmentwhereIcanseeandgettoknowthepeople(thefutureemployees).Quality,skills,handling,chemistry,etc.areallveryimportantandcannotbeproperlyintegratedinso-calledremoteteams.Iamnotabigfanofremoteteams.”Ex35“Youneedhalfwayqualifiedhumancapital.That’swhatyoufindincitiesandclusters,otherwiseyoucan’tscaleup.”Ex36“Well-trainedgeneralistsareimportant,notjustspecialistidiots.”Ex42“Goodemployeesarealsoparticularlyimportant.Especiallynow,whenyouneedalotofdatascientists,youneedmoredatascientiststhanareavailable,andmanydigitalstart-upsareinareasandenvironmentswherepeopleknowtheirwayaround.”Ex44“Later,whenIscale,itdoesn’tmatterthatpeopleareavailableinphysicalproximity.Thenitworksdifferently,becauseIcanoffersomething,andthecompanyisamagnetitself.”Ex47“Especiallyinthefirstyear,itisreallyimportantthatIhavethepeopleandemployeesaroundme.Inlaterphases,itisnotsoimportant.Thenmycompanyisupandrunning,andthehigherthenumberofemployees,theeasieritisformetomakeplans.”Ex54“Inthebeginning,peoplehavetosittogether,andyoudonotwantateamonlyworkingremotely,thatwon’twork.”Ex55“Ifyouhavereallygoodtalentsonboardandthecorrespondingcapital,thenthesetalentsalsocreatenewmarkets.”Ex70“Thatiswhythetrainingofthepeopleinmyteamissoimportant.Youcan'tbuildacompanywithoutagoodteam...technology-orientedemployeesandproductmanagers.”Ex76“Asarule,thebetterdigitalstart-upsareatthelocationswheretheuniversitiesare,especiallybecauseoftheIT[informationtechnology]staff.That’sthedifferencebetweenuniversityeducationandworkexperience.”“Thereisashortageofgooddevelopers.Thisbottleneckhasagreatinfluenceonthegrowthofthecompanies.”atthebeginningofthecompanylifecycle.Ex7statesthatacriticalmassofhumancapitalisneededatthebeginning;ametaphorforthefactthattheremustbeanecessaryminimumquantityofskillsrequiredforachainreactionofcreativityandimpetus(Table9.2).However,thecriticalmassforasuccessfullaunchofthebusinessmodelortheinnovativeproductorservicecannotbecreatedbylocallydistributedteams(remoteteams).AssuggestedbyEx32andEx54,acloselocalconnectionisrequired(Table9.2).Inaddition,start-upsneedaheterogeneousteamofspecialistsandgeneralists(seeEx36inTable9.2).Moreover,Ex4andEx25emphasizethattheemployees‘skillsneedtocomplementoneanother(Table9.2).NinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

134118HandbookondigitalbusinessecosystemsAsnotedbyEx12,thelocalconcentrationandcomplementaryheterogeneityofthestart-upteamarekeyprerequisitesforturninganinventionorabusinessideaintoaninnovation(Table9.2).Theneedtoaggregateacriticalmassofheterogeneouscompetenciesatasinglepointinspaceandtimeiscrucialinthecaseofdigitalbusinessmodelsinparticular.Paradoxically,digitalizationincreasestheimportanceofqualifiedpotentialemployeeslivingingeographicalproximity,despitethegeneralshifttowarddelocalizationofthedivisionoflaborcausedbydigitalization.Expertskills,particularlytechnicalones,arerequirednotonlyforprogramingbutalsoforproductmanagementandmarketing(seeEx5,Ex70,andEx76inTable9.2).Thelatterarekeytorapidbusinessmodelscalingandespeciallyinternationalization(seeEx25inTable9.2).Forthisreason,digitalstart-upsoftenpreferlargercitiesoruniversitytowns(seeEx8,Ex35,andEx76inTable9.2).Tosumup,theconcentrationofheterogeneousbutcomplementaryskillsandcompetenciesatasinglepointinspaceandtime,whichisnecessaryfortheearlycompanylifecycle,resultsinthecriticalmassrequiredfortheinitialphaseinasuccessfulstart-up’slifecycle.Inthegrowthphase,asuccessfulstart-upcompanyusuallyattractsamuchlargerandmorediversepoolofpotentialhumanresources(seeEx44andEx47inTable9.2fordiscussionsofthiskindofpulleffect).Incontrast,theavailabilityofVCseemstobemoresuccess-relevantduringlaterstages.AccordingtoEx6,VCisneededtoturnaninventionintoaninnovation,andtoscalethebusinessmodelinthestart-upandgrowthphases(Table9.3).Ex9likewisearguesthatVCbecomesanimportantissueduringthegrowthphase(Table9.3).Thatsaid,financialresources,asEx21pointsout,areimportantinallphases(Table9.3).Sixexperts(seeEx9,Ex15,Ex16,Ex26,Ex36,Ex67inTable9.3)agreethatVCisneededtoscaletheproductand/orbusinessmodel.Morespecifically,VCmightbespenttoovercomebarrierstoentry,accordingtoEx77.Severalstatementspointtocountry-specificdifferencesconcerningVCavailability(seeEx12,Ex18,Ex24,Ex31,Ex72inTable9.3).Forexample,Ex18statesthatinSiliconValley—incontrasttoGermany—moneyflowsfasterandideasandinventionscanthereforealsoberealizedmorequickly(Table9.3).ItcouldbeconcludedthatthemajorproblemforGermanstart-upsisnotthelackofrealinventions,butthescarcityofVCcomparedtotheUnitedStates(US).Nevertheless,Ex12argues,“Goodideasalwaysfindinvestors”(Table9.3).Theecosystem-specificavailabilityofVCcanthusbeconsideredanecessarybutnotsufficientconditionforstart-upperformance.Regardingbothmajorsuccessfactorsatthemacrolevel—well-trainedemployeesandtheavailabilityofstart-uporventurecapital—Germanyasanentrepreneurialecosystemischaracterizedbyalimitedavailabilityofwell-trainedemployeesandarelativelylimitedavailabilityofVC.Bothissuescouldrepresentmajorbottlenecksforstart-upgrowth(seeEx76inTable9.2andEx77inTable9.3).Ex24alsoexplainsthatpolicy-makersinGermanyhaveyettocreateatax-friendlymodelforVCandthatthetotalvolumeofVCisthereforetoolowcomparedtoothercountries(Table9.3).Ex31evennotesthatinthecasesoftheUSandIsrael,creativityorthelevelofinnovativenessislessimportantthantheabilitytoimplementaninvention.ThereadyavailabilityofVC,asafundingoptionduringtheseedphase,allowsstart-upstomarketanideamuchmorequickly.Thisisdesirablefortworeasons:first,theycanrealizethepioneerpremiumasaprerequisiteofanacceptablereturnonVCinvestment;second,entrepreneursaremorelikelytotakeentrepreneurialrisks.NinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

135Therelevanceofentrepreneurshipecosystemsforstart-upsuccess119Table9.3SelectedstatementsonavailabilityofVCIDStatementEx1“Manyprojects/objectives…whichIcanadvancemorequicklywiththehelpofVC.”Ex6“Forthevery,veryearlyphase,theavailabilityofventurecapitalisthereforenotsoimportant.Later,however,VCbecomesincreasinglyimportantasthecompanyscalesup.”Ex8“Thissalaryissuecansomehowbecoveredbystatesubsidies.Inmyopinion,however,regionalfundingisnotthereasonwhythestart-uprateishighintheseplaces.”Ex9“Theavailablecapitalisthereforeparticularlyimportantforthegrowthofacompany.”Ex11“Inthelast25yearsIdonotknowofasinglecaseinwhichfundinghasledtosuccess.”Ex12“Youhearagainandagain:ThereistoolittleventurecapitalinGermany.Thetruthis,however,thatit’snotabouttheamountoftheindividualinvestment.Goodideasalwaysfindinvestors.”Ex15“AndtheVCandPEfundsareonlyimportantinlaterstagesofdevelopment.”Ex16“WhenIhavemoney,Idomything.Thatisstillthemostimportantthingtogrow.”Ex18“InGermany,itisunfortunatelystillthecasethatmanypeoplethinkthatthestatewillfixit.QuitedifferentfromSiliconValley.Alotofmoneyflowsthere.Themoneyisavailableandwantstobeinvested.Andmoneyis,infact,necessarytogetsomethinggoingquickly.”Ex21“Goodfinancialresourcesarealwaysimportant.Ifyouwanttoscaleup,thatisveryimportant.Therearealsopeoplewhobuildagoodstart-upwithoutVC,butthatisnottherule.Tobeabletostartquickly,VCisimportant.”Ex24“Politicshasnotyetmanagedtocreateatax-friendlymodelforventurecapital.”“Althoughtheavailabilityhasincreasedbecauseforeigninvestorsarenowalsoenteringthemarket.ButcomparedtotheUSAorIsrael,themoneyisstillverylittle.”Ex26“VCisimportantparticularlywhenscalingofdigitalbusinessmodels.”Ex31“80%successrelevance—start-upcapitalisthemostimportant.SiliconValleyandotherclustersexistonlybecauseofcapitalandmoney...Investorshaveclearlyinvestedintheseareasandthuspushedthem.Israel,thesamething.TheIsraelisarenotthatcreative,butthereismoney.Youcangeteverythingthere—from10000to10million.”Ex36“Withoutcapital,thereisnoscaling.Manyfoundersunderestimatethis.Theiterationtakesatleast3to5months,andmanyunderestimatethat.”Ex52“AVCinvestoris,inanycase,agoodindicatorthattheideaisalsoeconomicallysuccessful.”Ex67“Later,youdefinitelyneedgrowthcapitaltoscale.Butattheverybeginning,thatdoesn’treallymatterfordigitalcompanies.”Ex72“InGermany,itisstillverydifficulttogetmoney.Ifyoudon’tgetthefirstrevenueandthefirstprofitimmediately,thenitdoesn’tfitformostVCs.”Ex77“WithregulatedmarketssuchaswehavehereinGermany,enoughcapitalmustbeavailablesothatthemarketentryhurdles(e.g.,timehurdles)canbebridged.”Anotherissueconcerningcountry-specificeffectsinvolvesthereturnexpectationsofVCinvestors.Ex72statesthatVCinvestorsinGermanytendtoexpectaquickreturnoninvest-ment(Table9.3).Thisobservation,however,couldalsobeinterpretedasanotherindicatoroftherelativescarcityofVCinGermany.Ifaverylimitednumberofinvestorscanchooseamongamultitudeofstart-ups,theywillprobablypickthosewithamaximumprobabilityofreturn,andnotthosewithmorecomplexbusinessmodelsrequiringlongerinvestmentperiods.Moreover,Ex8notesthatstatesupportcannotreplaceacomparativelysmallvolumeofVC(Table9.3).ThisisalsotrueasVCcanbeconsideredanallocationmechanismdifferentfromstatefunding;apointraised,forexample,byEx11andEx52(Table9.3).Therefore,onemayconcludethatfromtheeconomicpolicyperspectiveortheclustermanagementperspective,thelackofVCcannotbereplacedbystatefunding.Seeninthislight,buildinganartificialentrepreneurshipecosystemhasclearlydefinedlimits,particularlyinthecontextofthesuccessrelevanceoftheavailabilityofVC,asalsosuggestedbythefindingsofthisstudy.ThisNinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

136120HandbookondigitalbusinessecosystemsalsoappliestoanotherimportantroleofVCinvestors,namelyasproof-of-conceptindicators(seeEx52inTable9.3).KEYFINDINGS:THEVCPERSPECTIVEONCONTEXTUALFACTORSConcerningRQ1,theresultsofthisstudyshowthattwooutofsixfactorsareperceivedashighlysuccess-relevantbytheinterviewedexperts.Fourotherentrepreneurialecosystemfactors—politicalsupportofentrepreneurship,entrepreneurialculture,innovation-friendlydomesticmarket,andtheavailabilityofstart-up-specificservicesandinfrastructure—areratedaslessimportantornotimportantatall.Ananalysisofqualitativedataonthetworelevantsuccessfactorsidentifiedhereyieldstwoimportantinsights(Figure9.2).First,theavailabilityofVCisacatalystformarketentry,overcomingmarketbarriers,andgrowth(scalingandinternationalization),anditisanindica-torforthematurityandmarketabilityofaninventionorbusinessidea.Accordingly,severalfinancingroundsarealsoanopportunitytodiscussandtesttheproductmaturityorbusinessmodelmaturityagain.Second,theavailabilityofwell-trainedemployeesistheessentialsuccessfactororaconsiderablebottleneckfactor,especiallyintheseedphaseandformorecomplex,technology-basedproducts,whichmayexplainwhythesestart-upsemergeorarelocatedinlargecitiesand/orclosetouniversities.Moreover,theavailabilityofwell-trainedemployeesisthebasisforheterogeneousandcomplementaryfoundingteams.Thiscombina-tionisneededtostartentrepreneurialandinnovationprocessesinwhichanideaorinventionofafounder-entrepreneurorafoundingteamevolvesintoonewithmarketmaturityandmarketlaunch,especiallyonedirectedbyinterdisciplinaryteams.Figure9.2Specificationofsuccess-relevantcontextualfactorsandweightingoffactorgroupsWhilethesetwofactorsaredeemedrelevant,contextualfactorsingeneralareperceivedtobetheleastrelevantamongthethreefactordimensions(Figure9.2).PersonalityfactorsareseenNinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

137Therelevanceofentrepreneurshipecosystemsforstart-upsuccess121asthemostimportantones,whilethebusinessidea(businessmodel)isseenasthesuccessfactorhavingthesecond-highestimpactonstart-upperformance.Inlightofthesefindings,onecouldconclude,alsoinresponsetotheRQsconsideredhere,thattheeffectofcontextualfactorsonentrepreneurialperformanceasconsideredbytheVCmanagersisverysmallcomparedtothetwootherfactorgroups(personalityandbusiness-specificfactors).Moreover,onlytwofactorsofthefactorgrouparefoundtobedom-inant,withtheVCmanagersestimatingthatbothfactorstogethermightexplain57percent(averageofallweightingsforbothfactors)oftheentrepreneurialperformance.Therefore,itcanbeconcludedthatmicro-levelfactors(personalitycharacteristics)andmeso-levelfactors(businessideaandmodel)shouldbeconsideredasmoresuccess-relevantthancontextualfactors.Theseresultsseemtosupportthefindingsofpriorresearch,questioningthesuccessrelevanceofcontextualfactors.Asmentioned,thesystematicliteraturereviewbyRichteretal.(2016),basedon175publicationsonentrepreneurialecosystemspublishedbetween2000and2015,hasfoundlittleevidenceforcontextualfactorsassuccess-relevant,incontrasttothesuccessrelevanceofthepersonalitycharacteristicsoftheentrepreneurorthefoundingteam.Thatsaid,thisliteraturereviewalsohasfoundthataccesstofinanceandknowledgecanhaveapositiveeffectonstart-upperformance,afindingthatisalsosupportedbythoseofthisstudy.Asalreadydiscussed,RoundyandFayard(2019),aswellasKanshebaandWald(2020),questiontherelevanceoftheIsenbergmodelasanacademicconstructinresearchandprac-tice.EvenIsenberg(2013)assumesthattheentrepreneurialecosystemcanhelpresearcherstounderstandentrepreneurialactivitiesingeneral,butthatfactorssuchaspoliticalsupportortheexistenceoftheentrepreneurialculturearenotsuccess-relevantfortheindividualentre-preneur.Acsetal.(2017a)arguethatentrepreneurshipstudiesdomuchtoaddressthegapintheeconomicsliteratureontheroleofentrepreneurshipineconomicsystems.However,theylargelyignoretheroleofsystemswhenseekingtoexplainentrepreneurshipperformance.Basedonbothstudies,aswellastheresultsofthiscontribution,itmaybeconcludedthatthesuccessrelevanceofartificialentrepreneurialecosystemsintheformof,forexample,regionalclusterstosupportentrepreneurshiphasverynarrowlimits.Thisisallthemoretruetoday,withdigitaltechnologiessupportingdecentralized,cross-countryactivitiesnotonlyintheareaofsalesbutalsointheareasofsourcingandproduction,enablingcompaniestomoveessentialbusinessactivitiesfromonecountrytoanotherintheshortestpossibletimeandatlittlecost.However,itcanbearguedthatalthoughcontextualfactorsareclassifiedbytheinterviewedVCmanagersaslessrelevantforthesuccessofdigitalstart-ups,bothcontextualfactorsidenti-fiedassuccessfactorscanberegardedashygienefactors(Figure9.2),whichmaypreventneg-ativeoutcomessuchasfailurebutdonotaffecttheoutcomeinformofstart-upperformance(OstergaardandMarinova,2018).Forobviousreasons,availablehumancapitalandVCwithoutentrepreneurialenergyandmotivationwillremainunusedresources.Inthissense,theavailabilityofVCandadiverse,well-skilledworkforceisanecessarypreconditionfordigitalstart-upsuccess,butnotasufficientprecondition.Forthelatter,ittakestheSchumpeterianentrepreneurtoacquireandrecombineexistingresourcestoachieveentrepreneurialsuccess.However,withoutthesecoreresourcesconcentratedintimeandspace,entrepreneurialenergyandmotivationcanhardlyrisebeyondtheinventionphase.Thus,bothcontextualfactorsprovidethegroundforthequickrealizationandtransformationofaninventionintoinnova-tion.Itisneededforthesubsequentscalingupandthusthefastergrowthofastart-upcompanyinthelaunchphasetobenefitfromthepioneerbonusforalongerperiod.Thus,itislikelythatdespitethetendenciesofdelocalizationofworkplacesandworkforceseveninSiliconValleyNinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

138122Handbookondigitalbusinessecosystems(Flickinger,2020),acertainspatialproximitytoacultureofknowledgeandentrepreneurshipisstillnecessarytoprofitfromnetworkeffects(Delgadoetal.,2014).AlthoughdigitalICTincreasinglyallowscompaniestocoordinatethecollaborationofaremoteworkforce,thecrea-tionofideasstillseemstorequireface-to-faceinteraction,whichcannotbeoffsetbya“digitalproximity,”asempiricalresearchinthecognitivepsychologyofentrepreneurshipsuggests(e.g.,HaytonandCholakova,2012).Accordingly,themainvaluepropositionofartificialclusters,andthustheiruniquesellingproposition(USP),mightbetheirpotentialfornetworkeffects,becauseinnovationrequiresacriticalmassofcreativepotentialinface-to-faceproximity(Eliaetal.,2020).Moreover,theregionalconcentrationprovidesahigherdensityofbusinessopportunitiesforVCinvestors,therebyfacilitatingahigherdensityofpossibleinvestmenttargetswhich,inturn,decreasessearchcosts.Finally,itcanbeassumedthattheregionalconcentrationofstart-upactivitiesattractsalargerpoolofmoreentrepreneurialandwell-trainedhumanpotentialasaresourcetoleverageevennon-performingstart-upstoreachacriticalmassofinnovativecapability.FUTURERESEARCHThiscontributionisanexplorative,qualitativestudythatproposesapreliminarymulti-perspectivemodelofentrepreneurialsuccessinthesenseofthegroundedtheory,andthatprovidesamoredetailedexaminationofoneofthesefactors.Forthisreason,thischaptercannotbediscussedintermsofreliability,validity,orrobustnessofmodels.Instead,onemajorcontributionofthisstudyisthetriangulationofqualitativeandquanti-tativedata,allowingtodefineaworkingmodel.Whilecontextualfactorsmaybeneglectedinexplainingentrepreneurialperformance,theworkingmodelthusreducesthepossibleresearchperspectivestobusiness-specificfactorsandentrepreneurialpersonality.Oneofthedrawbacksoftheexplorativedesignofthisstudywasthefocuson77experts,anumberthat,ideally,wouldbemuchhigher.Furthermore,theanalysisofnumericaldataintheformofweightingsofindividualfactorgroupitemsandthesuccessrelevanceofthefactorgroupsintotalcanonlybeconsideredanapproximateestimation,butcannotreplacethestatisticalanal-ysisofquantitativedatainthecontextofaquestionnaire-basedsurveywithahighernumberofcases.Therefore,furtherresearchmustconsideramulti-theoreticalviewbyincludingthreemainresearchperspectivesrepresentingthemicro,meso,andmacrolevelofentrepreneurshipactivity,inordertoassesstherelevanceofallpossiblefactordimensionsintheentrepreneurialprocess.Itisnotnecessarytodifferentiatebetweenabusinessecosystemandadigitalbusinesseco-system,wherethecollaborationandknowledgeexchangebetweentheactorstakeplaceonlyviaICT,withthismulti-perspectiveapproach.Evenifabusinessecosystemisnotnecessarilybasedondigitalforms,currentdevelopmentssuggestthatbusinessecosystemswillhardlysurvivetodaywithoutdigitization.REFERENCESAcs,Z.J.,Autio,E.andSzerb,L.(2014).Nationalsystemsofentrepreneurship:measurementissuesandpolicyimplications.ResearchPolicy,43(3),pp.476–494.NinaSchumacher-9781839107191DownloadedfromPubFactoryat05/28/202209:56:28AMviaColumbiaUniversityLibrary

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14210.Valuecreationthroughstart-upintegrationChristianHorneberINTRODUCTIONANDPURPOSEAlthoughscholarshaveemphasizedtheimportanceofcompaniesdevelopingstrategicallianceswithothercompanies,withonlyafewexceptions,strategyandentrepreneurshipresearchhasnotgivenmuchimportancetotheroleofactorsandtheirinterdependenceforachievingcompetitiveadvantage(MinàandDagnino,2018).Inrecentdecades,suchinter-firmcollaborationhasincreasedsignificantlyand,inthecourseofexplainingthenatureandimplicationsofbusinesses’increasingrelianceonnetworks,theecosystemconcepthasemerged(Pulkkaetal.,2016).Intheearly1990s,Mooredrewfrombiologytointroducetheconceptof“businessecosys-tems”asclustersofinterrelatingactorsthatcoexistinagivenenvironmentandevolvejointlyintermsofknowledge,resourcepools,androles(Moore,1993;MinàandDagnino,2018).Withsupplychains,manufacturingsystems,innovationprocesses,anddistributionnetworks—oracrossalliancepartnersorrivals—firmsarealsofunctioningwithinanetworkofinterdepend-encies,andfirm’sbusinessenvironmentsthushavetoberecognizedasecosystems(Kopalleetal.,2020).Drivenbydigitization,thescaleandscopeofsuchinterdependenciesarebeingenrichedandexpanded.Itcomesasnosurprisethattheterm“digitalecosystems”hascon-sequentlyreceivedgrowinginterestintheacademicandbusinessdomains.Subramaniametal.(2019,p.84)definedigitalecosystemsas“businessenvironmentsshapedbyanetworkofinterdependenciesspecificallygeneratedthroughdigitaltechnologies.”Typicallydenotedas“brickandmortarcompanies,”oftenfoundedbeforethemoderndigitalera,legacyfirmshaveyettorecognizethattheirestablishedecosystemsareintheprocessofbecomingorhavealreadybecomedigitalecosystems(Kopalleetal.,2020).Nonetheless,aconsiderablenumberofcompanieshavealreadyadoptedcomponentsofdigitalecosystems;firstandforemost,digitaltechnologies.Butitisnotjustcomparativelyoldcompaniesthataretryingtotapintodigitalbusinessecosystems.Evenglobalplayersfromtheearlydaysofdigitization,suchasAmazon,nowrelyontheinvolvementofstart-upsfromthedigitalbusi-nessandtechnologyecosystem(MaioandGiudici,2019).Toexplorethefrontiersofvoicetechnology,forexample,AmazonfoundedtheAmazonAlexaFund(in2015)alongsideanenterpriseaccelerator(in2017).ThegoalisconnectedtotheAlexaecosystemandisprimarilyofstrategicnature.Despitesuchdigitalecosystem-focusedefforts,legacycompaniesthatarelessdigitallysavvyandcustomer-centricthanAmazonfacechallengesincapturingthenewnetworkofinterdependencies(Kopalleetal.,2020).Thecombinationofadoptingnewdigitaltechnologiesandleveragingthedigitalecosystemthattheygenerateremainsataskformanylegacycompanies.Counterpartstothelegacycompaniesareyoungcompanies,oftendigitalstart-ups,whoserelationshipswithlegacycompaniesindigitalbusinessecosystemsprovidethefocusofthischapter.FollowingthedefinitionofAutioandCao(2019,p.5429),digitalstart-upsare“newventuresthatharnessdigitalaffordancesforbusinessmodelinnovation.”Comparedtothe126ChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

143Valuecreationthroughstart-upintegration127traditional,linear,andplanning-orientedapproachtonewventurecreation,theharnessingofdigitalaffordancesallowsdigitalstart-upstodramaticallylowertheirstart-upcostsandenablesthemtoadoptaniterative,experimentation-drivenapproachtotheirbusinessmodeldesign.Asasourceofcompetitiveadvantage,digitalstart-upsleverageecosystemarchitec-ture.Suchdigitalstart-upsarepersemoreoftenpartofdigitalbusinessecosystemsthanarenon-digitalstart-ups.Relationshipsbetweenestablishedcompaniesandexternalcompaniescanhavestrategicadvantages,buttherealizationofsuchadvantagesissubjecttoconsiderableuncertainty(WadhwaandBasu,2013).Thisholdsespeciallytrueforrelationshipswithdigitalstart-ups,whichthemselvesoftenfaceunforeseeableuncertainty(Sommeretal.,2009).Althoughstudyingbusinessecosystemsisfarfromnew(Borghetal.,2012),onlyasmallnumberofpublicationsdealwiththemechanismsassociatedwiththecreationandsustenanceofvalueintheintegrationofdigitalstart-upsfromthedigitalbusinessecosystem.Asaproxyfortheuseofdigitalbusinessecosystems,thischapterexaminesthemotivationsandpossibilitiesforvaluecreationandvalueappropriationarisingfromvariousformsofintegrationofstart-upsfromdigitalbusinessecosystemsinestablishedcompanies.Asaresultofaliteratureanalysisandthreeexplorativeexpertinterviewsfromthefieldofthedigitalandnewspaperpublishingindustry,anoverviewoftheopportunitiesfordigitalstart-upintegrationandassociatedpossi-bilitiesforvaluecreationandvalueappropriationisintroduced.Thischapterthereforeoffersanswerstothequestionofwhichcircumstancesandgoalsareassociatedwiththeintegrationofstart-upsfromdigitalbusinessecosystems,andthewaysinwhichvaluecanbecreatedorcapturedfromthem.THEORETICALBACKGROUND:LITERATUREREVIEWONVALUECREATIONTHROUGHDIGITALSTART-UPINTEGRATIONThemechanismsandsuccessfactorsforvaluecreationhavebeendiscussedinnumerouspublications.Inthefieldofentrepreneurship,ShaneandVenkataraman(2000),aswellasLumpkinandDess(1996),notethatvalueistypicallycreatedthroughthediscoveryandexploitationofprofitablebusinessopportunities.Morerecently,afterAnandandKhanna(2000)askedwhetherfirmslearntocreatevalue,asubstantialpartoftheliteraturehasfocusedonstrategicalliancesandinter-firmrelationships.Inthatvein,manifoldperspectivesonvaluecreationhavebeenimplementedbyscholarsandpractitioners.ValueandValueCreationDependingonthespecificfieldofeconomicresearch,theconceptofvaluemanifestsitselfinmanyforms,sinceithasbeenacentralpointofacademicdebatesforover2000years(Wielandetal.,2016).Inthedomainofdigitalbusinessecosystems,examininghowvalueiscreatedbyAmericanandEuropeane-businessesthathaverecentlybecomepubliclytradedcorporations,AmitandZott(2001)statethatnewvaluecanbecreatedine-businessbythewaysinwhichtransactionsareenabled;forexample,valuemaybecreatedbycapitalizingoncomplemen-taritiesamongactivitiessuchassupply-chainintegrationandoncomplementaritiesamongtechnologiestounleashhiddenvalue.AmitandZottconcludethatthevaluecreationpotentialChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

144128Handbookondigitalbusinessecosystemsofe-businessescannotbefullyexplainedbyasingleentrepreneurshiporstrategicmanage-menttheory.Therefore,thischaptertakesanintegrativeapproachtoanalyzingtheliteratureconcerningvaluefromvariousdisciplines.BuildingonSchumpeter’stheory,Rothaermel(2001)explainsthatnoteveryradicaltechno-logicalbreakthroughresultsintheprocessofcreativedestruction.Aslongasestablishedfirmshavethenecessaryfinancialandmanagerialresourcesneededforadaptation,theymightfindwaystoadapttoradicaltechnologicalchangeandthuscreatevalue(ChristensenandBower,1996).Rothaermel(2001)arguesinfavorofsheddingmorelightonthephenomenonofexten-sivecooperationbetweenestablishedfirmsandnewmarketentrantsfollowingtechnologicaldiscontinuity,andtheresultingimpactonincumbentperformanceandvaluecreation.Indeed,whilenumerouscontributionsinawiderangeofdisciplinesaimtoanalyzethecreationofvalue,onlyasmallnumberdefinevaluecreationorvalueinanarrowersense.ValueCreationandValueAppropriationinDigitalBusinessEcosystemsAlthoughthenumberofentrepreneursandbusinessesusingdigitaltechnologiesisincreasing,therehasbeenlimitedscholarlyattentionforquitesometime(Shenetal.,2018).Thisholdstruenotonlyintermsofdigitalbusinessecosystemsandthewaysinwhichdigitaltechnolo-giesareusedinentrepreneurship,butalsointermsofunderstandingtherolesthatusersandagentsplayindigitalentrepreneurship(Nambisan,2017).Asitconsistsofresourcesandcompetencesprovidedbycomplementaryactorsthatcooperateandsometimescompeteforvaluecreation,thebusinessecosystemisameta-organization(MinàandDagnino,2018).Technological,digital,andcommunicationevolutionareamongthemostcrucialreasonstomotivatecompaniestointeractwitheachotherwithinanecosystem.Bycombiningtheoryandresearchonalliancenetworksandnewcompanies,Baumetal.(2000)analyzetheimpactofvariationinstart-ups’alliancenetworkcompositionontheirearlyperformance.Bydoingso,start-ups’earlyperformancewasexplicitlylinked—forthefirsttime,sincenopriorresearchexisted—totheirfounding-networkcomposition.Theauthorsfindthat,bydevelopingappropriatealliancenetworksatfounding,start-upsmightenjoyrelationshipsandresourcestypicalofmoreestablishedfirmsand,atthesametime,overcomeliabilitiesofnewnessand/orsmallness.Gulatietal.(2000)examinefundamentalissuesinstrategyresearchandshowthesignificantimportanceofnetworksofinter-firmties.Theauthorsarguethatthesearchforthesourceofvalue-creatingresourcesandcapabilitiesshouldbeextendedbeyondtheboundariesofthefirmand,insodoing,presentanewperspectiveintheresource-basedviewoffirms.Tomaximizetheeconomicvalueofnetworkconnections,thesystemssupportingdigitalbusinessesrequiretransformationandthereforeareshiftingtoplatformsandecosystemsthatarecollaborativebynature(Yablonsky,2018).Byreusingplatformcomponents,suchplatformsenablenewproductsorservices.Sincetheycapture,transmit,andmonetizedataovertheinternet,mostoftoday’splatformsareprincipallydigital.Analyzingsevensmallandmedium-sizedorganizations(SMEs)andtheirtransformationsfromlocalsmallcompaniestosuccessfule-commerceplayersonAlibaba,Lietal.(2018)provideinsightsonhowSMEsmightbetransformedusingthepossibilitiesofdigitalecosystems.ThoughvalueisanaddedserviceofferedbyAlibabasupportingtheSMEs,thenatureofvaluecapturedbyutilizingthepossibilitiesofthisspecificAlibabadigitalbusinessecosystemremainsanopentask.ChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

145Valuecreationthroughstart-upintegration129ValueCreationinAlliances,Partnerships,andOpenInnovationSettingsOneapproachtowardscreatingvaluethroughintegratingstart-upsfromthedigitalbusinessecosystemsintoincumbents’organizationsisthroughalliances,parternships,oropeninnova-tion.Eventhoughalliances,asconnectionsinnetworksandecosytems,createvalue,thereiswidespreadrecognitionofthedifficultiesinthisprocessofvaluecreationasshown,first,bythelargerateoffirmsthatfailtodoso;second,bytheopinionsofexperiencedpractitioners;andthird,bymanyacademicpublications(AnandandKhanna,2000).Withtheaimofsharingtheirresourcesandcompetenciestoachievemutuallyrelevantbenefits,strategicalliancesperdefinitionemareformedbetweentwocompanies(AnandandKhanna,2000;Gulatietal.,2000).Morespecifically,Gulati(1998,p.293)definesstrategicalliancesas“voluntaryarrangementsbetweenfirmsinvolvingexchange,sharing,orcodevel-opmentofproducts,technologies,orservices.”Scholarshavebeeninvestigatingawiderangeoftheaspectsofalliances,frompartnerselectiontoperformanceandtheroleofinterorganiza-tionalroutines(Panico,2017).Asgoaldivergencesmightoccur,therehasalsobeenresearchontheresultingtensions,aswellasoncoordinationandappropriation.Amajorityofpublicationscoververticalorhorizontalalliancesamongestablishedfirms.Ratherthanmerelyconstrainingrivalry,thisstreamofresearchsuggeststhatalliancesandnetworksofcooperativerelationscontributedirectlytofirmperformance(Hoffmannetal.,2018).Buttherulesofthegamehavechangedinthewakeoftheconvergenceoftechnologyandmarketglobalization(PérezandFierro,2018).Thus,moreandmoreindustryleaderscol-laboratewithsmalltechstart-upsuppliers(Stuart,2000;ChenandChen,2002).Asurveyoftop-levelmanagementmembersoflargecorporationsinDenmark,Finland,Iceland,Norway,andSwedenfindsthat78percentofthesurveyedcompaniesarecollaboratingwithstart-ups(OxfordResearch,2019).Themainmotivationforcollaboratingwithstart-upsisthatsuchcollaborationsallowthesurveyedcorporatestoexploreandcreatenewinnovativetechnolo-giesandsolutions,accessinnovativebusinessmodelsandindustrytrends,andfosteramoreentrepreneurialmindsetamongtheiremployees.By2016,68percentofthetop100companiesfromtheForbesGlobal500wereengagingwithstart-ups,andthemajorityofthe61.7percentofunicornsmentionedbytheWallStreetJournalundertheBillionDollarStartupClubhaveraisedventurecapitalfromatleastonecorporation,notincludinginvestmentfirmsandbanks(BonzomandNetessine,2016).Dörneretal.(2020)findthatalthough75percentofthesur-veyedstart-upsinGermany,Austria,andSwitzerlandthinkofpartnershipswithcorporationsasveryimportant,only27percentarecompletelysatisfiedwiththeserelationships.Insuchasymmetricpartnerships,thepartnersdiffersignificantlyinsize,resources,andcommercialexperience(Minshalletal.,2010).Ontheonehand,start-upsmightplayimpor-tantrolesforestablishedcompaniesseekingnewsourcestoimprovetheirinnovationscapa-bilities.Ontheother,start-upsmightbenefitfromestablishingpartnershipswithresource-andcapability-richlargercompanies.ThewaysinwhichvalueinasymmetricpartnershipsmightbecreatedareshownbyStuartetal.(1999),whoinvestigatehowtheinterorganizationalnet-worksofyoungcompanieshaveaninfluenceontheirabilitytoacquiretheresourcesneededforsurvivalandgrowth.Asaproxyforasymmetricalliances,PérezandFierro(2018)analyzetheelementsthatimpactvaluecreationandvalueappropriationinthecaseofdigitaltechstart-ups.Buildingonresourcedependencetheoryandcarryingoutananalysisofonesuccessfulandonefailedalliancecase,theauthorsfindthatalliance-specificinvestmentsareaconditionforsuccessChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

146130Handbookondigitalbusinessecosystemsandthepricetopayforinnovation.Thoughthecontractagreementitselfseemsnottobeimportant,thestudyfindsauniqueopportunitytoassesscollaborationopportunitiesbasedontheinitialsupplier‒customercharacteristicswithinthecontractualprocessitself.Intheirsystematicliteraturereview,Zottetal.(2011)showthatthedigitaleconomyopeneduppossibilitiesforfirmstoexperimentwithnovelformsofvaluecreationmechanisms.Inthatcontext,valueisnotbeingcreatedbysingleplayers,butbyanetworkofafirmandseveralpartnerstargetingmultipleusers,asisthetypicalcasefordigitalbusinessecosys-tems.Asshownabove,alliancescantakemanyforms,onespecificformofwhichisopeninnovationalliances.AsWestandLakhani(2008)explain,thetraditionalclosedinnovationparadigm—theinternalgenerationofnovelideasandtheirmarketingslowlyviaasinglepath—isinefficientandinflexible,givenconsumers’needsandrequirementsinfast-changingenvironments.Inlinewiththedemand-sideperspectiveofstrategybutcontrastingwiththeclosedinnovationparadigm,Chesbroughetal.(2018)definevalueinopeninnovationsettingsas“allactor-perceivedconsequencesarisingfromthedeploymentofaresourceinaprocess”(p.932).Externaltechnologyorknowledgecanthereforebesourcedfrompartnerssuchasstart-ups.Thespecificnatureofthevariousformsofvaluecreatedthushasnotbeencoveredexplicitlyinpublicationsofopeninnovationwithregardtodigitalbusinessecosystemsinthepast.Exceptionsarestudiesinvestigating“co-creation”astheinterplayofcompanyandusers(e.g.,Hanetal.,2012;Liuetal.,2018).ValueCreationandValueAppropriationinCorporateVentureCapital,MergersandAcquisitions,andPost-MergerIntegrationAnotherapproachtowardscreatingvaluethroughintegratingdigitalstart-upsfromthedigitalbusinessecosystemsisbycorporateventurecapital,mergersandacquisitions(M&As),andpost-mergerintegration(PMI).Chesbroughetal.(2018)summarizethatopeninnovationhasreceivedaconsiderableamountofattentioninthedomainsofscholarsandpractitioners.Butwhenaimingtofullyinvestigatetheprocessesandoutcomesofjointinventingitisimportanttounderstandthatactors’valuecreationisdrivingvalueinopeninnovation,aswellasthattheirabilitytocapturevalueisalsoimportant.Whenengaginginaresourcedeploymentprocess,theperceivedsacrificesareoutweighedforthatactorbytheperceivedbenefitsofthatprocess.Thisresultsinanincreasedvalueandthuscreatesvalue.Valuecapture,ontheotherhand,istheprocessbywhichfinancialornonfinancialreturnsfromvaluecreationaresecured.AsPérezandFierro(2018)clarify,scholarsdifferentiatetheterms“valuecreation”and“valueappropriation”insuchawaythatvalueappropriationisdefinedas“thenetvaluesuccessfullycapturedbyafocalfirm”(PérezandFierro,2018,p.541).Comparedtothewin‒winsituationinregardtovaluecreation,valueappropriationimpliesthatpartnerssharethevaluepieinazero-sumgame.Theterms“valuecapture”and“valueappropriation”areusedsynonymouslyinthischapter.Inhisearlierwork,Chesbrough(2003)describestwotypesoforganizationsforfundinginnovation:theinnovationinvestorsandthebenefactors.Originally,theinnovationinvestorintheabovedescribedclosedinnovationperspectivewasthecorporateresearchanddevelop-ment(R&D)budget.Broadeningthatperspectivetoopeninnovation,othertypesofinnova-tioninvestorshaveemerged,includingventurecapitalfunds,angelinvestors,andcorporateventurecapital(CVC)entities.CVC,ingeneral,isstronglyconnectedwiththeconceptofcor-porateventuringandisimportantforthestrategicrenewalofestablishedcompanies(Röhm,ChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

147Valuecreationthroughstart-upintegration1312018).However,duetothemultifacetednatureoftheCVCphenomenon,oneobservesahighdegreeoffragmentationintheexistingliterature.CVCinvestmentsconsistofminorityequitystakesinnew,notpubliclytradedfirms,seekingcapitaltocontinueoperation(DushnitskyandLenox,2005).ValueisideallycreatedonbothsidesofCVCtransactions,fortheCVCinvestorsandforthetargetventureitself.Thisso-called“smartcapital”includesallthevalue-addingservicesthattheCVCunitoffers,creatingvalueforthetargetventure(Gutmannetal.,2019).Coreactivitiesinvaluecreationservicesforportfoliocompaniesarebusinessactivitiessuchassupportingventuresindefiningstrategicgoalsanddevelopingfunctioningbusinessmodels;operationactivitiessuchasprovidingin-depthknowledgeonhowtoscaleoperationsandproductionsprocesses;andlastly,technologyactivitiessuchasprovidingtechnicalexpertiseandindustryknowledge.Besidessuchcoreactivities,CVCunitsaddvalueforandsupportportfoliocompanieswithsolutionstolegalissues,helpingthemtoacquireandmanagequali-fiedtalent,andsettingupworkinginfrastructures.FromtheperspectiveoftheCVCinvestor,corporateventurecapitalisanexternalventur-ingmode(Röhm,2018).CVCallowscorporateinvestorstomakelimitedriskinvestmentsinearly-stagecompaniesand,inreturn,gainaccesstoinformationaboutnewtechnologies(DushnitskyandLenox,2005).OneofthemaingoalsbehindtheimplementationofCVCprogramsistogainawindowonfuturetechnologies(Ceccagnolietal.,2018).Morespecifi-cally,CVCinvestorsaccesscomplementarytechnologies(NappandMinshall,2015).Despiteitsimportance,itremainsunclearhowbothsides,CVCinvestorsandreceivingstart-ups,measurethestrategicvalueofCVCinvestments.AnotherformofinvestmentisM&Asaimedatacceleratinggrowth,oftenexecutedbymultinationalcompanies(CooperandFinkelstein,2010).Mergersaredefinedasafusingtogetheroftwoormoreorganizations;whereasacquisitionsarethelegalandaccountingactofinvestorsbuyingmorethan50percentofavendor’sequity(VaziraniandMohapatra,2012).“Mergers”and“acquisitions”areoftenusedinterchangeably,sincebothresultinonecompanytakingcontroloveranothercompany.Intheirmeta-analysesof93empiricalstudiescoveringpost-acquisitionperformance,Kingetal.(2004)showthat,onaverage,theperformancesofacquiringcompaniesdonotpositivelychangeasafunctionoftheiracquisitionactivity,sinceonly50percentofallM&Ascreatevalue.Duetothefactthat“allvaluecreationtakesplaceaftertheacquisition”(HaspeslaghandJemison,1991,p.129),thevaluecreationofM&Asisoftenmeasuredbythereactionsoffinancialanalyststotheannouncementofanoperation,sincetheirjudgmentmightreflectthevaluewhichisbelievedtobecreatablefortheshareholdersoftheacquiringcompany(Chalençonetal.,2017).Integratingconstructsofdifferentschoolsanddiscussingtheirinter-dependencieswithM&Asuccess,BauerandMatzler(2014)developacomprehensivemodelofM&Asuccess.TheauthorsfindthatM&Asuccessdependsonstrategiccomplementarity,culturalfit,anddegreeofintegration.Inparticular,thedegreeofintegration,whichisoftencitedtobedecisiveforM&As,ismeasuredbysocioculturalintegration,integrationofproduc-tion,marketingintegration,andsystemintegration.Asaresult,ithasempiricallybeenshowntobepositivelyrelatedtosuccessfulM&Asintermsofthespeedofintegration.Theauthorsdrawtheconclusionthat,ifthedesireddegreeofintegrationishigh,firmstendtointegrateasfastaspossible.Themajorityofstudiesonintegrationcoverthelevelofintegrationthatisneededtotransfercapabilities,eliminateredundantresources,andleveragesynergies(Uzelacetal.,2016).ChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

148132HandbookondigitalbusinessecosystemsDuethecomplexnatureofM&Aeventsinorganizationallife,LarssonandFinkelstein(1999)developedaconceptualframeworkdescribinghowsynergyrealizationisinfluencedbythesimilarityandthecomplementarityofthetwomergingbusinesses,bythedegreeofinteractionandcoordinationduringtheprocessoforganizationalintegration,andbythelackofemployeeresistancetothemerger.ClassictheoriesofM&Aswithregardtovaluecreationemphasizetheimportanceofefficiencygainsfromsynergysources:including(1)operationalsynergiesinproduction,marketing,R&D,andadministrationachievedthrougheconomiesofscale,verticaleconomies,andeconomiesofscope,(2)collusivesynergiesfrommarketandpurchasingpower,(3)managerialsynergiesfromapplyingcomplementarycompetenciesorreplacingincompetentmanagersand(4)financialsynergiesfromriskdiversificationandcoinsur-ance(LarssonandFinkelstein,1999,p.1)IntheM&Aliteraturestream,mergerintegrationcomprisesacombinationofsomeorallorganizationalassets,processes,people,andtechnology(MehtaandHirschheim,2007).Thedynamicsofpost-mergerintegrationstillisnotfullyunderstood,despiteextensiveresearchonM&As(VaaraandMonin,2010).Therefore,agrowinginterestinpost-mergerprocessesandintegrationpracticesthatareexecutedpost-dealcanbeobserved(HomburgandBucerius,2005,2006).Summarizingthereviewedliterature,awiderangeofapproachestowardsintegratingstart-upsingeneral,ormorespecificallystart-upsfromdigitalbusinessecosystems,hasbeenpresented.Tounderstandthemechanismsconcerningvaluecreationandvalueappropriation,scholarshavetointegratedefinitionsandconceptsfromvariousdisciplinessuchasstrategicmanagement,entrepreneurship,andinnovationmanagement.Thereisalimitednumberofpublicationssheddinglightonthenatureandthemechanismsofvaluecreationandvalueappropriationbyintegratingdigitalstart-ups.Morespecifically,apartfromsomefindingsfromanalysesofvaluecreatedbytechnicalintegration,aresearchgapconcerningvaluecreationthroughstart-upintegrationfromthefieldofdigitalbusinessecosystemshasbeenidentified.RESEARCHDESIGNANDRESULTSManyarticlesanalyzedigitalbusinessecosystemsprimarilyfromatechnicalperspective.Incontrast,thischapterlooksatdigitalbusinessecosystemsfromadifferentangle,focusingontheopportunitiesforvaluecreationandvalueappropriationthatarisefromintegratingstart-upsfromdigitalbusinessecosystemsintoestablishedcompaniesinvariousforms.MethodologyDuetotheemergentnatureofthistopic,anexploratoryapproachwaschosentohelpfillthepreviouslyidentifiedresearchgap.First,aliteraturereviewwasconductedusingrelevantdata-basessuchasEBSCOBusinessSourcePremier,andconductingon-sitesearchwithinarangeofrelevantjournalsinseveralresearchareassuchasstrategicmanagement,entrepreneurship,andinnovationmanagement,withsearchtermscoveringvaluemechanismsinbusinesseco-systems.Inordertoverifythepracticalrelevanceofthetheoreticalfindingscollectedwiththehelpoftheliteraturereview,threesemi-structuredexpertinterviewswereconductedintheChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

149Valuecreationthroughstart-upintegration133secondstep.Byusingthisresearchapproach,thischapteralsocontributestothestillongoingdebateaboutrigorandrelevanceinmanagementstudies.Inordertoidentifysuitableexpertsfortheinterviews,thefirststepwastocompilealistofmembersoftheGermanAssociationofDigitalPublishersandNewspaperPublishers(BDZV).Inthesecondstep,theselectionwasnarroweddowntothosepublishersthathavebeeninvest-ingindigitalstart-upsorpartneringwiththemformorethantenyears.Fromthisreducedlist,theinterviewpartnerswererandomlyselected.Ifselectedintervieweesdidnotrespondtothefirstandseconde-mailrequests,additionalrandomdrawingsweremadefromthereducedlist.Thefinalselectedinterviewpartnerswereactivemanagingdirectors(IP1,IP2)andanactiveleadingemployee(IP3)ofCVCunits,whoatthesametimewereresponsiblenotonlyforfurtherdevelopingthecoreproduct,butalsoforextendingtheproductportfolio.AllinterviewpartnerswereassociatedprofessionallywithnewspublishingcompaniesinGermanyandthusaskedforanonymity.Ineachoftheinterviews,conductedviaonlinevideoconferencingortelephone,theinter-viewpartnersreflectedonandsharedinsightsintotheirprofessionalexperienceasCVCinves-torsanddigitalbusinessdeveloperswithinacontextofdigitaltransformation.Theaveragelengthofeachinterviewwas48minutes.Theinterviewpartners,withtheirbackgroundsinthenewspublishingindustry,werechosen,because:(1)thisspecificindustryisunderheavypressuretodigitallytransformitsbusinessinthewakeofmediaconvergence;(2)allthreeinterviewpartners,onaverage,havetenyearsofexperienceinthespecificareaofbeingactiveasCVCinvestorsandsimultaneouslyonthebusinessdevelopmentside;and(3)allthreeinterviewpartnersarewellpositionedinthejointdigitalbusinessecosystemofthenewspublishingindustryandmediastart-upsinGermany,leveragingthepossibilitiesitprovidesinawiderangeofprojectsandtransactions.Moreover,thecorrespondingcompaniesoftheinterviewpartnerswereofmediumsize,whichhastoberegardedadvantageousinthecontextofthisstudy,sincenotestablishingin-housecapacitiesonascaleofmultinationalenterprises(MNEs)forcessuchSMEstoleverageevenmoretheopportunitiesoftheirsurroundingdigitalbusinessecosystems.CircumstancesandGoalstoBeAchievedthroughtheIntegrationofDigitalStart-upsInallthreeinterviews,theimprovementofthecoreproductandthedevelopmentoffutureproductswerehighlightedbytheinterviewpartnersasthemainstrategicmotivationsforworkingwithandtheintegrationofstart-upsfromthedigitalbusinessecosystem.Indoingso,IP1pointedoutthattheoverallstrategicgoalwastojumptheinnovationcurve,whichillustratestheperceptionofdigitalstart-upsinthatcontextasbeingexternalsourcesofhighlyinnovativeideastobeleveragedinternally.IP3addedthatamorespecificaiminterrelatedwiththeoverallgoalisaccessingnewtechnologiesandintegratingthemintotheowncompa-nies’techstack.Theunderlyinggoalsoflearningandknowledgetransferwereexpressedindifferentformsbyallthreeinterviewpartners.Morespecifically,IP3viewstheidentificationofnewbusinessmodelsandbusinessmodelinnovationsasoneadditionalgoal,importantforthelearningofhowthecorebusinessmightbetransformedinthefuture.Apartfromthesestrategicgoalsofgeneralimportance,severaladditionalgoalshavebeenpointedoutfromeachoftheinterviewpartners.Asasoftfactor,theintegrationofdigitalstart-upsisaimedatgainingabroaderperspectiveonoverallmarkettrendsanddevelop-mentsinthedigitalmediasector.Specifically,regardingthedigitalbusinessecosystem,IP1ChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

150134Handbookondigitalbusinessecosystemsdescribesthepositionintheecosystemofone’sowncompanyasactive.Thisismanifestedinthegoalofnotonlybeingapassiveactorintheecosystem,butalsoactivelygettingtoknowone’sowndigitalbusinessecosystemandfurtherdevelopingitinacertainandstrategicallydesirabledirection.Asanadditionalremark,IP2stressesthatgoalsandtheirachievementarehighlydependentonthemindsetsofthepersonsresponsiblefordecision-makingontheincumbentside.Withnoexplicitopennesstowardsnewapproaches,orwithhalf-heartedlyexecutedapproaches,theintegrationofdigitalstart-upsmightfailtocreatevaluefortheincumbent.IP3arguesinthatdirection,alsoexplainingthattechnologicalorculturalfitisamoderatingvariableforachievingthegoalsassociatedwithintegratingdigitalstart-ups.IP1‒IP3collectivelyaddressthesamecircumstancesfortheintegrationofstart-upsfromthedigitalbusinessecosystem.First,incumbentscouldestablishcustomerrelationshipswithdigitalstart-ups,integratingtheirproductsorservicesintotheirowninternalset-up;forexample,anewspublishingincumbentcouldbethecustomerofadigitalstart-upthatenrichesnewsarticleswithadditionalcontent,improvingtheoverallcustomerexperience.Second,theincumbentcouldestablishacooperationwithastart-upfromthedigitalbusinessecosystem;forexample,anewspublishingincumbentfromtheprintsectorcouldcollaboratewithadigitalstart-uptojointlyexplorepossibilitiestoconverttext-to-speechtechnologies,andthustodirectlycreatevalueingeneratingadditionalrevenueinanovelbusinesssegment.IP2shedslightonplatformplayersbeingpartofcooperationinthedigitalbusinessecosys-tem,highlightingtheroleofGoogle’sdigitalnewsinitiativeinfundingpartnershipswithnewspublishingcompanies.IP3clarifiesthattheeffortsofincumbentsinsupportingspecificbusinessaccelerationprogramshavetobecategorizedascooperation.Third,incumbentscouldactasCVCinvestorswithminoritystakeinvestmentsinstart-upsfromthedigitalbusi-nessecosystem;forexample,anewspublishingincumbentcouldinvestinadigitalstart-upalreadyinpossessionofaready-to-marketsoftwareproducttoconvertstructuredinformationfromdatabasesintonewsarticles.Andfourth,incumbentscoulddoM&Asandpurchase;forexample,profitablecompaniesbuyingrevenuefrombusinessmodelswithproofofconceptsonthetechnological,aswellasthemarketingside.ConcerningCVCinvestments,IP2andIP3emphasizethatseveralformsofCVCstrate-giesexistandhaveproventocreatevalue.TheyaddthatsomeincumbentsonlymakeCVCinvestmentswithpredetermined“pathstomajority,”resultinginspecificoptionsforchangeofcontrolbyacquiringmorethan50percentofthestart-ups’sharesinthefuture.Thus,CVCinvestmentsmightleadtoM&Adealsbywhichstart-upsareintegratedfullyintotheincum-bents’organization,withanothercourseofactionbeingthepossibilityofshuttingdowntheoperationsoftheacquiredstart-up.Ontheotherhand,incumbentsmightfavorcollaborationswithstart-upsasmorepromisingintermsofvaluecreation,whenthereisnofutureperspectiveofgainingamajorityholding.Astothedegreeofintegrationofthedigitalstart-up,IP2mentionsthatanimportantaspectoftheCVCinvestmentdecisionistheabilityofthetargetstart-uptogrowrevenuesonitsown.Whentheincumbentisobligedtointegratethedigitalstart-ups’product,thismightbeviewedasnegativeinthecourseoftheduediligencepriortotheCVCdeal,asadeficiencytoscaleindependently.IP2alsopointsoutthatakeyquestionconcerningtheintegrationofdigitalstart-upsisthespaceintheinternalorganizationalenvironmentintowhichthedigitalstart-upistobeintegrated.Thisdecisiondependsontheincumbent’ssizeandpriorexperi-encewithintegratingstart-ups;forexample,withnewspublishingincumbentsalreadyhavingChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

151Valuecreationthroughstart-upintegration135digitalnewsroomsordigitalsalesoperatingunderagiledevelopmentsystems,digitalstart-upsmightbeorganizationallyconnectedtotheseunitsandpotentiallygeneratevaluefasterfortheincumbent.Anotherimportantdecisionconnectedwiththeintegrationofdigitalstart-upsinCVCsettingsistheinvestmentstrategyoftheincumbent.Wheninvestinginapre-seeddigitalstart-upwithoutready-to-marketorcustomizableproductsorservices,integrationontheleveloftheincumbent’scoreproductisnotyetpossible.Ontheotherhand,whenactingaspurefinancialinvestors,thetargetstart-upmightbenotrelatedatalltothelineofbusinessoftheincumbent,thusdigitalstart-upintegrationisnotanoptionforprimarilyfinanciallymotivatedCVCinvestors.FormsofValueCreationandValueAppropriationAftercollectinginformationonoverallandspecificgoalsandcircumstancesforintegratingstart-upsfromthedigitalbusinessecosystem,theinterviewpartnerswereaskedtodescribethewaysinwhichsuchintegrationaleffortscreateandcapturevaluefortheincumbent.NotbeingprimarilyfinanciallyorientatedCVCinvestors,thegoaltobenefitmonetarilyfromsuccessfulexitsofthestart-upsortobenefitfromannualprofitordividenddistributionswasnotpointedoutexplicitlybyanyofthethreeinterviewpartners.Uponrequest,allthreeinterviewpartnersunderlinedthatthepotentialformonetaryreturnswasanecessaryconditioninanyofthedescribedcircumstancesforintegratingstart-upsfromdigitalbusinessecosystems.Therebytheinterviewpartnersimplicitlytookupthesubjectofvaluecreationandvaluecapture,asintroducedbyChesbroughetal.(2018);thatis,thecapturingofvaluethroughthevalue-in-useoftheuser.Allthreeinterviewpartnersdescribedtheirspecificprogramstointegratedigitalstart-upsasdrivenbytheintentiontocreateandtocapturevalue.Insodoing,theycategorizedtheabove-describedcircumstancesandexplainedcustomerrelationshipsandcollaborationsasprimarilyaimedtocreatevalue,forexample,bycreatingvalue-in-use;whereasminoritystake(CVC)ormajoritystake(M&A)investmentswereprimarilyaimedatvaluecapturebyvalue-in-exchange.Thissupportstheconceptof“valuepartaking”describedbyChesbroughetal.(2018),whichrepresentstheprocessofvaluecaptureinvolvingtheappropriationofashareofthevaluethatanotheractoraimstorealize.Apartfrommonetarybenefits,allthreeinterviewpartnersdescribedthefieldsoftechnicalintegration,productintegration,legalintegration,humanresources(HR),andstructuralinte-gration,aswellasculturalintegration,aspotentialsourcesforcreatingandcapturingvalueinsomeform.IP1describedtechnicalintegrationasexplicitlypromisingwhenthedigitalstart-upoffersaspecifictechnicalcomponentmissingintheincumbents’technologicalset-up.Implementingsuchamissinglinkthenhasadirectinfluenceontheproductandthusimprovestheproductenvironment.IP1gavetheexampleofconsentbannersbeinglegallyessentialforcompaniesactiveintheonlinebusinessenvironment.Specifictechnologiesforsettingupsuchconsentbannerswerenotdevelopedin-house.Therefore,newspublishingcompanieswouldestablishcustomerrelationshipstointegratethetechnologyortheproductofonespecializeddigitalstart-up.IP3broadenedthatperspectivebymentioningthatproductsandservicescouldbeco-createdjointlybytheincumbentandthestart-up,alsowiththeaimofcreatingvalueofintegratingtheresultingtechnologyortheproductintheincumbents’productorserviceChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

152136Handbookondigitalbusinessecosystemsportfolio.Insodoing,incumbentswouldserveasleadusers,providingvaluablefeedbackandinsightsfromacustomerperspectivetothestart-up(e.g.,UrbanandvonHippel,1988).AccordingtoIP1-3,legallyintegratingstart-upsfromthedigitalbusinessecosystemintoorganizationsoffersmorepotentialtocreateandcapturevalueforMNEsthanitdoesformedium-sizedcompanies,sinceitrequiresspecificskillsandresources.Aspectsoflegalintegrationwereseeninthepossibilitiesofaccessingtrademarksandpatents,aswellasotherlegalassets.IP3pointedoutthataccesstointellectualpropertyisnotadriverforintegrationfortherespectivenewspublishingcompany.CreatingandcapturingvaluebytheintegrationofHRandstructureswasalsoaddressedbyallthreeoftheinterviewpartnersinsomeform.Eitherhiringasinglepersonwithaspecificskillsetorintegratingawholeteamasapre-developedstructureintotheincumbents’organ-izationchartwerenamedinrespectofHRandstructuralintegration.IP2explainsthat,sincesmallerincumbentsasCVCinvestorsacthighlyopportunistically,theintegrationonanHRorstructurallevelismoreofanopportunityforMNEs,oratleastmiddle-sizedincumbents.IP3viewedsuchadecisioninthelightofa“buy-or-build”discussionwiththerelevantproandconarguments.ThesameinterviewpartnersaddedtothepointofHRintegrationthatitcouldworkbothways:eitherkeyemployeesfromthedigitalbusinessecosystemcouldbeintegratedby“acquihires”intotheincumbents’organization,orincumbentsactingasCVCinvestorscouldarrangefornewmanagingdirectorsfromtheirowncompanytobetransferredtothedigitalstart-up.ThisalsocanbeviewedasaproargumentforCVCinvestments,sincetheyprovidepossibilitiesfortheinvestortoinfluencetheorganizationalchartsofthetargetstart-up,whichispossibleonlyonasmallerscale,ornotatall,incustomerrelationshipsorcollaborationsettings.IP3addressedsupportingportfoliocompaniesinhiringkeyemployeesasoneofhismajorregulartasks.Addingtothatpoint,IP2viewedthepriorHRorstructuralintegrationofdigitalstart-upsashelpfulsoftfactor;forexample,whenhiringfornewbusinessmodelsonthesideoftheincumbent.This,accordingtothesameinterviewpartner,isduetotheopportunitiesofleveragingrelationsestablishedbypriorHRorstructuralintegrationtothedigitalbusinessecosystem.Themostdifficultformofintegrationtocreateandcapturevaluebyintegratingstart-upsfromthedigitalbusinessecosystemisculturalintegration,accordingtoallthreeinterviewpartners.Inthiscontext,IP2highlightedaspectsthatarealsorelevantfororganizationalchangeandtransformation,namelyleadershipandfailureculture.Thiswouldbespecificallyrelevantforhiringnewstaffmembersontheincumbentside,sinceorganizationalculture,besideswages,wasoneofthetwomostimportantaspectsforapplicants.Jointly,allinterviewpartnerspointedoutthat,fororganizationaltransformation,thelargestpotentialforcreatingandcapturingvalueliesinculturalintegration.IP3addressedarangeofpossibilitiesofapproachingculturalintegration,usuallyalsotappingintothefieldsofHRintegration:intern-shipsandtrainees,jobrotations,andeventssuchasportfoliodaysasin-houseeventsontheincumbentside.Furthermore,IP3addedthatsuccessforsuchmethodsoforganizationalinte-grationisthemostdifficulttomeasure,specificallyinthecontextofrapidlychangingenviron-mentsindigitalbusinessecosystems.IP1clarifiedthatapproachesaimedtointegratedigitalstart-upsculturallyincreasetheperceptionofincumbentsasbeinginnovative,whichresultsinasignificantvaluecreationpotential.Thesameinterviewpartnerdescribedaplatformeventorganizedannuallybytheincumbent,atwhichSMEsandstart-upsfromvarioussectorsintheincumbents’businessregioncometogether.Inthisway,impulsesfromtheregionaldigitalbusinessecosystemwouldberecognizedandtransformedinawaythatpositivelylinkstheChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

153Valuecreationthroughstart-upintegration137corebrandoftheincumbentswiththeclosenesstothestart-upecosystem.Thesuccessofthisspecificeventintermsofculturalintegrationcouldbemeasuredevenbyquantitativemeans,sincetheclosenesstothedigitalbusinessecosystemparadoxicallyincreasessalesofadspacefortheincumbent,andthereforecreatesvalueforthecorelegacybusinesssegment.DISCUSSIONANDACADEMICCONTRIBUTIONThefindingsfromreviewingliteratureinthefieldsofstrategicmanagement,entrepreneurship,andinnovationmanagementshowavarietyofconceptsofvaluecreationandvalueappropri-ation,withconsiderableambiguity.Indeed,studyingvaluecreationisadifficulttask(Hanetal.,2012).Duetotheabsenceofacomprehensivetheoreticalframeworkonvaluecreationbyorganizationsofalltypes,progressingaininginsightsonhowpublic,nonprofit,andprivateorganizationsworktogetherhasbeenstalled,despiteadvancesinthefieldofstrategicmanage-ment(Cabraletal.,2019).Thischapterthereforeaimstoprovideanimpetustothescientificcommunitytoresumethegeneralacademicdiscussiononvaluecreation,andtoextendittotheparticularopportunitiesofferedbydigitalbusinessecosystems.Contributingtoongoingresearchbymeansofapreliminarystudy,thischapterextendsthefindingsofPérezandFierro(2018)concerningvaluecreationandappropriationinasymmetricalliancesintwocasesofdigitaltechstart-upsformorein-depthinsightsintothenatureofcreatedorappropriatedvalues.Inthemorespecificfieldofintegratingstart-upsfromdigitalbusinessecosystemstoincumbents,theinterviewpartnershighlightedsignificantvaluecrea-tionandvalueappropriationpotentialbytechnicalandproductintegration,legalintegration,HRandstructuralintegration,andculturalintegration.Approachestocreateandappropriatevaluebyintegratingstart-upsfromthedigitalbusinessecosystemareshowninFigure10.1.Figure10.1Overviewofapproachestocreatingandappropriatingvaluebyintegratingstart-upsfromthedigitalbusinessecosystemChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

154138HandbookondigitalbusinessecosystemsAsforthedegreeofintegration,thefindingsfromtheconductedinterviewsarebroadlyinlinewiththesuggestionofMinshalletal.(2010)tocategorizepartnerships,intermsofgov-ernance,alongacontinuumofincreasingintegration.Orderedbyincreasingdegreeofinte-gration,partnershipscantaketheformsofinformalrelationshipswithinformalagreements,outsourcingwithcontractservices,partnershipsandalliancesbylicensing,sharedresources,partialacquisition(<50percent),andjointventures,aswellasM&Aswithpartialacquisitioncontrolling>50percentor100percentacquisitions.Withregardtointegratingstart-upsfromthedigitalbusinessecosystem,thecategorizationofMinshalletal.wasbroadlyconfirmedbythestatementsofallthreeinterviewpartners,categorizingthecircumstancesforstart-upintegrationfromthedigitalbusinessecosystemincustomerrelationships,cooperationsandjointventures,CVCminoritystakeinvestments,andM&Amajoritystakeinvestments.AsMinshalletal.pointout,somelargecompanieshaveveryclearpointsofcontactforstart-upsandastructuredprocessfordealingwiththesestart-ups,whilemanycompaniesdonotdealwithstart-upsinsuchaprofessionalizedmanner.Therefore,ithastobeclarifiedthat,ontheonehand,allinterviewpartnerswerenotassociatedwithlargecompanies,andontheotherhand,theyhadadaptedprofessionalrulesandproceduresforcooperating,funding,oracquir-ingstart-ups.Chesbroughetal.(2018)differentiatefourvalueprocessesinatwo-by-twomatrix,withoneofitsdimensionsreflectingwhethervalueisbeingcreatedorcaptured.Theseconddimen-sionreflectshowvalueisreceived,byvalue-in-useorbyvalue-in-exchange.Inoneoftheresultingquadrants,valueiscapturedthroughthevalue-in-useoftheuser.Theauthorstermthisthe“valuepartaking”quadrant,whichrepresentstheprocessofvaluecaptureinvolvingtheappropriationofashareofthevaluethatanotheractoraimstorealize.Foroneactor,thefocalcompany,thisresultsinmonetizingthevaluerealizationoftheotheractor.Andfromtheperspectiveoftheotheractor,formonetizationpurposessomeoneelseisleveragingtheirvaluerealization.Thus,thestrategiesandactionsconcerningCVCandM&Aspointedoutinthecourseofthethreeconductedinterviewscanbeviewedinthelightof“valuepartaking.”Thepossibilityofcreatingvaluebyprimarilyfinanciallydriveninvestmentsindigitalstart-upsisnotincorporatedintoFigure10.1,since,inaccordancewiththeinterviewfindings,itdoesnotnecessarilyinvolveanyexplicitformofintegration.Moreover,itisimportanttoclarifythatFigure10.1showspotentialsforvaluecreationandvalueappropriationwiththeequallysizedboxes,notreferringtoequallysizedpotentialsortheprobabilityfortherealizationofsuchpotentials.Asnotedabove,toqualifyasaclassificationsystemforvaluecreationandvalueappropriationbyintegratingdigitalstart-ups,furtherresearchisneeded.NotaddressingthepossibilityofindirectinvestmentsseemstosupporttheassumptionofHasenpuschandBaumann(2017)thatindirectinvestmentsareinsignificantintermsofstrate-gicvalueascomparedtodirectinvestments.CONCLUSIONInthischapteronvaluecreationthroughdigitalstart-upintegrationasaproxyfortheuseofdigitalbusinessecosystems,aliteraturereviewinvariousfieldsofresearchwaspresented,alongwithfindingsfrominterviewswiththreeCVCinvestorsfromthefieldofnewspub-lishingcompanieswhoarealsoresponsiblefordigitalbusinessdevelopment.Byintegratingcontributionsfromthefieldofstrategicmanagement,entrepreneurship,andinnovationman-ChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

155Valuecreationthroughstart-upintegration139agement,thisprovidesforfindingsnotonlyoncircumstances,goals,andvaluecreation,butalsoonvalueappropriationapproachesforincumbentsintegratingstart-upsfromdigitalbusi-nessecosystems.Inaddition,anoverviewforanalyzingtheopportunitiesforvaluegenerationandvalueappropriationthroughtheintegrationofdigitalstart-upswasproposed.Usingabroadinductiveapproach,inaccordancewiththesystematicapproachintroducedbyGioiaetal.(2012),theaimwastoidentifyanddescribecircumstancesandgoalstobeachievedthroughtheintegrationofstart-upsinthecontextofdigitalbusinessecosystems,andtodescribethevariousformsforcreatingandcapturingvalue.Beingawareofthedownsidesofthisresearchapproach,thepotentialtogaininsightsintoahighlyspecificindustry,whichotherwiseishardlyaccessiblebypublicinformation,outweighsthemethodologicaldraw-backs.IntheeraoftheCovid-19pandemic,andthesignificantdifficultyofgainingaccesstointerviewpartnerswithahighlyspecificskillandexperiencesetinrapidlychangingdigitalbusinessecosystems,thecomparativelysmallnumberofinterviewshastoberegardedasanacceptableshortcoming.Duetotheemergentnatureofthistopic,anexploratoryapproachwaschosen,sothattheresultspresentedremaintobefurtheranalyzedinthefuture,onabroaderscaleandwithmoresophisticatedresearchmethods.Furthermore,onlyinterviewpartnersfromnewspublishingcompanieswerechosen.Themechanismsofvaluecreationandvalueappropriationinotherindustries,andtheirrespectivedigitalbusinessecosystemswithdifferentimplicationsderivedfromdigitaltransformation,thereforeremaintobeinvestigated.Sinceonlysmall-andmedium-sizedGermanmediacompanieswereanalyzed,thespecificopportunitiesforvaluecreationandappropriationoflargermediagroupsandcorporationsalsoremaintobeillumi-natedinthefuture.Clarifyingthedynamicnatureoftheapproachestowardsdigitalstart-upintegration,allthreeinterviewpartnersmentionedthatincumbentswouldactonlyasonetypeofintegrationpartner—forexample,incumbentswouldestablishacooperationrelationshipwiththestart-upfromthedigitalbusinessecosystemandsimultaneouslyactasCVCinvestor—whichmightleadtoanacquisitionofamajoritystakeoreven100percentofthestart-up’ssharesinthefuture.Toshedlightonsuchdynamicsofincumbents’strategicactions,furtherresearchisneeded.Inregardtocustomerrelationshipsandcooperation,theinterviewpartnershighlightedtwoapproachestowardsvaluecreationforincumbentsworkingwithdigitalstart-ups.Interestingly,theconceptofvalueco-creationwasnotaddressedexplicitly(e.g.,Mitleton-Kelly,2006).Somecontributionsanalyzecooperationamongcompaniesandtheircustomerswithafocusonco-creation.Forexample,Liuetal.(2018)investigatethevalueco-creationmechanismsincrowdsource-basedopeninnovationbetweenusers’ideasandinternalresources.Theyfindthat,insuchsettings,Web2.0technologiesarecrucialtoolsintheprocessofvalueco-creation,sothatindigitalbusinessecosystemstheconceptofvalueco-creationisofprimaryinterest.Viewingthisthematiccomplexfromthischapter’sperspective,thespecificvalueco-creationmechanismsincorporatingtheideasoftheincumbent(asauser)andtheinternalresourcesfromthedigitalstart-upneedtobeanalyzedmoreprofoundly.Lastly,turningtopracticalimplications,theinterviewpartnersstatedthatdespitegreateffortstakenduringduediligence(DD)—forexample,examiningthelegalcontractualhistoryofthecompany—aframeworkforan“integrationalDD”ismissingandneedstobedeveloped.BuildingonefficiencygainsfromsynergysourcesidentifiedinclassictheoriesofM&AsbyLarssonandFinkelstein(1999),aresultingframeworkforintegrationalDDcouldChristianHorneber-9781839107191DownloadedfromPubFactoryat05/28/202209:56:32AMviaColumbiaUniversityLibrary

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15911.Femaleentrepreneurs’innovativenessindigitalbusinessecosystemsNgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndtINTRODUCTIONInformationtechnologyandglobalizationhavetriggeredradicalchangesinthebusinessenvironmentbycreatingopportunitiesforentrepreneursacrossbusinesssectors(Balohetal.,2012;Eggersetal.,2017).Technologicalassetssuchastheinternetandinformationandcommunicationtechnologiesbuildapowerfulchanneltonewventurecreation(SussanandAcs,2017;LeDinhetal.,2018)andincreasedproductivity(Balohetal.,2012).Theneweraofthedigitalecosystemhaschangednotonlythewaywedobusiness,butalsothewaywecommunicate(Krausetal.,2019;LeDinhetal.,2018).Digitalecosystemsfosterentrepreneurialactivities(Nambisan,2016).Digitalentrepreneur-ialactivitiesdiffersfromtraditionalentrepreneurialactivitiesduetocontinuoustechnologicalevolutionandinteractionsinthedigitaleconomywhichinitiate,create,andchangethedigitalentrepreneurialprocessmanytimes.Digitalizationhasfacilitatedshiftsinbusinessmodelstowardsnewdigitalenvironments.Theseshiftshavegivenrisetothecreationofnewbusi-nessesbyalteringoldbusinessesfromofflinetoonlinespaces,andbyestablishingentirelynovelformsofentrepreneurialactivities.Digitalentrepreneurshiphasbenefitedfromthedevelopmentofdigitalecosystemsthatprovideopportunitiesforentrepreneurstogrowandscaletheirentrepreneurialactivities(SussanandAcs,2017;Krausetal.,2019).AccordingtoLietal.(2012,p.119),“adigitalecosystem(DE),isdefinedasaself-organizing,scalableandsustainablesystemcomposedofheterogeneousdigitalentitiesandtheirinterrelationsfocusingoninteractionsamongentitiestoincreasesystemutility,promoteinformationsharing,intraandintercooperationandsysteminnovation.”Auserofandparticipantinadigitalecosystemisanyonewhohasthechancetoaccessconnecteddevices,forexample,computers,mobilephones,tablets(Krausetal.,2019).Digitalecosystemsenablethetestingofnewideasthroughbusinessmodelreconfigurationsandinnovationplatformsincollaborativesettings(HsiehandWu,2019;Ries,2011).Whileresearchontheroleofdigitaltechnologiesforentrepreneurialecosystemsisinitsinfancy,arguablythemostimpactfulquestionhasbeenwidelyoverlooked:Howdoesdigitaltechnologyenabledisadvantagedgroupsandcontexts?(Ughettoetal.,2019;Welter,2011)Digitalentrepreneurshipisameansofempowermentandanopportunityforgreatereco-nomicparticipationforunder-resourcedandsociallymarginalizedgroups,especiallywomen(MartinezDyetal.,2018;BergerandKuckertz,2016;NgandArndt,2019).Forexample,GhanaandNigeriaareamongthefewcountriesintheworldwherefemaleentrepreneursout-numbermales.Thetotalentrepreneurialactivity(TEA)rateofmaleandfemaleentrepreneursinNigeriais34percent(male)and36percent(female),whileinGhanaitis35percent(male)and38percent(female),respectively(HerringtonandKelley,2012).143NgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

160144HandbookondigitalbusinessecosystemsAsactorsintheecosystem,femaleentrepreneurshavebeenidentifiedasdriversofbotheconomicandsocialdevelopment(Hechavarriaetal.,2019;DeVitaetal.,2014),evenmoresothantheirmalecounterparts(JenningsandBrush,2013).Sincefemaleentrepreneursencounterdualchallenges,becausetheyoftencombineentrepreneurialroleswithdailyworkandfamilyliferequirements(Hunderaetal.,2019;EddlestonandPowell,2012),theneedarisestounderstandhowfemaleentrepreneursleveragedigitaltechnologiestoinnovativelyadaptandovercomechallenges.Understandingthevariousdigitalbusinessecosystemapproachestostimulatefemaleentrepreneurshipinstart-upecosystemscouldimpacttheleveloffemaleentrepreneurshipintheentireeconomy.Thefeminineperspectiveoftechnologyincludesnotonlyartifactsbutalsoculturesandprac-ticesassociatedwithtechnology,yetwomenareexcludedindesignandartifacts(Wajcman,2010).Hence,theyencountersignificantbarriersinallocatingtimeandresourcestoattendtotheirprofessionalandprivaterolessimultaneously(Hunderaetal.,2019).Althoughresearchhasrecentlybeguntoanalyzetheroleofdigitaltechnologiesinentrepreneurialecosystems(Brushetal.,2019;SussanandAcs,2017),thegenderperspectivehasremainedsignificantlyunderexplored.Thus,weask:Howdoesthedigitalbusinessecosystemfacilitatethedevelop-mentoffemaleentrepreneurshipinadevelopingcountrycontext?Weexplorethisphenome-nonasitrelatestofemaleentrepreneurs,howtheyovercomethesebarriersandinnovativelyutilizethedigitalbusinessecosystemforproductiveentrepreneurship.Thischapterdiscussestheroleofthedigitalbusinessecosysteminimprovinglevelsoffemaleentrepreneurship.Itanalysestheactivitiesoffemaleentrepreneurstounderstandhowtheyinnovativelyrespondtoentrepreneurialchallenges.Indoingthat,itidentifiesandanalyzesenablersoffemaleentrepreneurshipinthedigitalbusinessecosystem.Therestofthechapterisstructuredasfollows.Wediscusstheconstraintsoffemaleentrepreneurshipwithafocusondevelopingcountries.Then,weidentifyanddiscussdigitalbusinesseco-systemenablersoffemaleentrepreneurship.Tosetthecontextforthischapter,wehighlightthechallengesoffemaleentrepreneursindevelopingcountriesacrossfourkeyareas:accesstofinance,technologicalandinfrastructuralchallenges,entrepreneurialeducation,andsocio-culturalchallenges.CHALLENGESOFFEMALEENTREPRENEURSINDEVELOPINGCOUNTRIESAccesstoFinanceTheavailabilityandaccesstofinancialresourcesisanimportantaspectinstartingandoper-atingnewventures.Yet,itremainsachallengetofemaleentrepreneurship(Basiglioetal.,2019;Poggesietal.,2016;Coleman,2000).Generally,womenencountermoreconstraintsingettingfundingcomparedtotheirmalecounterparts(Basiglioetal.,2019;Robichaudetal.,2019;Coleman,2000;Chaudhurietal.,2020).Onereasonforthisgenderdifferenceisthemale-dominatednatureofthefinancialsector,whichleavesfemaleentrepreneursbattlingtosecureaccesstocredit.Asecondreasonforthisistheinefficientallocationofcapitalduetogenderdiscriminationoftenbasedonstereotypes(Coleman,2000;GichevaandLink,2015).Indevelopingcountries,femaleentrepreneursencounterevenmoreseverechallengesinaccessingfinancing.First,femaleentrepreneursareunder-representedintheformalbankingNgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

161Femaleentrepreneurs’innovativenessindigitalbusinessecosystems145system,andoftenchargedhigherinterestratesbyfinancialservicesinstitutions(BrixiováandKangoye,2016;Halkiasetal.,2011).Second,inmostinstances,femaleentrepreneurslackadequatestart-upcapitalandtendtofundtheirbusinessesfromtheinformalsectorratherthantheformalsector(BrixiováandKangoye,2016;Asieduetal.,2012).Thisclaimiscorrobo-ratedbythestudyofKithaeetal.(2013),whichrevealedthatalthoughthebusinessperfor-manceoffemaleentrepreneursislowerthanthatoftheirmalecounterpartsduetodifficultiesinaccessingmicrofinance,therateoftheirinvolvementintheinformalsectoroftheeconomyishigherthanthatofmales.Yet,studiesdemonstratethatmicrofinancingandmicrocreditinitiativesfostertheempowermentofwomenmarginalizedbytheformalbankingsystem(MadichieandNkamnebe,2010;Onyejekwe,2001;Marcillo,2017).Microfinanceinstitutions(MFIs)serveasavenuesforchannelingcredittothepoorandforsupportingfemaleempowermentthroughmicro-enterprises.Althoughmicrofinancingisusedasatoolforencouragingentrepreneurship,microfinancingisconstrainedbythesocial,cultural,andeducationalchallengesofwomen(Marcillo,2017).Thus,strengtheninggenderedMFIswouldcontributetotacklingtheexistingexclusionofwomenfrommakingasubstantialcontributiontotheeconomy(MadichieandNkamnebe,2010).Third,theAfricansocietyislargelypatriarchal,withmenincontrolofinheritancesandfixedassetsmorethanwomen(Nsengimanaetal.,2017;Kithaeetal.,2013;Kamberidou,2020).Thisleaveswomenwithlittleornothingtopresenttolendinginstitutionsascollateral(Buietal.,2018).Moreso,constraintsinmicrofinanceaccessandfamilydynamicshavealsobeenattributedtokinship(Halkiasetal.,2011).Forexample,inRwanda,Nsengimanaetal.(2017),observedthatentrepreneurshipisperceivedasaman-ledendeavor.Hence,womenentrepreneursfacelegitimacyissues.Empiricalevidencehasshownthatinadequateaccesstofinancingisoneofthemostimpor-tantbarrierstofirmgrowth(BeckandDemirguc-Kunt,2006;Nkurunziza,2010),andakeyfactorthatdecreaseswomen’sabilitytolaunchandgrowentrepreneurialfirms(ColemanandRobb,2018).InAfrica,accesstocreditfornewfirmsisconstrainedbyweakpropertyrights,gapsinfinancialauditing,aswellasthelackoffinancialskillsamongentrepreneurs(Brixiováetal.,2020).Yet,theevidenceprovidedbytheseauthorsrevealstheintricaciesofotherinflu-encingfactors.Theactualdeterminantoffinancialaccessforfemaleentrepreneursisnotbasedonthelevelofliquidityinthebanks,butcanbeattributedtoinfluencesofpatriarchy,genderstereotypes,discrimination,andnegativeperceptionofwomen.Wesuggestthatattemptstotacklethesesocio-culturalfactorsthatimpactfinancialaccessmaycontributetowardsaddress-inggender-basedbarriersinaccessingfinance.TechnologicalandInfrastructuralChallengesWomenrepresentkeyagentsintheeconomicdevelopmentofcommunitiesindevelopingcountries.Amidstchallengesanduncertainties,theyoftenembarkonentrepreneurialactiv-itiestosupporttheirfamilies(Michota,2013;Kithaeetal.,2013).Earlierstudiesrevealtheneedforfemaleentrepreneurstoadoptinformationandcommunicationtechnologies(ICTs)(Benitez-Amadoetal.,2010).ICTsareessentialbecausetheycantransmitanddisseminateinformationeasily(Michota,2013).Theycanalsoboosttheeconomic,political,andsocialempowermentofwomen;andpromotegenderequality.Thisisevidentintherecentadvance-mentininformationtechnology,applications,anduseofelectronicserviceswhichprovideNgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

162146Handbookondigitalbusinessecosystemsfemaleentrepreneursgreateropportunitiesforpersonalgrowthandbusinesssuccess(Mileketal.,2011).Althoughrecentadvancementsdemonstratethatdigitaltechnologiesarekeyenablersofsmallfirmperformance(Benitez-Amadoetal.,2010;Pergelovaetal.,2019;FieselerandFleck,2013),studiesrevealthatfemaleentrepreneursindevelopingcountriesareconstrainedbyinadequatetechnologyandinfrastructuralaccess,adoption,andknowledge(Kamberidou,2020;KamberidouandPascall,2020).Yet,othersstatethatwomen’saccesstotechnologyandICTsishinderedbyfactorsthatextendbeyondtechnologicalinfrastructureandthesocio-economicenvironment.Thesestudiespointtoinvisiblebarrierssuchasdigitalprivacywhichlimitwomen’sandgirls’participation.Wajcman(2010)concludedthatgenderandtechnologyhaveamutuallyshapedrelationship,andthattoachievegenderequalityattentionshouldbepaidtothepoliticsofgenderpowerrelationswhichisembeddedintechnology.Indoingthis,theimportanceofintegratingwomen’sidentities,needs,andprioritiesindigitaltechnologieswashighlighted.Somestudiesreportadigitalgenderdivide,especiallyinremoteruralareasindevelopingcountries(Mileketal.,2011),anddigitalexclusionofasizeablepartoftheworkforce,par-ticularlywomen,fromthedigitalmarketeconomy(KamberidouandPascall,2020;Mileketal.,2011).Despitetheadvantagesofdigitaltechnologiestoentrepreneurship,femaleaccesstoICTscannotbeassumedtooccurnaturallyifgender-blindapproachesandtechnologiescontinuetobeimplemented.WithmassiveadvancementsofICTsinbusiness,employment,education,training,andotherareasoflife,womenneedencouragementandsupporttotakepartintheinformationrevolution.Yet,whilemanydevelopingcountriesarestrugglingwithbasicaccessandinformationtechnology(IT)infrastructureissues,mostdevelopedcountriesarefine-tuningthebasicrightsandpoliciesforeffectiveinternetuseandgovernance(DuttaandBilbao-Osorio,2012).Hence,aseconomiesbecomemoreinformation-driven,thiselicitsaneedtoaddressissuesrelatingtowomen’saccessanduseofICTsinbothdevelopedanddevelopingeconomies.EntrepreneurialEducationEntrepreneurshipeducationcanbecategorizedintoinformalandinstitutionaleducation,whichconveysspecificattitudesandabilitiestoincreaseandimproveparticipationandefficiencyofwomen’sentrepreneurialbehavior(RauchandHulsink,2015).AbbasNaqvietal.(2020)suggestthatfemaleentrepreneurshipeducationprogramsincorporatebuildingbusinessskills,attributes,actions,andpracticalitiestoovercomeobstaclesinthecreationofnewventures.WhileKrausetal.(2019)highlighttheincreasingimportanceofdigitalentrepreneurialeducation,notmuchresearchaddressestheteachingofdigitalentrepreneurship.Accesstoandadoptionofdigitalentrepreneurialeducationbyfemaleentrepreneursinruralareasishamperedbylimitededucation,anattitudeofalienationfromthedigitalenvironment,andinadequatedigitalcompetencewithdirectconsequencesfortrainingneeds,health,anduseofdigitalservices(Orseretal.,2019;Sánchez-OroSánchezandFernándezSánchez,2017).Tomaketechnologyadoptionaccessibletofemaleentrepreneurs,governmentshaveintro-ducedpoliciesandprogramstoencouragetechnologyadoptionamongstentrepreneurs.Anexampleistheentrepreneurshipeducationandtraining(EET)program.Yet,scholarshavecriticizedtheseinterventionsasmasculinizedandnotedthattheseinterventionspropagatemasculineactivitieswhilstexcludingfemaleentrepreneurs(Orseretal.,2019).Asaresult,NgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

163Femaleentrepreneurs’innovativenessindigitalbusinessecosystems147therehavebeencallsfortechnologyadoptionprogramsthattakecognizanceoftheneedsoffemaleentrepreneurs.Socio-CulturalChallengesTheliteratureonfemaleentrepreneurshiphasevolvedfromneglectedtounderdeveloped(Marlowetal.,2009;Carteretal.,2001).Thisisbecauseeventhoughthegenderandentre-preneurshipphenomenonhasgainedrecognitionoverthelast30years,itwasonlysincethemid-1990sthatfemaleentrepreneurshipbegantogarnermorecredibilityandrespect.Yet,whilesomeauthorsbelievethatfemaleentrepreneurshiphasmovedbeyondthestateofneglect(Marlowetal.,2009),othersbelievethatfemaleentrepreneurshiphasbeenlargelyneglected(Bakeretal.,1997).Thisisespeciallysoindevelopingeconomieswherefemalesdealwithextremesocio-culturalcircumstances(Cesaronietal.,2017;EtimandIwu,2019;Nsengimanaetal.,2017).Whataresomeofthesocio-culturalbarriersthatfemaleentrepreneursencounter?Femaleentrepreneursencounterchallenges,particularlyindevelopingcountries.Apartfromthemultitaskingwhirlpoolresultingfromsocio-culturalexpectationsandwork‒familybalance,womenindevelopingcountriesencountergreaterchallengesbecausemanysocietiesarepatriarchal.Customs,beliefs,culture,andreligionreinforcegenderinequalitiesandgendergapsregardingentrepreneurialactivities(Kamberidou,2020).Genderinequalityexistsduetonormsthatcreateabiasagainstwomen.Stereotypesagainstwomenexist.Thisstereotypeinvolvesthecontinuoussocialjudgmentofindividualgroupmembersalongsidegroupexpectations(LeeandJames,2007).Itoccursunconsciouslyinthemalecommunityandisdifficulttoavoid(Blair,2002).Thementendtoperceivewomenaslesscompetentintheirinteractions(DePateretal.,2010;Oakley,2000),moreunpredictable(Brescoll,2016),andlessauthoritative(Hacker,1951).Thisgenderbiasandstereotypingaregroundedandmoreevidentinmale-dominatedcontextssuchasentrepreneurship(Acsetal.,2011;Bardasietal.,2011).Also,thesharedculturalbeliefthatentrepreneurshipisassociatedwithmasculinetraits(Brunietal.,2004)generallydiscourageswomenfromaspiringtobecomeentrepreneurs.Despitethechallengesthatfemaleentrepreneursencounter,thedigitalbusinessecosystemfacilitatedbydigitaltechnologiesprovidesopportunitiestoovercomethese.Thisispresentedinthefollowingsection.DIGITALBUSINESSECOSYSTEMENABLERSOFFEMALEENTREPRENEURSHIPThedigitalbusinessecosystemfostersanewbreedofcompaniesthatutilizedigitaltech-nology,entrepreneurship,andinnovationtotranscendindustriesonaglobalscale.Digitalentrepreneurshipthrivesontheexistenceofthedevelopmentofdigitalecosystemswhichofferampleopportunitiesforentrepreneurstogrowandscaletheirentrepreneurialactivities(SussanandAcs,2017;Krausetal.,2019).SussanandAcs(2017)linkedthedigitalecosystemwiththeentrepreneurialecosystem,therebyintegratingagentsandusersintotheirconceptofthedigitalentrepreneurialecosystemframeworkcomprisingoffourmajorconcepts,namely,digitalinfrastructuregovernance,digitalusercitizenship,digitalentrepreneurship,anddigitalmarketplace.NgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

164148HandbookondigitalbusinessecosystemsTable11.1DigitalbusinessecosystemenablersoffemaleentrepreneurshipindevelopingcountriesChallengesoffemaleentrepreneursDigitalbusinessecosystemenablersAccesstofinanceFinanceenablers:●Digitallyenabledinvestment,e.g.,mobilewallets,cryptocurrencies●CrowdfundingTechnological/infrastructureTechnologyenablers:●Internationalentrepreneurship●Businessmodel●Innovation●Pivoting●Onlinehomebusiness●Socialmedia/digitalmarketing●SocialtechnologiesEntrepreneurialeducationEntrepreneurialeducationenablers:●Sociallearning●Socialentrepreneurship●Onlinecourses/e-learningSocio-culturalSocio-culturalenablers:●Entrepreneurialnetworks●Socialmediainfluencers●Socialentrepreneurship●TransformativeentrepreneurshipDigitalbusinessecosystemsprovidefemaleentrepreneursopportunitiestoovercomechal-lengesandenableentrepreneurialdevelopment.Forexample,theenablingeffectofdigitaltechnologiescanpositivelyimpacttheinternationalizationoffemale-ownedenterprisesbecauseofitscapacitytoincreasecross-borderconnectionsamongstsmallandmedium-sizedenterprises(SMEs)stakeholders(Pergelovaetal.,2019).Anenablerincludesanytool,arti-fact,infrastructure,technique,practice,ornormfacilitatedbydigitaltechnologieswhichcanincreaseefficiency,andreducetransactionandcoordinationcosts,towardstheadvancementordevelopmentofentrepreneurship.Table11.1isanoutlineofthedigitalbusinessenablersoffemaleentrepreneurship.FinanceEnablersVariousgovernments,policy-makers,andstakeholdershaveattemptedtoaddresstheissueofassessingfinancinginentrepreneurship(Kamberidou,2020;AhmadandMuhammadArif,2015;Siringi,2011).Onewayinwhichgovernmentshaverespondedisthroughmicro-financinginitiatives.Yet,theoperationsoftheseinstitutionshavebeenmarredbythesamegender-relatedconstraints,suchasunequaltreatment,discrimination,andbias,thatwomensuffer(Orseretal.,2020;Halkiasetal.,2011;Siringi,2011).Forexample,mostgovern-mentinterventionprogramstaskedwithofferingfinancialresourcestobusinessesprefermale-ownedfirms,leavinglittleopportunityforwomen(Halkiasetal.,2011).InassessingtheimpactofgovernmentmicrocrediteffortsonKenyanfemaleentrepreneurs,Siringi(2011),indicatedthatthoughgovernmentmicrofinancingeffortshadapositiveimpactuponfemaleentrepreneurs’income,savingsandgeneralsocialwelfare,itwashinderedbysocio-culturalNgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

165Femaleentrepreneurs’innovativenessindigitalbusinessecosystems149andotherinstitutionalpolicyissuessuchastherighttoownproperty,righttoeducation,ownland,manageandinheritproperty,andconductbusiness,amongothers.Asaresult,Siringi(2011)suggestedthatgovernmentalleviateburdensomeloanproceduresandimplementagenderpolicythataddressesthesocio-cultureissuesoffemaleentrepreneurs.Conversely,thepresenceofdigitaltechnologiesinthedigitalbusinessecosystemprovidesalternativestoraisingcapitalandenablesthecounteringofstructuralbarriersthatfemaleentrepreneursfaceinaccessingfinancialcapital.Throughtheadventofcrowdfunding,peer-to-peerlending(Richteretal.,2015a;Krausetal.,2019),biometriccashassistance,cryptocurrencies,mobilewallets,andotherdigitallyenabledformsofinvestment,digitaltech-nologiesfacilitatesignificantchangesinentrepreneurialfinance;anddisruptthestatusquoofinstitutionalinvestment(Orseretal.,2020).Crowdsourcing,asystemwherecapitalisraisedfromthirdparties,isanotherwayinwhichfemaleentrepreneurscanraisecapitalfromothersources,whetheroperatingdigitalbusinessmodelsortraditionalones.Crowdsourcingalsoprovidesanalternativeavenueforraisingfundsforwomeninsocietieswheremendominatefinance,andthoseunabletoaccesscapitalduetodiscrimination(Richteretal.,2015a,2015b).Anotherexampleofadigitallyenabledformofinvestmentiswomen-focusedcapitalfunds(WFCFs)thattargetwomen-owned,women-ledenterprisesandnon-binaryentrepreneurs.Aninvestigationofweb-basedinvestmentplatformssuggeststhatdigitallyenabledsourcesofcapitalmaydisproportionatelybenefitwomenentrepreneurs,yetthesedigitalWFCFsmaygenerateeconomicvalueforsuppliers,recipientsofcapital,andsupportbroadersocialchange(Gafnietal.,2021).“Platforms”referstodigitalspaceswhichprovidebusinesseswiththechancetoconnectwithoneanotheraswellaswithcustomers(HsiehandWu,2019).Digitallyenabledinvestmentplatformscontributetoincreasingwomenentrepreneurs’accesstocapitalandwomen’seconomicdevelopmentinthedigitalera.Sincewearguethattacklingsocio-culturalimpedimentsthathinderfinancialaccessmaypresentabigstepinaddressinggender-basedbarriersinaccessingfinance,weinferthattheseweb-basedinvest-mentplatformsenablefemaleentrepreneurstobreakstructuralandinstitutionalbarrierswhichimpedetheiraccesstofinance.Thisbreakingofstructuralbarriersisachievedthroughfinancialliteracyenhancement,andeasingofmobilityconstraintsespeciallyinregionswherefinancialservicesarelimited.Krausetal.(2019),indicatethatdigitalizationisresponsibleforadisruptivetransformationintherespectivefieldsofentrepreneurship.Thus,byengagingwiththeseplatforms,femaleentrepreneursaredisruptingthestatusquotobringaboutsocialchange(Orseretal.,2020).Technological/InfrastructureEnablersFemaleinternationalentrepreneurshipDigitaltechnologiescanenabletheinternationalizationoffemale-ownedenterprisesinseveralways.First,digitaltechnologyinfrastructureenablesthereductionoftransactionandcoordinationcosts,makingiteasierforbusinessestoconnectwithdifferentstakeholdersacrossborders(FieselerandFleck,2013;FischerandRebeccaReuber,2014).Second,digitaltechnologiespossessaformidableeffectinpromotinginternationalentrepreneurship,sincetheytriggeraloweringofbarrierstomarketentry.Thisenablesawiderangeofindividualstoengageininternationalmarketexchange,includingexport(Nambisan,2016;HagstenandKotnik,2017).Femalebusinessownershavealsoventuredintoforeignmarketsthroughnet-worksfacilitatedbydigitaltechnologies(Rosenbaum,2017).NgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

166150HandbookondigitalbusinessecosystemsKnowledgeofeffectivemarketingtechniquesanddistributionchannelsallowsfemaleentrepreneurstochoosesuitableforeignmarkets,clients,andsuppliers.Itresultsinimprovedcommunicationandinteractionswithforeignclients,thusaidinginternationalexpansion(Stoianetal.,2017).Withaninternet-enabledmobilephone,afemaleentrepreneurcaneasilyinteractwithclientsindifferentpartsofthecountryandevenacrossborders.ThisviewagreeswithHairetal.’s(2012)statementthat,basedonthenatureoftheinternetandthevirtualworldenvironmentinwhichdigitalentrepreneurscompete,themoredigitalanentrepreneuris,themoreinternationaltheirventure.Althoughthedigitalbusinessecosystemisfacilitatedbydigitaltechnologieswhicharecapableofenablingfemaleentrepreneurstoexpandtheirbusinessesatlowcost,someauthorshavepointedoutthepotentialofreproducinggenderinequalitiesonline(Dyetal.,2017).Theseissuesarenoteworthyforfutureresearch.BusinessmodelResearchhasdescribedtheemergenceofnewbusinessmodelsarisingthroughdigitalizationandcreatinganewplatformforentrepreneurialinteraction(Hairetal.,2012;CastroSoeiroetal.,2016;Nambisan,2016;Jose,2018).Digitalizationhasresultedinavenuestotransformbusinessmodels,resourceutilizationpatterns,socio-economicframeworks,organizationalandbehavioralpatterns,culturalparadigms,policyframeworks,andlegalissues(Cochoyetal.,2017).Thedigitalbusinessmodelrepresentsa“movefromtraditionalmanagementapproachestonetworkorchestrationsincenetworksandcommunitiesarecrucialfordigitalentrepreneurs”(Wind,2008).DutotandVanHorne(2015)proposeamodelfordigitalbusinessmodeldevelopmentwhichstatesthatentrepreneursutilizedigitaltechnologiesfornetworking,andinformationacquisitionandstorage,whichenablesthemtolearnaboutcus-tomers’demandsforinnovation.Digitalventuresthatfailtokeepabreastofthisinformationrunaconsiderableriskoffailure.Inthewakeofuncertainties,pivotingbusinessmodelsenableentrepreneurstotakeadvan-tageofnewlycreatedopportunitiestocreateawinningbusinessstrategy(Manolovaetal.,2020;Morganetal.,2020).Thisisfacilitatedbythecapacityofthedigitalecosystem.Pivotinginvolveschangingproductorserviceofferingstocapitalizeonemergingopportunities(Morganetal.,2020).Femaleentrepreneurscanleveragetheuniquedifferencesinthebusi-nessmodeltocreateuniquestylesofentrepreneurshipwithreducedcapital.Thedifferencesinthebusinessmodelarealsoobservedintheappearanceofgoodsandservices,digitizationofthedistributionchannel,andinternalprocesswhichdiffersfromtraditionalentrepreneurs.Also,anotherwayinwhichfemaleentrepreneursareinnovativelyutilizingdigitaltechnolo-giestoovercometheirchallengesisthroughhome-basedonlineventures(DiDomenicoetal.,2014;Krausetal.,2019).Home-basedonlineentrepreneursarethosewhoutilizetechnologytofosterbusinessgrowthbeyondthelimitationsoftheirhomes,whilstremainingathome.Theflexibilityofbusinessmodelsinthedigitalbusinessecosystemenablesfemaleentrepre-neurstoexpandtheircontacts,meetfamilydemands,andstillruntheirdesiredbusinesses.Aconsiderationofsomeoftheinnovativewaysinwhichfemaleentrepreneursadoptdigitaltechnologiestoboosttheirinnovationprocessfollows.InnovationEntrepreneurshipresearchshowsthesignificantimpactofwomen-ledbusinessesinbringingaboutamoreinnovativeenvironment,greaterprospectsforfirmsurvival(Cunninghametal.,2017),andgrowth(Bogrenetal.,2013).InnovationiscrucialtosustainingcompetitiveNgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

167Femaleentrepreneurs’innovativenessindigitalbusinessecosystems151advantage,andrequiresnewcombinationsofknowledgetocreatenewproducts(Hardwicketal.,2012).Productinnovationandprocessinnovationarenotedtohavecomplementaryandpositiveperformanceeffects,especiallywhenappliedtogether(ReichsteinandSalter,2006).Processinnovationcomprisestheintroductionofneworsignificantlyimprovedproductionanddistributionmethodstolowerunitcostsofproductionordistribution,increaseproductquality,ordistributeneworsignificantlyimprovedproducts.Thiscouldinvolveusingneworsignificantlyimprovedtechniques,equipment,andsoftware(OECD,2005).Forsmallbusinesses,thisentailshavingtoextendtheirresources,knowledge,andcontactsbycollabo-rationsandthroughnetworking.Productinnovationisprocess-orientatedandfollowsaroutineorspecifiedprocedure.Hence,theprocessofcreating,testing,andmodifyingideasisnotasacceleratedasinthedigitalbusinessecosystem.Thepresenceoftechnologymakesthedigitalbusinessenvironmentincreasinglydynamic,andinnovationmorewidelydistributedandcomplex(ShinandPark,2010).Thus,femaledigitalentrepreneursleverageonpotentialsofthedigitalbusinessecosystemasacheaperalternativetofosterinnovativecollaborationwithcustomersthroughnetworking.Thispotentialprovidedbytechnologiesenablesthemtocollaborate,capturetheneedsofthewidermarket,andboosttheirinnovativenessbygatheringinformationondigitalplatforms(DutotandVanHorne,2015).Moreso,theseinnovativecollaborationswithcustomersprovideacheaperalternativeforfemaleentrepreneurstoliaisewithcustomers,receivefeedback,andfocusefforts.Sinceinnovationisrisky,especiallyattheearlystage,andsmallbusinessesarevulnerable,innovativecollaborationwithcustomersiscrucial(Jacketal.,2008)becauseithelpstoreduceriskanduncertainty(Kristenssonetal.,2004).Althoughitisproductiveforsmallbusinessestonetworkwithcustomerswhentryingtodevelopinnovations(Andersonetal.,2010),yetthisdoesnotoverruletheimportanceofface-to-faceinteraction.Therefore,toboostprospectsoffirmsurvival,femaleentrepreneursneedtoallowroomforaninterplayoftheseidentifiedfactors.EntrepreneurialEducationEnablersGenerally,entrepreneurshipeducationisstructuredontwoapproaches:formalandinformal.Theformalmoduleofentrepreneurshipeducationischaracterizedbyroutineclassesandcasestudies,whiletheinformalapproachemphasizesacquiringknowledgethroughtheinfluenceofothers,suchasaninfluentialgroupoffemaleentrepreneurs’participantsinaneducationprogram(Rossanoetal.,2019).Yet,whilestudieshighlighttheimportanceofmixedmethods,femaleentrepreneurialdevelopmentthrougheducationishighlydependentontheformalteachingclassroomsociallearningset-up(Batool,2020).Recallthatliteraturehighlightstheincreasingimportanceofdigitalentrepreneurialeducation,yetnotmuchaddressestheteach-ingofdigitalentrepreneurship(Krausetal.,2019).Thedigitalbusinessecosystemfacilitateslearningonawiderscale.AccordingtoDetonietal.(2018),entrepreneurshipgoesbeyondaninborntraitandcanbenurturedthroughproperentrepreneurialtraining.Sincethedegreetowhichfemaleentrepreneurslearnfromeachothersociallyandinformallywasrevealed,itissuggestedthatincorporatingamixtureoftraditionalandinformalinnovativemethodscanpositivelyaffectentrepreneuriallearning(Batool,2020).Byengagingandparticipatingine-learningandonlineprograms,femaleentrepreneurscanbecomeacquaintedwithotherwomeninotherregionsevenwithoutphysicallymeetingthem.DigitaltechnologiescreateopportunitiesforfemaleentrepreneursnotonlytolearnbutalsotoNgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

168152Handbookondigitalbusinessecosystemsuseentrepreneurshiptotransformtheirembodiedselvesandlivedrealities,ratherthanjusttoescapegenderconstraints,madepossiblebytheonlineenvironment(McAdametal.,2020).Thisimpliesthattherearepossibilitiesoffosteringsocialandinformallearningamongstfemaleentrepreneursonawiderscalethroughtheversatilityofthedigitalbusinessecosystem.Variousdigitaltechnologiesenablelearningonawiderscalepossibleinthedigitalbusinessecosystem.Forexample,socialmediaapplicationsdonotrequirehigh-levelICTskills(Mileketal.,2011;Scuottoetal.,2017).Accesstotheinternet,microblogging,andsocialnetworkingsites(SNSs)haschangedhowentrepreneursdevelopinnovation.Theentrepreneurialjourneyofwomencanbesupportedbythegrowinguseofsocialnetworkingsitessuchasblogs,Facebook,Twitter,andYouTube,amongothers(Scuottoetal.,2017).Socialmediaapplica-tionsallowindividualstopublishtheircontentandtosharethoughtswiththeircommunity.Apartfromthat,aSNSsuchasablogconstitutesavaluableresourceforthedisseminationofusefulinformationforwomen(Pettigrewetal.,2016).Therefore,femaleentrepreneurscanusesocialmediatoachievesociallearningwithoutrequiringextensivetechnicaltraining,asisthecasewithcomputers.Socio-CulturalEnablersThedigitalbusinessecosystemisbeneficialtofemaleentrepreneursindevelopingeconomiescharacterizedbyseveresocio-culturalconstraints,becauseenablesthemtooperatetheirbusinessesdespitethechallenges.Genderequalityinentrepreneurshiphasnotbeenachievedintraditionalentrepreneurship,duetopatriarchy,culturalnorms,andsocietalexpectationswhicharebiasedagainstwomen.Althoughgenderequalityinentrepreneurshiphasnotbeenfullyachievedinthedigitalbusinessecosystem,itspotentialinbreakinglong-entrenchedsocio-culturalbarrierscannotbeoverlooked.Thisisduetothecapacityofthetechnologyfacilitatingthedigitalbusinessecosystemwhichhelpstoincreaseawarenessoftheeffectsandimpactofgendergapsinentrepreneurshipandgender-relatedconstraints.Thisisbeneficialtofemaleentrepreneurssincethecyberspaceactsasanemancipatorytoolforthemduetotheempoweringpotentialsforwomenthatdigitaltechnologiesallow(MartinezDyetal.,2018;Cesaronnietal.,2017).Digitaltechnologiesenablefemaleentrepreneurstooperatebusinesses,despitesocial-culturalbarriers,inseveralways.First,despitethedomesticchallengesofmotherhood,femaleentre-preneurscanoperateconvenientlyfromtheirhomesoranywherethroughhome-basedonlinebusinesses(Pettigrewetal.,2016).Home-basedonlineventuresaregearedtowardsachievingself-control,self-management,mobility,andfreemovement.Thisappealstothedesiretobeautonomous,flexible,andsociallyconnectedthroughtechnology(DiDomenicoetal.,2014).ThesituationinRwanda,revealedinthestudybyNsengimanaetal.(2017),iscommontoothercountriesinAfrica.Thisisthecasewherewomenfinditdifficulttodecidetobeginabusiness,orarenotabletoworkasmuchasmen,duetodomesticresponsibilities.Hence,women’sbusinessescontributelesstoacountry’ssocio-economicdevelopment.Yet,becausedigitaltechnologytranscendslocationdisadvantagestoincreasedirectcommunicationwithcustomers,thishelpsbusinessestotakeadvantageofdirectsellingthatcanincreaseoverallprofitability(KoyanaandMason,2017).Second,womenleveragedigitaltechnologiestotransformthemselvesandlivetheirrealitiesthroughsocialandtransformationalentrepreneurship.Researchindicatesthatwomenareabetterfitforleadingsocialenterprises,andthatfemalesocialentrepreneurswhoarehighlyNgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

169Femaleentrepreneurs’innovativenessindigitalbusinessecosystems153motivatedconcerningsocialissuesencounterspecificchallengesintheemergingmarketcontext(Roscaetal.,2020).Atthesametime,insharingtheirthoughtsandinformationthroughactivitiessuchasbloggingandstorytelling,individualfemaleentrepreneursnotonlyachievesociallearningonawiderscale,butalsocontributeassocialentrepreneursandtrans-formationalentrepreneursworkingtowardsimprovingtheirsocieties(Pettigrewetal.,2016;Byrneetal.,2019),andasagentsofchange(Roscaetal.,2020).Thesestudiescorroborateclaimsthatfemaleentrepreneurscontributetoachievingnotonlyeconomicgoalsbutalsosocialgoals(Hanson,2009),andcanbridgesocio-culturalandinstitutionalconstraintsthroughdigitalentrepreneurship(McAdametal.,2019,2020).Womenwhoareoftentraditionallymarginalizednowleveragedigitalplatformstoover-comesocietalchallenges.McAdametal.(2019)concludedthatthedigitalecosystemprovidesameritocraticandsafespaceforwomenwithrestrictivesocialandculturalnorms,duetotheemancipatorypotentialthatdigitalentrepreneurshipenablesforfemaleentrepreneurship.Despiteargumentsfortheemancipatorypotentialofthedigitalenvironmentinloweringbar-rierstoentrepreneurship,criticspointoutthatofflineobstaclessuchassocialinequalitiesstillexistonline(Dyetal.,2017).Doesthismeanthatfemaleentrepreneursarebetteroffwithoutthedigitaladvantages?Thefactthatthedigitalecosystemprovidesahaven,asafespace,andcanenabletheentrepreneurshipprocess,albeitdiscreetly,remainslaudable.Overall,sincestudiesshowthatwomenhaveleverageddigitaltechnologiestotransformthemselvesandlivetheirrealities,itisatoolthatshouldbeencouragedinentrepreneurship.CONCLUSIONANDFUTURERESEARCHThischapteranalysesthechallengesandenablersoffemaleentrepreneurshipwithafocusondevelopingcountries.Femaleentrepreneursindevelopingcountriesareconstrainedbyseveralchallengesuniquetotheircontext.Yet,thedigitalbusinessecosystemischaracterizedbyfemaleentrepreneurswiththepotentialsofutilizingdigitaltechnologiestoattainbusinessgoalsaswellasimprovingtheirsocietiesbybridgingtheinstitutionalgapsandsocio-culturalvoidsoftheircontextualenvironment.Althoughmoststudiesconsiderthataccesstofinanceisakeyconstrainttoentrepreneurshipindevelopingcountries,socio-culturalfactorscaninflu-encefinancialaccessforfemaleentrepreneurs.Hence,attemptstotacklethesesocio-culturalfactorsthatimpactfinancialaccessmaycontributetoaddressinggender-basedbarriersinaccessingfinance.Sinceentrepreneurscanutilizedigitaltechnologyandinnovationtotranscendindustriesonaglobalscale(Ughettoetal.,2019),femaleentrepreneursindevelopingcountriesconstrainedbyuniquechallengescanleveragethecapacityofdigitaltechnologiestoboosttheinterna-tionalizationoffemale-ownedbusinesses,andhencebreaklocalbarriers.ThisissupportedbyMcAdametal.(2019,2020),whoindicatesthatdigitalentrepreneurshipnotonlyfacilitatesthenavigationandbridgingofsocio-culturalandinstitutionalgaps,butalsoprovidesoppor-tunitiesforentrepreneurstomakechangesdirectlyandindirectlyintheirexistinginstitutionalcontext.Therefore,tothriveamidsttheuncertaintiesandseverechallengescommoninmostdevelopingcountries,femaleentrepreneursneedtotakeadvantageofdigitalbusinessecosys-temenablerssuchasinnovativebusinessmodels,entrepreneurialeducation,entrepreneurialnetworks,anddigitallyenabledinvestmentplatforms,tobreakbothsocio-culturalandotherbarriersinthiscontext.NgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

170154HandbookondigitalbusinessecosystemsDespitechallenges,femaleentrepreneurshaveremainedrelentlessintheirattemptstobreaksocio-culturalbarriers.Thischapterhasparticularlyhighlightedtheimportanceofnetworkingasagendercapital-enhancinginitiative.Hence,policy-makersneedtochanneleffortstodesigninggendernetworksthatwouldincorporatedigitalentrepreneurialeducationandtrain-ingprograms.Sincenetworksarecrucialtothebuildingofsocialcapital,theyareimportantdriversforentrepreneurship,andthuscoreenablersoffemaleentrepreneurship.Therefore,governmentandpolicy-makerscansupportentrepreneurialactivitiesbydevel-opinginstitutionalsupportstructuresdesignedtoencouragenetworkingbetweenfemaleentrepreneurs.InlinewiththeconclusionofBogrenandvonFriedrichs(2016),thiswouldservetoincreasethelevelofsocialcapital,boostresourcesforfemaleenterprises,promotediversityandbusinessgrowth,andultimatelyboostregionaldevelopment.Thisstudyhasimplicationsforfutureresearchdirectionsintothefemaledigitalbusinessecosysteminemerg-ingeconomies,andthenatureoftheuncertaintiesandchallengesthatariseindevelopingregionscomparedtodevelopedregions.Moreso,inbreakingsocio-culturalnorms,aregenderinequalitiesreproducedonline,andifso,how?Suchresearchcouldalsoserveasabasisforthedevelopmentandimplementationofgender-inclusivepolicyindevelopingeconomies.REFERENCESAbbasNaqvi,M.H.,Jiang,Y.,Miao,M.andNaqvi,M.H.(2020)Theeffectofsocialinfluence,trust,andentertainmentvalueonsocialmediause:evidencefromPakistan.CogentBusinessandManagement,7(1),p.1723825.doi:10.1080/23311975.2020.1723825.Acs,Z.J.etal.(2011)IntroductiontoSpecialIssueofSmallBusinessEconomicsonfemaleentrepre-neurshipindevelopedanddevelopingeconomies.SmallBusinessEconomics,37(4),pp.393–396.doi:10.1007/s11187-011-9372-1.Ahmad,S.Z.andMuhammadArif,A.M.(2015)Strengtheningaccesstofinanceforwomen-ownedSMEsindevelopingcountries.Equality,DiversityandInclusion:AnInternationalJournal,34(7),pp.634–639.doi:10.1108/EDI-11-2012-0104.Anderson,A.R.,Dodd,S.D.andJack,S.(2010)Networkpracticesandentrepreneurialgrowth.JournalofManagement,26,pp.121‒133.Asiedu,E.,Freeman,J.A.andNti-Addae,A.(2012)Accesstocreditbysmallbusinesses:howrelevantarerace,ethnicity,andgender.AmericanEconomicReview,102(3),pp.532–537.doi:10.1257/aer.102.3.532.Baker,T.,Aldrich,H.andLiou,N.(1997)Invisibleentrepreneurs:theneglectofwomenbusinessownersbymassmediaandscholarlyjournalsintheUnitedStates.EntrepreneurshipandRegionalDevelopment,9(3),pp.221‒238.Baloh,P.,Desouza,K.andHackney,R.(2012)Contextualizingorganizationalinterventionsofknowledgemanagementsystems:adesignscienceperspective.JournaloftheAmericanSocietyforInformationScienceandTechnology,63(5),948‒966.Bardasi,E.,Sabarwal,S.andTerrell,K.(2011)Howdofemaleentrepreneursperform?Evidencefromthreedevelopingregions.SmallBusinessEconomics,37(4),pp.417–441.doi:10.1007/s11187-011-9374-z.Basiglio,S.,DeVincetiisP.,Isaia,P.,andRoss(2019)Creditaccessandapproval.CentreforResearchonPensionsandWelfarePolicies.Availableat:https://iris.unito.it/retrieve/handle/2318/1701961/507040/Cerp_WP_189.pdf,accessedJanuary20,2021.Batool,H.(2020)Roleofsociallearninginwomenentrepreneurshipbehavior.JournalofEntrepreneurshipEducation,23(2),pp.1–11.doi:41528-2651-23-2-540.Beck,T.andDemirguc-Kunt,A.(2006)Smallandmedium-sizeenterprises:accesstofinanceasagrowthconstraint.JournalofBankingandFinance,30(11),pp.2931–2943.doi:10.1016/j.jbankfin.2006.05.009.NgozichukwukaM.EnehOjo,OluwasoyeP.Mafimisebi,andFelixArndt-9781839107191DownloadedfromPubFactoryat05/28/202209:56:34AMviaColumbiaUniversityLibrary

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17612.Designknowledgefordigitalbusinessecosystems:towardsdesignprinciplesfordigitalengagementplatformsSimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-BissantzINTRODUCTIONModerntechnologies,globalization,andderegulationhaveledtothedevelopmentofco-creativeorganizationalecosystemsheavilyreliantondigitaltechnologies(Senyoetal.,2019).Intheseecosystems,heterogeneousactorsintegrateknowledgeandresourcestotheirmutualbenefit(Edvardssonetal.,2011).Thisco-creationofvalueincomplexecosystemshascreatedsomeofthemostsuccessfulcompaniessuchasAmazon,Apple,andGoogle,furtherdrivingothercompetitorstoengageinco-creativeinteractionsaswell.However,themanage-mentofvalueco-creationwasandstillremainsachallenge(Senyoetal.,2019).Toaddressthischallenge,anewviewisneededthatconsidersfirmsaspartofecosystemsthatengageincomplexmodesofcollaboration,comparedtoviewingthemasisolatedentities.ServiceLogic(VargoandLusch,2004;Grönroos,2011;LuschandNambisan,2015)enclosesthisperspec-tiveanddefinesthreecentralelements:valueco-creation,serviceplatforms,andserviceeco-systems(LuschandNambisan,2015).Withthedigitaltransformation,theseserviceplatformsandecosystemsincreasinglyrelyoninformationandcommunicationtechnologies(ICTs)andtherebybecomedigitalbusinessecosystems(DBEs)(Nachiraetal.,2007)anddigitalserviceplatforms(GöbelandCronholm,2016).Actorsontheseplatformscontributeaspecificsetofresources,which—onanindividuallevel—arenotsufficientforacomprehensiveserviceprovision.Therefore,valueco-creationisofpivotalimportance.Theterm“actors”includescompanies,governmentagents,custom-ers,oranyothercontributorsofvaluable,complementaryresources.TheseheterogeneousactorsjoinDBEstoefficientlyandeffectivelyintegrateresourcestoco-createvalueforthe(mutual)benefitofoneormultipleactors.Forexample,theDBEthathasbeenestablishedbyUberprovidesahighlyefficientplatformtocustomersandmobilityserviceproviders.WhileUberprovidestheunderlyingdigitalplatform,otheractorsintegratecentralresourcessuchascarsanddrivers.TheDBEthenfurtherreliesonmechanismstoensuretheseresources,costs,andrevenuescontributetotheactors’(mutual)benefitsofsuccessfullybuildingalargeruserbaseandmotivatingthemtoparticipate(Lohrenzetal.,2021b).Drawingfromthisexample,theimportanceofdigitalplatformstoenableandfacilitatevalueco-creationinDBEiswidelyacknowledged(Heinetal.,2019).However,astheterm“digitalplatform”lacksconceptualclarity(deReuveretal.,2018),werelyontheconceptofengagementplatform(EP)inthischapter.BreidbachandBrodie(2017)defineanEPasa“physicalorvirtualtouchpointdesignedtoprovidestructuralsupportfortheexchangeandintegrationofresources,andtherebyco-creationofvalue,betweenactorsinaservice(eco)system”(p.765).Google,for161SimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

177162Handbookondigitalbusinessecosystemsexample,establishedseveralEPstocontrolthecustomer’sexperienceinavastEPlandscapebyprovidingbothphysical(Chromebook)andvirtualtouchpoints(forexample,GooglePlaystore).TheconceptofEPstemsfromcentralthemesofServiceLogic,thusprovidingafittinglensandconceptualbasisforassessinginteractiononEPsthatconstitutethedensity,structuralintegrity,andliquefactionofresourcesinDBEs(LuschandNambisan,2015).ThesuccessfuldevelopmentandmanagementofanEPreliesonthedesignofgovernancestructuresandmechanismsthatneedtoattractandbindacriticalmassofactors,balancetheirheterogeneousinterests,andensurefuturesuccessbyserviceinnovation,thatis,improvingtheserviceexperienceofactors(Alt,2020,Tiwanaetal.,2010,LuschandNambisan,2015).Inordertofacilitatevalueco-creationinaDBE,anEPneedstoenableandenhanceco-creation,co-learning,andco-designofnovelservicesandimprovedserviceexperiences(Fuetal.,2018;LuschandNambisan,2015;OrdaniniandParasuraman,2011).Whilethedigitalplatformliteratureisrapidlygrowingininformationsystems(ISs)research,thereisalackofprescriptiveguidelinesondesigningandimplementingmechanismstoimprovethecorefeatureofEP:enablingandfosteringvalueco-creationamongitsactors(Fischeretal.,2020,Senyoetal.,2019).Therefore,ourresearchquestionis:Howcanvalueco-creationonEPsbeenabledandimproved?Conceptually,ourstudydesigndrawsfrom:(1)ServiceLogic,whichisinherentlyfocusedonvalueco-creationofactorsin(service)ecosystems(e.g.Vargoetal.,2008;LuschandNambisan,2015);and(2)thedesignscienceresearch(DSR)methodologicalapproach(Hevneretal.,2004;Gregoretal.,2020)thatdescribesapractice-informedprocesstoiden-tifyandsolvecomplexproblemswhichareundoubtedlyexistentinthedesignofanEP.TheDSRapproachprovidesanimportantadditiontodescription-drivenresearchthatexplainsaproblem’snatureyetlacksprescriptiveinsightsaboutmanagerialsolutions(GregorandJones,2007).Byemployingthisapproach,weseektoprovidemorerelevantandapplicablefindingstopractitioners,whilealsocontributingtotheexistingdesignknowledgeformulatedbyscholars.ThecombinationofDSRandServiceLogicismotivatedbytwocallsforresearch.Firstly,whileServiceLogicliteratureisgrowinginpopularity,thereisstillalackofpracticalknowledgeinthisdomain(VargoandLusch,2017;Blaschkeetal.,2019).Combiningthethe-oreticalfoundationofServiceLogicandtheprescriptiveDSRapproachthusprovidesaclearfittoaddresspracticalrelevance.Secondly,deReuveretal.(2018)callspecificallyforDSRtoshedlightonhowdigitalplatformprovidersmayshapeplatformstosuccessfullyenterandsurviveinconstantlychangingmarkets.BylinkingDSR,ServiceLogic,anddigitalplatformliterature,weaddressrelateddesignproblemsandsolutionswithspecificdesignprinciples.Tothisend,14semi-structuredexpertinterviewswereconductedtoderiveacomprehensivesetofdesignprinciples.Thischapterisstructuredasfollows.First,weoutlineandlinkthetheoreticalconceptsofServiceLogic,DBEsandEPs,followedbyadescriptionofourmethodologicalapproach.Intheresultssection,wepresentourestablisheddesignprinciplesalongsidetheidentifiedmechanismsandenactors.Finally,weconcludethischapterbydiscussingourfindingsandoutliningwhichtopicstofocusoninthefuture.SimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

178Designknowledgefordigitalbusinessecosystems163THEORETICALBACKGROUNDThissectionprovidesanoverviewofcoreconceptsandpresentshowServiceLogicandDBEresearchstreamsareinterconnected.DigitalBusinessEcosystemsandEngagementPlatformsTherapidtechnologicaladvancesofrecentdecadeshaveledtothedevelopmentofcollabora-tivenetworksthatareheavilyreliantondigitaltechnologies(Senyoetal.,2019).Thisenablesorganizationswithinnovativeinformationtechnologystructurestorespondtocustomerneeds.Consequently,competitiveadvantagesarisethatcanberealizedinmostindustriesandhaveledtoasurgeinDBEactivityandgrowthacrossindustries(Heinetal.,2019).Senyoetal.(2019,p.54)defineaDBE“asasocio-technicalenvironmentofindividuals,organizationsanddigitaltechnologieswithcollaborativeandcompetitiverelationshipstoco-createvaluethroughshareddigitalplatforms.”Stemmingfromthisdefinition,anddrawingfromthesub-stantiallygrowingliteratureonDBEs,adigitalplatformisacentralcomponentthatenablesandenhancesvalueco-creationinDBEs(Heinetal.,2019;Senyoetal.,2019).Theactorsthatengageinvalueco-creationonEPsincludecustomers,serviceproviders,customercommuni-ties,andcorporatenetworks,withdistinctiveneedsandresources(Edvardssonetal.,2011).Therefore,thekeychallengeliesnotnecessarilyindevelopingthetechnologicalarchitecture,butinsteadingoverningaheterogeneousgroupofactorswithinaninterrelatedecosystem,strivingtoaddressconstantexternalandinternalchange(Schreiecketal.,2016).AsEPsusuallyhosttwoormoredistinctiveactorgroups(forexample,suppliers,buyers,platformvendors,third-partyserviceproviders),aninitialandpotentiallypersistingchallengeexistsofbalancingandgrowinganactorbasewithcomplementaryorrivalinginterests(GawerandCusumano,2014).Tothisend,EPsneedtosupportacontinuedinfluxofnewactors;forexample,byloweringthebarrierstoadapttoexistingprocessesandcultures(GöbelandCronholm,2016).Additionally,collaborativelydevelopedpricingandcostmechanismsthatremainfairthroughouttheecosystem’sexistenceshouldbeintroduced,therebyensuringamotivatingenvironmentforestablishedandnewactorsontheEP(Blaschkeetal.,2019).Supportingvalueco-creation,asstatedearlier,isacentralpropertyofanEP.Activitiesandmechanismstoimprovevalueco-creationincludeinvolvingexternalactorsandcommunitiestoimprovethedensityofvalueco-creationonEPs(Blaschkeetal.,2019;Heinetal.,2019),coordinationandcontroloftheinteraction,butalsotoprovidethefreedomto(collabora-tively)introducenewandimprovedofferingsamongheterogeneousactors(Aulkemeieretal.,2019).Whilethesupportofvalueco-creationintheDBEthroughEPisessential(GöbelandCronholm,2016),attractingandmaintainingacriticalmassofactorsreliesontheabilitytoofferneworenhancedservicesandimprovetheoverallserviceexperience(Breidbachetal.,2015).Otherwise,rivalingplatformsmightbenefitfromlowswitchingcostsandtechnologicaladvancesandthusexertpressureonincumbentplatformstoimprovetheactor´sserviceexpe-rience(Fuetal.,2018;Heinetal.,2020).Asillustratedabove,DBEandplatformresearchachievedanoverwhelmingconsensusthatthesuccessofEPsisdirectlyreliantontheirabilitytoallowandenhancevalueco-creation(thatis,theprocessinwhichdiverseactorsintegrateresourcesfortheirmutualbenefit)andserviceinnovation(LuschandNambisan,2015).Againstthisbackdrop,theServiceLogicisawidelypopularandhighlyappropriatelenstoexaminevalueco-creationprocessesinDBEsSimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

179164HandbookondigitalbusinessecosystemsandtheEPswithnoticeableconceptualties(e.g.,Heinetal.,2019).Toprovideanoverviewofthespecifictheoreticalbackgroundwedrawfrominthischapter,Figure12.1depictsfiveconceptsrelatedtoecosystems,platforms,andvalueco-creation.Therelationshipoftheseconceptsiselaboratedfurtherinthenextsection.Figure12.1Conceptualizationsofecosystem,platform,andvalueco-creationfrominformationsystemsandServiceLogicliteratureServiceLogicandEngagementPlatformsinDigitalBusinessEcosystemsFormorethanadecade,therewasamajordiscussionontheconceptualizationofservicesbeforeVargoandLusch(2004)developedandpopularizedanoverarchingServiceLogic,whichresonateswithresearchersacrossdiversefields(Barrettetal.,2015).Tosimplifytheter-minology,andinlinewiththesuggestionfromOjasaloandOjasalo(2018),theterm“ServiceLogic”isusedinthisresearch,referringtothebasicprinciplesoftheservice-dominantlogic(VargoandLusch,2004),servicelogic(Grönroos,2011),andcustomer-dominantlogic(Heinonenetal.,2010),whicharetightlyinterwoven.AcentralprincipleofthisServiceLogicisthataservice’svalueisnotprovided,butofferedbyanactorasavaluepropositionthatcanbeengagedtoco-createvalue(VargoandLusch,2004).Therefore,valueisalwaysco-createdwithoneormultiplebeneficiaries,andcontributestothewell-beingofmultipleactors,sometimeseventhoseunawareofeachother(VargoandLusch,2017).Theco-createdvalueisalwaysphenomenologicallydeterminedbythebeneficiarydependingontheirparticularcontextofuse(value-in-use)(Grönroos,2011;VargoandLusch,2004).Thecontextinwhichvalueiscreatedforthebeneficiaryunderliesconstantchangesasactorsandtheirresourcesjoinandleaveserviceecosystems(LuschandNambisan,2015).Serviceecosystemsare“relativelyself-containedself-adjustingsystemsofSimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

180Designknowledgefordigitalbusinessecosystems165resource-integratingactorsconnectedbysharedinstitutionalarrangementsandmutualvaluecreationthroughserviceexchange”(VargoandLusch,2017,p.11).Enablingandenhancingco-creation,co-learning,andco-designofnovelserviceshighlightanEP’spotentialtowardsvalueco-creationfacilitationinDBEs(Fuetal.,2018;OrdaniniandParasuraman,2011).Withagrowingnumberofheterogeneousactorsandtheirdistinctiveneeds,developingandsustainingsuccessfulDBEsdependsonsuccessfullygoverningaheter-ogeneousgroupofactorswithinaninterrelatedserviceecosystemstrivingtoaddressconstantexternalandinternalchange.Thus,thedigitalinfrastructurethatenablesvalueco-creation—thatis,theEP—needstoprovideactor-specificsolutionsviaasingulartechnologicalplatform(Schreiecketal.,2016).Tovitalizevalueco-creationactivitiesonEPs,differentwaysoforganizingactorstoreachinnovationopportunities(thatis,structuralflexibility)andmech-anismstounderstandanddesignactorinteractionsinanetwork(thatis,structuralintegrity)shouldbeconsideredtofosterDBEs(LuschandNambisan,2015).Thiseffort,however,requirescloseattentiontohowindividualswithinthefocalDBEareinfluencedbystructuralproperties(Edvardssonetal.,2011).Therefore,EPsmustequallysupportvalueco-creationandprovidespacetocollaborate.Consequently,successfulEPsrelyonasetofactivitiestoenableandfostervalueco-creation(Lohrenzetal.,2021a).METHODOLOGYWebaseourresearchprojectonthesystematicanditerativeDSRparadigmproposedbyHevneretal.(2004).TheoverarchinggoalandthecontributionofDSRisthegenerationofso-calleddesignknowledge,whichcantakedifferentformsandisusedtodesignartifactsmorerigorouslythantraditionaldesignorengineeringmethods.VomBrockeetal.(2020)statethatinordertocreatedesignknowledge,theaccumulationandevolutionacrossdifferentartifactsandapplicationareas(inourcase,EPs)issubstantial,andaresilientrelationshipbetweenproblemandsolutionspacesisnecessary.Byaccumulatingdifferentjustifiedcompo-nents(forexample,designprinciplesandinstantiations)ofdesignknowledge,designtheoriesemerge.Designknowledge,andespeciallydesigntheories,areimportantforbothresearchandpracticetounderstandhowvariousartifactsandmechanismsworkandhowtheyshouldbedesignedtoreachaconstitutedgoal(forexample,actoracceptance)(Gregoretal.,2020).Therefore,DSRisanessentialadditiontodescription-drivenresearchthatexplainsthenatureofaproblem,yetusuallyneglectstoproduceprescriptiveinsightaboutmanagerialsolutions(GregorandJones,2007).Consequently,ourobjectiveistocontributedesignknowledgeforEPstoimprovevalueco-creationamongDBEactorsintheformofdesignprinciples.Assinglecontributionsandfieldsofapplication“tendtoremainisolatedwithlittletonorelationtoothersolutions”(vomBrockeetal.,2020,p.521),wegatherinsightsfrom14existingEPsinordertocreatecomprehensiveandtransferabledesignknowledgebyconduct-ingqualitativeexpertinterviews.WeoptedtoemployaqualitativeapproachaswesuspectDBEsandEPstobedynamicratherthanastaticenvironmentwitharealitythatishardly“measurable”(Minchielloetal.,1990).These14identifiedartifactsalsoserveasexpositoryinstantiations,astheydescribeexistingandfunctioningEPs.Alistof136relevantEPswithactivecommunitiesintheDACHregion—Germany(D),Austria(A),andSwitzerland(CH)—wascomposedbasedonpubliclyavailabledata.InMay2020,14companiesagreedtogiveinterviewsthatlasted,onaverage,52minutes.ParticipantsSimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

181166HandbookondigitalbusinessecosystemsTable12.1InterviewpartnersPlatform(Focus)PositionAnimus(Livingquarters)BusinessDevelopmentManagerCare(Childcare)NewBusinessManagerEinkaufshelden(Localshopping)FounderExtraSauber(Cleaningservices)FounderHomesitter-Eu(House-sitting)FounderJobruf(Consumerservices,C2C)FounderMyFeelix(Financeandinsurance)SalesManagerMyHammer(Craftsmanservices)CEOMyHelpBuddy(Multi-lingualassistance)FounderNebenan(Neighborhoodactivities)FounderNotfallmamas(Childcare)FounderPengueen(Collaborationactivities)CEOSandkasten(Studentinitiatives)FounderYoopies(Childcare)SalesManagerwere,onaverage,40yearsold,withthreefemaleand11maleexperts.Theinterviewswereconductedviaphoneandvideoconferencetools.Toensurehomogeneityandtheinterviewees'qualificationasexperts,welimitedoursampletoeitherfounders,chiefexecutiveofficers(CEOs),ormanagersoftwo-sidedbusiness-to-customer(B2C)transactionplatformsinthepersonalservicesectorthathadexistedforatleasttwoyears.TheinterviewspartnersarepresentedinTable12.1.AninterviewguidelinewasdevelopedbasedonexistingdesignrequirementsandprinciplesforEPs(Fischeretal.,2020).Itconsistedoffiveparts:(1)introductionoftheintervieweeandbasicinformationonthecompany;(2)elaborationoffunctionalaspectsandactorcon-stellationsontheplatform;(3)elaborationofinteractionandvalueco-creationactivities;(4)elaborationofserviceinnovationprocesses,approaches,andactorengagement;and(5)elaborationofadditionalplatformdesignaspects.InlinewithMilesandHuberman(1994),weusedcodestoanalyzethedataathandanddefinedaninitialsetofgeneralcodesbasedonfourkeycategoriesfordesigningEPs(Fischeretal.,2020).Asseveralcodingcyclesareneededforanalyzingqualitativedata,weanalyzedthedatainthreecycles,goingfromageneralanalysiswithdeductivecodingtomorespecificinductivecodes(Saldaña,2009).Thecodingwasdonecollaborativelybytworesearchers,todistributetheeffortofconductingandcodingtheinter-views,andtogetdifferentviewsonthequalitativedata.Inthefirstcycle,deductivecodingprovidedaninitialoverviewofthedata,relyingonfourcategoriesforEPdesign:“easingtheentry,”“mutualproblemsandneeds,”“valueco-creation,”and“serviceinnovation”(Fischeretal.,2020).Inthesecondcodingcycle,thedatawereanalyzedinductivelytoidentifyadditionaldetailsandthemesthatsupplement,contradict,orsupportthecodesfromthefirstcycle.Asaresult,weidentifiedmorethan382codingswithatotalnumberof34codesdescribingindividualactivitiesthattheplatformownersconducttoimprovetheirEP.Thissetofactivitieswasfurtherassessedtoidentifyoverarchingaims,mechanisms,andenactorstodefinedesignprinciples.Consequently,inathirdcodingcycle,thesecondcycle’scodesandcodingswereiterativelysortedandrefined.Thethirdcycle’sprimaryfindingwasthattheplatformownersimplementmechanismsandsupportingenactorstoachievefouraims(A):A1toattractandbindactorsontheplatform;A2toachievemutualgrowth;A3tofosterinteractionandvalueco-creation;andA4toimproveSimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

182Designknowledgefordigitalbusinessecosystems167Table12.2MechanismsandenactorsforthedesignofengagementplatformsMechanismEnactorExample1.RaisingMarketingcampaignsRunadvertisingtodrawattentiontotheplatformawarenessSocialmediapresenceBeactiveinrelevantsocialmediachannels2.SupportingactorTutorialsandinstructionsProvideinstructionsonhowtousetheplatformonboardingSimilaritytofamiliarappsOrientatethedesignonwell-knownapps3.EmployingHumanmoderationofcontentOfferadditionalpersonaldiscussionsforuserquestionstrust-buildingRefundsystemsOfferrefundsfortheserviceprovidediftheuserisunsatisfiedsymbolsandQualitycertificatesDisplaycertificatesontheplatform,e.g.,TÜV(TechnischeractivitiesÜberwachungsverein)certifiedWelcomepackagesSendthenewuserphysicalmaterialabouttheplatformPersonaltouchesShareuserstoriesandsuccessstoriesReal-worldartifactsandsymbolsProvidephysicalbrochuresandinformationmaterial(5)4.ImplementingfairInvolveactorsinplatformchangesHavekeyactorsapproveofnewfeaturescostandrevenue(7,13)mechanismsAttractingcorporatepartnersFindcompaniesthatpromoteandusetheplatform(existingnetworks)(3,5)5.Attendinginter-EstablishapersonalbondwithkeyTrytogettoknowkeyactorsandtheirneedsbetterpersonaleventsactors6.Connecting(Manual)matching(2,11)BringtogethersuitableofferswiththerightusersexistingandnewCommunicationtools(11)ProvidetheuserwithmultiplecommunicationchannelspartnersRecommendersystemsProviderecommendationsthatpointactorstorelevantofferingsSearchfunctionalitiesEnhancethesearchonEPs,e.g.,bycollaborativefiltering7.TreatingactorsasWorkshopstoidentifymutualHostactorworkshoptoidentifyactorneedsequalpartnersproblems(5,8)IntegrationofinnovationpartnersInvolvekeypartnerstodevelopfeaturesaccordingtotheirneeds8.BeingopentoWhitelabelsolutionsIndividualizetheplatformforspecificfocusgroupsnewsolutionsThird-partyinnovationandIntegratefeaturesfromotherpartnersintotheplatformofferings9.DesigningforFeedbackchannels(12)Implementfeedbackchannelsandusedata,e.g.,click-streamstousabilityanalyzeuserbehavior10.Creatingnew,IdearealizationFollowuponreceivedfeedbackandimplementtheactorideasusefulfeaturesInnovationworkshopswithactorsConductregularmeetingstodiscussofferingsandimprovements(12,13)11.DefiningEasetheexchangeofresourcesCreatechannelsfortheexchangeofphysicalanddigitalgoodsfunctionalitiesQualityspecificationsandProvideclearinstructionsandrulesonwhatanofferingshouldforresourcestandardsincludeorwhatisinsufficientexchangeRulesofinteractionEnsurerespectfulinteractionamongusers12.Utilizingfeed-TrendscoutingParticipateintradefairsandidentifycurrenttrendsbackchannelsforKeyperformanceindicator(KPI)UsetechnologytoidentifyandimproveuserbehaviorinnovationtrackingandreportingImplementratingandendorsementAllowuserstoratetheplatformstogetfeedbackfromthemsystems13.ConvincingPreventexploitation(8)EnsurethattheplatformbusinessmodelcannotbeunderminedactorsofbeingAgileprocesses(12)Useagiledevelopmenttoreactfasterto,e.g.,legalchangesfuture-proofNote:Ifanenactorispartofmorethanonemechanism,theadditionalmechanismsaredepictedinbrackets.Anenactorisprintedinboldifmorethanthreeexpertsmentionedit.SimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

183168Handbookondigitalbusinessecosystemscompetitivenessbycoordinatedserviceinnovation.Despitebeingderivedinductively,theseaimsresonatestronglywiththeinitialsetofcodesderivedthroughaliteraturereview(presentedindetailinFischeretal.,2020),therebysupportingandextendingourpreviousfindings.Astheaimsrelyonmechanismstobeachieved,atotalof13mechanisms(M)wereidentified.Basedonourfindings,thesemechanismshave32additionalcomponentsthatwerefertoasenactors.Somemechanismssupporttwoaims,whilesomeenactorsalsocontributetomultiplemechanisms.WearguethatthisoverlapisanaturalconsequenceofEPs’complexandsocio-technicalnature,aswellastheoverlapofconceptualthemesinpractice;forexample,supportandtheimprovementofvalueco-creation(thatis,serviceinnovation)maybothbeachievedbyimplementingandmonitoringfeedbackchannels.InlinewithGregoretal.(2020),theidentifiedaims,mechanisms,andenactorswerevalidatedandrefinedusingcorrespondingliterature,byprovidingtheoreticalandempiricaljustifications.Bycombiningaims,mechanisms,andenactors,theyformasetoffourdesignprinciples.ThedesignprinciplesaredescribedandvisualizedinFigure12.2andTable12.2.Thesedesignprinciplecomponentsaredirectlyrelatedtothecodesappliedintheinterviewtranscripts.Toprovideanecdotalinsights,severalcomponentsarecorroboratedwithquotationsfromtheexpertinterviews.Figure12.2AimsandmechanismsforthedesignofengagementplatformsRESULTSThedesignprinciplesaredescribedinmoredetailineachspecificsubsection.Thesubsectionheadingsarerelatedtothefouraims.Eachaimispursuedbyemployingmultiplemechanismsthat,inturn,relyonenactorstobeeffective.Toreduceredundancy,wepresentthefourdesignprinciplesbasedontheirrespectiveaims,describethe13underlyingmechanismsineachcontext(seeFigure12.2),andgiveatabularoverviewof32enactorsandrespectiveexamplesfromtheinterviewsinTable12.2.SimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

184Designknowledgefordigitalbusinessecosystems169AttractandBindActorsTofosterasteadyinfluxofnewactors,whoprovideanddemandofferings,theEPsemployvaryingmechanismstoattractandbindactorstofosterresourceintegration.ThepotentialvalueofaDBEreliesontheabilitytoconnectheterogeneousactorsefficientlyandeffectivelytoaffordthedynamicbundlingofresourcestoco-createvalue.AnEPortheoverarchingDBEneedsacriticalmassofactorstoensuretheseproperties.Initially,EPsneedtoincreasetheirvisibility,thusattractingpotentialactors.Thereby,EPsinstrumentalizeexistingsocialmediaplatforms,physicalevents,marketingcampaigns,andbusiness-to-business(B2B)partnerstoraisetheirawareness(M1)andbenoticedbypotentialactors.Afterwards,supportingactoronboarding(M2)helpstoattractandbindnewuserstotheEPbyfamiliarizingthemwiththeplatform’srespectivefeaturesanddecreasingthechanceofleavingshortlyafterjoininganEP.Whentheplatformowners(POs)wereaskedwhatassistancewasgivenwiththeplatform’susabilityandonboardingprocess,onePOrepliedasfollows:Wehaveahelpcenter,aZendesk,whereweanswerquestionsaboutthemostcommonquestionsontheplatform.Wealsohavemanysuggestions,tips,andtricksinourmagazine,i.e.,anaccompanyingblog.Wepartlygiveadvicebyphone,haveahotlineforcustomersbyemail,andcanbereachedbyphone...Wehavesmallvideosandtutorialsonregistrationprocessesorfunctionalities.Wehavedesignedinstructionsandchecklistsforeventformats,andsometimesourfoundationalsoconductswebinars.There,largergroupscanbebroughttogetherinteractively.Besidesproperlyassistingnewuserswithsupportfeatures,theinitialserviceexperienceofnewactorsalsoreliesonestablishingtrustwiththeactorsalmostimmediately.Theemploy-mentoftrust-buildingsymbolsandactivities(M3)givesactorsasenseoftrustandsecuritywhenusingtheEPandthusstrengthenstheDBEcommunity.AsaPOemphasizes,italsohelps“tobehonestandtransparent.Wearecloseandaccessible.Asmediators,wetrytocreateunderstandingfortheotherside.”Besides,thiscanbefurtherincreasedbyallowingcoopera-tivelydeveloped,risk-basedpricingandcost(M4)mechanismsthatallowfairdistributionofrisk,costs,andrevenuesamongtheheterogeneousactors.Designingfairpricingmodels—forexample,onlycharginguponusingcertainfeaturesorbasedonmonetarysuccess—ismoreattractivetoactorswhoarenotyetfamiliarwitharespectiveDBE.Toachieveafeelingoffamiliarity,personalmeetingsat,forexample,publicconferences,areavaluableopportunitytoestablishasenseofcommunitybetweentheactors.Attendinginterpersonalevents(M5)allowsPOstogetintoconversationwithpossiblenewactorsortoidentifytheproblemsofexistingactorsearlyon.Thereby,establishingaconnectionbetweenexistingandnewpartners(M6)is,ontheonehand,beneficialtousethelevelofpopularityofthepartnersand,ontheotherhand,tousethetrustworthinessofsupposedlybetterknownandperhapsevenlargerpartnersforyourDBE.Forexample,oneintervieweestatedthatthey“ratherrelyonestablishedcompaniesthathavealreadybuiltuptrust.”Andthatitpresentedasignificantchallenge“toestablishacompany,whichhasnonameyet.”PracticesassociatedwithM2arestandardamongtheDBEsandwereoftenadoptedafterinitiallyfocusingonbuildingaconsumerbasebyattractingprivatehouseholds/consumers.Drawingfromthecon-ductedinterviewsandthehighlightedquotes,wederivethefirstdesignprinciple:DesignPrinciple1:ForPOstoattractandbindactorsonEPs,theyshouldraiseawareness(M1),supportactoronboarding(M2),employtrust-buildingsymbolsandactivities(M3),SimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

185170Handbookondigitalbusinessecosystemsestablishrisk-basedcostsandpricing(M4),attendinterpersonalevents(M5)andconnecttoexistingandnewpartners(M6)inordertofosterresourceintegration.AchieveMutualGrowthTosolidifytheoverallcompetitivepositionofaDBEinever-changingmarkets,mutualprob-lemsandneedsmustbeaddressedtoachievemutualgrowth.Thecollaborativeidentificationofthesefactorsdecreasesmisguidedresourceallocationandinnovationactivitieswithintheecosystemontheonehand,whileincreasingthetransparencyandawarenessoflatentcapa-bilitiesamongactorsaswellasasharedunderstandinganddirectionforfuturedevelopmentsontheother.Inordertobepreparedforfuturechallenges—forexample,legalchanges—theconnec-tionofexistingandnewpartners(M6)shouldbeusedtoreacttounforeseencircumstanceswithpotentialmorediversifiedpartners,asmentionedbythePOs.Whenparticipatingininterpersonalevents(M5),newpartnerscanbeacquiredthroughdirectconversation,whichmaybemoreconvincingthanrecruitingviaawebsiteortelephonecall.Here,themechanismestablishingfairrisk-basedcostsandpricing(M4)playsadecisiveroleinattractingactorsandthusmakingjointgrowthpossibleinthefirstplace.Forexample,onePOstated:“WedonotdemandafeefromthecompanywhenIplaceanadvertisementorwhenIcreatemyprofile,butuptothepointwhereIwanttogetincontactwiththeapplicants,theusageiscompletelyfree.”BeingopenandtransparentaboutthepricingstrategiessignalstotheactorsthatfairtreatmentisahighpriorityintheDBE.Thistiesintotreatingactorsasequalpartners(M7),whichimpliesthattheneedsofallpart-nersandactorsofaDBEareconsidered,andproblemsareaddressed.“Respectfulinteractionateyelevelensuresagoodrelationship.Forthispurpose,wehavepublishedanetiquette:Itconsistsoffourgoldenrules:Benice,bepolite,behonest,andbehelpful.”Iftheactorsfeelrespected,theyaremoreopentowardscollaboratingandrecommendingtheEP.Whencollab-oratingwiththeactors,newideasandsolutionsforunsolvedproblemsareidentified.Seeingthisbenefit,thePOsintroducedactivitiestowardsbeingopentowardsnewsolutions(M8)asaddressingexistingproblemsbasedoncollaborativeeffortsyieldssignificantlong-termadvantagessuchaslowerinnovationcostsandensuringactorsthattheEPadaptsbasedontheirneeds.AsthepresentedquotationsunderlinetheimportanceofachievinggrowthamongactorsandPOinaDBE,weproposethesecondderiveddesignprincipleasfollows:DesignPrinciple2:ForPOstoachievemutualgrowthinEPs,theyshouldestablishfairrisk-basedcostsandpricing(M4),participateininterpersonalevents(M5),connecttoexist-ingandnewpartners(M6),treatactorsasequalpartners(M7),andbeopentonewsolutions(M8)inordertoaddressmutualproblemsandneeds.FosterInteractionandValueCo-creationValueco-creationisonlyenabledthroughtheintegrationofresourcesbyvariousactors.Thus,theinclusionandengagementofallactorsarenaturallyamajordriverofaDBE’ssuccess.Therefore,toenhanceresourceintegrationamongheterogeneousactors,thePOsneedtoconsidertheirrelationshipsandresourceintegrationprocessesontheEP.AddressingSimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

186Designknowledgefordigitalbusinessecosystems171thesetasksappropriatelyrequirestheconnectionofexistingandnewpartners(M6)indesignprocesses,sotheEPcaterstotheactors’needsandprovidestherequiredfunctionalities.Thisalsoincludesthechoiceofcommunicationchannelssothatactors“cancommunicateviaourplatformiftheylike,buttheycanalsocommunicateoutsidetheplatform”asvariouschattools,andcontactpossibilitiesalsodrivetheinteractionamongactors,asonePOstates.ToenablethebestpossiblecooperationbetweentheactorsinaDBE,theEPshouldbedesignedtoensureintuitiveusability(M9).AsonePOputsit:“Sotheappis,withrespect,self-explanatory.”Hence,theEPdesignshouldbeguidedbyalreadyknownplatformstoutilizetheirfamiliarityonthisplatform.Thisincludesdesigningasimpleprocessforsupport-ingactoronboarding(M2),increasingthechancefornewactorstojointheDBE.Furthermore,bylearningaboutcrucialfunctionalitiesatanearlystage,itcanbeensuredthatdistinctivefeaturesarenotedandutilizedearlyon.KnowingabouttheEP’spossibilitiesandlimitshelpsinidentifyingareasforco-creatingnewandusefulfeatures(M10).Throughtheactors’inter-action,resourcescantherebybeintegratedinanewway,forexample,implementingadhocofferingsofexternalactorsascorefunctionalities.OnePOstatedthat“itisreallyalluserswhoaredrivingthis(ideas)forward.Asweareanagileproject,wedon’thaveafixedfeatureset…andeverythingthatisreportedbacktousendsupintheroadmap.Withanappropriatepri-ority,ofcourse.”Aftertheresourceshavebeenintegratedandbundledduetointeractionandvalueco-creation,suitableopportunitiesmustbecreatedforresourceexchange(M11)amongactors,bothvirtuallyandintherealworld.Inthisregard,linkinginherentlyphysicalaspectsofinteractionintheoverallDBE—forexample,sharingtoolswithneighborsviaaneighborhoodplatform—needsspecialconsiderationtowardsdesigningEPmechanismsthatenableandsupporttheseinteractions.Therefore,theinterviewedPOswelcomeandsupportthatactorsalsointeractinreallifetoimprovetheoverallserviceexperienceandincreaseloyalty.Oneintervieweeevenstatedthat:“thisiswhatguidesus,sowesaywedonotwanttobeanonlinetoolthatdrawspeopleonlineforitsownsake,butratheraplatformthatisausefulonlinetoolandalwaysresultsinrealaddedvalueofflineaswell.”Basedonthepresentedfindings,wederivethethirddesignprinciple:DesignPrinciple3:ForPOstofosterinteractionandvalueco-creationinEPs,theyshouldsupportactoronboarding(M2),connecttoexistingandnewpartners(M6),designforusabil-ity(M9),createnewandusefulfeatures(M10),anddefinemechanismsforresourceexchange(M11)inordertoenhancevalueco-creation.ImproveCompetitivenessbyCoordinatedServiceInnovationAsmarketsarecontinuallychangingandactordemandsincrease,EPsmustensurefeasibleandsustainableserviceinnovation.ThisoverarchinggoaliscentraltotheideaofEPsthatenablewaysforserviceinnovationthroughincreasingresourceliquefactionandresourcedensityofserviceecosystems.Beingopentonewsolutions(M8)seemstobeacorepremiseofthePOswesurveyed,asthisiswhatenablesinnovationstoemergeinthefirstplaceandallowstherespectivecompaniestoremaincompetitive.AsonePOstates:“Soinnovationsareactuallyalwaysnewfunctionsforus.Theycanalsocomefromussincewearealwayseagertodevelopourplatformfurther.So,wearealwaysontheroadattradefairs,readingthelatestnewsaboutwhatishappeningindigitalization.”SincethePOsarecommittedtocreatingnew,SimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

187172Handbookondigitalbusinessecosystemsusefulfeatures(M10),closecooperationwiththeplatform’sactorsseemstobesensibleinordertoimplementfeaturescateredtotheirdistinctiveneeds:Wehaveourowncallcenterforbothendcustomersandcompanies.Wegetfeedbackeveryday.Ifwedosomethingthatpeopledonotlike,wehearitimmediately.Buttherearealwayspeoplewhosay“Hey,Ihaveagreatidea,haveyouthoughtaboutthisandthat”.WegetalotofideasandIthinktheyaregreatandwealwaystakethem.Therefore,theyutilizefeedbackchannelsforinnovation(M12)—forexample,customerhot-lines,click-streamdata,anduserexperiencetesting(UX-testing)—andclaimthattheactorsintheDBEmainlydriveserviceinnovation.“Thesecanbecustomerswhosendusashortemailwithsuggestionsforimprovement.Forexample,thattheygetanautomaticcalendarinvitationwhenbooking...Wethinkitisgreatwhencustomersinteractwithusinthisway,andthenwecanimplementitquickly.”Itisequallyimportanttoprocessthefeedbacksothattheimple-mentationcanbetrackedandreportedbacktofeedbackproviders.Byconnectingexistingandnewpartners(M6)itallowsthePOstoincorporatecompetenciesthatwouldotherwisehavetobedevelopedintheirowncompany,andthustheycaninnovatetheirservicesfaster.Thisprovidesthemwithanadvantageoverpotentialcompetitorsandsignalstotheactorsthattheyarefuture-proof(M13);thatis,theycanreactswiftlytomarketchangesorlegalrequirements.Thechallengesofremainingcompetitivewerestronglyemphasizedintheinterviews,whichiswhyourfourthderiveddesignprinciplestates:DesignPrinciple4:ForPOstoimprovecompetitivenessbycoordinatedserviceinnovationinEPs,theyshouldconnecttoexistingandnewpartners(M6),beopentonewsolutions(M8),createnew,usefulfeatures(M10),utilizefeedbackchannelsforinnovation(M12),andsignaltoactorsthattheyarefuture-proof(M13)inordertoensureserviceinnovation.EnactorsforMechanismsAccordingtoGregoretal.(2020),amechanisminvolvesenactorsthatmayhaverespectivedesignprinciples.Enactorsarehuman(thatis,actorgroupssuchasmoderators)ornon-human(thatisprocesses,activitie,orotherartifacts)changeagents.InTable12.2,theenactorsarepresentedaccordingtotheircorrespondingmechanism.Ifanenactorispartofmorethanonemechanism,theadditionalmechanismsaredepictedinbracketsaftertherespectiveenactor.Anenactorisprintedinboldifmorethanthreeexpertsmentionedit.Forthischapter,wewillnotdiscussthedesignprinciplesofindividualenactorsbutgiveexamplesofwhatactivities,processes,orartifactsarerelated.Thisbeingsaid,thetableonlyprovidesanoverviewofenac-torsutilizedandmentionedbythePOsinoursample.Thelistedenactorsshouldbecombinedwiththeinformationregardingaimsandmechanismspresentedinthepriorsectiontocreatesuitablechangeagents(thatisprocesses,activities,androles)tosupporttheaspiredoutcome.DISCUSSIONThischapteremploysDSRtogenerateprescriptiveknowledgeintheformofdesignprinciplesforEPstosupportvalueco-creationinDBEs.Theexpertinterviewshavebeencodedandcon-ceptuallyevaluatedthroughthelensofServiceLogicandplatformresearch.ByconductingSimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

188Designknowledgefordigitalbusinessecosystems173empiricalresearchwith14POs,ourcontributionencompassesseveralaspects.Mainly,wepresentthemanagerialimplicationsofServiceLogicandprovidefourdesignprinciplesthatconsistoffouraims,13mechanisms,and32enactorstoenableandenhanceco-creationandserviceinnovationonEPs.TheprescriptiveknowledgeathandinformsPOsofincumbentandnewlyfoundedEPsonimprovinginteractionamongactorsinDBEs.AsDBEsincreasinglyrelyonEPsascorestructurestoenableandfacilitatevalueco-creation,prescriptiveresearchprovidesampleadvicetoinformthedesignofmechanismsrelatedtoDBEgovernance,growth,andinnovation.Inthisway,wealsocontributetoexistingresearchgapsconcerning:(1)applicableresearchthatdrawsfromServiceLogic(VargoandLusch,2017);(2)thecallforactionableinformationforpractitionersdesigningEPs(Blaschkeetal.,2019);and(3)alackofresearchonthedigitalizationofpersonalservices(Lattemannetal.,2020).TheinterviewedPObusinessmodelsmainlyrelyonB2Cinteractions.Whiletherearecorporatecomplementorsandcustomers,themajorinfluxofincomeisgeneratedbyprivatecustomersorprivatehouseholds.Inthiscontext,theheterogeneityofactorsandtheirdistinc-tiveneedsishigherwhencomparedtohomogeneousDBEsthatconsistpurelyofcorporateactorsorsimpleB2Crelationships(Heinetal.,2020).AstheEPneedstosupportvarious,sometimescontractingneedsviaasingulartechnologicalplatform(Schreiecketal.,2016),wetriedtoassessawidearrayofcriticalmechanisms,thuscontributingtoabetterunderstandinganddesignofactorinteractionsinaDBE.Wealsoacknowledgephysicalandnon-virtualcomponentsthatcontributetothesemechanisms;forexample,personalmeetings,workshops,marketingmaterial,handbooks,training.Inthisway,wecontributetotheEPliteraturethatdeliberatelyconsidersbothphysicalandvirtualtouchpoints(BreidbachandBrodie,2017).Consequently,ourresearchprovidesabroaderandmorepragmaticoverviewofactivities,processes,rules,androlestoimproveEPsthanstudiesthatfocusedonlyonvirtualaspects.DrawingfromServiceLogic,weoftenrefertoheterogeneousgroupsasactors(LuschandNambisan,2015).Asaresult,ouranalysisremainsrathervagueonthemechanismsandspe-cificneedsofspecificcomplementors,customers,orotheragentsoftheDBE.Also,thesetof32exemplaryenactorsisonlypresentedasanoverviewand,duetotheheterogeneityofenac-torsemployedbythePO,needsfurtherempiricalanalysistoprovideamoreconsistentandrobustsetoffactorstoconsider.Thelevelofdetailalsoremainslowforspecificandhighlycomplexdesignprinciples;forexample,theformulationofpricingandcostmechanismsthatremainfair.Toprovideamorepreciseanddetailedanalysis,additionalresearchisneeded.Anotherlimitationofthisresearchisthelimiteddiscussionofco-creativeversusindividualcontribution,consideringthedifferentmechanismswepresent.Asvalueco-creation(VargoandLusch,2004)isacentraltheoreticallens,littleattentionhasbeenpaidtotheactivitiesofindividualactorsandspecificactorgroups.Forfuturestudies,wewillincorporateamorediversesetofstakeholdersandvalidatetheproposedsetofdesignprinciplesnotonlyargumentativelybutalsostatistically.Additionally,wewillevaluatethegeneralizabilityofthedesignprinciplesbyconductingadditionalinter-viewswithexpertsfromtheB2Bdomaintocontrastdifferencesandhighlightsimilaritiesbetweenthetwosectors.SimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

189174HandbookondigitalbusinessecosystemsCONCLUSIONBasedontheDSRapproach,wedevelopedfourdesignprinciplesbasedon14expertinterviews.TheresultsincludefouraimsthatmayprovideaframeworkforassessinganddiscussingmechanismsandenactorsinEPliterature.Tofurthersupporttherobustnessofourfindings,wevalidatedeachoftheidentifiedmechanismswithresultsfromothersources(seeFigure12.2).Byofferingthissetofprescriptivefindingsandinsightonwhichmechanismsandenactorsareemployedbyplatformownerstofosterco-creationonEPs,weanswerresearchcallsforamoredetailedassessmentoftechnology-enabledvalueco-creation(Breidbachetal.,2015)andmorepracticalimplicationsofServiceLogic(VargoandLusch,2017).EachoftheidentifiedcomponentspresentsresearchopportunitiesfortheoreticalresearchandfurtherDSR.ByemployingtheDSRapproach,wealsodevelopedpracticalknowledgeforpractition-ersinEPandDBEcontexts.Weprovideactionabledesignprinciplesthatmayalsoinformstrategicandoperationaldecisionsforincumbentplatformownersandforthoseintheearlystagesofplanningorimplementation.Eventhoughweareconfidentthattheresultsofthisstudysupporttheendeavorsofpracti-tioners,aswellasprovidenewtheoreticalinsights,wehavetodrawattentiontoafewlimita-tions.AswelimitedtheinterviewsampletoexpertsfromtheDACHregion,andthesectorofpersonalservices,wearguethatourfindingsmustbecomparedtootherEPs.Also,resultingfromthedeliberatechoicetointerviewexpertsintheB2Csector,werefrainedfrominter-viewingconsumers.Theselectionofexpertsforourinterviewswasmorerobustlyensuredbyrelyingonestablishedandmeasurablecriteriasuchasjobpositionandtimeinthemarket.Wefurtherarguethatthemechanismsandenactorsmentionedarenotcomplete,andthereexistadditionalonesthatwillneedtobeinvestigatedinfuturestudies.EPsareincreasinglypopularandpowerfulmeansbywhichtoenableco-creationandserviceinnovation.Inthisstudy,weconductedexpertinterviewswithfounders,CEOs,andmanagersof14EPcompaniesfromthepersonalandhousehold-relatedservicesector,togaininsightsintoessentialsuccessfactorsandrelatedactivitiesandmechanisms.Hence,thischapter’scontributionisinterestingfordesigningfutureEPs,asitprovidesthereaderwithsuitabledesignprinciples,includingaims,mechanisms,andenactorsthatcanbefollowedandimplemented.Fourmajoraims—namelyA1,attractandbindactors;A2,achievemutualgrowth;A3,fosterinteractionandco-creation;andA4,improvecompetitivenessbycoordi-natedserviceinnovation—werederivedandpresented.Besides,mechanismsandenactorswereidentifiedthatfurtherspecifytheseaims.Thesefindingsshouldbeappliedinafuturestudytonewandexistingplatformstorefineandevaluatethefourderiveddesignprinciplesstemmingfromthesignificantaims.ACKNOWLEDGEMENTThischapterispartoftheproject“BegleitforschungPersonennaheDienstleistungen”(BeDien),fundedbytheGermanFederalMinistryofEducationandResearch(BMBF),grantnumber02K17A080and81.SimonMichalke,LisaLohrenz,DominikSiemon,ChristophLattemann,andSusanneRobra-Bissantz-9781839107191DownloadedfromPubFactoryat05/28/202209:56:48AMviaColumbiaUniversityLibrary

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19213.Digitalplatformsintheindustrialsphere:valuecreationlogicsandplatformtypesPhilippMoschandRobertObermaierINTRODUCTIONPlatformsconnecttwoormoredistinctactorgroups(usuallysellerandbuyer)onatwo-ormulti-sidedmarket(HagiuandWright,2015;RochetandTirole,2003).Theyactascentralintermediaries,providethenecessaryinfrastructure,andenablevalue-creatinginteractionsbetweenactorgroupsunderpredefinedrules(Gassmannetal.,2017;Parkeretal.,2016;TäuscherandLaudien,2018).Platformshaveexistedforcenturiesinvariousforms,suchastraditionalmarkets,andhavealwaysbeenanimportantpartofafunctioningeconomy(Eisenmannetal.,2006).Overthelasttwodecades,however,anewclassofplatformshasemerged:digitalplatformsbasedontechnologiesincludingbigdata,cloudcomputing,andtheInternet-of-Things(Bakos,1998;Chenetal.,2014;NgandWakenshaw,2017).Digitalplatformsenablevalueco-creationinthesociotechnicalconstructofdigitalbusinessecosystemsthatconnectindividuals,organizations,anddigitaltechnologiesthroughcompetitiveandcollaborativerelationships(Senyoetal.,2019).CompaniessuchasApple,Google,Facebook,andAmazonhavesuccessfullydemon-stratedthatdigitalplatformsbasedonbusiness-to-consumer(B2C)orconsumer-to-consumer(C2C)interactions—definedasconsumerInternet-of-Thingsplatforms(CIoTPs)—areabletosignificantlytransformorcreatenewbusinesssectors(Gebaueretal.,2020).Intheindustrialsphere,“Industrie4.0”andothercomparableinitiativesworldwidehavedrivendigitalizationduringthepastdecade,leadingtothedevelopmentofdigitalplatformsbasedonbusiness-to-business(B2B)interactions,alsoreferredtoasindustrialInternet-of-Thingsplatforms(IIoTPs)(Heinetal.,2019;Obermaier,2019).Generally,IIoTPsservetwokeyaspects:(1)providingthebasisfortransactionsbetweendifferentactorsand/or(2)enablinginnovationinvolvingthird-partycomplementors(Cusumanoetal.,2020;Paulietal.,2021).Severalincumbentindustrialfirms(e.g.,Bosch,Siemens,Trumpf)andInternettechnologyfirms(e.g.,Amazon,Microsoft,Google)amongothershaveintroducedIIoTPstoreplicateortransferthesuccessstoriesofCIoTPstotheB2Bfield.However,companiesdevelopingIIoTPsoftenfacesignificanthurdles(Paulietal.,2021),astheprocessofestab-lishingIIoTPsinthemarketrequireshugeinvestmentsaswellasagoodunderstandingofIIoTPecosystemsandtheirvaluecreationlogics(Heinetal.,2020).AprominentexampleforthecomplexityofthisissueisGeneralElectric,whichdrasticallyreducedinvestmentsintoitsownIIoTPPredixduetoseveredivergencesbetweenrealizedandexpectedreturnoninvestment(McGrath,2020).Surprisingly,studiesspecificallyinvestigatingIIoTPsarestillscarce(Foerdereretal.,2019;Heinetal.,2019;Paulietal.,2021).Inparticular,thereisalackofresearchondifferenttypesofIIoTPstoprovideabetterunderstandingofIIoTPecosystemsandtheirunderlyingfunc-tionalities(Gebaueretal.,2020).Previousresearch(1)failstoadequatelydescribeIIoTPs,as177PhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

193178HandbookondigitalbusinessecosystemstheirtaxonomiesblendB2CandB2Bsectors(Cusumanoetal.,2019;Riasanowetal.,2020);(2)focusesmainlyonspecifictechnicalelementsorindustries(Arnoldetal.,2021;Jovanovicetal.,2021),or(3)lacksaconsistentandconsolidatedpictureoftheIIoTPmarket(Brodtmannetal.,2020;FalckandKoenen,2020;Foerdereretal.,2019).Therefore,adeeperanddifferen-tiatedunderstandingofIIoTPtypesregardingthedifferentactorsandelementsisrequiredtospecifythemasanobjectofresearch(deReuveretal.,2018).Addressingthisresearchneed,wepostulateourfirstresearchquestion:RQ1:Whichdifferenttypes,actors,andelementsofIIoTPscanbedescribed?ArichliteraturehasinvestigatedtheemergenceanddesignofCIoTPs,particularlyincompari-sontotraditional,non-digitalplatformsettings(e.g.,Eisenmannetal.,2009;Parkeretal.,2016;ParkerandvanAlstyne,2018).Theextensiveeliminationofrequiredphysicalinfrastructurecausedbyinformationtechnologyaffectsvaluecreation,delivery,andcaptureinthreeways(deReuveretal.,2018;Parkeretal.,2016;vanAlstyneetal.,2016;Yooetal.,2010).First,growththroughnetworkeffectscanbeachievedsignificantlyfasterandmorecost-effectivelythaninnon-digitalplatformsettings.Second,transactioncostsarenearlyeliminatedthroughdata-driven,efficientmatchingbetweenvariousplatformactors.Third,innovativebusinessandrevenuemodels,suchassharingofgoods,canbedevelopedonalargerscale.However,IIoTPsmaydifferintheirvaluecreationlogicscomparedtoCIoTPsastheyvaryinanumberofcharacteristics(Heinetal.,2019;Paulietal.,2021):First,duetothegreatervariety,number,andweightofdifferentstakeholders(e.g.,sensorormachinemanufacturers,systemintegrators,softwaredevelopers),thecomplexityofvaluecreationandcommunitygovernanceonIIoTPsissignificantlyhigher.Second,thedatatransferredonIIoTPsiscon-sideredmorecriticalfortheindividualactoranditscompetitiveadvantage(e.g.,productiondataforamanufacturer).Third,digitalservicesofferedonIIoTPsaremoresophisticatedandrequireadeeperunderstandingoftheunderlyingprocesses.However,thereisalackofstudiesthatspecificallyinvestigatehowknownvaluecreationlogicsofCIoTPsareappliedonIIoTPs(deReuveretal.,2018;Heinetal.,2020).Inparticular,weintendtoleveragetheassignedvaluecreationlogicstodevelopadelineatedandcomprehensiveclassificationoftheidentifiedIIoTPtypes.Hence,weposeoursecondandthirdresearchquestions:RQ2:WhichvaluecreationlogicsderivedfromCIoTPsareappliedondifferentIIoTPtypes?RQ3:HowcanIIoTPsbeclassifiedbasedonthevaluecreationlogicsderivedfromCIoTPsettings?Addressingourresearchquestions,webuildonObermaierandMosch(2019)andenhanceourelaboratedinsightsbyprovidingastructureddescriptionandclassificationofIIoTPsbasedontheidentifiedvaluecreationlogics.Thereby,wemakethefollowingcontributions.First,weidentifyfourdifferentIIoTPtypes—namelyDigitalMarketplaces,ConnectivityPlatforms,Hyperscalers,andIntegratedIIoTPs—anddescribethemintermsofactorsandelementstoprovideaconsolidateddrawingoftheIIoTPecosystemforabetterunderstandingofthisresearchfield.Second,weshowthatvaluecreationlogicsofCIoTPsarepartiallydifferenttotheapplicationinIIoTPmarkets,leadingtotheimplicationthatCIoTPsandIIoTPsneedtobeexaminedwithacleardistinction.Third,wearethefirsttoelaborateaclassificationoftheidentifiedIIoTPtypesbasedontheassignedvaluecreationlogics,therebyprovidingafruitfulbasisforfurtherresearchandofferingvaluablepracticalimplications.PhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

194Digitalplatformsintheindustrialsphere:valuecreationlogicsandplatformtypes179Westructureourchapterasfollows.First,wepresentthevaluecreationsderivedfromCIoTPliteraturethatservesasthefoundationofourIIoTPclassification.ThedescriptionandclassificationofIIoTPsaredevelopednext.Then,weconcludeandbrieflydiscussourstudy,specifyingtheoreticalandmanagerialcontributions.VALUECREATIONLOGICSInordertograspthemechanismsofIIoTPs,itisnecessarytounderstandhowandwhichvaluecreationlogicsareapplied.Weunderstandvaluecreationlogicsastheoperatingprinciples,whicharedecisivetoprofitfrominnovationasaplatformoperator(HelfatandRaubitschek,2018;Teece,2018).However,inpreviousresearch(Cusumanoetal.,2019;Eisenmannetal.,2011;Parkeretal.,2016),whichpredominantlytakesthemarket-basedperspective(Heinetal.,2020),valuecreationlogicsareoftenderivedfromCIoTPs(Gebaueretal.,2020).Therefore,weinitiallysummarizethevaluecreationlogicsidentifiedfrommarket-basedliteratureonCIoTPstoprovideasolidtheoreticalbasisforapplicationtoIIoTPsinanextstep.Basedonthis,weidentifytwobasiccharacteristics(digitalinformationgood,externalvaluecreation),threesupportingvaluecreationlogics(initialization,openness,digitalbusi-nessecosystemembedment),andtwodominantvaluecreationlogicsofCIoTPs(supply-anddemand-sidenetworkeffects,communitycuration,andgovernance)thatarerelevantforoper-atingindigitalbusinessecosystemsandbuildoneachothertomapaconsecutiveconstruct(seeFigure13.1).Figure13.1ValuecreationlogicsofCIoTPsBasicCharacteristicsCIoTPsaregenerallycharacterizedbythefactthattheconstantexchangebetweenthedifferentactorsisprimarilycarriedoutbydigitalinformationgoodsbasedondata.Digitalinformationgoodshavethreeessentialcharacteristics:(1)theyexhibitmarginalcostsclosetozero;(2)theyareperfectlyreplicable;and(3)theyareavailableatanytime.Onceinformationisavailableindigitalform,adigitalcopycanbeproducedwithcostsclosetozero.PerfectionPhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

195180Handbookondigitalbusinessecosystemsreferstotheperfectcopy,whichcanbecreateddigitallyandusuallycorrespondscompletelytothedigitaloriginal.TheimmediateavailabilityalmostanywhereintheworldisensuredbytheInternet.Broadlyspeaking,digitalinformationgoodscanthereforebeconsumedvirtuallyfreeofchargeandareperfectlyreplicable(McAfeeandBrynjolfsson,2017;Rifkin,2014).Theextensivedetachmentfromthephysicalworldmakestheexchangebetweenthedifferentplatformactorseasier,therebyenablingasignificantlyfasterandcheaperscalingthaninnon-digitalsettings(vanAlstyneetal.,2016).Generally,CIoTPsdonotcreatetheirowncontent.Instead,theymerelyprovidetheinfrastructureforefficientmediationbetweenthevariousactors,therebyrelyingonexternalvaluecreation.Inphysicalproductmarkets,valuecreationmainlytakesplaceinternallyinaso-calledpipelinebusinessmodelthroughdifferentstages(e.g.,procurement,production,distribution)(Porter,1985).Inplatformmarkets,however,therearenoclearvaluestreamdirections.Providers,customers,andtheplatformoperatoritselfareinacomplexrelationshipwitheachother.Theexchangeofdifferentvaluesandresourcestakesplaceonapermanentbasisandwithoutapredefinedorder(Parkeretal.,2016).Inparticularbetweenprovidersandcustomers,newinnovationsandthusvaluearecreated.Therefore,CIoTPsrelyonboundaryresources,suchasapplicationprogramminginterfaces(APIs),enablingexternalvaluecrea-tionintheformofinnovationsortransactionsbetweenvariousactorsthatcomplementtheplatform’soffering(KarhuandRitala,2021;Teece,2018).Thetwobasiccharacteristicsserveasimportantinputvariablesforthefollowingsupportingvaluecreationlogics,andthusoverallprovidethefoundationforthevaluecreationonCIoTPs.SupportingValueCreationLogicsBeforenetworkeffectscanbebuilt,thequestionoftimelyentryintoplatformmarketsarises(ClementandSchreiber,2016;ShapiroandVarian,1999).Afterreachingacertainthreshold(criticalmass),first-movercompaniescanoftenbuildupacompetitiveadvantagethatisdiffi-cultforcompetitorstocompensatefor.Theinitializationproblemdescribestheprocesstogetfirstcustomersonaplatformifnoprovidersareavailableyet,ortoacquirefirstprovidersifnocustomersareregisteredyet.Thisdilemmaiscalledthechicken-or-eggproblem(CaillaudandJullien,2003;EvansandSchmalensee,2010).Onesolutionistosubsidizeoneofthetwoactorsides.Manycompaniesoffertheservicetoselectedactorsatasignificantdiscountorevenfreeofchargeandthustrytoacquirenewcustomersorcustomersfromcompetingplat-forms.Basically,thefollowingrulecanbeestablished:theactorgroup(providerorcustomer),whichprofitsmorefromthepresenceoftheotheractorgroup,ischargedwithhigherpricepremiums.Thevalueofoneactorgroupfortheotheractorgroupthusdeterminestheprice(Armstrong,2006).Acloselyrelatedsupportingvaluecreationlogicisdefiningthedegreeofopennessontheplatform(Jacobidesetal.,2018;ParkerandvanAlstyne,2018).ItisdeterminedbyhowopentheCIoTPistothird-partydevelopersorotherpartnersandcompetitors.However,decidingonthedegreeofopennessisoftenverycomplex.Ifthedegreeofopennessisrestrictedtoomuchbyintensivecontrol,third-partydevelopersmaybeforcedofftheplatformormaynotbebroughtontotheplatformatall.Theabilitytoinnovateandscalewouldbesignificantlyrestricted.If,onthecontrary,theplatformisopentoallpotentialactorswithoutanykindofcontrol,thiscouldleadtoahighdegreeoffragmentationandheterogeneity,fromwhichneitherthedeveloperorprovidernorthecustomersidewouldbenefitintheend.Additionally,PhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

196Digitalplatformsintheindustrialsphere:valuecreationlogicsandplatformtypes181newentrantsmayexploitresourcesdisadvantageouslytotheplatformoperator,iftheresourcesaretooopenlyaccessible(KarhuandRitala,2021).Hence,ontheonehand,openinguptheplatformcansupportthegenerationofnetworkeffectsandinnovationofthirdpartiesthroughbetteraccessforthedifferentactors,furthergreatlyreducingtheriskoflock-in.Ontheotherhand,however,ahighdegreeofopennessalsoincreasescompetitivepressurethroughlowerswitchingcosts,andthusreducesprofitability(Eisenmannetal.,2009).Inordertobuildastable,openandsustainablecommunity,platformcompaniestrytoembedtheiractorsinaso-calleddigitalbusinessecosystem,whichencompassesamultilateralsetofpartners(Adner,2017)andthedevelopmentofvariousplatformproducts,oftendevelopedthroughproductsequencing(HelfatandRaubitschek,2018).Itaimsatkeepingtheswitchingcostsashighaspossibletogeneratealock-ineffectandpreventmigrationtocompetitors.Thelock-ineffectofecosystemscanbedescribedintermsofapathdependencyoftheuser.Inearlycompetitivestagesofplatformmarkets,theuserusuallycanusedifferentsystemsatthesametime,alsocalledmulti-homing.Afteracertainperiodoftime,theusermaynolongerperceivetheuseofseveralplatformsassoefficientoradvantageous,andprefersoneplatform;theotheralternativesfadeintothebackground(Evans,2003).Assoonastheuserhasdecidedonanoption,itisinaso-calledlock-in,whichonlyallowsachangewithhighcostsinmate-rial(e.g.,monetary)ornon-material(e.g.,loyalty,learning)form,andultimatelyresultsinasingle-homingsituation,thatis,theexclusiveuseofoneplatform(ShapiroandVarian,1999;TäuscherandLaudien,2018).Thethreesupportingvaluecreationlogicsidentified,andtheirsuccessandstringencyofimplementation,willlargelydeterminehowthrivingthedominantvaluecreationlogicsbecome.Afterall,thegoaloftheCIoTPisto:(1)scaleupasfastaspossiblethroughsupply-anddemand-sidenetworkeffects;and(2)attractasmanydifferentcomplementorsaspossibleusingcommunitycurationandgovernance.DominantValueCreationLogicsInordertoattractsufficientactorsforexternalvaluecreationandtoachievethenecessarydominantmarketposition,so-callednetworkeffectsmustbecreated.Theplatformactors,whoareincomplexandmultiplerelationships,generatethemthroughtheconstantexchangeofinformationgoods(ShapiroandVarian,1999).OnereasonfortheemergenceoflargeCIoTPsaresupply-sidenetworkeffects,alsocalledeconomiesofscale(Bohr,1996):anincreaseintheoutputquantityperunitoftimecausesadecreaseoftheproductioncostsperunit.Thewidespreadabsenceofphysicalgoodsstrengthensthesupply-sidenetworkeffectsofCIoTPs,sincecapacitylimitsintheproductionofdigitalgoodscanonlyarisewhenveryhighusernumbersareinvolved.Highinitialfixedcostsfordevelopingandsettingup,andlowvariablecosts,meanthattheaveragecostperuserfallssignificantlyasthenumberofusersincreases,leadingtomarginalcostsclosetozero(EvansandSchmalensee,2010;McAfeeandBrynjolfsson,2017).Besidessupply-sidenetworkeffects,themaindriverfornetworkeffectsandtheachievementofadominantmarketpositionaredirectandindirectdemand-sidenetworkeffects.Inthecaseofdirectnetworkeffects,thevalueforeachindividualactoronaplatformdependsonthenumberofexistingusers(ShapiroandVarian,1999);theyonlyrefertooneside(e.g.,providersorcustomers).Forexample,themoreusersFacebookhas,themorevalueitgeneratesforeachindividualparticipant,sincethelattercanexchangeinformationwithmoreandmoreacquaintances.Thenumberofconnectionsbetweennnetworknodes,PhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

197182Handbookondigitalbusinessecosystemsthatis,users,increasesinquadraticform:n(n-1)=n2-n.ThisprincipleisalsoatworkinMetcalfe’slaw(Gilder,1993).Indirectdemand-sidenetworkeffectsaffectatleasttwosides,e.g.,providersandcustomers.Themoreproviders,forexample,offertheirownhomesasovernightaccommodationontheAirbnbplatform,themorepotentialguestsareattractedandthemorevalueisgeneratedforallplatformactors.Thecombinationofsupply-anddemand-sidenetworkeffectsinadigitalenvironmentisthekeytoarapidgrowthpotentialofCIoTPs.Themoreusersactonthedemandsideoftheplatform,thelowerthemarginalcostsonthesupplysideandthemoreprovidersareattracted.Thisinturnmakestheplatformmorecompetitive,whichagainattractsmorecustomersandproviders.Thislogicisalsocalledpositivefeedback,andinevitablyleadstothedominanceofindividualCIoTPsinso-calledwinner-takes-allmarkets(ShapiroandVarian,1999).However,thepositivenetworkeffectcanalsoquicklybereversediftheplatformlosesitsattractivenessduetoanewcompetitorordecliningreputationduetomanagementerrors.Inordertoavoidnegativenetworkeffects,thefocusofCIoTPsliesinthecontinuousman-agementoftheactors.Thisso-calledcommunitycurationandgovernanceintendstofostertheinnovationtakingplaceontheplatform.Innovationsareusuallycreatedbythird-partycomplementorsoutsidethedirectcontrolofthefocalplatform.Therefore,theCIoTPaimstounderstandhowinterdependentactorsinteract,anddevelopandcommercializeinnovations,inordertoprovidethebasisonwhichcomplementaryinnovationcanemerge(Jacobidesetal.,2018).Itisoftenaboutbreakingdownbarriersbetweendifferentactorsandmakinginterac-tionsasefficientaspossible(Cusumanoetal.,2019).Onceagain,theruleapplies:themoreusersordata,thebetter.Thealgorithmsofcurationbecomemoreandmoreprecisewithmoredataandcancreateindividuallytailoredoffers(Parkeretal.,2016).ManyCIoTPsthereforecheckthepreferencesoftheirownusersatthetimeofregistrationtoachievethemostprecisematchbetweensupplyanddemand,therebybringingtherightcomplementaryinnovationtotherightcustomer.Incontrast,theworsethecurating,thegreaterthe“noise,”thatis,theproportionofcontentthatdoesnotfit.Curatingisoftenalsosupportedbyaratingsystemforthecontentontheplatform.Forexample,publicfeedbackfromusersonapplicationsintheApple’sAppStoresupportnewusersinfindingthebestapplicationfortheirpurposes,astheyoftencontainimportantinformationregardingusageandfurtherimportantcontextdetails.Yetthisalsoservestheneedforthird-partydeveloperstogetimmediatefeedbackfromthecommunitysothattheycanimprovetheirapplications(PaganoandMaalej,2013).Inadditiontocommunitycuration,theinnovationtakingplaceontheplatformmustbegoverned,regu-lated,andcontrolled(Tiwanaetal.,2010).Thismeansdeterminingtransparentlyhowvalueiscreated,howitisdistributedfairlyamongallinvolvedactors,andhowanyconflictsthatmayarisecanberesolvedquickly.Ifonesideisoverchargedwithfeesorfeelsdisadvantaged,thishasadirectandpervasiveeffectonthenumberofusersandproviders,andthusalsoonthegenerationofnetworkeffects(Parkeretal.,2016).BothdominantvaluecreationlogicsonCIoTPsformaninterdependentandreciprocalrelationship.Ontheonehand,networkeffectsaremoredifficulttoachievewithouteffectivecommunitycurationandgovernance.Ontheotherhand,thelackofnetworkeffectsmayrendercommunitycurationandgovernanceobsolete.PhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

198Digitalplatformsintheindustrialsphere:valuecreationlogicsandplatformtypes183RESULTSAfterdescribinghowvaluecreationlogicsperformonCIoTPs,weapplythemtoIIoTPstounderstandhowtheyfunctioninanindustrialcontext.Beforeweareabletocarryoutthisstep,however,weneedtounderstandwhichIIoTPtypesgenerallyexist.Overall,wethereforefollowathreefoldapproach.First,weuseexistingclassificationapproachesinscientificandpracticalliteraturetoidentifythemostcommonIIoTPtypes.Second,takingthesociotechnicalperspectiveofinformationsystems(IS)(deReuveretal.,2018)anddigitalbusinessecosys-tems(StanleyandBriscoe,2010;Tilsonetal.,2012)literature,wedescribethedifferentIIoTPtypesintermsoftheirtechnicalandorganizationalelements,thatis,theirdifferentactorsandplatformlayers.Third,weapplytheinsightsgainedinthefirsttwostepstorelatethevaluecreationlogicsofCIoTPstothedifferentIIoTPtypesanddevelopacorrespondingclassifica-tionasaresult.IdentificationandDescriptionofIIoTPTypesFigure13.2Actors,platformlayers,andtypesofIIoTPsSincetheliteratureregardingIIoTPsisstillinitsinfancy,thereareonlyafewscientificstudiesthatclassifyanddescribedifferenttypesofIIoTPs.However,thesestudieslackanencompassingviewoftheIIoTPmarket,sincetheyalsoincludeCIoTPs(Cusumanoetal.,2019;EvansandGawer,2016;Riasanowetal.,2020;TäuscherandLaudien,2018),takeaverynarrowindustryperspective(Jovanovicetal.,2021),orfocusmainlyontechnicalarchitecturalfeatures(Arnoldetal.,2021).Basedonthesestudies,wethereforebroadenourperspectivebyintegratingmarketstudies,suchasthelatestpractitionerreports,toidentifythemostrelevantIIoTPtypes.AlthoughthereisnogeneralconsensusamongthesestudiesonthePhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

199184HandbookondigitalbusinessecosystemsTable13.1SynthesisofdifferentscientificandmarketstudiesregardingtheirIIoTPtypesScopeAuthorsIIoTPtypes(1)(2)(3)Hyperscalers(4)DigitalConnectivityIntegratedMarketplacesPlatformsIIoTPsScientificEvansandGawer(2016)XXstudiesTäuscherandLaudien(2018)XCusumanoetal.(2019)XXRiasanowetal.(2020)XXJovanovicetal.(2021)XXArnoldetal.(2021)XXXMarketRauenetal.(2018)XXXstudiesGraffetal.(2018)XXXLerchetal.(2019)XXBrodtmannetal.(2020)XXXFalckandKoenen(2020)XXKoenenandHeckler(2020)XXXNote:“X”meansthattheIIoTPtypeisincludedintherespectivestudy.numberandtypesofIIoTPs,thefollowingfourwerecommonlyfoundbydifferentauthorsandthereforeconsideredthemostrelevant:DigitalMarketplaces(1),ConnectivityPlatforms(2),Hyperscalers(3),andIntegratedIIoTPs(4)(seeTable13.1).Followingthat,wedescribetheIIoTPtypeswithregardtotheirtechnicalandorganiza-tionalelements(seeFigure13.2).First,weusethreecommonplatformlayersthatareusuallybuilduponeachotherinordertodescribetheunderlyingarchitecture(Villegasetal.,2012):Infrastructure-as-a-Service(IaaS),Platform-as-a-Service(PaaS),andSoftware-as-a-Service(SaaS).TheIaaSlayer(A)providesthedatastoragesystem,thatis,thetechnologicalbasistodeploystorage,networkandservercapacitiesthatareadjustableintermsofscalabilityandcustomization.PaaSsolutions(B)offertheoperatingsystemonwhichactorsareabletobuildapplicationsandgenericanalysistoolsviaopenapplicationprogramminginterfaces(API).SaaS(C)representstheapplicationlayer,whichincludesspecialized,single-purposesoftwareapplicationsthataredeliveredtothecustomer.Second,weassignadiversesetofvariousactorgroupstothedifferentIIoTPtypes:platformoperator(I)ashostoftheplatform;platformusers(II)thatareprovidersandcustomers;plat-formcomplementors(III),e.g.,third-partydevelopers,machinemanufacturers;platformena-blers(IV),e.g.,digitaltechnologies,Internet,connectivitydevices;andplatformintegrators(V),e.g.,consultancies,systemintegrators(ObermaierandMosch,2019;Paulietal.,2021).InFigure13.2weportraytherelevantplatformactors(I‒V)andplatformlayers(A‒C)interactingonthedifferentIIoTPtypes(1‒4),ultimatelyformingthedigitalbusinessecosys-temofIIoTPs.WespecifythevariousIIoTPtypesinthefollowingandguidethereaderbyconstantlyreferringtothedifferentnumberedactorsandelementsinFigure13.2.PhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

200Digitalplatformsintheindustrialsphere:valuecreationlogicsandplatformtypes185DigitalMarketplacesDigitalMarketplaces(1)aretwo-sidedmarketsforphysicalordigitalproducts/servicesandaimtoefficientlyconnectprovidersandcustomers,whointeractinadyadicrelationship.Manyhavebeenoperatinginthemarketforseveralyears,eitherastraditionalcompany-ownedonlinestores(e.g.,steeltraderKlöckner&Co.)oraspuree-commercemarketplacesforphys-icalproducts(e.g.,MercateoandAmazonBusiness).Morerecently,industrialdataplatformshaveemerged(e.g.,TelekomDataIntelligenceHub)thatofferdatasetsaimingtoincreasevaluecreationandproductivityinindustrialcompanies(JonesandTonetti,2020).Moreover,certainDigitalMarketplacesactasbrokersforsupplychainandlogisticsservicesbetweencarriersandmanufacturers(KoenenandHeckler,2020).DigitalMarketplacesusuallyoperateintheSaaSlayer(C)andlackthird-partycommunityinvolvement(III),whichreducestherelevanceofopensourcesoftwareandAPIs.Theyratherfocusontheefficientconnectionoftheplatformusers(II)andgenerallydonotofferownproductsordata.ViaInternettechnology(IV)theyensureanefficient,inmanypartsautomated,procurementprocess(e.g.,C-parts),thusreducingthecomplexityinB2Bbusinessrelationships.Mercateo,AmazonBusiness,SAPAriba,andAlibabaarewell-knownexamples,whicharedrivingthedevelopmentofonlinepurchasingforcompanies(PanafieuandBreitenstein,2018).Platformintegration(V)isoftencarriedoutbytheplatformoperatoritself.ConnectivityPlatformsConnectivityPlatforms(2)arepurelydigitaltransactionplatformsintheformoftwo-sidedmarketswithdyadicrelationshipsbetweendifferentmachinesand/orhumans(II)thatenabledataexchange,usuallyattheshop-floorlevel.Theyaimtoachieveefficiencygainsinproductionthroughprocessinnovation,ultimatelyleadingtotheestablishmentofasmartfactory.Theinstallationofsensortechnologyandlocalnetworks(IV)onthemachinesisanessentialcomponenttofacilitatetheconversionofanaloginformation(e.g.,temperatureandvibrations)intodigitalform(Jovanovicetal.,2021).Theresultisanembeddedcyber-physicalsystem(CPS),which,incombinationwithmanufacturingexecutionsystems(MESs),enablestheconnectionofthephysicalwiththeinformationtechnologyworld(Obermaieretal.,2019).ConnectivityPlatformsusuallyconstituteSaaSsolutions(C)andareadaptedtotherequirementsoftheindividualfirmorevenfactory.Third-partydevelopers(III)areusuallynotinvolved.Inparticular,incumbentindustrialfirmssuchasMaschinenfabrikReinhausenandTrumpfhavedevelopedsuchConnectivityPlatforms,labelledasMR-CMorTruConnect,andoffertheminconjunctionwiththeirownmachines,oftenspecializedinacertaintypeofindustry.Therefore,platformintegration(V)isusuallyconductedbytheplatformoperatoritselformightbesupportedbysystemintegrators.HyperscalersHyperscalers(3)provideIaaS(A)andopenPaaS(B)offerings,thusrepresentingamulti-sidedmarketinwhichthird-partydevelopers(III)areabletocreatedigitalservicesforindustrialcustomers(II).Hyperscalersprovideon-demandstoragetootherIIoTPtypesandindustrialcustomersviapubliccloudtechnology(IV).Theyenablescalabilityoftheindividualcustomerserviceswhileensuringtheoperationandsecurityoftheplatform.AmazonWebServices(AWS),MicrosoftAzure,andGoogleCloudarebyfarthemostimportantHyperscalers(Gartner,2020).Themarketisnowconsideredtobeconsolidatedandoccupiedbyhighlycompetitivecompanies(Brodtmannetal.,2020;Rauenetal.,2018).AWS,Microsoft,andPhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

201186HandbookondigitalbusinessecosystemsGooglehavedeliberatelychosencustomeraccessasHyperscalerstopositionthemselvesintheindustrialmarketandgainaccesstodata,whichinturnservetogenerateadditionalsuitableserviceofferings(Riasanowetal.,2020).Theyoffernotonlystoragecapacity,butalsothecorrespondinganalysistoolsandvariousdigitalservicesviaaPaaSsolution.Basedonthis,ausuallyhugedevelopercommunityprovidesSaaSofferings,oftenenabledbyopensourcetools(e.g.,BotoasAWSSDKforPython).ThisallowscompaniesusingHyperscalerstoeitherrunexistingapplicationsdevelopedbythecommunityortoprogramtheirowncustomapplications.HyperscalersusuallyonlybuildownSaaSsolutions(C)iftheyarestandardizedandthusscalable.Theplatformintegration(V)isoftenindirectlysupportedbyconsultanciesorprovidersofIntegratedIIoTPs,sinceHyperscalersformthebasisonwhichmanytheirservicesrun.IntegratedIIoTPsIntegratedIIoTPs(4)operateinacloudoredgesetting(IV)andenabletheextraction,struc-turing,andanalysisofmachineorproductdata(II)attheshop-floorlevel(processinnovation),ortheconnectionofmachinesatthecustomerlevel(productinnovation).Theyoffertailoredapplicationscreatedbythemselvesorathird-partydevelopercommunity(III),formingamulti-sidedmarket.ThisIIoTPtypeiscalledIntegratedIIoTP,asitisoftenprovidedbyincumbentindustrialcompaniesembeddedintheirexistingphysicalproductandserviceport-folio(V).IntegratedIIoTPsarepositionedinthePaaS(B)andSaaS(C)layers;theIaaSlayerisusuallyprovidedbyHyperscalers.ProminentexamplesareSiemensMindsphereandBoschIoTSuite.Thesetwoplatformscoverabroadspectrumofservices,operateacrossdifferentindustries,andservenotonlymanufacturingcompaniesbutalsoothersectors(Arnoldetal.,2021).Theyconstituteopenplatformsforusersandareoftenbasedonpay-per-use.Therefore,themonetizationmodelisverysimilartothatofHyperscalers.SincetheyaredependentonHyperscalersincloudcomputing,IntegratedIIoTPstendtobelocatedatthedownstreamendoftheIIoTPvaluecreationprocess.Forinstance,SiemensMindsphereusesAmazonWebServices(AWS),MicrosoftAzure,andAlibabaCloudforcloudservices.Instead,IntegratedIIoTPsfocusoneasy-to-usePaaSsolutionsandcustomizeddigitalservicesintheSaaSlayerforspecificindustriesthroughtheirdomainknowledgetodifferentiatefromHyperscalers.ValueCreationLogicsofIIoTPTypesBasedonthedescriptionoftheidentifiedIIoTPs,weassignthevaluecreationlogicsderivedfromCIoTPstothedifferentIIoTPtypes(seeTable13.2).WeobservethatDigitalMarketplaces,Hyperscalers,andIntegratedIIoTPsexhibitanumberofvaluecreationlogics.However,thedominantvaluecreationlogicofcommunitycurationandgovernanceforthird-partycomplementors,whichcomeswiththeintegrationofthePaaSlayer,isonlyvisibleatHyperscalersandIntegratedIIoTPs.Therefore,werefertoHyperscalersandIntegratedIIoTPsasIIoTPsinthenarrowsense,andtoConnectivityPlatformsandDigitalMarketplacesasIIoTPsinabroadersense.IIoTPsinthebroadersenseDigitalMarketplacesshowmanyvaluecreationlogicsofCIoTPs,particularlyintensedemand-sidenetworkeffects.Therefore,thesuccessfulovercomingoftheinitializationproblemdetermineshoweffectivelynetworkeffectsarecreated.ToillustratehowDigitalPhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

202Digitalplatformsintheindustrialsphere:valuecreationlogicsandplatformtypes187Table13.2AppliedvaluecreationlogicsofIIoTPsIIoTPclassIIoTPtypeBasiccharacteristicsSupportingvaluecreationlogicsDominantvaluecreationlogicsDigitalgoodExternalInitializationOpennessEcosystemCommunityNetworkvalueeffectscreationIIoTPintheDigitalXXXXXbroadersenseMarketplacesConnectivityXXPlatformsIIoTPintheHyperscalersXXXXXXXnarrowsenseIntegratedXXXXXIIoTPsMarketplacesapplyvaluecreationlogics,wetakethemarketleadingB2Be-commerceplat-formMercateoasanexample.Mercateoisapuretransactionplatformbetweentheproviderandcustomersides,andemphasizesitsneutralitybetweentheinvolvedactorsasaparticularlyattractiveadvantage.Theinvolvementofathird-partycommunity(e.g.,developers)andhencethemanagementofopennessarelackinghere.Thelowaccessfeesanduseoftransactionfeesareintendedtoovercometheinitializationproblemandpromotedirectandindirectnetworkeffects.Inordertomitigatethedangerofbeingexchangeable,Mercateotriestogeneratealock-ineffectintheformofaverticalintegration,suchastheintegrationintothecustom-er’sprocurementprocesses.ThemoreprocessesthecustomeroutsourcestotheIIoTPandthedeeperitisintegratedintothecustomerprocessesanditsdigitalbusinessecosystem,thegreaterthedependencyandthusthelock-ineffect.Inthesecases,switchingtoacompetitorisonlyassociatedwithveryhighcostsandisthusmadealmostimpossible.Therefore,thedigitalbusinessecosystemembedmentconstitutesanimportantfactortomaintainnetworkeffectsandultimatelycompetitiveadvantage.Thisissimilartothee-commerceCIoTPssuchasAmazonorZalando,thatalsouseembedmentstrategiessuchassequencingtolocktheircustomersin.Incontrast,ConnectivityPlatformsarenotaboutinducingasmanytransactionsofdifferentactorsaspossibleontheplatform,orprovidingthebasisforinnovation,butaboutorganizingasimpleandefficientconnectionviaopeninterfacesbetweendifferentsystemstoafunction-ingoverallconstruct.Therefore,valuecreationlogicsofCIoTPsplayarathersubordinateroleonConnectivityPlatforms,astheyareusuallycustomizedtoacertainmanufacturingcompany.InordertoillustratethemodeofoperationofaConnectivityPlatforms,MR-CMisexplainedexemplary.MR-CMisaweb-basedMESandfocusesonthemachiningindustry.TheMESensuresacross-stationdataflowregardingtheproductionresourcesandaccom-paniestheorderprocessthroughout.Thesystemprovidesemployeeswithuserinterfacestosupporttheirdecisions.TheMR-CMultimatelymonitorstheentireproductionresourcecycle.Programs,tools,measuringandtestingequipment,andtheassociateddataarepassedthroughproductioninapaperlessprocess(Obermaieretal.,2019).Thegoalistoestablishaninde-pendentlyorganizedproductionthatisabletoproduceverysmallbatchesuptobatchsizeone.Frequently,theprocessingoftheaccumulateddatatakesplaceon-siteorinaprivatecloudsetting,sinceapubliccloudconnectionisoftenundesirable(e.g.,fordataprotectionreasons),orsimplyunnecessary,or(still)tooslow.Inthisso-callededgecomputing,theprocessorisinstalleddirectlyattherelevantmachineandthusenablesreal-timeprocessingofthedata.PhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

203188HandbookondigitalbusinessecosystemsIIoTPsinthenarrowsenseYetthesituationisdifferentwithHyperscalers.Duetothefocusonscalablesolutionsandlargedevelopercommunities,valuecreationlogicsofCIoTPshaveahighrelevanceforthem.Communitycurationandgovernanceplaysacrucialrole,sincethird-partydevelopersconstituteanimportantsourceofcomplementaryinnovationonHyperscalers.Supportingthis,Hyperscalersoftenrelyonopenstandardsandopensourcetools.Additionally,supply-sidenetworkeffectsplayamajorroleinamarketdominatedbyU.S.-basedtechnologyfirms.Themorestoragecapacitythatcanbebuiltupintheformofserverparks,thelowerthestoragecostspergigabyteandthegreaterthecompetitiveadvantage.Moreover,directandindirectdemand-sidenetworkeffectsrepresentanimportantvaluecreationlogictoreachmarketdominance.Afterall,themorethird-partydevelopers,thebettertherangeofapplications;andthebettertherangeofapplications,themorevaluabletheIIoTPistopotentialcustomers.Theinitializationproblemisaddressedbytheinfrastructure-givingcharacterofaHyperscalerforotherIIoTPtypesandspecificmeasures.Forinstance,AWSandMicrosoftAzuresubsidizethecustomersidewithfreeplatformaccessandofferselectedservicesfreeofchargeforthefirst12months.Afterthat,billingisusage-based(pay-per-use)wherebythepricepergigabytedecreaseswithhigherusageandthusvolumediscountsaregranted.Fortheproviderside,platformaccessislimitedandonlyavailableforafee.Throughthisbarriertoentryandappropriatecuration,thequalityofthedevelopercommunityisensuredtoultimatelyachieveanembeddinginadigitalbusinessecosystem.IntegratedIIoTPsprovideSaaSandPaaSofferingsthatareoftentailoredtoandintegratedwithspecificmanufacturingindustries.ThenumberofpotentialcustomersofeachSaaSsolutionontheIIoTPisnaturallylimitedtothenumberofactorsinaparticularindustry,astheyareusuallynottransferabletootherindustries.Therefore,networkeffectsaretypicallylowandnotabletoworkaseffectivelyaswithHyperscalers.Buildingonthis,theinitializa-tionproblemisnotamajorconcern,astheIntegratedIIoTP,whichistypicallyprovidedbyincumbentindustrialmanufacturers,leveragesexistingsupplierandcustomerrelationshipstoattractinitialuserstotheirplatform.However,toprovideawiderangeofspecificservicesforcertainindustries,IntegratedIIoTPstrytoestablishopendigitalbusinessecosystemsviatheirPaaSsolutionscontainingdifferentthird-partydevelopmentcommunities.Asaresult,communitycurationandgovernanceplayanimportantroleinIntegratedIIoTPs.However,sinceIntegratedIIoTPsuseHyperscalersasIaaSplatformlayer,theydependonthemtoaconsiderableextent.Inaddition,bothIIoTPtypesincreasinglycompetewitheachotherinthePaaSlayer,whichmayleadtoadjustmentsintheirofferingsandtargetgroups.ClassificationofIIoTPtypesBasedonthepreviousargumentsandcondensedtothetwodominantvaluecreationlogicsofnetworkeffectsandcommunitycurationandgovernance,wedevelopthefollowingclassifica-tionmatrixofthefourIIoTPtypes.Thematrixrelatestwovariables,namelytherelevanceofcommunitycurationandgovernance(low/high)andthenetworkeffectpotentialoftransactiongood(low/high)(seeFigure13.3).Indoingso,wesummarizethatthetwodominantvaluecreationlogicsarenotapplicabletoallfourIIoTPtypes,andthusvaluecreationlogicsofIIoTPsmustbevieweddifferentlyfromthoseofCIoTPs.PhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

204Digitalplatformsintheindustrialsphere:valuecreationlogicsandplatformtypes189Figure13.3ClassificationofIIoTPtypesbasedondominantvaluecreationlogicsDISCUSSIONANDCONCLUSIONPreviousresearchhasprimarilyinvestigateddigitalplatformsinB2Cindustries,ignoringthepeculiaritiesofIIoTPsinindustrialB2Bcontexts(Gebaueretal.,2020).OurstudyaddressesthisresearchneedandextendsexistingresearchbyfocusingonIIoTPsandmakingthefollow-ingtheoreticalandmanagerialcontributions.First,wespecifydigitalplatformsasresearchobjectsandthusaddtotheISliterature(deReuveretal.,2018;Heinetal.,2020)byidentifyinganddescribingactors,platformlayers,andfourdifferentIIoTPstypes,referredtoasDigitalMarketplaces,ConnectivityPlatforms,Hyperscalers,andIntegratedIIoTPs.Thereby,weaddresstheconceptualambiguityintheliteratureregardingthelackofdefinitionsandcomparabilityofdigitalplatforms(deReuveretal.,2018).Specifically,bysynthesizingexistingclassificationapproaches,wecomplementpreviousstudies(e.g.,Paulietal.,2021)bydevelopingaholisticoverviewoftheIIoTPeco-systemandcombiningthiswithexplicitcontextualizationthroughspecificIIoTPtypes,layingthefoundationforcreatingfurthervaluableinsights.Second,weenrichthemarket-basedliteratureondigitalplatforms(Parkeretal.,2016)anddigitalbusinessecosystems(Senyoetal.,2019;StanleyandBriscoe,2010)byapplyingvaluecreationlogicsofCIoTPstodifferentIIoTPtypes.Thereby,weshowthatDigitalMarketplacesexhibitsimilarvaluecreationlogicscomparedtothoseoflong-establishedandwell-understoode-commerceCIoTPs.Therefore,thepotentialtogainnewinsightsthroughfurtherresearchofthisIIoTPtypeisratherlimited.Incontrast,ConnectivityPlatformsshowhardlyanyapplicationofCIoTPs’valuecreationlogics,leadingtotheimplicationthattheyareratherdesignedwithafocusontechnicalnetworkingandshouldbeunderstoodasaspe-cificandcustomizedIIoTPinanarrowlydefinedareaofapplication(e.g.,singleplant).BothIIoTPtypesareconsideredasIIoTPsinabroadersense,sincetheyhaveincommonthatPhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

205190Handbookondigitalbusinessecosystemstheylackthird-partycomplementorswhicharenecessarytogeneratevalueaddedinahighlyheterogeneousindustriallandscapeonalargerscale(Paulietal.,2021).ThisisopposedbyIntegratedIIoTPsandHyperscalersasIIoTPsinanarrowsense,sincetheyconsiderablydependoninnovationsfromthird-partydevelopercommunities.However,networkeffectsarelowonIntegratedIIoTPsastheylackstandardizedservicesfittingtoabroadcustomerbase.SolelyHyperscalersareabletoachievebothhighthird-partyparticipationandhighnetworkeffects,resultinginthewinner-takes-alllogicalreadyvisibleintheIaaSlayer.Third,weprovideabasisforfutureresearchbyderivingaclassificationmatrixbasedonthetwodominantvaluecreationlogicsofnetworkeffectsandcommunitycurationandgovernance.HyperscalersandIntegratedIIoTPsinparticularexhibitincreasinglyinterwovenbusinessrelationshipsthatincorporatedivergingpositionsinthevaluecreationprocessandcoopetitionsituations,requiringamorenuancedinvestigation.InlinewithrecentresearchonIIoTPs(Heinetal.,2020;Paulietal.,2021),itisthereforestronglyrecommendedtoexaminestrategicmeasuresanddevelopstrategictrajectoriestoexplainhowvariousvaluecreationlogicscanbestbeleveragedandhowthistranslatesintofutureIIoTPmarketdynamics.Fourth,bydescribingtheactorsandvaluecreationlogicsofdifferentIIoTPtypes,wealsomakeconsiderablemanagerialcontributions.WeguidemanagersofIIoTPfirmsregardingwhichtechnicalandorganizationalelementstheyshouldfocusontonavigatethestormywatersofhighlycomplexIIoTPmarketsanddigitalbusinessecosystems.Moreover,byidentifyingsignificantdifferencesinthevaluecreationlogicsofthefourIIoTPtypes,ourstudyprovidesabasisformanagerstodecidewhethertoinvestinbuildingandmaintaininganIIoTP,andifso,whateffortstomakeandwhattofocuson.REFERENCESAdner,R.(2017).Ecosystemasstructure:anactionableconstructforstrategy.JournalofManagement,43(1),pp.39–58.Armstrong,M.(2006).Competitionintwo‐sidedmarkets.RANDJournalofEconomics,37(3),pp.668–691.Arnold,L.,Jöhnk,J.,Vogt,F.,andUrbach,N.(2021).AtaxonomyofindustrialIoTplatforms’architec-turalfeatures.InternationaleKonferenzWirtschaftsinformatik,pp.1–17.Bakos,Y.(1998).TheemergingroleofelectronicmarketplacesontheInternet.CommunicationsoftheACM,41(8),pp.35–42.Bohr,K.(1996).Economiesofscaleandeconomiesofscope.In:W.Kern,H.H.Schröder,andJ.Weber(eds),HandwörterbuchderProduktionswirtschaft,2ndedn.Stuttgart:Schäffer-Poeschel,pp.375–386.Brodtmann,T.,Schnittler,V.,Becker,M.,Herring,D.,Mayer-Haug,K.,andSchleyer,T.(2020).KundenzentrierungalsChancefürdendigitalenDurchbruch:WassichdieEndkundenindustrievomMaschinenbaubeidigitalenPlattformenundMehrwertdienstenwünschen.FrankfurtamMain:VDMA.Caillaud,B.,andJullien,B.(2003).Chicken&egg:competitionamongintermediationserviceprovid-ers.RANDJournalofEconomics,34(2),pp.309–328.Chen,M.,Mao,S.,andLiu,Y.(2014).Bigdata:asurvey.MobileNetworksandApplications,19(2),pp.171–209.Clement,R.,andSchreiber,D.(2016).Internet-Ökonomie.Wiesbaden:Springer.Cusumano,M.A.,Gawer,A.,andYoffie,D.B.(2019).TheBusinessofPlatforms:StrategyintheAgeofDigitalCompetition,Innovation,andPower.NewYork:HarperCollinsPublishers.Cusumano,M.A.,Yoffie,D.B.,andGawer,A.(2020).Thefutureofplatforms.MITSloanManagementReview,61(3),pp.46–54.PhilippMoschandRobertObermaier-9781839107191DownloadedfromPubFactoryat05/28/202209:56:56AMviaColumbiaUniversityLibrary

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20914.Customerrolesindigitalbusinessecosystems:differentformsofcustomercontributioninvaluecreationKarolinaBährINTRODUCTIONCustomerscontributeessentialresourcestovaluecreationindigitalbusinessecosystems(DBEs)andarecriticalactorsthatshapesuchecosystemsinmanifoldways.AccordingtothedatamanagementplatformproviderDomo,theircontributionsreachedanewpeakin2020,withInstagramusersposting347222stories,YouTubeusersuploading500hoursofvideo,Facebookusersuploading147000photos,andWhatsAppuserssharing41666667mes-sages,everyminute(domo.com,2020).Indeed,withoutsuchcustomercontributions,mostwell-knownDBEswouldlookverydifferent.Interestingly,despiteitsimportancetoDBEs,researchisonlybeginningtoaddressandunderstanddigitalresourceintegration(Ngetal.,2019).Avastbodyofliteratureexistshighlightingcustomers’roleinvaluecreation(Gummessonetal.,2014;NambisanandBaron,2009;Ngetal.,2019)andthechallengesinvolvedinman-agingessentialresourcesoutsideafirm(Hiltonetal.,2013).Yet,onlyafewarticlesconsiderwhatcustomerscontributetovalueco-creation.Intheirliteraturereviewontherolesandresourcecontributionsofcustomersinvalueco-creation,AgrawalandRahman(2015)addi-tionallyfindthatmoststudiesoncustomers’contributionsarelimitedtooneortwocustomerroles,andhence,intheirpapertheycallformoreresearchonthedifferentcustomerrolesandtheirdegreeofcontributiontovalueco-creation.Inparticular,literatureontheunderstandingofvaluecreationthatovercomesthedistinctionofcustomersorfirmslookingbeyonddyadicinteractionsisstillunderrepresented(Beatty,2019;Hollebeeketal.,2018;Fehreretal.,2018;ÅkessonandEdvardsson,2018).Despitethegrowingbodyofliteratureoncustomerrolesinvalueco-creation,asystematiclinkbetweencontributedresources,interaction,andtheresult-ingcustomerrolesinDBEsisstillmissing.Therefore,thischapter’scentralresearchquestionis:WhichcustomerrolesemergeinDBEsaccordingtocustomers’resourcecontributiontovaluecreation?Inparticular,thischapterseekstodevelopaframeworkofthedifferentcustomerrolesaccordingtotheirco-creationinteractionsandtheirco-creationintegrationofresources.Ascustomers’contributionshaveespeciallymoreimpactinDBEs(PrahaladandRamaswamy,2002),itisessentialtounderstandthedifferentrolesofco-creatingcustomers.Customers’motivesforparticipatinginco-creationactivitiesaregenerallyrelatedtoperceivedbenefits(NambisanandBaron,2009)andtheirevolvingexperience(RamaswamyandOzcan,2018).However,individualcustomersmaydifferintheirmotives(ÅkessonandEdvardsson,2018)andintheirperceptionsofthebenefitsandexperience.Thecoordinationofvaluecrea-tioninDBEsexceedstheisolatedoptimizationofproducts,andconfrontsmanagerswithnew194KarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

210Customerrolesindigitalbusinessecosystems195challenges(Parkeretal.,2017)duetotheneedtoorchestratecustomers’co-creationactivities.Co-creationoccursinseveralways,andtounderstanditinthecontextofDBEsitisvitaltoidentifyanddifferentiatethedistinctcustomerroles,becauseeachrolemaycausedistinctchallengesforfirms(RaynaandStriukova,2021).Inreadingthischapter,practitionerswillbecomemoreawareofthedifferentcustomerrolesandmaybebetterabletochooseamatchingconfigurationfortheirDBEtoorchestratetheirco-creationandresourceintegrationactivities.Thetheoreticalcontributionofthischapterliesinthefurtherelaborationoftheco-creationactivitiesofcustomersinDBEs,resultingindefiningeightidealtypesofdistinctcustomerroles.Inthefollowing,thischapterpresentsthetheoreticalframeworktounderstandthedifferentcustomerrolesinDBEsbydefiningtheconceptofaDBE,whileintroducingcustomersasessentialactors,anddiscussingsomeexemplaryreal-worldcasestodemonstratetheserolesinaction.Itintegratescustomers’contributionstothevaluecreationofDBEsbydevelopingdifferentcustomerrolesandelaboratingpotentialfutureresearchopportunities.Theremainderofthischapterisorganizedasfollows.Itfirstpresentsthetheoreticalframeworkbydefiningthecentralconcepts,discussingpastresearchoncustomerroles,andintroducingtwokeyfacetsofco-creation:theinteractionbetweencustomersandtheotherecosystemactors,andtheresourceintegrationofcustomers.Thederivedtheoreticalframeworkcompriseseightcus-tomerroles,whichareexplained.Thechapterthenbrieflyintroducessomeexemplarycasesforillustrationpurposesandpresentscasedescriptionsfortheeightcustomerrolesinthesereal-worldexamples,aswellasanexplanationoftheresourceintegrationandlevelofinter-actionintherespectivecases.Thecentralfindingsarediscussednext.Theconcludingsectionhighlightsthecontributionthischaptermakestothefield,explainsthestudylimitations,andpointsoutsomeopportunitiesforfutureresearch.THEORETICALFRAMEWORK:CUSTOMERROLESINDIGITALBUSINESSECOSYSTEMSDefiningDigitalBusinessEcosystemsThinkingaboutbusinessusingtheanalogyofanecosystemgoesbacktoMoore(1993,1996),whosuggests:acompany[may]beviewednotasamemberofasingleindustrybutaspartofabusinessecosystemthatcrossesavarietyofindustries.Inabusinessecosystem,companiesco-evolvecapabilitiesaroundaninnovation:theyworkcooperativelyandcompetitivelytosupportnewproducts,satisfycustomerneeds,andeventuallyincorporatethenextroundofinnovations(Moore,1993,p.76).Therefore,essentialtotheconceptis,first,thenotionthatcompetitiontakesplacebetweenecosystemsacrossindustrialbordersinsteadofamongfirmsinoneindustry(Moore,1996).Second,acombinationofcooperativeandcompetitiverelationshipscharacterizesbusinessecosystems;alsocalled“coopetition”(Ritalaetal.,2016;Baconetal.,2020).Third,businessecosystemsemergearoundafocalvalueproposition(Adner,2017)thatmayincorporateinno-vativeproductsorservicesandthatsatisfiescustomerneeds.Duetoprogressingdigitalization,theDBEconceptwasdevelopedtoaccountfordigitaltechnologiesmoreexplicitly.Matopoulosetal.(2012)defineaDBEasasystemthatpassesKarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

211196Handbookondigitalbusinessecosystemsthroughseveralevolutionphases,organizesitself,andincludesasoftwarelayer.Intheirmorerecentwork,Senyoetal.(2019)defineaDBEas“asocio-technicalenvironmentofindividu-als,organisationsanddigitaltechnologieswithcollaborativeandcompetitiverelationshipstoco-createvaluethroughshareddigitalplatforms”(p.53).Further,DBEscanentailmultipleactorsbesidesthefocalfirm,forexample,enterprisepartners,end-usercustomers,anddevel-opercustomers(RamaswamyandOzcan,2018).Summingup,thenewrealmsofcompetitionareecosystems(Moore,1996),insidewhichcoopetitioncanemerge(Ritalaetal.,2016;Baconetal.,2020)aroundthefocalvalueproposi-tion(Adner,2017).Finally,digitalizationaddsasoftwarelayerordigitalplatformasafourthdefiningelement(Matopoulosetal.,2012;Senyoetal.,2019)ofaDBE.Inthestrategyliteratureonecosystems,theideaofvalueco-creationisembeddedinAdner’s(2017)definition,whichstatesthatseveralecosystempartnersjointlyco-createthefocalvaluepropositioninmultipleinteractions,resultinginanalignmentstructure.Inasimilarvein,theresearchstreamonserviceecosystemstendstobeconcentratedonco-creationfromaservice-dominantlogicperspective,lookingatdyadsofresourcecontributionandbenefitextraction(AutioandThomas,2020).AccordingtoVargoandLusch(2010),serviceecosystemsseektoaddressthreeaims:(1)toofferco-producedservices;(2)toprovideser-vicesthroughmutualengagement;andfinally(3)theco-creationofvalue.Inthiscontext,LuschandNambisan(2015,p.162)describeco-creationasthe“processesandactivitiesthatunderlieresourceintegrationandincorporatedifferentactorroles.”Thisdefinitionhighlightsco-creationasincludingthreeelements—actors,resources,andintegration—whichwillguidetheremainingtheoreticalpartofthischapter.CustomersinDigitalBusinessEcosystemsBusinessecosystemsincorporatetherelationshipswithandtheresourcesofcustomers(VargoandLusch,2010;Moore,1993;Adner,2017).Participatingecosystemactorstrytocapturevalueandcontributetovaluecreation.Therefore,thecategorizationofproducersversuscon-sumersbecomesblurryorcanevendisappearcompletely(VargoandLusch,2010).Indeed,somescholarsacknowledgethisdevelopmentbyreplacingtheterminologyof“businesses”and“customers”with“actors,”resultinginactor-to-actorinteractions(Beirãoetal.,2017).Digitaltechnologieshaveacceleratedandamplifiedthisdevelopmentofmoreactivecus-tomerroles(PrahaladandRamaswamy,2000),forexamplebyenablingself-serviceondigitalplatforms(Mostafa,2016).Theemergentactivitiesofcustomersnowtranscendthebordersbetweenproductionandconsumptionandhavebeenlabeled“prosumption”(e.g.,Toffler,1980;Kotler,1984)iftheirproductionactivitiesresultinconsumption(RitzerandJurgenson,2010).RamaswamyandOzcan(2018)alsotranscendthebordersbetweenproductionandconsumptionwiththeirconceptofdigitalizedinteractiveplatforms.TheyarguethatideasfortheconfigurationofdigitalizedinteractiveplatformscanoriginatefromanywhereintheDBE,andarenolongerdependentontheestablisheddistinctionbetweenproductionandconsump-tion,orbetweentheproducersandconsumersofgoodsandservices.Xieetal.(2008)describeprosumptionasthevalue-creationactivitiesofconsumersthatgenerateproducts,followedbytheconsumptionactivitiesandexperiencesofthesameconsumers.AcknowledgingthatthedistinctionbetweenconsumersandproducerscanbecomeblurryinDBEs,customers’rolesneedtobeclarifiedandfurtherdeveloped.LappiandHaapasalo(2016)presenttheideaofdifferentbusinessecosystemcustomertiers:endcustomers,coreKarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

212Customerrolesindigitalbusinessecosystems197serviceproviders,second-tierserviceproviders,indirectstakeholders,andsupportingserviceproviders.Endcustomersaretheoneswhoconsumetheco-createdvalue;therefore,theirneedsarecentraltotheserviceproviders.Thecoreserviceprovidersarecustomersofthesecond-tierserviceproviders(LappiandHaapasalo,2016).Buildingonthisideaofecosystemcustomertiers,endcustomersandothertypesofcustomerscanintegratetheirresourcesintheco-creationofvalue.Besidescustomertiers,recentresearchhasalsodevelopedtheideaofdis-tinctcustomerrolesinvalueco-creation.Forexample,AgrawalandRahman(2015)identify11roles,rangingfromco-producertoco-tester,basedoncustomers’responsibilities.ÅkessonandEdvardsson(2018)identifyfourarchetypicalcustomerrolesinaself-service-basedsystembydifferentiatingbetweenhighandlowmotivation,andhighandlowknowledge/skills.Thetheoreticalperspectiveofinteractivevaluecreationstressesthegrowingimportanceofcustomersduetotheaffordancesofdigitaltechnologies.Affordancesemergebasedonnumerousstillunrevealedpossibilitiesfornewfunctionalitiesorefficiencygains(Autioetal.,2018).RamaswamyandOzcan(2018)pointoutthatvalueco-creationininteractionsleadstoincompleteofferingsandtheupcomingdistinctionbetweencustomersas“engagingactors”andfocalfirmsas“organizingactors.”CustomerCo-creationinDigitalBusinessEcosystemsTheconceptofvalueco-creationisusedinseveralstudyareas,suchasinnovationorservicemanagementresearch(Gummessonetal.,2014).Centraltovalueco-creationactivitiesistheinteractivevaluecreationbetweencustomersandfirms(Gummessonetal.,2014;VargoandLusch,2010).Co-creationactivitiesaremultifacetedandoccurinmanydifferentforms:forexample,self-service,co-reflection,co-design,andco-recovery(Mostafa,2016);theco-creationofbrandvalue(MingioneandLeoni,2020);andco-creationinnewproductorservicedevelopment(Hoyeretal.,2010).Theactivitiescanspanmultiplefunctionsfromtheco-conceptionofideasandco-design,toco-production,co-distribution,co-maintenance,andco-disposal(Frowetal.,2015).Still,theco-designofinnovationdominatestheperceptionofco-creationandfirmstendtounderrateotherformsofco-creation(Frowetal.,2015).Inthefollowing,abroadconceptualizationofco-creationactivitiesisapplied.Co-productionincorporatesself-service,self-servicetechnology,andahigherlevelofcustomeractivityinresourceintegration(Hiltonetal.,2013).Itisusuallyconsideredaspartofvalueco-creation(Frowetal.,2015;LuschandVargo,2006),orusedasasynonymforit(Payneetal.,2008).LuschandVargo(2006)conceptualizevalueco-creationbydescribingitasanestedconcept.Valueco-creationrepresentsthesuperordinatelevel,whiletheco-creationofvalueandco-productionofvaluerepresentthesubordinatelevel.Further,theystatethattheco-creationofvalueoccursduringconsumption,whereasco-production“involvestheparticipationinthecreationofthecoreofferingitself”(p.284).Althoughsomeauthorsarguethatco-productionisnotpartofco-creation(e.g.,Etgar,2008),thischapterwillapplytheprevailingdefinitionthatbothconceptsareinterrelatedandthatco-productionisoneaspectofvalueco-creation(Frowetal.,2015).Intheremainderofthissection,thecentralideasoftheinteractionsbetweenco-creatingactorsandresourceintegrationwillbeelaboratedinmoredetail.KarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

213198HandbookondigitalbusinessecosystemsLevelofinteractionbetweenco-creatingcustomersandfocalfirmsindigitalbusinessecosystemsGrönroosandVoima(2013)describeinteractionastheparticipationofoneactorinanotheractor’sactivitiesbyphysical,virtual,ormentalcontact.Typically,oneactorwillorchestratetheseinteractionopportunities(GrönroosandVoima,2013;GrönroosandRavald,2011).Whilesuchinteractionsenablevalueco-creation,theymaynotbesufficientforvalueco-creationtounfoldinpractice(GrönroosandVoima,2013).Directinteractionisdescribedasanactive,ongoingcoordinatedprocessthatincludesdialogueandintegratingresourcesfrombothactors.Indirectinteractionistheusageorconsumptionoftheotheractor’sresources(GrönroosandVoima,2013).Thischapterfocusesondirectinteraction,withsuchinteractiondefinedasacoordinatedandcollaborativeprocessinwhichbothactorsintegrateresources.Thedifferentiationbetweeninteractionsinitiatedandcoordinatedbythefirm(labeled“passive”fromthecustomers’perspective)andinteractionsinitiatedandcoordinatedbycustomers(labeled“active”fromthecustomers’perspective)characterizesthecustomerrole.Theideatodifferentiateactiveandpassivecustomerrolesisnotnew;forexample,ÅkessonandEdvardsson(2018)introduceactiveandpassivecustomerrolesanddifferentiatetheserolesbasedoncustomers’motivation.GrönroosandVoima(2013)differentiatetherolesbasedontwodistinctsituations.Inthefirstsituation,thefirmasksthecustomertointegratetheirresourcesintoacollaborativeproductionprocess.Thisactivityislabeledapassiveinter-actionfromthecustomer’spointofviewbecausethecustomerisfollowingthefirm’slead.Inthesecondsituation,thecustomerbecomestheintegratingactorandinitiatestheactivity(GrönroosandVoima,2013),whichcanbeunderstoodasanactivecustomerinteraction.Customerssignaltheirinteractionwillingnessbytheirvoluntarybehavioralactionsorbysigningupforresourceintegrationactivities.Thesecustomer-coordinatedsingletransactionsareexamplesofactivecustomerengagement.IntegrationofresourcesbycustomersindigitalbusinessecosystemsResearchontheintegrationofresourcesinvalueco-creationhasmadesomeinterestingprogressoverthelastfewdecades,butitisstillunclearwhatidealresourceintegrationprac-ticesandprocesseslooklike(Kleinaltenkampetal.,2012).Vargo(2008)commentsontheongoingdiscussiononresourceintegrationinvalueco-creationtostressthatcustomersnotonlyintegrateresourcesinfirms’value-creatingactivities,butalsoco-createvaluethemselvesbycombiningtheresourcesofseveralactors.Customersinthisinstancecanbeunderstoodasresourceintegratorsinsteadofafirm’sresource,followingthepremiseofservice-dominantlogic(Vargo,2008).ThisperspectiveoncustomersasresourceintegratorsallowsamorenuancedunderstandingofcustomerrolesbyacknowledgingthedifferenttypesofresourcesthatcustomerscontrolorowninDBEs.Inservice-dominantlogic,itiscommontodifferentiatebetweenoperantandoperandresources(e.g.,Tariqetal.,2020;Plé,2016;Kleinaltenkampetal.,2012).Operandresourcesaretangibleandstaticresourcesthatenableorsupportactors’activities(LuschandNambisan,2015),whileoperantresourcesareintangible,dynamic,challengingtotransfer,andaffectotherresources(LuschandNambisan,2015),forexample,knowledge,skill,expertise,andtime(Hiltonetal.,2013).Technologyasaresourcehasattractedmuchscientificattention(e.g.,Sklyaretal.,2019)duetoitsambiguity.AkakaandVargo(2014)conceptualizetechnol-ogyasanoperantresource,asoneneedstofullyconsideritspotentialtoactonotherresources;whereasothersdescribeit—forexample,inthecaseofself-servicetechnology—asanoperandKarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

214Customerrolesindigitalbusinessecosystems199resourcebecauseitsvaluecreationisdependentontheoperantresourcesofcustomers(Hiltonetal.,2013).Insummary,thisshowsthatthedifferentiationbetweenoperandandoperantresourcesiscontext-dependentandstilldevelopinginthescientificdiscourse.Theactualtypesofresourceshaveattractedsignificantlylessattentionthantheoverar-chingdifferentiation;althoughsomenoteworthyexceptionsaretheworksbyPlé(2016)andAgrawalandRahman(2015).Concerningthischapter’saimtoidentifyandcomparethedifferentcustomerrolesinvalueco-creation,bothcontributionsdonotseemespeciallyappropriate,duetothemanyresourcetypesandtheessentialoverlapsbetweenthesetypes.Therefore,thetypologystemmingfromtheprosumptionliteraturewillbeappliedhere.Inthistypology,customerscontributefourresourcetypes:time,skill,physicalresources,anddata.Thefirstthreeresourcesarebasedontheseminalworkdefiningprosumption(e.g.,Toffler,1980;Kotler,1984),whilethefourthresource,thatis,data,emergedlaterduetothegrowingimportanceofdigitaltechnologiesinthemodernworld(RaynaandStriukova,2021).Timeandskillareconsideredtypicalexamplesofoperantresources(Hiltonetal.,2013).Theincreasingdigitalizationofbusinessecosystemsintroducesdataasanewtypeofresourceandcallsforitsdifferentiationfromtheotherthreeresourcetypes,thatis,time,skill,andphysicalresources.Accordingtothewisdomhierarchy,dataisalowerformofknowledgewhenreferringtoitsstructureandagency(Rowley,2007).Dataisadigitalrecordingofthings,events,activities,andtransactions,comeswithoutcontextandinterpretation,andisunorgan-izedandunprocessed(Rowley,2007).Incontrast,informationisstructureddatathatcanbeusedforaspecificpurpose(Rowley,2007;DeMauroetal.,2016).Accordingly,datacontainsnocontextualmeaningorusage,whereasinformationisstructuredandpurpose-bound.Inthefollowingcases,thetheoreticaldistinctionbetweendataandinformationmaybecomeblurry.However,rememberingthatinformationispurpose-bounddata,thenthereuseofthisdataforotherpurposesmakesdatathemoreappropriateconceptinthecontextofresourceintegrationinDBEs.Thissectionhasintroducedanddifferentiatedactivefrompassiveinteraction,andarguedthattherearefourresourcetypesthatareessentialtounderstandingresourceintegrationinDBEs.Hence,eightidealtypesemerge,whichareillustratedinTable14.1.Activeinteractioncontains,dependingontheresourcetype,thecustomerrolesofself-serviceseekers(time),contentcreators(skills),product/serviceproviders(physicalresources),anddataproviders(data).Incomparison,thepassiveinteractionlevelentailsservicegraders(time),skillsources(skill),co-producers(physicalresources),anddatagenerators(data).Alleightidealtypesofcustomerroleswillbeillustratedbyreal-worldcasesintheremainderofthischapter.Thelabelsoftheidealtypeswerededucedfromthecases.EXEMPLARYREAL-WORLDCASESAccordingtothetheoreticalargumentspresented,thecaseselectionprocessaimedtochooseDBEsincorporatingthevalueco-creationactivitiesofcustomers.Further,theselectedcasesshouldrepresentthetheoreticallydeducedcategories.Thisapproachfollowstheideaofadiversecasemethod(SeawrightandGerring,2008),whichisinlinewithexploringdifferentrolesthroughcaseexamples(Nylundetal.,2021).Thecaseselectionseekstorepresentthemaximalvariance(SeawrightandGerring,2008)regardingtheeightidealtypes,buildingontheintroduceddimensionsforintegratedresourcesandthelevelofinteraction(Table14.1).KarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

215200HandbookondigitalbusinessecosystemsTable14.1IdealtypesrepresentingdifferentinteractionsandintegratedresourcesIntegratedresourceLevelofinteractionActivePassiveTime(e.g.,self-service,answeringofSelf-serviceseekersinitiatearelationshipServicegraderssharetheiropinion/surveys,gradingofcontent)andactivelyengageininteraction(individualexperienceafteraninvitation(individualtransaction).transaction).Skills(e.g.,personalskillslikeContentcreatorsprovideindividualpartsofSkillsourcesprovidecontentthatotheractorscreativity,writing,video-making,self-producedmaterial(transaction),oftenuseforadditionalpurposes.programming,orsinging)afteraninitialregistration(relationship).Physicalresources(e.g.,realProduct/serviceprovidersinitiatetheCo-producersinitiatetherelationshipbyestate,cars,products,3Dprinters,relationshipbyregisteringandinitiatetheenteringintoacontractbutdonotinitiatepower-generatingorenergy-storagetransactionbylistingtheiroffer.singletransactions(ongoingnature),devices,hardware,technology)coordinationperformedbyothers.Data(e.g.,purposefulself-producedDataprovidersinitiatetherelationshipbyDatageneratorsinitiatetherelationshipbydataorlocalinformationontrafficregisteringforservicesandsharedataonregisteringforservices;datagenerationandjams,preferences,usagepatterns)individualevents(e.g.,runningtracks,communicationworkinthebackground.coronavirusinfection,bugs).DBEsmayentaildifferentvaluecreationopportunities,resultinginseveralvaluepropositionsandco-creationactivitiesinthesameecosystem(RamaswamyandOzcan,2018).Hence,thesameecosystemmaybeanexampleoftwo(ormore)distinctcustomerroles;forexample,oneactormightactivelyintegratetheirtimeandskillindifferentco-creationsituations,becausethesameactorscanplaydifferentrolesdependingonthespecificsituation(ÅkessonandEdvardsson,2018).Customers’IntegrationofTimeCustomersactivelyintegratetheirtimetoco-createself-serviceexperiencesbyusingself-servicetechnology(Hiltonetal.,2013),andthereforetheybecomeself-serviceseekers.ING,alargedirectbank,providedaround9.5millioncustomerswithbankingservicesin2019withoutactuallypossessinganyphysicalservicepoints,makingINGthemostsignificantdirectbankinEurope(ING,2020).Itsbankingservicesinclude,forexample,moneytransfers,mobilepayments,credit,andinsuranceservices,andareembeddedinaDBEcomprisingvariouspartnersofING,suchasVisa,GooglePay,andApplePay.However,themostcrucialresourceinonlinebanking’sDBEseemstobethecustomers’time.Customersactivelyinte-gratetheirtimetoco-createself-serviceexperiencesbyinstructingtheirbankingtransactions;forexample,transferringmoney,buyingandsellingshares,installinglimits.Customersarewillingandcapableofdoingtheirbankingtransactionsbythemselves,whichisanessentialpartofonlinebanking’svaluecreation.Theactivecustomersprimarilyintegratetheirtime(Payneetal.,2008),resultinginaperceivedco-createdvalueofbetterandmoretimelyinfor-mation,morecontrol,andahigherlevelofconvenience(Hiltonetal.,2013).Theintegrationofcustomers’timeduringthedigitalself-serviceisactivebecausetheactorsinitiatetherela-tionshipbybecomingcustomersoftheDBEs’offeringandbyinitiatingthesingletransaction;forexample,byloggingintotheironlineaccounttobuyshares.AnotherexampleoftheactiveintegrationoftimecanbeseeninGoogleOpinionRewards,anapplicationinGoogle’sDBE.Here,mainlyend-usercustomersanswerthesurveyques-tionsofpartnerfirmsordevelopercustomerstoearnsmallpaymentsforcompletingeachKarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

216Customerrolesindigitalbusinessecosystems201mini-survey.CustomerscanusetheirearningstopayintheGooglePlayStore.InSeptember2020,thereweremorethan50millioninstallationsofthisapplicationonGooglePlay(Google.com,2020).Onceinstalled,andafteransweringaninitialsurveywithpersonalquestions,theapplicationwilloccasionallysendmini-surveyson,forexample,watchedYouTubecontent,visitedplaces,orpersonalhabits.Initially,thecustomerroleisactivebecausecustomersdecidetousetheapplicationandregistertoparticipateinmini-surveys.Here,participationinthesemini-surveysisnotaby-product,butrathertheexperiencethatisco-created.Lateron,Google,whichwillinviteselectedcustomerstoparticipateinspecificmini-surveys,initiatestheongoinginteraction.Sooverallthecustomersinitiatetherelationship,butlateronthefirmorchestratestheindividualinteractions.Thecustomerrolebecomeslessactiveasthecustomersfollowtheinvitationtoparticipateinselectedmini-surveys.Regardingthecontrib-utedresources,thecustomersmainlycontributetheirtimetoanswerthesurveyquestions,astherearenospecificskills,knowledge,orexpertiserequiredtoparticipate.Comparedtothefollowingexamplesofpassivetimeintegration,itisinterestingthatcustomersdedicatetheirtimeveryconsciouslytothisactivityofansweringmini-surveys,anditisnotaby-productofotherservices.Netflix,AmazonPrime,Wattpad,andmanyotherDBEsorchestratetheintegrationofcustomers’timeasservicegraders,resultingintheirpassiveintegrationoftimeinvalueco-creation.Thisintegrationoftimeispassivebecauseittakesplaceparalleltoorafterthemainactivity.Themainactivitymaybewatching,reading,buying,orsearchingtheweb.Typically,focalfirmsaskcustomerstosharetheiropinions/experienceswithothers.Theseopinionsrangefromelementaryratings,suchasathumbsup/down(Netflix)orstarratings(AmazonPrime,eBay,Amazon),torecommendationsorverbalfeedback(AmazonPrimeReading,Wattpad,eBay,Amazon).Regardlessofthecomplexity,theintegratedresourceistime,becausethecustomersutilizetheirtimeforgradingtheservicesadditionaltothemainactivities.TheusualreaderonWattpadalsoprimarilycontributestheirtimebyreadingWattpadstories,ratingandcommentingonthem;thusbecomingaservicegrader.Wattpad,whichintroducesitselfas“Theworld’smost-lovedsocialstorytellingplatform”(Wattpad.com,2020),isaDBEthatconnects80millionreadersandwritersgloballyandisavailablein30languages.Wattpadconnectscustomers(writersandreaders)andpartnerfirms(publishersandstudios)initsDBE.Readersdonotnecessarilyneeduniqueorspecializedskillstocon-tributetotheDBEofWattpad.Therefore,theyalsodonatetheirtime.Readersbegintheirinteractionthroughtheregistrationtoenablethemtoenjoyupcomingauthorsandtrending,legal,andaccessiblestories.Insteadofpayingmoney,Wattpadinvokesthemtorateandcommentonstoriestohelpbuildafanbase.Otheractorsoftheecosystem,likethefocalfirm,askreaderstoengageinthesevalue-creationactivities.Hence,ifpresent,theirengagementislabeledpassivebecause,whiletheyinitiatedthemainactivity(reading),theydidnotinitiatetheco-creatingactivity(contentgrading).Customers’IntegrationofSkillsContentcreatorsactivelyintegratetheirskills.TheMozillaFirefoxbrowserwasbuiltwithopen-sourcesoftwarewiththegoalofchampioninga“healthy”internet.TheMozillaFoundationcontrolstheMozillaCompany.Itisanon-profitorganizationestablishedin2003withthestatedpurposethateveryoneshouldbeabletoaccesstheinternetwithoutanybarriersKarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

217202Handbookondigitalbusinessecosystems(Mozilla.org,2020b).Itprovidesanon-profitalternativetocommercialofferings(Mozilla.org,2020a),andcollectsonlydatanecessarytoprovidetheservice,whileavoidingusingdataforotherpurposes.Severaltypesofcontentcreatorscontributedifferentlytovalueco-creationintheDBEofMozillaFirefox.WhenMozillaintroducedFirefoxasaninnovativealternativetotheavailablecommercialbrowsers,customersengagedcloselywiththem,especiallyinthemarketingactivities(Krishnamurthy,2009).Today,twotypesofcontentcreatorsprevail:developercustomersandend-usercustomers(Mozilla.org,2019).Thecontentcreatorsinitiatealltheirengagement,sinceMozillaFirefoxisaccessibletoeveryone,evenwithoutFirefoxcommunityengagement.Consequently,thecontentcreator’sinteractioninvalueco-creationisactive.Regardingtheresources,theend-usercustomersintegratetheirskillsby,forexample,testingthebrowser’snewfeatures,answeringsupportquestions,andtranslatingandlocalizingFirefox;forexample,enhancingthebrowsersfitwithaspecificarea.Customersneedacertainskillleveltoexecutetheco-creationactivities(timeandphysicalresourcesarealsonecessary,butskillisessentialforthecontribution).Summingup,inthecaseofMozillaFirefox,thecustomersalsoactivelyintegratetheirskills.ThesecondexamplerefersagaintoWattpad.Here,writerscreatethestoriesthatareWattpad’scontent.Theyusetheirskill,knowledge,andexpertisetowriteauniqueandcaptivatingstorytoshareonWattpad.Becausetimealoneisnotsufficientforwritingastoryandspecificskillsarenecessary,thisexamplerepresentstheintegrationofskills.ThecontentcreatoruploadsandsharestheirstorywiththeWattpadcommunity,andinitiatesboththerelationshipandinteraction.Therefore,thisexamplerepresentsanactiveintegrationofskills.DBEsthatbuildonmachinelearningenablecustomersasskillsourcestointegratetheirskillspassively.DeepL,foundedin2017,appliesneuralmachinetranslationtooffertransla-tionservicestomorethan1billioncustomers(Deepl.com,2020),achievingconvincingtrans-lationresults(ColdeweyandLardinois,2017).TheonlinedictionaryLingueeisthebackboneofDeepLanduseswebcrawlingtofindtranslatedtextpairs.Humantranslatorsevaluatetextpairsthatarelaterusedformachinelearninginneuralmachinetranslation,especiallytotraintheneuralnetwork(Faes,2017).Textpairscome,forexample,frommulti-nationalorganiza-tionsthatofferprofessionaltranslationsoftextsinvariouslanguages,suchastheEuropeanUnion(Smolentceva,2018).Besidestextpairs,rightfromthebeginning,LingueeandDeepLhavebeenworkingwithuserfeedback,whichallowstheskillsourcestocomment,correct,orchoosethebesttranslations.Bothformsofevaluatingexistingtextpairs,anduserfeedbackontheirtranslationrequests,buildonhumanlanguageskills.Therefore,theintegratedresourceisnecessaryaswellastheskillsources’skills.Theskillsourcesdonotactivelyseektheintegrationoftheirskills.Also,theydonotusetranslationservicesspecificallytomakethembetter,butrathertoreceiveaspecifictranslation.Therefore,servicesbuiltonmachinelearn-ing,suchasneuralmachinetranslation,enableskillsourcestointegratetheirskillspassivelywhileusingthecoreservice.Similarly,thespeechrecognitionusedbymanysystems,suchasSiri,Alexa,orCortana,enablesskillsourcestointegratetheirlanguageskillstotraindigitalassistants’understandingcapacityforthelanguage.Customers’IntegrationofTheirPhysicalResourcesInDBEs,actorsneedsomebasicinfrastructuretoenabletheirparticipation,andindeedthisisusuallyanecessaryprecondition(forexample,accesstotheinternet,standarddevices,andKarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

218Customerrolesindigitalbusinessecosystems203standardsoftware).Hence,thisbasicinfrastructureisnotconsideredanintegratedresourceforvalueco-creationinthischapter.Productorserviceprovidersactivelyintegratetheirphysicalresources.AirbnbcreatedaDBEformatchingtravelerswithplacestostayaroundtheglobe.Airbnb’sendcustomersaretravelerslookingforlocalroomsandspecialevents(Airbnb.com,2020).Airbnbalsotargetscoreserviceproviders(LappiandHaapasalo,2016)ascustomersoftheDBE,suchashosts.Thehostsparticipateasserviceproviderstoendcustomers,andareatthesametimecustomersofAirbnbwhorentoutfreespaceintheirownedrealestateafterinitiallyregisteringasAirbnbhosts.Airbnbsupportshostsbyprovidingthedigitalbookingplatformandsupportservices,suchasinsuranceforliabilitiesandpropertydamage,andpaymentprocessing.Airbnbchargesthehostsasmallfeeproportionaltothereservation.Guestsandhostsaremotivatedbytheperceivedvalue(forexample,servicequality,economicbenefits,humaninteraction,authen-ticity,andconvenience)toengageinco-creationactivities(Thaichonetal.,2020).AsAirbnbserviceproviders,thehostsactivelycontributetovalueco-creationinthedigitalecosystembycontributingtheirphysicalresources(forexample,apartments,houses,rooms).Theircontributionisactivebecausetheyinitiatetheirhostingactivitieswiththeirfirstregistrationandthenactivelymanagethehostingprocessbypreparingtheirplace,welcomingguests,andansweringquestions.Similarly,productprovidersactivelyintegratetheirphysicalresources,especiallytheirproducts,ontheeBaymarketplacebysellingthemtoeBay’sbuyingcustomers(eBayInc.com,2020b).EBay’sDBEconsistsofthemarketplaceebay.com,itslocalmarketplaces,andeBaymobileapps(eBayInc.com,2020a),connectingmillionsofbuyersandsellersworldwide.Theproductprovidersareindividuals,andorganizationsofallsizes.Asanymarketplaceneedsproductproviders,theyplayadualroleassellersoftheproductsandcustomersoftheeBaymarketplace.TheyusetheDBEservicesandpayfortheseservices,rangingfromthedigitalplatformtoambassadorgroupslobbyingforthesellers’interestsandinitiatingcampaignsshapingcriticalpoliticalissues(eBayInc.com,2020b).Asproductprovidersactivelyhavetoofferproductstheywanttosell,theircontributiontovalueco-creationisactive.Theyprimarilycontributephysicalresources,consistingofnewandusedproducts;forexample,automobileparts,books,shoes,smartphones,toys,watches,andlaptopcomputers.Co-producersintegratetheirphysicalresourcespassivelyintheDBEs’valueco-creation.Inparticular,intheenergysector,innovativeDBEsaroundserviceplatforms(MidttunandPiccini,2017)suchasvirtualpowerplants(VPPs)allowfortheintegrationofdecentralizedunits(Nosratabadietal.,2017).Theseofferahigh-techdigitalplatformthatenablesenergyefficiencyandenergypeer-to-peersharing(Mahmudetal.,2020).VPPsvirtuallyintegrateandcontrolpower-generatingunits,suchasphotovoltaic,windturbines,hydroturbines,andenergystoragesystems(Kasaeietal.,2017).Withinthiscontext,energycustomersappearbothasconsumersandasproducersofelectricity,orso-calledprosumers(Dellermannetal.,2017;Olkkonenetal.,2017).Theyinitiatetheprosumingofenergy(Olkkonenetal.,2017),forexample,byacquiringthesystems;andmostly,theyownenergyproductionunitssuchassolarpanels(Olkkonenetal.,2017),orbatteriesofelectricvehiclesusedtostoreenergy(Mahmudetal.,2020).AVPPaggregatororchestratestheDBE(Nosratabadietal.,2017)andmanagestheday-to-dayactivities.Thisorchestrationresultsintheongoingpassiveintegra-tionofprosumers’physicalresourcesintheco-productionoflocalgreenenergy.Someotherexamplesofco-producerspassivelyintegratingtheirphysicalresourcesarecryptocurrencies,andwebaccessviaprivatelyownedremoterouters.KarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

219204HandbookondigitalbusinessecosystemsCustomers’IntegrationofDataDataprovidersactivelyintegrateself-createdandowneddataintoDBEswhentheyshareindi-vidualpackagesofdatawithallorwithchosenactorsoftheecosystem.Thisactiveintegrationisbuiltonsingledecisionstointegratedata.Itisnotasideeffectofserviceuse,butratheraninterdependentanddeliberateactivity.Manyapplicationsforphones(Runtastic,Strava)andsmartdevices,suchaswatches(AppleWatch,Fitbit),orshoes(FeetMe),cantrackthedailylivesofindividualactors.Forexample,Fitbittracksthenumberofsteps,distancetraveled,caloriesburned,weight,heartrate,sleepstages,activeminutes,andlocationofusers(FitBitInc.com,2020),andgeneratesamassiveamountofdata.Fitbitenablescustomerstosharethatdatabyconnectingtheirdeviceswithapplicationsorsoftwaretosynchronizethedata(FitBitInc.com,2020).Additionally,itispossibletosharesomeaspectsofthisrecordeddatawithfriendsandstrangers,butthiscanalsohaveunintendedconsequences.Oneexampleofhowdataproviderssharingsuchinformationcanbeproblematicrelatestoafamouscaseinvolvingsoldiersusingfitnesstrackingwhileexercising.Theyrecordedtheirexerciseroutesandsharedthem;thirdparties,inturn,usedtheroutestolocatethemilitarybases(Hern,2018).Usually,suchdataisusedtorecommendcoursesorcompareexerciseresults,resultinginexerciseexperienceco-creationfromdataproviders’activedataintegration.Passivecustomerdataintegrationalsohappenseverymomentofthedaywhencustomersco-createvalueasdatagenerators.OneprominentexampleisGoogleMaps.TheuseofGoogleMapsfornavigationgeneratesrichlocationdataandtrafficdata,becauseeveryuseristracked.Thegenerateddatahelpstounderstandandforecasttrafficjams(Lau,2020).AGermanartistwhofakedatrafficjambyslowlycarrying99phonesonthestreetimpressivelydemonstratedhowthispassiveintegrationofcustomerdataworks(Hern,2020).Theinformationresultingfromthe99phonesseemedtosignalatrafficjambecausetheyweremovingslowly.Thisinte-grationofcustomerdataispassivebecausethedatageneratorsgivetheirconsentbyacceptingthetermsofuseofthecoreservice.However,customersmaynotbeawareofthisactivityastheydonotinitiateasingletransactiontointegratedata,suchassharing,uploading,orconnecting;instead,thedatatrackinghappenscontinuouslyinthebackgroundwhilethedatageneratorsparticipateinotherDBEactivities.Table14.2summarizesthepresentedidealcus-tomertypesregardingtheirlevelofinteraction,theintegratedresources,andexemplarycases.DISCUSSIONFirst,theactiveintegrationofresourcesemergesintwocases(timeandphysicalresources)witheconomicbenefitsintheformofeithercheaper,morecomfortable,andself-controlledservices(self-serviceseekers),orfinancialcompensation(product/serviceproviders).Theeconomicbenefitsfromtheactiveintegrationofskillsanddatavarybetweenecosystemsandindividualactors.Theco-creatorsinthediscussedexamplesreceivenoobviouseconomicben-efits,whereasothersdo;forexample,YouTubersmayearnmoneywiththeircontent;design-ersonSpreadshirtselltheirdesignsofseveralproductsviathecentralplatformprovidedbySpreadshirt;betatestersgetearlyanddiscountedaccesstoproductssuchasvideogamesforgivingbugreportsandfeedback.Tosummarize,activeintegrationcangohandinhandwitheconomicbenefitsforresource-owningcustomers.ThisdiscrepancyposeschallengesintheorganizationofvaluepropositiondesignandvaluecaptureinDBEs,whichcanbeaddressedKarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

220Customerrolesindigitalbusinessecosystems205Table14.2Summaryoftheidealcustomertypesinthisstudyandsomeexemplaryreal-worldcasesTypeExemplarycasesLevelofinteractionIntegratedresourceActiveintegrationofSelf-serviceplatforms,suchActive–Self-serviceseekersTime–Engaginginself-service,time→self-serviceasonlinebankingservicesandinitiatearelationshipandactivelysuchaslookingupsolutionstoseekersbookingkiosks,onlineFAQs,engageininteraction(individualone’sownproblemsoransweringanddiscussionforums,feedbacktransaction).surveyquestions,whichprimarilysystems,suchasGoogleOpinionconsumestime.Rewards,YouGov.PassiveintegrationNetflix,AmazonPrime,WattpadPassive–ServicegradersshareTime–Servicegradersneedoftime→serviceasareader,YouTubeasauser,theiropinion/experienceofmostlytimetoconsumeandgradegradersInstagramasauser.consumedcontentwithothersorcontent.thefocalfirmafteraninvitation(individualtransaction);noinitialregistration/consent(relationship)necessary(e.g.,YouTube).ActiveintegrationWattpad,Firefox,YouTube,Active–ContentcreatorsprovideSkills–Contentcreationsbuildofskills→contentInstagram,Facebook,Wikipedia,individualpartsofself-producedonpersonalskills,suchascreators3Dprintingdesigns.material(transaction),oftenaftercreativity,writing,video-making,initialregistration(relationship).programming,orsinging.PassiveintegrationofDeepL/Linguee(textrecognitionPassive–SkillsourcesprovideSkills–Skillsourcingbuildsskills→skillsourcesandtranslation),Alexa/Siri/contentthatotheractorsuseforontheavailabilityofmatchingCortana(speechrecognition).additionalpurposes.contentthathasbeencreatedusingspecificskills.ActiveintegrationofAirbnb,eBay,Uber,3D-printingActive–ProductorservicePhysicalresources–Bothproductsphysicalresourcesservices,peer-to-peer-credits.providersinitiatetherelationshipandservicesintegratephysical→product/servicebyregisteringandinitiatetheresources,suchasrealestateorproviderstransactionbylistingtheiroffer.cars,products,or3Dprinters,oftheproduct/serviceproviders.PassiveintegrationVirtualpowerplants,Passive–Co-producersinitiatePhysicalresources–Co-producersofphysicalresourcescryptocurrency,THORnetworkastherelationshipbyenteringintegrateresources,such→co-producers/apassiveparticipant,provisionofintoacontractorbyregisteringaspower-generatingorprosumersprivatenetworkaccesspoints.onminingplatforms,butdoenergy-storagedevices,notinitiatesingletransactionshardware,andenergytomine(ongoingnature),withcryptocurrencies–especiallycoordinationperformedbyothers.technology.ActiveintegrationFitbit,GermanCorona-Warn-App,Active–DataprovidersinitiateData–Dataprovidersintegrateofdata→databetatests.therelationshipbyregisteringpurposefulself-produceddata.providersforservicesandsharedataonindividualevents(e.g.,runningtracks,coronavirusinfection,bugs).PassiveintegrationGoogleMaps,Facebook.Passive–DatageneratorsinitiateData–Datageneratorscreateofdata→datatherelationshipbyregisteringmassivedatawhileusingservicesgeneratorsforservices;datageneration(e.g.,localinformationontrafficandcommunicationworkarejams,preferences,usagepatterns).performedinthebackground.KarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

221206Handbookondigitalbusinessecosystemsindialoguewithresource-owningcustomerswhosignalawillingnesstomakeavoluntarycommitmentorwhohaveaninterestintheeconomicbenefits.Viceversa,customersaremorelikelytosignaltheirwillingnesstointegrateresourcesiftheycanobserveanattractivevalueproposition.Second,referringtoLappiandHaapasalo’s(2016)ideaofecosystemcustomertiers,thefourcustomertypesrepresentdifferenttiers;forexample,self-serviceseekers,dataproviders,servicegraders,skillsources,anddatageneratorsmightbeendcustomers.Contentcreators,product/serviceproviders,andco-producers/prosumersseemtorefertocoreserviceprovid-ers.Onepossibleassumptionmightbethateitherintegratingphysicalresourcesortheactiveintegrationofaskillenablescustomerstobecomecoreserviceproviders.Indeed,physicalresourcesandactiveskillintegrationareactivity-specificresources.Timeanddataareusuallynotactivity-specificbecausetheremaybeseveralotherequallygoodopportunitiestousethem.Hence,thereseemtobefeweropportunitiestouseactivity-specificresources;whileatthesametime,fewercustomerspossesstheseresources.Customersintegratingactivity-specificresourcesthustendtooccupycentralpositions.Thesecustomersmayactmoreliketraditionalbusinesses(provisionofservices/products/production,roleofeconomicbenefits).Thus,theactor-to-actor(A2A)interactionseemsespeciallyappropriatetocharacterizeDBEinteractions(seealsoBeirãoetal.,2017)becauseitbecomeschallengingtocharacterizetheinteractionasB2BorB2C.Third,itmaybequestionedwhetheritishelpfultoconsiderthepassiveintegrationoftimeinvalueco-creation.AccordingtoGrönroosandVoima(2013),theservice-dominantlogicoveremphasizesco-creation.Everyvalue-creatingactivitycanbedescribedasco-creation,becausethekeyelementsaretheactivitiesoftheserviceprovidersandcustomers,whicharepresentineveryserviceexperience.Isitpossibletodifferentiatetheillustratedco-creationfromatypicalanalogserviceexperience?Regardingthepassiveintegrationoftime,servicegraderssharetheirexperiences,evaluation,orfeedback.First,thisbehaviorisverytypicalforDBEs.Itovercomesspecificshortcomingsofdigitalvaluepropositions(forexample,missingtrustorsecurity)(Flanaginetal.,2014),andenables,extends,andimprovesthevalueproposi-tion.Thus,servicegradingresultsinvaluecreationbeyondthesingleconsumptionexperienceattheDBElevel.Second,thegradingactivitymaybepartoftheconsumptionexperience,butindividualconsumptioncanunfoldwithoutthegradingactivity.Therefore,itisnotanindispensablecomponent(externalfactorinservice),likebeingpresenttogetahaircut.Theactivityofservicegraderstranslatedtotheanalogworldmightbeextensivefeedbackgiventothehairdressertoimprovetheservice,orrecommendationsgiventoothers(forexample,wordofmouth),resultinginco-creationininnovationormarketing(Frowetal.,2015).Fourth,thedimensionsarenotmutuallyexclusive.Serviceprovidersalsointegratetheirtimeandskills.Contentcreatorsalsocontributetheirtimeandphysicalresources(forexample,devicesusedforinternetaccessandotherspecializedequipment).ThepassiveintegrationofphysicalresourcesintheVPPbecomesactiveifthepower-generatingunitisabiogasplantinsteadofaphotovoltaicunit,becausebiogasfarmersneedtofillthepowerplantwithresources(forexample,corn).Theresourcetypes,though,arestilloverlapping(Plé,2016;AgrawalandRahman,2015).Anothermoredetailedpossibilitytoconceptualizeresourceswouldbetoconsiderdifferentresourcecombinationsandtheirimpactonthecus-tomerroles.Similarly,itcouldbeworthwhiletoconceptualizethelevelofinteractionnotasdichotomous(activeversuspassive)butratherasadimensionthatcapturesdifferencesinthekindanddifferencesinthegradeofinteraction.KarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

222Customerrolesindigitalbusinessecosystems207Fifth,digitaltechnologiesandcustomers’optiontointegratedataovercomethechallengesofinformationprovisionwhichisnecessaryforprovidingindividuallytailoredproductsandservices.Etgar(2008)arguesthatco-productionandinformationprovisionaretwodistinctstrategiestoachievecustomization.Heconcludesthatinformationprovisionisinferiortoco-production,duetothehighrisksofmismatchingandhightransactioncost.Incontrast,thediscussedexamplesindicatethatdigitaltechnologies(forexample,automateddatacollection,possibilitiestosharedata,andcommunicationtechnologiesbuildingonartificialintelligenceandchatbots)reduceboththerisksandtransactioncostsbyestablishingmoreefficientandeffectivewaystoensureinformationprovision(LuschandNambisan,2015).Therefore,DBEsenablenewformsofresourceintegrationandvalueco-creation(Keelingetal.,2021).CONCLUSIONAtthebeginningofthechapter,theresearchquestionwasstatedas:WhichcustomerrolesemergeinDBEsaccordingtocustomers’resourcecontributiontovaluecreation?Thetheo-reticaldeductionoftwodimensions(thelevelofinteractionandtheintegratedresource)withtheirrespectivemanifestations(activeandpassive,time/skill/physicalresources/data)resultedineightidealtypes,assummarizedinTable14.1.Thesewerecentralfortheidentificationandselectionofthereal-worldcasesdepictedinTable14.2.Thecasesillustratewhichresourcesatwhichinteractionlevelcustomersmaycontributetovalueco-creationinDBEs.Thefourrolescharacterizedbytheactiveintegrationofresourcesare:self-serviceseekers,contentcreators,product/serviceproviders,anddataproviders.Therolesdescribedasinvolvingcustomers’passiveintegrationofresourcesare:servicegraders,skillsources,co-producers/prosumers,anddatagenerators.Theeightcustomerrolesexplicitlylinkcustomers’resourceintegrationwiththeirinteractiondegree,whereastheexistingworksintheliterature(e.g.,AgrawalandRahman,2015;LappiandHaapasalo,2016)donotcombinebothperspectives.Theeightidealtypesofcustomerrolesmightsupportmanagersintheorchestrationofvalueco-creationinDBEsbecausetheyshowdifferentoptionstoorganizevalueco-creationdependingonthelevelofcustomerinteractionandtheresourcetype.Additionally,theselectedreal-worldexamplesillustratethedifferencesbetweenthecustomerroles,andsupportthedesignofsimilarcustomerco-creationopportunitiesinothersettings.Thedistinctionbetweendataprovidersanddatageneratorsseemsespeciallyinterestingforfutureresearchinthefaceofgrowinginterestindatasecurityandprivacy.Thediscussionoftheappropriatedesignofthecustomerrole,eitherasadatageneratororasadataprovider,dominatedtheGermanCorona-Warn-App’sdevelopment.Finally,customershavebecomedataproviders,withtheresponsibilitytoactivelyintegratetheirdataforvalueco-creation.Futureresearchmightaddresssuchissues,andfocusonthecausesandeffectsofthedescribedcustomerroles.Thevoluntaryandactiveresourceintegrationofself-serviceseekers,contentcreators,product/serviceproviders,anddataprovidersneedscustomerstobemotivatedtoparticipateinactiveinteractionandresourceintegration.Often,thereisnoneedforcustomerstointegratetheirresourcesinvalueco-creation;therefore,theyhavetoacknowledgetheemergentbenefittofeelmotivated(Kleinaltenkampetal.,2012).Futureresearchmightfurtherelaborateonthesemotivationalaspectsofactiveresourceintegration(AgrawalandRahman,2015).KarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

223208HandbookondigitalbusinessecosystemsThepassiveandsometimesinvoluntaryintegrationofresourcescanevenbevalue-destroying.Additionalextremeformsofpassiveintegrationofskillmightbeseenintheuseofavailableonlinecontent,includingonlineplatformssuchasNapster,kino.to,andSciHub,wherecontentavailabilityisoftenmisusedtosurpasspaywallsorviolatepropertyrights.Theseextremeandadverseformsmightresultinaco-destruction(Keelingetal.,2021)ofvalue.Therefore,thepassiveintegrationofcustomerskillsneedsmorenuancedattentioninfutureresearch.Thisstudyisnotfreefromlimitationseither.Duetothecaseselectionandthesmallnumberofcasesineachcategory,thereisnoguaranteeoftherepresentativenessofthechosencases;althoughthecomprehensivedescriptionsandexplanationstrytoenablereaderstoevaluatethecasesandreachtheirconclusions.Somecasesmaybeextremeonesthatdonotappropriatelyrepresentthecorrespondingconfigurationofcustomers’resourceintegrationandinteractioninvalueco-creation.Oneexampleofapotentialambiguousclassificationistheservicepro-videroutlinedinthediscussion.Additionally,thisworkfollowsarelativelystaticviewofDBEs,wherecustomersinte-gratetheirresourcesintoexistingvaluepropositions.Ofcourse,customersalsocontributetodynamicdevelopmentsasco-innovators(AgrawalandRahman,2015)andcanevencontrib-utetochangingtheexistingecosystem.Thechangesincludecreatingnewvalueco-creationlogics,expandingtheexistingvalueproposition,orcreatinganadditionalvaluepropositioninsidetheexistingDBE.Futureresearchmightlookintocustomerrolesregardingecosystemdynamics.REFERENCESAdner,R.(2017).Ecosystemasstructure:anactionableconstructforstrategy.JournalofManagement,43(1),39–58.Agrawal,A.K.,andRahman,Z.(2015).Rolesandresourcecontributionsofcustomersinvalueco-creation.InternationalStrategicManagementReview,3(1–2),144–160.Airbnb.com(2020).Hostingin3steps.Availableathttps://www.airbnb.com/host/homes?from_footer=1&locale=en&_set_bev_on_new_domain=1599219873_NDhmNmRkNWRmNmQ0(accessedOctober8,2020).Akaka,M.A.,andVargo,S.L.(2014).Technologyasanoperantresourceinservice(eco)systems.InformationSystemsande-BusinessManagement,12(3),367–384.Åkesson,M.,andEdvardsson,B.(2018).Customerrolesfromaself-servicesystemperspective.InternationalJournalofQualityandServiceSciences,10(2),196–210.Autio,E.,Nambisan,S.,Thomas,L.D.,andWright,M.(2018).Digitalaffordances,spatialaffordances,andthegenesisofentrepreneurialecosystems.StrategicEntrepreneurshipJournal,12(1),72–95.Autio,E.,andThomas,L.D.(2020).Valueco-creationinecosystems:insightsandresearchpromisefromthreedisciplinaryperspectives.InS.Nambisan,K.Lyytinen,andY.Yoo(eds),HandbookofDigitalInnovation.Cheltenham,UKandNorthampton,MA,USA:EdwardElgarPublishing,107–132.Bacon,E.,Williams,M.D.,andDavies,G.(2020).Coopetitionininnovationecosystems:acomparativeanalysisofknowledgetransferconfigurations.JournalofBusinessResearch,115,307–316.Beatty,S.E.(2019).Introduction:valuecreationandco-creationwithinnetworks.InL.HollebbekandD.E.Sprott(eds),HandbookofResearchonCustomerEngagement.Cheltenham,UKandNorthampton,MA,USA:EdwardElgarPublishing,391–401.Beirão,G.,Patrício,L.,andFisk,R.P.(2017).Valuecocreationinserviceecosystems.JournalofServiceManagement,28(2),227–249.Coldewey,D.,andLardinois,F.(2017).DeepLschoolsotheronlinetranslatorswithclevermachinelearning.techcrunch.com.Availableathttps://techcrunch.com/2017/08/29/deepl-schools-other-online-translators-with-clever-machine-learning/?guccounter=1&guce_referrer=aHR0cHM6Ly9kZS53aWtpcGVkaWEub3JnLw&guce_referrer_sig=AQAAADuhwI-bhwJFgZQ1UKarolinaBähr-9781839107191DownloadedfromPubFactoryat05/28/202209:56:59AMviaColumbiaUniversityLibrary

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22715.Digitalplatformsandtradingcompanies:theevolutionoftraditionalbusinessecosystemsintointegrateddigitalbusinessecosystemsReinhardSchütteandTobiasWulfertINTRODUCTIONDuetotheireconomicandsocio-politicalsignificance,retailersplayanimportantroleintheservicesector(SchütteandWeber,2020).Mostrecently,publichealthandsafetymeasurestocombatthecoronaviruspandemichavecompelledestablishedretailersandwholesalers1toshiftfrombrick-and-mortartoonlineoperations.Indeed,thepandemichasdrivenandsustainablyinfluencedthedigitaltransformationinretailoperationsthatpreviouslyneglectedthenecessarydigitalizationinitiatives(SchütteandVetter,2017).However,theanalysisofinternalprocessimprovementsusingdigitaltechnologieshasrarelybeendiscussedinaca-demicliteratureorinpressreleasesbyretailers.Thedigitalizationopportunitiesandthreatshavelongbeenobvioustomanytradingcompanies.Thediscrepancybetweenthetraditionalviewofestablishedandsuccessfultradingcompaniesandtheaspirationsofdigitalcompetitorsmakesitnecessarytoinvestigatedigitalchangesforretailers.Thefocusofthemarketingandcommerceliteratureisone-commerceandestablishedincumbents(GrewalandLevy,2007;Grewaletal.,2017).Traditionalretailersactasmarketintermediariesandresellersthatoffermanufacturers’productstocustomers(Müller-Hagedornetal.,2012).However,theexclusivefocusonphysicalproducts,whichstillcharacterizesretailbusinessandtheacademicliteratureonthissector,isbecomingincreasinglyinsufficient.Inadditiontophysicalproducts,anincreasingamountofinformationisbeingofferedtoprovidesmartserviceswithaddedvaluetocustom-ers(Beverungenetal.,2019).TheincreasingpenetrationofeverydaylifewithsensorsandactuatorsinanInternetofThings(IoT)worldisakeydriverforthedigitaltransformationofretailcompanies,andwillsignificantlychangetheworldofretail(Schütte,2019;SchütteandWeber,2020).Thebasisofallchangesincompaniesistheavailabilityofdata,sothatnewinformationcanbederivedandexploitedforserviceprovision(Beverungenetal.,2019;Paukstadtetal.,2020).Thesecondkeydriverisdescribedbytheterm“platform”.However,thistermisinter-pretedindifferentwaysacrosstheliterature.Platformsintheretailcontextareexaminedinthischapter.AsThomasetal.(2014)show,differentphenomenafromvariousscientificdisciplineshavebeeninvestigatedintheresearchareasoforganizationalcapabilities,productfamily,industrialeconomics,andoperationsmanagement.Inouranalysisofplatformsintheretailcontext,wefocusonthecombinationoftwoaspects:theorchestrationofformerlyinde-pendentmarketsinthesenseoftwo-ormulti-sidedmarkets(RochetandTirole,2003;HaucapandHeimeshoff,2018);andtheestablishmentofdigitalplatformsfromatechnicalsoftwareperspective(GawerandHenderson,2007;Tiwanaetal.,2010).Thetechnicalpossibilities212ReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

228Digitalplatformsandtradingcompanies213forexploitingeconomiceffectshaveledtowell-knowneconomicsuccesses,especiallywithhyper-scalingplatforms,suchasthoseofApple,Google,andAmazon.Duetothespecificpowerofnetworkeffects,suchcompaniestendtobecomenaturalmonopolies(GawerandCusumano,2008;Hagel,2015).Comparedwithtraditionaltradingecosystemswhereretailersactasresellersofmerchandiseboughtfrommanufacturers,retailersmaytakeonatripleroleindigitalbusinessecosystems.Thisincludestheownershipofatransactionplatformorchestrat-ingmultiplemarketsides,competingwithothersupply-sideparticipantssellingmerchandiseonthetransactionplatform,andprovidinginnovationservicesfordevelopingandprovision-ingsmartservices(WulfertandSchütte,2021).Thedevelopmentofdigitalplatformsfortheimplementationofmulti-sidedmarkets(asageneralizationoftwo-sidedmarkets)hasusuallybeendrivenbytechnologycompanies(forexample,Amazon,eBay,Zalando).Nevertheless,someretailcompanieshaverecentlystartedtointroducemulti-sidedmarkets(forexample,WalmartMarketplace,REWEOnline).Incontrasttotraditionalretailbusinessmodels(resellermode)focusingonthebridgingfunctionsbetweenmanufacturingandendcustomers(Levyetal.,2019),transactionplatformsorchestratepreviouslyindependentmarkets,causing(merelyindirect)networkeffectsforecosystemparticipants,andimplementasymmetricpricingmechanismsformonetizingthematchmaking(RochetandTirole,2003;Armstrong,2006).Digitalplatformsfacilitatethedigitalmatchmakingbetweenparticipantsfromthesupplyside(manufacturersandretailers)andthedemandside(customers)andenable(retail)transactionsbetweenthem(RochetandTirole,2003;StaykovaandDamsgaard,2015;Schütte,2018),withoutgainingownershipofthetradedarticles(incontrasttoe-shops)atanypointofthetransaction.Duetofurtherdigi-tizationandconcentrationintheretailsector,competitionisincreasingamongretailers(hori-zontalcompetition),aswellasmanufacturersestablishingtheirownretailbranchesoronlinedistribution(verticalcompetition).Duetotheorchestrationofretailtransactions,multi-sidedmarketscollecthugeamountsoftransactiondataandprovideadditionalinformationtousers,suchasuser-generatedproductratings(Wulfertetal.,2021).Digitalplatformsprovideaddi-tional(digital)servicestotheirusers,augmentingthephysicalproduct(hybridproduct),orenablemanufacturerstodeliverfullydigitalproductsforalmostzeromarginalcosts.Theyalsolowertransactioncostsforcustomers’informationsearchandpurchaseinitiation(Wulfertetal.,2021).Becauseoftheirsuccess,otheronlineandbrick-and-mortarretailersarerethinkingtheire-commercestrategyandparticipatinginalreadyexistingmulti-sidedmarketsortryingtoestablishdigitalplatformsthemselves(StaykovaandDamsgaard,2015;Hagbergetal.,2016).Withcallsbeingmadeforfurtherresearchtocollateandstructurethebodyofknowledgeondigitalplatforms(Schreiecketal.,2016)andthecallforadomain-specificconceptualizationofdigitalplatforms(deReuveretal.,2017),weprovideaunifiedviewondigitalplatformsinthee-commercecontext.Ourframeworkdescribesandstructuresdigitalbusinessecosystemsinretail,integratingthetraditionalecosystemacrosslayers,asexplainedinenterprisearchi-tecturemanagement.Itthusprovidesastartingpointforstrategydevelopmentandforderivingtherequirementsimposedbyaretailer’stripleroleforsupportinginformationsystems(ISs).Forthedevelopmentofourframework,weapplyadesignscienceresearch(DSR)approach(Peffersetal.,2007).Theframeworkisderivedfromanextensiveanalysisoftheplatformliteratureandintheretailcontext,aswellasfromourdomainknowledge.WedemonstrateourframeworkusingthecaseoftheGermanpetfoodretailerFressnapf(FressnapfSE,2021b).ReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

229214HandbookondigitalbusinessecosystemsTheframeworkisappliedtostructureFressnapf’sdigitaltransformationinitiatives,withafocusonplatformimplementations.Theremainderofthischapterisstructuredasfollows.Followingthisgeneralintroduction,wesketchourDSRapproach,followingthatofPeffersetal.(2007).Then,weintroduceourliterature-basedframeworkforintegrateddigitalbusinessecosystemsinretail.Thereafter,theconceptualframeworkisdemonstrated,usingthecaseofFressnapf.Finally,wepresentabriefconclusionandanoutlookforfutureresearch.RESEARCHAPPROACHTodevelopaframeworkdescribingandstructuringdigitalbusinessecosystemsinretail,inwhicharetailer’straditionalbusinessecosystemisintegrated(Böttcheretal.,2021),weapplyaDSRapproach,followingthatofPeffersetal.(2007).Theproblem-andobjective-initiatedprocessstartswiththeobjective,whichforourstudyisthestructuringofdigitalbusinessecosystemsinretail.TheobjectivesoftheartifactshouldcomplywiththeISrequirementsstemmingfromtheretailer’stripleroleasmarketplaceowner,competitorsellingproducts,andproviderofinnovationservices(WulfertandSchütte,2021).Wehavedesignedanddevelopedourreferenceframework(aspresentedinthenextsection)basedonanextensiveliteraturereviewandourdomainknowledge.TheframeworkisdemonstratedandevaluatedusingthecaseofFressnapf,aGermanpetfoodretailer.Applyingqualitativecasestudiesisawell-establishedapproachintheretailliterature(e.g.,McGuinnessandHutchinson,2013;Ritalaetal.,2014;JanhonenandLindström,2015;ElgandHultman,2016;Hänninenetal.,2018).Wehavecollectedourdatasolelybyobservationandinterviews(Wieringa,2014).OurcasestudyhasbeenpreparedaccordingtoYin’s(2018)procedureandorganizedbyusingthestructureofourframework,aspresentedinthenextsection.FollowingRitalaetal.(2014),weuseabroadsetofsecondarydatagatheredfromnewspapers,journals,andscientificpublica-tions.Thisdatasetissupportedbyprimarydatafromthecasecompany’spressreleasesandtwoconsecutiveinterviewswiththeheadofbusinessconsultingandapplicationmanagement(Cranz,2020,2021).ADSRapproachshouldgothroughthreecycles(Hevner,2007).Whileouroverarchingresearchfocusesondevelopingandevaluatingareferencearchitecturethatsupportsdigitalmarketplacesine-commercewithtransactionandinnovationfunctions(EvansandGawer,2016),thisdesigncyclepresentsaframeworkforstructuringintegratedbusinessecosystemsinretailandwholesale.Ourresearchapproachcanbesummarizedasfollows.First,wedevelopourframeworkbasedonaliteratureanalysisandourdomainknowledge(rigorcycleanddesigncycle).Second,wedemonstrateourframework’scapabilityasageneralsolutionconceptandapossiblestructureforthetransformationinitiativesatFressnapf.STRUCTURINGPLATFORM-CENTEREDDIGITALBUSINESSECOSYSTEMSDigitalplatformsconstituteaparticularlyefficientwayoforchestratingmulti-sidedmarkets.Thepivotalparticipantsofamulti-sidedmarketine-commercecanbedescribedassuppliersandcustomers.Theycanbeaugmentedbyadditionalactorsinasinglemarket.FollowingtheReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

230Digitalplatformsandtradingcompanies215Figure15.1Frameworkforintegrateddigitalbusinessecosystemsinretailmulti-sidedmarketparadigm,theparticipantscanalsooriginatefromformerlyindependentmarketsthatareconnectedviaacentralplatform(RochetandTirole,2006).Thisviewofthe“realelements”ofaplatform,whichisalsoconceivablewithouttechnologies(level2a),isimplementedinavirtualforminthecaseofadigitalplatform(levels2b–5),requiringatechnologicalecosystem,whichshallbecalledadigitalbusinessecosystem(Figure15.1).Multi-sidedmarketscombinenetworksoftherealworld(forexample,suppliers)andthedigitalworld(forexample,developers,technologycompanies,suppliersystems)toestablishasuccessfullyintegrateddigitalbusinessecosystem(Figure15.1).Theconceptofaninte-grateddigitalbusinessecosystememphasizestheinterconnectionofaretailer’straditionalanddigitalbusinessecosystem.Thebusinessecosystemisalreadyintegratedwhentheanalogandthedigitalworldsareintertwinedviaeitheratransactionoraninnovationplatform.However,wearguethatdigitalbusinessecosystemsareespeciallysuccessfulandvaluabletotheirpartic-ipantsifbothplatformsareimplemented(EvansandGawer,2016).Tointegratetherelevantperspectivesinthecontextofdigitalbusinessecosystems,wepresentamulti-layeredframe-workforthedigitalplatformsupportedbytheparticipatingactors.2TheframeworkappliesReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

231216Handbookondigitalbusinessecosystemsanenterprisearchitectureperspective,whichiscommonintheIScommunity,thatsplitsthedigitalbusinessecosystemintostrategy(1),businessactors(2)andbusinessprocesses(3),application(4),andinfrastructurelayers(5).StrategyLayerTheretailercandefinethedirectionofitsdigitalplatformbyaugmentingitstraditionalresellerbusinessmodelonthestrategylayerwithtransactionandinnovationplatforms(1).3Itmayimplementatransactionorinnovationplatform,orevenboth,resultinginapotentialtriplerolefortheretailer(WulfertandSchütte,2021).Whiletheformerplatformfocusesonconnectingindependentbusinessactorsusingdigitalmeansandestablishesmulti-sidedmarkets(RochetandTirole,2003,2006;Armstrong,2006),thelatterenablesdeveloperstocreatemodulesbasedonthedevelopmentservicesprovided(GawerandHenderson,2007;Tiwanaetal.,2010).ResellerRetailershavetraditionallyoperatedintheresellermode(HagiuandWright,2015),withdis-tributionsystemsconsistingofmultiplestages(Specht,1998).Withafewexceptions,suchastheagencyorthecommissionbusiness,thismodeusuallyinvolvespurchasingproductsfromsuppliermarketsandsellingthemtocustomermarkets(Levyetal.,2019).Inthisregard,theyperformanumberoftheso-calledbridgingfunctions(Turbanetal.,2017).Regardlessoftheinstitutional-economicdiscussionoftradingcompanies,thetasksintendedwiththetradingfunctionsareundisputedandalsoeconomicallynecessary,eveninthedigitaltransformation(Levyetal.,2019).Therearethreebasicfunctionsforbridgingthediscrepancybetweenmanufacturersandcustomers.Inthestreamsbetweenmanufacturersandcustomers,retailersbridgethediscrepanciesinrealgoods(goods,services,returns),nominalgoods(money,credits),andinformationacrossspaceandtime,aswellasinquantityandquality(Barthetal.,2015).Facilitatedbytheongoingdigitalizationoftheretailsector,thethreebasicfunctionsincreasinglycopewithdigitalproductandpriceinformationandadaptationsinpayment,logistics,anddistributionprocesses(BeckerandSchütte,2004;SchütteandVetter,2017).Ine-commerce,tradingtransactionsaretosomedegreecarriedoutdigitally(LaudonandTraver,2019).Sincetheexplosivegrowthoftheinternet,eitherexistingbrick-and-mortarretailershaveextendedtheirtraditionalin-storebusinessbyanadditionalonlinechannel(Rudolphetal.,2015)inmulti-oromni-channelstrategies(Verhoefetal.,2015),ornewcompanieshavebeenfounded,sellingmerchandiseonlinewithoutoperatinganyupfrontstores(Xingetal.,2010).Asdigitalizationprogresses,existingdistributionsystemsaretransformedandaimatdirectlysellingproductsviaonlineshopsandtransactionplatformstotheendcustomers(GrewalandLevy,2007).Existingretailers,wholesalers,andevenmanufacturersoptforparticipatinginexistingtransactionplatformsortrytoestablishnewones,eitherontheirownorjointlywithcompetitors,asanadditionalsalesorprocurementchannelfortheirbusinessmodel(StaykovaandDamsgaard,2015;Hagbergetal.,2016).TransactionplatformThetransactionplatform(1b)providesthenecessaryprocessesandservicestoorchestrateretailtransactionsbetweenactorsfromdifferentandindependentmarketsinamulti-sidedReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

232Digitalplatformsandtradingcompanies217marketmode(HagiuandWright,2015;StaykovaandDamsgaard,2015).Tointroducemulti-sidedmarketsestablishedbyatransactionplatform,wedrawontheeconomicsliteratureandtheconceptoftwo-sidedmarkets(RochetandTirole,2003;Armstrong,2006;HagiuandWright,2015).Multi-sidedmarketsmatchtwoormorepreviouslydistinctmarkets(gatekeep-ers).Transactionplatformsformacentralnodeinadigitalbusinessecosystemthatconnectsdynamicnetworksofsuppliersandcustomers(McIntyreandSrinivasan,2017).Thecorevaluepropositionofthetransactionplatformisthefacilitationofthematchmakingbetweenusersfromthedemandsideandthesupplyside,enablingtransactionsbetweenthem(ReillierandReillier,2017).Fromacustomerperspective,transactionplatformsinretail“resembleretailagglomerations”(Hänninenetal.,2018,p.155),assemblingtherangeofmerchandiseofparticipatingsuppliers,andretailersinasingledigitalchannel(TellerandElms,2010).Theyprovideanintegratedandhomogeneousdigitalstorefrontforindependentsuppliers.Transactionplatformsaggregatethediverseassortmentofmerchandiseofthesupply-sidepar-ticipantsfromthesupplymarkets(WulfertandSchütte,2021).Thisassortmentasanaggregatebythetransactionplatformcanbedescribedastheperiphery,whilethecoreistheplatformitself,offeringservicestosupply-sideanddemand-sideparticipants,asdescribedanalogouslyintheplatformliterature(BaldwinandWoodard,2009;StaykovaandDamsgaard,2015).Byconductingtransactionsinvolvinggoodsorservices,money,andinformation(Schütte,2017)viatheplatform,theusersformatransactionecosystem(EvansandGawer,2016).Atransactionisunderstoodasatransitionfromaproductoraserviceviaatechnicallysepara-bleinterface(Williamson,1985).Transactionplatformsareabletoexploitdirectandindirectnetworkeffectstofurtherpropeltheecosystem.Connectingmultiplemarketsides,theyapplyasymmetricmeasures(forexample,onesideofthemarketsubsidizingtheother)(RochetandTirole,2003;ArmstrongandWright,2007)toreachandexceedcriticalmass(RochetandTirole,2006;Tiwana,2014).Transactionplatformsprovidenetworkeffectsforparticipants(lowertransactioncostsforsearchandpurchaseinitiation)andenhanceeconomiesofscaleformarketowners(almostzeromarginalcostsforaddinganothersupplierormerchandise),evenmoresointhecontextoftheinternet.Transactionplatformsprofitfromincreasednetworkeffectsastheyareabletomonetizethetransactionstheyorchestrate(RochetandTirole,2006).InnovationplatformInnovationplatforms(1c)areunderstoodashavingtechnicalcapabilitiestocreatenewsolutions(Asadullahetal.,2018).BaldwinandWoodard(2009,p.19)defineaninnovationplatform“asasetofstablecomponentsthatsupportsvarietyandevolvabilityinasystembyconstrainingthelinkagesamongtheothercomponents.”Tiwanaetal.(2010,p.675)empha-sizethatthissetofstablecomponentscanbeusedbythird-partydevelopersasan“extensiblecodebase…thatprovidescorefunctionalitysharedbythemodulesthatinteroperatewithitandtheinterfacesthroughwhichtheyinteroperate.”Whilestablecomponentsformthecoreoftheinnovationplatform,thethird-partymodulesresembletheperiphery(StaykovaandDamsgaard,2015).Theplatformcoreandtheperipherycanbeevolved;thus,onlytheinter-facespecificationsremainstableoveralongerperiodoftimetoavoidmoduleadjustmentsforthedevelopersthatwouldbenecessaryotherwise(BaldwinandWoodard,2009).Inthecontextofe-commerce,innovationplatformssupportitsbusinessmodels.Therefore,Blaschkeetal.(2019,p.4)defineinnovationplatformsasthe“technicalcore”ofasurround-ingecosystem.Inthecontextofe-commerce,innovationplatformsaretheoperatingsystemforonlineshopsandtransactionplatforms(HansethandLyytinen,2010,p.4).TheyprovideReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

233218Handbookondigitalbusinessecosystemstheapplicationservicesnecessaryforexecutingthebusinessmodel-relatedbusinessprocesses(Coralloetal.,2007).Platformprovidersenablethedevelopmentofexternalmodulesorappsbyexternaldevelopersandmakeuseoftheinnovationplatforms’developmentenvironmentbyopeningtheirplatforms,implementingtechnicalinterfaces‒forexample,applicationpro-gramminginterfaces(APIs)andsoftwaredevelopmentkits(SDKs)‒andprovidingsocial(forexample,documentationandtechnicalsupport)boundaryresources(forexample,commercetools).Externalmodulesmakeuseofthetechnicalboundaryresourcesprovidedbytheinno-vationplatform(GhazawnehandHenfridsson,2013;Eatonetal.,2015).Theopennessofaninnovationplatformdetermineswhichplatformservicesandcomponentsfromtheapplicationandinfrastructurelayercanbeused,modified,andextendedbythird-partydevelopers(WitteandZarnekow,2018,p.734).Third-partydevelopersimplementadditionalmodules,suchasshopthemes,interfaceswithotherdigitalplatforms,orfeatureadd-ins.Whileinnovationplat-formsusuallyexploiteconomiesofscaleandscopewithincreasingefficiency,andincreasedproductvarietythroughreusabilityandreconfigurationofmodulesorservices,theymayutilizefurthereconomiceffectsasthecenterofabroaderinnovationecosysteminwhichtheymayalsoestablishmulti-sidedmarkets(CusumanoandGawer,2002;Gawer,2009;BuxmannandHess,2015).BusinessActorsThebusinessactorsfromatraditionalbusinessecosystemofaretailerresemblethemajoractorsfromtheofflineresellermode(HagiuandWright,2015).Technologiesandcapabilitiestoestablishadigitalplatformforthedigitalrepresentationofthetraditionalecosystemareacquiredbyadditionalbusinessactors.BusinessactorsinatraditionalbusinessecosystemAbusinessecosystem(I)isformedbyindependent(orevencompeting)actors(naturalorlegalentities)thatshareacommoninterest,suchasthesuccessoftheecosystem(Coralloetal.,2007;Warehametal.,2014;McIntyreandSrinivasan,2017),andevenco-createvalue(BlaschkeandBrosius,2018).Themajorbusinessactors(2a)fromaretailer’straditionalbusinessecosysteminanofflinecontextarethevarioussuppliersandcustomers.4Theformergroupprovidestheecosystemwithproductsorservicesthatarepurchasedandconsumedby(end)customers(Eisenmann,2008).Thearchetypalsuppliersandcustomerscanbeinstanti-atedbydifferententities,suchasgovernments,businesses,andevensinglecustomers(Turbanetal.,2017).Theretailerprocuresgoodsfromitssuppliersandsellsthemtoitscustomers.Theretailer’straditionalbusinessecosystemisoftencharacterizedbycomplexownershipstructures(forexample,aretailerorganizedasaco-operative)requiringclosecoordination,resultinginahighdegreeofbureaucracy.Todecreasepurchasepricesandprofitfromecon-omiesofscale,retailersmayengageinapurchasingassociation.Astheavailabilityofgoodsisamajorconcernforretailers,theyassertcontrolovertheirsupplychainandcloselymonitortheirsuppliers.Forsuppliers,theretailerisusuallytheonlytouchpointforcustomers,whointurncanonlypurchasecertaingoodsfromaretailerthatperformsimportanttradingfunctions(Müller-Hagedornetal.,2012).Besidesthesemajorbusinessactors,Böttcheretal.(2021)introduceadditionalactorsthatsupporttheretailtransactions,suchasstoreequipmentprovid-ersormarketresearchers,intheir(traditional)retailecosystemmodel.ReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

234Digitalplatformsandtradingcompanies219AdditionalbusinessactorsinadigitalbusinessecosystemDigitalbusinessecosystems(II)involveadditionalbusinessactors(2b)thatprovidethetechnologyandcapabilitiesnecessarytoimplementadigitalrepresentationoftherealworld(Grewaletal.,2017;Teece,2017).Thelinkagesamongtheindependentactorsarerealizedviadigitalchannels(Baumann,2019).Whileamarketplaceproviderfocusesonservicesthatenablearetailertoorchestrateformerlyindependentmarkets,platformandinfrastructurepro-viderssupplythetechnicalenvironmenttoattractthird-partydevelopers.Externaldevelopersimplementsoftwaremodulesbasedonthegivenfunctionsandprovidethemtootheractors(Tiwanaetal.,2010).Otherretailersmayparticipateinaretailer’sdigitalbusinessecosystemandactassuppliersoralsodemandgoods.Theorganizationalboundariesoftheindependentactorsincreasinglyvaryinadigitalbusinessecosystem,dependingontheappliedconception(efficiency,power,competence,andidentity),andareincreasinglyblurredforendcustomers(SantosandEisenhardt,2005).Thevalueofadigitalbusinessecosystemincreasesforeveryactorwitheachadditionalactorinthenetwork(ShapiroandVarian,1998;Briscoeetal.,2006).Inter-ecosystemcompe-titionandexclusiveoffersonthesupplysidedonotinfluencethisoveralltrendbutincreasethevaluefordemand-sideparticipants(Zhaoetal.,2020).Thisadditionalvalueispropelledthroughdirectandindirectnetworkeffects,increasingthevalueofparticipationinanetworkbyactorsofboththesameanddifferenttypes(ShapiroandVarian,1998;Hinzetal.,2020).Thestrengthofnetworkeffectsisinfluencedbythecontinuousanddynamicchangeinthedigitalbusinessecosystem,causedbyusersjoiningandleavingit(Coralloetal.,2007).BusinessProcess,Application,andInfrastructureLayerThebusiness(3),application(4),andinfrastructurelayers(5)providetheapplicationservicesandtherequiredcomputingandstoragecapacitythatsupportbothtransactionandinnovationplatform-relatedbusinessprocesses.Theapplicationlayerformsthetechnicaloperatingsystemforthebusinessmodel–thatis,theestablishedmulti-sidedmarket–viathetransactionplatformor,equivalently,theinnovationecosystemviatheinnovationplatform.Itprovidestheapplicationservicesnecessaryforexecutingthebusinessmodel-relatedbusinessroutines(Coralloetal.,2007).Transactionplatformsestablishadigitalchannelbetweentheindepend-entactorstoenableatransaction.Besidesthematchingofthemarketsides,thetransactionplatformmayofferadditionalgenericdomain-orientedservices,suchasmanaginggoodsoraccountspayable,totheactors(Schütte,2011).Thus,itmaycoverallphasesofthepurchas-ingprocess.Foramoresophisticatedserviceprovisionthroughoutthepurchasingprocess,ecosystemparticipantsmayinteractwiththeapplicationlayerservices(3)throughpredefinedboundaryresources(Eatonetal.,2015).FollowingthefindingsofAulkemeieretal.(2016),thegenericdomain-orientedservicessummarizingtypicalretailactivities(Schütte,2011)aresupportedwithapplicationservicesdedicatedtothecustomersinvolved,aswellassupplychain-relatedservices.Customerser-vicesareimplementedtosupportcustomer-relatedprocesses,suchasmarketingorpricing(BeckerandSchütte,2007).Supplierservicesenableprocessesthatareaimedtowardthesuppliermarket,suchasprocurementoraccountreceivables.Thesupplychainservicesenablesupplychainandlogistics-relatedprocesses,suchasgoodsreceipts,orissueandreturnhan-dling.Masterdataandanalyticalservicesformcross-cuttingservicesthatcanbeaccessedbybothtransactionandinnovationplatforms.TheyareespeciallyrelevantforthematchmakingReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

235220Handbookondigitalbusinessecosystemsbetweentheindependentactors.Developmentandintegrationservicessupporttheprocessesoftheinnovationplatform(HumbleandFarley,2010).Thedevelopmentenvironmentenablesadditionalbusinessactors,suchasthird-partydevel-opers,todevelopmodulesbasedonthefunctionsprovidedbytheinnovationplatformthroughpredefinedboundaryresources.Third-partydevelopersimplementadditionalmodules,suchasshopthemes,transactionplatforminterfaces,orfeatureadd-ins,andprovidethemviadedicatedmarketplaces.Thesemodulesmakeuseoftheinterfacesprovidedbytheinnovationplatform(GhazawnehandHenfridsson,2013;Eatonetal.,2015).Thetestingservicesoftheinnovationplatformoffersophisticatedservicesforautomaticallytestingthedevelopedmodules.Additionally,servicesareprovidedtosupportthedeploymentofthemodulesdirectlytocustomersorintermediatingappmarketplaces(HumbleandFarley,2010).Whilethedevelopmentenvironmentispreconfigured,readytobeusedbythedevelopers,thesingleservices,suchasinterpretersforavarietyofmodelinglanguagesanddatabasemanagementsystems,aredeliveredviathedevelopmentservices.Theapplicationandinfrastructurelayerscanbeoperatedbyaretailerorsubscribedtofromasoftwareproviderthatprovidesthedigitalinfrastructureandrelatedservicesinprivatecloudormulti-tenantmodes(Constantinidesetal.,2018).Theapplicationandinfrastructurecom-ponents’functionscanbeexecutedbyaretailerorsubscribedtofromaserviceproviderthatprovidesthedigitalinfrastructureandrelatedservicesinprivatecloudormulti-tenantmodes(Constantinidesetal.,2018).5However,retailersincreasinglyestablishinnovationplatformsthemselvesandprovidethemtoothercompetitorstocreateanintegrateddigitalbusinessecosystem(WulfertandSchütte,2021).APPLYINGTHEPLATFORMFRAMEWORKTOELECTRONICCOMMERCETheimplementationpossibilitiesofthedigitalplatformsoutlinedaboveintheextensionoftraditionalbusinessecosystems(1a)aredemonstratedbymeansofanobservationalcasestudy(Wieringa,2014;Yin,2018).Thecasestudydepictsthedevelopmentorevolutionofanrepresentativeretailer’sexistingeffortstotransformitsbusinessmodelfromaninterme-diaryresellertoamulti-sidedmarket(Hagiu,2007;Cranz,2021).Digitalplatformscurrentlyformanimportanttouchpointfortheendcustomer(Barann,2018).ThecasestudydescribesFressnapf,aGermanretailerandfranchisecompanythatisthemarketleaderforpetfoodandaccessoriesinEurope.Foundedin1990byTorstenTöller,Fressnapfoperates1650stores,alongwithitsfranchisees.Withitsalmost13000employees,FressnapfoperatesinGermany,Austria,Switzerland,Italy,France,Hungary,Poland,Luxembourg,Ireland,Denmark,andBelgium.TheFressnapfGroupendedthe2020fiscalyearwith€2.5billioninsales.Fressnapfoffersbetween6000and10000productsinitsstoresandonline(FressnapfSE,2021b).Theassortmentconsistsoffood,grooming,toys,accessories,andspecialoffers,suchasorganicandrawfood.Additionally,ithasawiderangeofprivatelabels.Currently,the13brandsinitsportfoliothatareexclusivelyavailablefromFressnapfincludepetfood,snacks,accessories,andtoysforallkindsofanimals(Toeller,2017).ReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

236Digitalplatformsandtradingcompanies221StrategyLayerFressnapfiscurrentlytransformingitsbusinesswiththestrategicinitiative“Challenge2020”anditssuccessor,“Challenge2025”(Schmitz,2018).Fressnapfisaugmentingitstraditionalbusinessecosystembyaspectsoftransactionandinnovationplatformstorealizeanintegratedbusinessecosystemoverthecourseoftheseinitiatives.Since2009,Fressnapfhassoldproductsviaitswebshopinadditiontoitsbrick-and-mortarstores(1a).Thiswebshopwasrelaunchedin2015,emphasizinganomni-channelapproachwithatighterconnectionbetweenitswebshopandbrick-and-mortarstores(Holstetal.,2018).Theomni-channelapproachprovidesfeaturessuchasclickandcollectandin-storereturnhandlingforproductsthatwereboughtonline(Toeller,2017).Forthefuture,Fressnapfisplanningtoextenditswebshopandestablishatransactionplatform(1b)forpetowners(Holstetal.,2018).Byopeningtheshoptothird-partysellers(analogoustotheAmazonMarketplace)thatofferadditionalproductsandservices,thewebshopisevolvingintoamulti-sidedmarket(Ohs,2019).Hence,itisabletoexploitnetworkeffectsforpropellingitsonlinerevenueandtoprovidecustomerswithadditionalservicestoimprovetheiroverallexperiencewithFressnapf(Wulfertetal.,2021).Fressnapfhasestablishedaninnovationplatform(1c)(Marxen,2019),whichformsthecoreofthecompany’sinnovationecosystemforthedevelopmentandprovisionofadditional(smart)services(forexample,smartdogcollar,walkiesapp)forpetowners(Toeller,2017).Byofferingsmartproducts,Fressnapfisabletocollectadditionaldata,augmentingtheexist-ingcustomerrecords,andinturnprovidepersonalizedservices(Beverungenetal.,2019).Forexample,theinnovationplatformwilloffersoftware-andartificialintelligence-basedrecommendationsthatwilldeterminetheoptimaltimetowalkthedog,enabletheprovisionoffeedingschedules,andextendtoaremotediagnosisoftheanimal’sdisease,basedonthedatacollectedbythesmartdogcollar(Schmitz,2018).Afterpursuingitsstrategicinitiatives,Fressnapfwilltakeonatripleroleinitsintegratedbusinessecosystemasomni-channelreseller,ownerofitstransactionplatform,andproviderofinnovativeservices(WulfertandSchütte,2021).BusinessActorsOnthebusinessactorlayer,thetraditionalbusinessecosystem(2a)ofFressnapfconsistsofsuppliersofbrandedandprivate-labelproducts(suchaspetfoodorpetaccessoriesorderedfrommanufacturers)ononehand,andendconsumersontheotherhand.Theproductsaresoldtousuallyunknownendcustomersinstationaryretailstores.DuetothecompetitivesituationwithZooplus,whichhasestablisheditselfasthemarketleaderinthee-commercechannel,itisnecessarythatthethreebasicfunctionsthatbridgethediscrepancybetweenmanufacturersandendcustomersalsosupporttheonlinebusinessmodel(SchütteandVetter,2017).Forsalesviaitswebshop,Fressnapfalreadyhasthebasicsetofcustomermasterdatarequiredforprocessingpurchasetransactions.Thiscustomerdatawillbeenrichedoverthecourseofthestrategicinitiatives(Cranz,2021).AsFressnapfisimplementingtransactionandinnovationplatforms,itmustconsideraddi-tionalbusinessactorsforitsdigitalbusinessecosystem(2b).Forthetransactionplatform,Fressnapfcooperateswithanexternalproviderofthemulti-vendormarketplacesoftwarethatisalsoabletohosttheapplicationinthecloud.Thetransactionplatformmayalsoattractaddi-tionalsuppliers(Holstetal.,2018).AsthetransactionplatformisintendedtoformthefocalReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

237222HandbookondigitalbusinessecosystemstouchpointforcustomersinFressnapf’sdigitalbusinessecosystem,italsoattractsadditionalserviceproviders,suchasveterinariansorpetgroomers(Cranz,2021).Forexample,Fressnapfplanstointegratethedataofthousandsofveterinariansintoitsplatformandoffercustomerstheopportunitytoratetheveterinarians,providingasinglesourceofaggregatedinformation(Holstetal.,2018).Fortheinnovationplatform,FressnapfcooperateswithaMicrosoftpartnerandusesMicrosoft’scloudplatformforthedevelopmentandprovisionofitsservices.Theinnovationplatformwillalsobeopentothird-partydevelopersusingFressnapf’scoreservicestoprovideadditionalservicemodulestocustomers.Intandemwithaspecializedhardwaremanufacturer,Fressnapfisdevelopingitsownsmartproducts(forexample,smartdogcollar),aimingtoofferbothpetsandcustomersabetterserviceexperience(Schmitz,2018).Inaddi-tiontotheintegrationofexternalknow-how,Fressnapfisalsobuildingupin-housecapabili-tiestodevelopdigitalservicesandexperimentwithsmartproducts(Cranz,2021).BusinessProcess,Application,andInfrastructureLayerFortheimplementationofitsplatformstrategyonthebusinessprocess(3),application(4),andinfrastructurelayers(5),Fressnapfiscurrentlyrestructuringtowardabimodalinforma-tiontechnology(IT)approach(Cranz,2021).WhilethefirstpartoftheITisresponsibleforhandlingthetransactionsoftheresellerinthetraditionalbusinessecosystem,thesecondexploratorypartisresponsiblefortheplatforminitiativesandthusabletoexperimentwithIoTdevicesandadditionalsmartservices(Horlachetal.,2016).Fressnapfisimplementingatransactionplatformwiththird-partysellersofferingasimilarassortmenttothatofFressnapf.ThistransactionplatformwillserveasafocaltouchpointinFressnapf’sdigitalbusinessecosystem,withadditionalservicesofferedtopetowners(Marxen,2019;Ohs,2019).Fressnapfplanstoopenitswebshoptothirdpartiessellingtheirownmerchandise,creatingamulti-sidedmarket(Cranz,2021).ThecurrentwebshoprunsonanSAPHybrisInstanceexecutedbyacloudserviceprovider.Torealizethemulti-vendorfunctionalityrequiredforthetransactionplatform,Fressnapfwilluseadditionalmarketplacesoftware(Cranz,2021).Fromtheperspectiveofatransactionplatform,domain-specificservicesareimplemented,whichrequirespecificcustomerservices,adesignoftransactionsforproductsorservices,andtheanalysisofpastandfuturetransactions.Besideschargingcommissionfeesfromthird-partysellersforeachsaleontheplatform,Fressnapfplanstoactcompetitivelyonthetransactionplatformbysellingitsownproducts(Wulfertetal.,2021).Thus,theSAP-basedwebshopandthetransactionplatformshouldbeintegrated,whichisamajorrequirementforthetransactionplatform(Cranz,2021).Anotherdifferentiatingdimensionoftransactionplatformscomprisestheadditionalser-vices(offeredtoplatformparticipants)thatvaryintype,scope,andcoverage.Atransactionplatformcanbedistinguishedbytheofferedlevelofservicesfordemand-andsupply-sideusers(Wulfertetal.,2021).Withitsinnovationplatform,Fressnapfaugmentsthepurchaseofpetfoodandaccessorieswithavarietyofadditionalservices.Newserviceswillbeofferedaspartofthetransaction:theoptimaltimetotakethedogforawalkwillbedetermined,feedingplansbasedondogmovementprofileswillbeproposed,orremotediagnosesoftheanimal’sdiseasewillbeofferedtothepetowner(Schmitz,2018).Thetraditionalbusinessecosystemoftheretailerisextendedtoaservicecompanythroughthecapabilitiesoftheinnovationplatform.Theseadditionalservicesareenabledbyenrichedcustomerdataandsmartproductsofferedtopetowners(Cranz,2021).OneexamplecitedthroughoutthischapterisasmartdogReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

238Digitalplatformsandtradingcompanies223collar(Schmitz,2018).Thissmartproductcollectsdog-relateddata,suchasmovement,healthparameters,andenvironmentinformation.Thesedataaresharedviaadedicatedsmartphoneappthatalsocollectsadditionaldoginformation,suchasageorbreed(Cranz,2021).Thesmartphoneappwillbefurtherdevelopedasasinglepointofcontactwithpetownersandwillalsoincludeasocialnetworkforpetowners(Gassmann,2019).Inthefollowingparagraphs,wedescribesixservices(a–f)providedbyFressnapf,applyingourframeworkforintegrateddigitalbusinessecosystems(Table15.1).Fressnapfdoesnotonlyopenitstransactionplatformtoadditionalthird-partysellersbutalsointegratesadditionalthird-partyservices(a)byanumberofexternalproviders,suchasveterinarians,insuranceproviders,petgroomers,andsoon(FressnapfSE,2021a).Theseadditionalservicesarealsoofferedviathetransactionplatform,augmentingthesalesofphysicalproducts.Thus,anextendedmatchingserviceisrequiredtoconnectpetownerswiththeseadditionalservices.Ontheapplicationlayer,service-relatedsupplierservicesneedtobeimplemented,aswellasadditionalboundaryresourcesforthethird-partyproviderssothattheycanprovidetheirservicesonthetransactionplatform(Cranz,2021).Theseservicesarealsoofferedin-storebyserviceassistantswhocanarrangeappointmentswiththeserviceprovidersusingthetransactionplatform(Cranz,2021).Thus,Fressnapfisalsoplanningtoexpanditscustomermasterdatawithadditionalpet-relatedinformationtoenablepersonalizedin-storeconsultingandonlineservices.Thisalsoresultsinanincreasedhybridizationofofflineservices,suchaspetgrooming.AsFressnapfisextendingitstransactionplatformtobecomethecentralpointofcontactwithpetowners,itplanstoimplementasocialnetwork(b)forpetowners.Itaimstoconnectpetownersfromvariouslocationsandthusrequiresenhancedmatchingservicesandcustomer,supplier,andanalyticservicesfromtheappli-cationlayer.Thesocialnetworkshouldalsoenableco-createdcontentbypetownerswithotherpetowners(forexample,experiencereports)andprovideanimal-specificprofessionalguidebooksforpetownersandemployees(Cranz,2021).Thesetofwalkiesfeatures(c),asanadditiontotheFressnapfapp,usesthesensordatafromthesmartdogcollartocalculatetheoptimalwalkingtimeandrouteforthedog’sspecificrequirementsandhealthstatus(Cranz,2021).Additionally,thewalkiesappcanconnectdogownersforajointwalkandevenhandleoffersfordog-sittingandwalkingservices.Thisisrelevantfordogownerswhodonotalwayshavethetimetotaketheirdogsforawalk(Toeller,2017).Furtheranalyzingthedog’smovementprofilegeneratedbythesmartdogcollar,Fressnapfisabletoprovideitscustomerswithapersonalizedfeedingplan(d).Thefeedingschedulecanbecustomizedbasedonthedog’spreferencesanddailyactivities.Forexample,adogwithasmalleramountofdailymovementmayreceiverecommendationsfordietfood.Basedonthepersonalizedfeedingplan,Fressnapfwillalsoprovideasubscription(e)fortherequiredprod-ucts.Withthesubscription,thepetownerwillautomaticallyreceivethenecessaryfoodwiththeappropriatenutritionbasedonthedog’sdata(SchütteandWeber,2020).Theseservicesaredevelopedinthecloud.FressnapfisusingMicrosoftIoTdevicemanagementservicesandanalytics.Itisalsoimplementingcustom-developedservicesinthiscloudenvironment.ThenecessaryarticlemasterdataareimportedfromthemasterdatamanagementsystemandhandledintheIoTmanagementintandemwiththedogandcustomermasterdata.ToenableaccessofthesmartservicestotheSAP-basedenterpriseresourceplanning,FressnapfusestheSAPcloudplatform(Schmitz,2018).Moreover,Fressnapfprovidessmarthealthservices(f)forpets,brandedasDr.Fressnapf.Theseservicesincludepet-specifichealthandcaringinformationfortheownersandachatbotthathandlespetownerrequestsregardingthehealthReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

239224Handbookondigitalbusinessecosystemsofapet.Ifthechatdoesnotsuffice,Dr.Fressnapfprovidesatelemedicineservicebyimple-mentingavideoconferencewithaveterinarian(FressnapfSE,2021c).Dr.Fressnapfcanalsoarrangeanappointmentforanofflinemedicalexaminationiftheveterinariancannotmakeanysuggestiononline(Cranz,2021).BasedontheoutlinedstrategicinitiativesofFressnapf,Table15.1liststheparticularlyrelevantcharacteristicsofanintegrateddigitalbusinessecosystem.Withtheevolutiontowardadigitalbusinessecosystem,adistinctionismadebetweenstrategiclevelsandprocessandapplicationlevels(Figure15.1).CONCLUSIONANDRECOMMENDATIONSFORFUTURERESEARCHApplyingaDSRapproach,wehavedevelopedaframeworkfordescribingandstructuringdigitalbusinessecosystemsinretail.Theframeworkintegratesbusinessactorsintraditional(offline)andadditionaldigitalbusinessecosystems.Retailersenteringtheplatformeconomycanintroducetransaction(thatis,digitalmarketplace)andinnovationplatforms.Businessprocess,application,andinfrastructurelayersimplementthenecessaryservicesforbothkindsofplatforms.Amongothers,theseincludegenericdomain-orientedservices,matchingservices,andthedevelopmentenvironment.Theframeworkisaugmentedbythespecificsthatcharacterizeeithertraditionalordigitalbusinessecosystems.Theyfocusonownershipstructure,operations,underlyingeconomics,andfocalobjects.Withitsplatforminitiatives,Fressnapfisimplementingtransactionandinnovationplat-forms,augmentingitstraditionalresellerbusiness,bothonlineandoffline.Thetransactionplatformisopentothird-partysellers,withFressnapfalsosellingitsownarticles.ThetransactionplatformisenhancedtowardthefocalnodeofFressnapf’sdigitalbusinesseco-system,providingadditionalservicesforpetowners.Theseservices(forexample,walkiesapp,feedingplan,healthcare)areimplementedusingtheinnovationplatformandmakeuseofco-developedsmartproducts,suchasthesmartdogcollar.Fortheprovisionofadditionalsmartservices,Fressnapfispartneringwithmorebusinessactors,suchassmartproductman-ufacturers,veterinarians,insuranceproviders,andpetgroomers.ThegenericretailservicesaresupplementedatFressnapfwithmatchingservicesanddevelopmentservicesthatareavailableontheMicrosoftcloud.Additionalservicesbythecloudproviderwillbeusedinthefuture.TheapplicationlayeralsorequiresIoTmanagementforthesmartproducts,enhancedmasterdata,anddedicatedboundaryresourcesforintegratingtheadditionalbusinessactors.Theconsequencesofplatformdevelopmentforretailersingeneralareconsiderable.Theyrequireamuchdeeperunderstandingoftheinterplayamongeconomic,social,andtechnicalsystems.Itisbecomingincreasinglycommonthatservicescanbedevelopedbasedonalreadyavailabledata.However,fromabusinessperspective,thecustomers’willingnesstopayisdecisivefortheprovisionofsuchservices.Duetotheeconomiesofscaleandnetworkeffectsofplatformproviders,thetrendtowarddigitalservicesofretailcompanieswillcontinuetoadvance(SchütteandWeber,2020).Thesedevelopmentsmeanthatadigitalplatformwillbecomeoneofthecentralcompetitiveopportunitiesforretailcompaniesinthefutureforseveralreasons.First,thetrendtowardtheconstantaugmentationofanalogservices(forexample,veterinariancheck-up)withdigitalservices(forexample,digitalveterinariansurgery)(BruhnandHadwich,2017;SchütteandReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

240Digitalplatformsandtradingcompanies225ApplicationlayerMasterdata,boundaryresourcesMatchingIoT,analytics,masterdata,matchingIoT,analytics,masterdata,nutritionIoT,analytics,masterdataIoT,masterdata,diseases,symptomsBusinessprocesslayerSupplierrelations,billingCustomermanagement,billing,marketingCustomermanagement,billingProcurement,manufacturing,logisticsCustomermanagement,logisticsHealthmanagement,productdevelopment,logisticsTransaction,innovationVertical,horizontalOpen,closedDirect,indirectOwn,third-partyAdditionalactorsVeterinarian,insuranceprovider,groomer,insurance,medicinePetowners,otherthirdpartiesPetownersNutritioncounselorManufacturers,nutritioncounselorVeterinarian,telemedicineserviceprovider,insuranceproviderStructuringservicesanddigitaltransformationinitiativesatFressnapfServiceThird-partyservices(a)Community(b)Walkiesapp(c)Feedingplan(d)Feedsubscription(e)Healthcare(f)PlatformplatformTransactionInnovationTable15.1ServicesprovidedthroughFressnapf’splatforminitiativesStructuringdigitaltransformationinitiativesatFressnapfStrategylayer(1)TypeofplatformValuechainintegrationaspectsDegreeofopennessNetworkeffectamplifiersPlatformproviderStartingpoint:thetraditionalbusinessecosystem(I)ReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

241226HandbookondigitalbusinessecosystemsApplicationlayerBusinessprocesslayerManufacturer,customer,retailer,wholesaler,logisticserviceprovider,suppliersofarticles,serviceproviders,andsoonArticles,services,andsoonBusiness-to-customer(B2C),customer-to-customer(C2C)Veterinarian,insuranceprovider,groomer,telemedicineprovider,nutritioncounselor,andsoonMatchingfocus,hybridproduct,digitalservices,andsoonNeedrecognition,informationsearch,evaluationofalternatives,purchasephase,post-purchasephaseMembership,opentoallApp,webshop,store,andsoonFixedprices,dynamicprices,auctions,negotiationSupplyside,servicereview,demandside,andsoonWebsite,personalsupport,fileupload,APIsAppsfortransactionphases,smartproducts,andsoonAdditionalactorsServiceServicesprovidedthroughFressnapf’splatforminitiativesBusinessactors(2a)DifferentiationoftheservicesthataresubjectsofthetransactionValuechainEnhancementoftheintegrateddigitalbusinessecosystemthroughmulti-sidedmarketthinkinganddigitalplatformelementsAdditionalbusinessactors(2b)Businessprocess,application,andinfrastructurelayers(3–5)ServicesPurchasingprocessCustomeropennessCustomertouchpointsPricepolicyReviewsystemBoundaryresourcesoftheplatformTypesofmodulesontheplatformSources:SchütteandWeber(2020)andCranz(2021).ReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

242Digitalplatformsandtradingcompanies227Weber,2020)meansthatretailcompaniesneedadigitalplatformforconnectingcustomersandsuppliersthatalsoenablestransactions.Second,thenecessityforadigitalplatformforcesretailerstodevelopdigitalcapabilitiesin-house,ashugepercentagesofaretailer’svaluepropositionareaffectedbydigitaltransformation,suchastheprovisionofadditionalservices.Thisaspectisparticularlyimportanttoourpresentresearchbecausetraditionalretailcompa-nieshaverarelydevelopedanyproventechnologicalcompetenceincontrasttopureonlinecompetitors,suchasAmazon.Third,thetraditionalbusinessecosystemwithitsstrategicsuccessfactors,suchassupplierorsalespower,isstillofconsiderableimportance,althoughvaryinggreatly,dependingontheindustry.However,thesetraditionalsuccessfactorswillnolongerbesufficienttobesuccessfulascustomersbecomeaccustomedtoservicesprovidedbyonlineretailers.Associetiesbecomeincreasinglydigitized(forexample,autonomousdriving,robotics,self-controllingalgorithms,andsoon),digitalplatformsshouldbeestablished,eveninareas(forexample,foodretailing)thatseemlessaffectedbythetransformation,toremaincompetitive.Less-affectedareasarealreadypressuredtodaybydisruptivebusinessmodels(forexample,HelloFresh,Picnic).Aswecouldonlydemonstrateourframeworkwithoneselectedretailer,futureresearchmayevaluateandfurtherdeveloptheframeworkbyusingittodescribeandstructurethedigitalizationinitiativesofadditionalretailers.Moreover,thehigh-levelframeworkmaybedescribedinmoredetailonthebusinessprocessandtheapplicationlayers,andespeciallytheinfrastructurelayer.Anotherimportantavenueforfutureresearchistoanalyzetheimplica-tionsoftheretailer’sdecisiontoprovideadditionalservicestoitscustomersandthustakeontaskspreviouslyexecutedbyotherecosystemparticipants.ThisisespeciallycriticalregardingadditionalISrequirementscausedbyplatforminitiativesingeneral,andtheadditionoffurtherservicesinparticular.Weplantoexpandourinterviewswithenterprisearchitectstoderiveamoredetailedsoftwarearchitectureforaretailer’sdigitalizationinitiativesconcerningtrans-actionandinnovationplatforms.NOTES1.Inthischaptertheconceptof“retail”includesbothretailandwholesalecontexts.Wealsoincludemanufacturerswitharetailerrole,sellingarticlesdirectlytoconsumersunderthisterm.2.Thesinglecomponentsoftheframeworkareconsideredoptionalandmaynotbeimplementedforaconcreteretailer.Morecomponentsthatarenotdepictedinthereferenceframeworkmayalsobeadded.3.Inthefollowingexplanations,eachnumberinparentheses,forexample,(1)referstothecorre-spondingelementoftheframeworkshowninFigure15.1.4.Althoughadditionalbusinessactorssupportaretailer’straditionalbusinessecosystem,suchaslogisticsserviceprovidersorrentersofitsstore,wefocusonthemajorparticipanttypes—suppliersandcustomers–withtheretailerbridgingrealgoods,nominalgoods,andinformationbetweenthem.5.Ascloudservicesincreasinglycommoditizeinfrastructureservices,applicationserviceproviderstypicallysummarizelayers3and4.Thus,theinfrastructurelayerisnotfurtherspecifiedinFigure15.1.ReinhardSchütteandTobiasWulfert-9781839107191DownloadedfromPubFactoryat05/28/202209:57:07AMviaColumbiaUniversityLibrary

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24716.ThedigitalconsultingecosystembusinessmodelVolkerNissenCONSULTINGISFACINGITSDIGITALTRANSFORMATIONConsultingcanbedefinedasaprofessionalserviceprovidedbyoneormorepersonswhoareprofessionallyqualifiedandhierarchicallyindependentoftheclientbeingadvised.Thisserviceislimitedintimeandisusuallypaidfor.Thegoalistointeractivelydefine,structure,andanalyzeeconomicproblemsofthecommissionedcompanywiththeclient,todeveloporfacilitatesolutionstotheproblems,and,ifdesired,toplantheirimplementationandrealizetheminthecompany,togetherwithrepresentativesoftheclient(Nissen2018).Whiletheystrengthenthecompetitivenessoftheirclientsbyinnovativesolutionsandsubstantiallytakepartinthedevelopmentofnewconceptsfordigitalization,consultingservicesareoftenstillperformedbytheconventionalinteractiveface-to-faceapproach.Thus,consultingistradition-allyalabor-intensivebusinessthatscalespoorly.However,thesamedisruptiveforcesthathavealreadychangedthebusinessmodelsofotherindustriesarenowbeginningtotransformtheconsultingsector(Christensenetal.2013;Parakala2015).Eventhoughthetotalturnoverintheconsultingindustryisincreasingfromyeartoyear,thecompetitiveconditionsforconsultingcompaniesarechangingrapidly(Nissen2018).Complementarytechnologicaldevelopmentssuchascloudcomputing,mobiledevices,bigdata,andsophisticatedanalyticalapplicationslowerbarriersofentryandmodifythewayconsultingmaybeprovidedandconsumed.Newcompetitorsareenteringthemarketwithinnovativebusinessmodelsandtechnology-drivenapproachestoconsulting.Manyofthemsupplynewsolutionsforaspecificstepintheconsultingvaluechainthatcanspeedupserviceprovisionatpotentiallybetterqualityorlowercost.Examplesincludeautomateddataanalysisandinterpretation,processminingandmodelling(vanderAalst2016),quicklyconnectingaclienttoanexperttoprovideon-demandbusinessadvice(“nanoconsulting”),orcrowd-basedconsultingmodels(Christetal.2018).Manyofthesenewconsultingprovidersrelyonweb-basedinformationtechnology(IT)platformsasamediumofcommunicationanddataexchange.Atthesametime,itcanbeobserved,thatforcommodityconsulting(standardthemes)businessconsultinghasbeenchangingtowardsabuyers’market.Heretheprice,speed,andvalueformoneyareforemost,ascompetitionamongstprovidersisintense.Agroupofnewcompetitorsintheconsultingmarketprovidesasset-basedconsultingsolutions.Christensenetal.(2013)describeasset-basedconsultingasinvolving“thepackagingofideas,processes,frameworks,analytics,andotherintellectualpropertyforoptimaldeliverythroughsoftwareorothertechnology.”Consequently,theamountofhumaninterventionisgenerallylessthanwhattraditionalconsultingrequires.Asset-basedconsultingisoftenprovidedatalowerpricethantraditionalpeople-basedconsulting,becauseofasubstantialincreaseinefficiency,speed,andproductivity.Newandpotentiallydisruptiveconsultingdeliverymodelsbecomemore232VolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

248Thedigitalconsultingecosystembusinessmodel233acceptablewithclients,whentheybetteraccountfortheirneedsandprovideaclearerreturnoninvestment(ROI).Asaresult,incumbentconsultanciesmustbecomeincreasingly“data-driven”(Nissen2021b).Ontheonehand,theycanintegratedataandanalyticalcompetenciesmorecloselyintotheirservices,thusimprovingtheiraddedvaluefortheclients.Ontheotherhand,thebusinessmodelofconsultingproviderscanbesignificantlymodifiedifdataanddigitaltech-nologiesareusedtodigitalizetheserviceprovisionandenable(semi-)automatedconsultingapproaches.Thesedevelopments,possiblycombinedwithnaturallanguageprocessing,alsopavethewayforknowledge-intensiveconsultingself-servicesfortheclients,forinstanceintheformofintelligentchatbots,consultingapps,andautomateddigitalassessmentsinmoreorlessstandardizeddomainsofapplication.Clientsincreasinglyusedigitalchannelstosearchinformationoneligibleconsultingpro-vidersfortheirprojects.Here,digitalmarketplacesandonlinecommunitiesalreadyexceedtheimportanceofsearchenginesandportals,accordingtoasurveybyCardea&Newcoventure(2016).Clientsarealsobecomingmuchmoreselectiveandmodularaboutwhattheyarebuying,oftenseekingservicesinsmaller,well-definedscopesofwork(Parakala2015).Theresultofthismodularizationinconsultingisashrinkingvolumeofindividualengagements,whichleadstorisingsalesandmarketingefforts.Thus,newsalesconceptsanddistributionmodelsforsmallconsultingservicesmustbedeveloped.Asareactiontomodularizeddemandontheclientside,consultingprovidersshouldmoreoverrespondbyapplyingmoreflexibledeliverymodelsthatareadaptabletoclients’rapidlyevolvingneeds.Summarizing,itcanbeexpectedthatmuchofthefuturegrowthinconsultingwillgotothosewhosuccessfullycreatetechnology-basedconsultingapproachesanddeliverymodelsthatbettermeetclientneedsatlowercost.Inviewofavailabledigitaltechnologiesandnewtechnology-drivenapproachestoconsulting,themanagementofconsultanciesshouldthere-forecriticallyreviewtheirserviceportfoliosandassesswherethetraditional,costlyconsultingmodelisrequiredandwhereitisnot.Ultimately,thegoalisfindingbetterwaystosupporttheirclients’businessesinanagileandvalue-addedway.Inviewofthesechallenges,thevirtualizationofconsultingservicescanbeaninnovativestrategytoensurethesustainablesuccessofacompany.Avirtualprocessisaprocessinwhichthephysicalinteractiondisappears.Thetransitionofaphysicalprocesstoavirtualprocessistermedprocessvirtualization(Overby2008,2012).Thegoalofvirtualizationinconsultingistomeaningfullyreduceface-to-faceinteractionbetweenconsultantsandclients(butalsoamongstconsultants)throughthefocuseduseofinformationandcommunicationtechnolo-gies.Thecorecomponentsofvirtualizationinconsultingarestandardization,digitalization,andinterconnectivity.Virtualizationhasmanypotentialbenefitsandrisksforconsultanciesandclients,detailedelsewhere(NissenandSeifert2015).Itmaybedescribedasastrategyforthedigitaltrans-formationoftheconsultingbusiness.Virtualservicescomplementtraditionalconsultingtooptimizeandexpandtheserviceportfolio.Infocusedareasofapplication,thevirtualizationandautomationofconsultingservicesmayimprovethereach,flexibility,speed,cost,andsometimeseventhequalityofserviceprovision.Virtualizationcanalsoopenupnewmarketsthatwouldotherwisebegeographicallyinaccessible,orunsuitablefortraditionalformsofserviceprovision(Nissen2018).Amongtherisks,thefearedweakeningoftheconsultant‒clientrelationshipandthelossofclienttrustthatmightaccompanyitstandout,becausetrustisacentralassetinconsulting.VolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

249234HandbookondigitalbusinessecosystemsToolittleindividualizationofperformanceduetoexcessivestandardizationcouldalsohaveanegativeimpact.Otherconcernsrefertosecurityissues,fearsofuncontrollableprojectcom-plexity,andthusproblemswithcommunication,coordination,andcooperation.Digitalplatformsandassociatedecosystemscouldbeemployedasacoreapproachtoallowforlarge-scalevirtualizationintheconsultingdomain,leadingtounprecedentedreachandscaling.Tolayafoundationfortheremainderofthischapter,thenextsectiondefinestheterms“digitalplatform”and“digitalplatformecosystem,”beforeplatformeffectsinconsultingareexplained.Variousplatform-basedbusinessmodelscanbedifferentiatedintheconsultingindustry.WhileIbrieflytouchonallthesemodels,thefocusofthischapterisonthedigitalconsultingecosystemasthemostdisruptiveplatform-basedbusinessmodelforfutureconsult-ing.Attheendofthechapter,Idiscusswhichcompanytypesaremostlikelytoevolveinthisdirection.SOMEFUNDAMENTALSOFPLATFORMECONOMICSDigitalPlatformsandEcosystemsTheCOVID-19pandemicclearlyledtochangesinthewaybusinessisconducted.Whilecustomersarelookingformoredigitalend-to-endjourneysacrossproductsandservices,enterprisesarelookingtoreinventtheirvaluepropositionfortheplatformage(Dietzetal.2020).Thisageisuponusduetothedisseminationofpowerfulinformationandcommuni-cationtechnologiesthathaveloweredthecostandincreasedthereachofconnectingmarketparticipantsviadigitalplatforms(SussanandAcs2017).Onagenerallevel,aplatformmaybeseenasastablecoreandavariableperiphery(BaldwinandWoodard2009).Digitalplatformscanbeconceptualizedindifferentways,asdeReuveretal.(2018)pointout.Theymaybeviewedastechnicalartefactswheretheplatformisanextensiblecodebase,andadigitalecosystemaroundthisplatformcomprisesthird-partymodulescomplementingthiscodebase.Fromafunctionalperspectivethisallowsfordistributeddevelopmentandrecombinantinnovationthroughmodularization(HendersonandClark1990).Anothertypeofplatformmediatesbetweendifferentusergroups(suchasbuyersandsellers).Thistypeisgen-erallydenotedasatwo-sidedormulti-sidedplatform(BoudreauandHagiu2009).However,adigitalplatformalsoconstitutesasociotechnicalsystemwithtechnicalelements(hardware,software),interactingusers,andassociatedprocessesandstandards.Thefocusinthischapterisnotonthetechnicalimplementationlevelwithdigitalmedia,butratheronthebusinessmodels,processes,andservicesthatcanbeaccessedandprovidedviaadigitalplatform.Platformsarecloselyrelatedtoecosystems.Abiologicalecosystemcanbedefinedasacommunityoflivingorganismsinconjunctionwiththenon-livingcomponentsoftheirenvi-ronment,interactingasasystem(SussanandAcs2017).Adigitalplatformecosystem,follow-ingHeinetal.(2020),comprisesaplatformownerthatimplementsgovernancemechanismstofacilitatevalue-creatingmechanismsonadigitalplatformbetweentheplatformownerandanecosystemofautonomouscomplementorsandconsumers.Usingcurrenttechnologies,tasksareperformedmoreefficientlyandeffectively,whilecooperationandexchangecanbeconvenientlyarrangedonthedigitalplatform.AccordingtoasurveybyKlimmerandSelonke(2016),successfultopmanagersoftenestablishadigitalecosystemaroundtheirenterprisesinVolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

250Thedigitalconsultingecosystembusinessmodel235thecourseofdigitaltransformation.Thebasicideaistoleveragethebenefitsofdigitalizationthroughanecosystemofpartners,whichfocusonspecifictasks.Digitalplatformsareanessentialbasisforthesuccessofmanydisruptivecompaniesincountlessindustries.Processesareeasilyscalableandrepeatablethroughdigitalplatforms.Marginalcostsareverylowwhenthebusinessexpandsintermsofvolume.Customerscanbereachedatanytime,anywhere;andmanyplatforms(forinstanceintravel)allowforanindividualconfigurationandindividualizationoftheservicebythecustomer.Manyofthemostvaluablecompaniestodayhavegrownexponentiallythroughtheuseofdigitalplatformsthatactivelymanageandmonetizeecosystemsofprovidersandconsumers.Frequently,thisissupportedbycollectingandanalyzinglargeamountsofdatageneratedthroughuserinterac-tionsonorwiththeplatform.Aswasdemonstratedseveraltimesinvariousindustries,thedevelopmentofplatformshasthepotentialtochangemarketsandmarketstructuresveryquickly.Thenetworkeffectsofdigitalplatformsarecreatingawinner-take-mostdynamicinsomemarkets(McKinseyGlobalInstitute2016).Theinfrastructureindependenceofdigitalplatformsandtheirpotentialusabilityfromanyinternetconnectionaretechnicalfoundationsfortheexploitationofdirectandindirectnetworkeffects.Positivedirectnetworkeffectsarisethroughthedirectinteractionofalargenumberofconsumers;thatis,thesizeofthenetworkmatters.Thebenefitincreasesdirectlywiththenumberofotherparticipants(socialmediaareanexample).Positiveindirectnetworkeffectsarisewhentwoormoregroups(oftenbuyersandsellers)interactonaplat-form.Thustheattractivenessofaplatformfortheonesideincreasesasmoreusersareontheotherside(retailplatforms,forinstance).McKinsey&Companycalldigitalecosystemsa“majorshiftforsociety”(Dietzetal.2020)andestimatethattheintegratednetworkeconomycouldrepresentaglobalrevenuepoolof$60trillionin2025.PlatformEffectsinConsultingTraditionalconsultingscalespoorly.Itisa“peoplebusiness,”meaningthatstaffarethedominantresourcerequiredtoexecuteprojects.Hence,ifatraditionalconsultancywantstodoublethenumberofprojectsinagiventimethenapproximatelytwicethenumberofpeopleareneeded.Thisresultsinhighmarginalcostsasthebusinessexpands.Anotherlimitingfactorforthegrowthofconsultingfirmsinthiscontextisthetoughwarfortalentsinrecruiting.Bycontrast,inthedigitaleconomybusinessisscalableandcreatesvalueusingdigitaltechnologies.Thisappliestomanyofthenewtechnology-basedstart-upsthatprovidevirtualconsultingservicesanddigitalconsultingtools(Nissen2018).Thus,thequestionarisesofwhattraditionalconsultanciescandotoimprovethescalabilityoftheirownbusiness.Tothisend,WerthandGreff(2018)suggestfouroptions:●separateanddigitalizeinformation-basedpartsoftheconsultingprocess;●engageinplatform-basedsharingeconomy,useexternalinsteadofinternalresources;●enableclientsandpartners,integratingthemintothe(digital)serviceprocesses;and●applyfullyautomatedconsultingservicesandalgorithmicprocessing.However,thelevelofscalabilitydependsonthechosenvirtualizationapproach,andtheextentandqualityofimplementation.Alltheseformsofscalingcaneffectivelybeimplementedviadigitalconsultingplatforms.Aswithplatformsinotherindustries,nexttoleveragingtheVolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

251236Handbookondigitalbusinessecosystemsscalingeffects,otherobjectiveswouldbetomaketheserviceprovisionmoremodularandconfigurablebytheuser,whileatthesametimeserviceinnovationscanbeintroducedthroughthecomplementorsaroundtheplatform.Inconsulting,digitalplatformsfundamentallyenabletheimplementationofallofPorter’scompetitivestrategies(Porter1980);interestingly,someevenincombination(hybridstrategy).Forexample,costleadershipcanbeachievedthroughprocessdigitizationandautomation,aswellasthroughthesharpdropinthemarginalcostsofadditionalbusiness.Platformsalsoenableadifferentiationstrategyfromthecompetitionbycleverlybuildingupadigitalecosys-temcomplementarytotheplatformoperator.Finally,aplatformcanalsobeusedtoimplementafocusstrategy,forexamplewhensectionsofaprovider’sserviceportfolioorvaluechainaresuccessfullydigitizedandthusscaled.Moreover,platformcompaniescaneffectivelycombinethesestrategies.Theymaybemoredifferentiatedandthusgenerateavalueadvantagefromtheclient’spointofview,whileatthesametimetheextensivedigitizationandthusprocessefficiencyenablethemtosellatcomparativelylowprices.Thecrucialquestionforconsultingmanagementis:Whatdopromisingbusinessmodelsinconsultinglooklikethatarebasedondigitalplatforms?Thisquestionisansweredmoreextensivelyelsewhere(Nissen2021b,forthcoming),whileinthischapterthefocusismostlyonthedigitalconsultingecosystem(DCE)model.Thisbusinessmodelaggregatesthevaluepropositionofothermodelsinaplatform-centeredecosystem.Itisconsideredthemostadvancedandfavorablefutureplatform-basedbusinessmodelinconsulting,incorporatingthecompetitiveadvantagesofothers.Ifonethinksaboutinnovativetechnology-andplatform-basedservices,theanalogytoanotherimportantfieldwithintheservicesectorcanbehelpful:logistics.Thedigitalizationoflogisticsisfarmoreadvancedthaninconsulting.Virtualprocesses,theuseofdigitaltechnologiesandplatforms,workinginnetworks,anddataexchangebetweenlogisticserviceproviders,customers,andpartners,havebeenconceptualizedandimplementedinthisindustryforatleast20years(GudmundssonandWalczuck1999;Walleretal.1999;Nissen2001,2002;NissenandBothe2002).Certainideasandconceptsthatareinsuccessfuluseinlogisticscanbetransferred“inspirit”todigitalplatformecosystemsinconsulting.Ofcourse,logisticsmainlydealswithphysicalgoods,whileconsultingishighlynon-material.However,onahigherlevelofabstraction,conceptsofclosedigitalcollaborationbetweenserviceproviderandcustomermakesenseinbothfields.Digitalizationenablespartnerintegrationandtechnology-basedserviceprovision.Similarly,theideaofoutsourcingtasksthatrequirehighlyspecializedknowledgecanbetakenfromlogisticstoconsulting,withremotedataaccessprovidingthebasisforinnovativefutureconsultingservices(Nissen2021b).DIGITALCONSULTINGECOSYSTEMBUSINESSMODELBusinessModelsandBusinessModelTransformationsinConsultingTheterm“businessmodel”isnotuniformlydefinedintheliterature.Verybriefly,accordingtoOsterwalderandPigneur(2011),abusinessmodeldescribestheessentialfunctionsofacompanyandthemeansbywhichitgeneratesprofitandvalue.Inamoreelaboratedversion,VolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

252Thedigitalconsultingecosystembusinessmodel237Al-DebeiandAvison(2010),basedonacomprehensivereviewofbusinessmodelconceptual-izationsintheliterature,suggestaunifiedframeworkwithfourdimensions:1.Valueproposition:highlightstheofferedproductsand/orservicesofanorganizationaswellasitsinteractionswiththetargetedcustomers.2.Valuearchitecture:referstoanorganization’scoreresourcesandcapabilities,aswellastheirconfigurations,necessaryforproducingtheofferedproductsand/orservices.3.Valuenetwork:describestherelationshipsandinteractionsofanorganizationwithkeyexternalpartnersandotherstakeholders.4.Valuefinance:isconcernedwithhowacompanyisabletocapturethevaluecreated,includingcoststructures,pricingmethods,incomechannelsandrevenuetypes.Inanattempttostructuretheplayingfield,Nissen(2018)suggestsfivetypesofdigitalbusinessmodeltransformationsinconsulting(Figure16.1).Basedontheamountofchangeinduced,thesearedifferentiatedinthreeevolutionaryandtwodisruptivetransformations.Source:AdaptedfromNissen(2018).Figure16.1DigitalbusinessmodeltransformationsinconsultingDigitalevolution:1.Rethinkvalueproposition:Here,thepresenceincurrentmarketsisincreased,butwithachangeoffocus.Inparticular,existingservicesarecombinedininnovativeways,leadingtonewrevenuestreamsandpaymentmodels,suchaspay-per-useorflatfeepayments.VolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

253238Handbookondigitalbusinessecosystems2.Changedeliverymodel.Inthistransformation,consultingprovidersconnectwiththeirclientsandpartnersinnewways,attractingnewcustomersandloweringoperationalcosts.Examplesincludeconsultingonlineshopsandremoteformsofconsulting.3.Createadditionaldigitalbusiness.Here,newdigitalservicescomplementthetraditionalserviceportfolio.Thismayalsobeachievedbyintegratingnewpartnersinacompany’sdigitalecosystem.Existingexamplesincludecertainself-services,suchasconsultingapps,andrelatedformsofasset-basedconsulting.Digitaldisruption:4.Replacetraditionalconsultingwithdigitalservices.Here,digitaltechnologiesareemployedinsuchawaythattraditionalformsofconsultingarenolongerrequiredorchangefocustocombineautomatedandhumanformsofconsulting.Thismayresultinanewcompet-itivepositioningoftherespectiveconsultingprovider.Examplesofrelevanttechnologiesincludedataandprocessmining(vanderAalst2016),aswellasdigitalself-assessments.5.Reinventtheindustrymodel.Thisdisruptivetransformationintroducesnewdigitalbusi-nessmodelsandsolutionapproachesthatfundamentallychangethewaytheconsultingindustryworks.Anexampleiscrowdsourcedconsulting,relyingonadistributedcrowdofdomainexperts.Digitalmatchmakersareanotherexample,abusinessmodelbrieflyexplainedinthefollowingsection.AnOverviewofPlatform-BasedBusinessModelsinConsultingAvarietyofplatform-basedconsultingbusinessmodelscanbedistinguished(Figure16.2).Thesimpleronesareactuallyinexistencetoday,whilethemorecomplexmodelsarenotimplementedyet,andmaychangetheindustrywithinthenextfivetotenyears(Nissen2021a,forthcoming).Verybriefly,thefirstsixbusinessmodelsinFigure16.2canbecharacterizedasfollows.Informationproviderplatformstargetconsultingclients,consultants,andgraduatesinter-estedintheconsultingprofessionwithfocusedinformationservices.Consultanciescanpresentcompanyinformationandcontentmarketingontheplatformandthusincreasetheirvisibility.SuchplatformsexistintheUnitedKingdom,theNetherlands,andGermany,forinstance.Digitalmarketplacesinconsultingactasmatchmakersbetweencompanieswiththeirpro-jectsandrequirementsthatneedexternalsupportontheonehand,andconsultantswiththeirskillsandavailablecapacitiesontheother.Often,matchingisbasedonsupportingalgorithms.InthecaseofoneproviderfromGermany,acombinationoftechnologyandpersonalassess-mentisemployed,whichshouldensurefastandgoodmatchingresults(Hardt2018).Consultingconfiguratorshelpclientstoconfigureandpurchaseconsultingservicesonlineatanytimeandfromanywhere,ortobuysupplementarydigitalgoods.Whiletheselectionandcustomizingofconsultingservicesareopenedupforconfigurationbyclients,theprovisionofconsultingservicesremainstraditional(WerthandGreff2018).Futureusersonaplatformthatprovidesdigitalconsultingtoolsasaservicewillhaveaccesstoawiderangeofmodernanalyticalapplicationsandotherconsulting-relatedtoolswithouthavingtobuyandmaintainthempermanently.Thisleadstoavariabilizationoffixedcosts,reductionofoperatingcosts,higherflexibility,andcontinuousupdates.Itisbecomingincreas-inglyimportantforconsultingcompaniestoimprovetheproductivityofindividualconsultantsVolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

254Thedigitalconsultingecosystembusinessmodel239inordertoremaincompetitive.Thiscanbeachievedthroughdigitaltechnologiesthatspeeduproutinetasks.Atthesametime,suchtoolsareoftenexpensive.ItdoesnotmakesenseforeachconsultingfirmtobuythesetoolsindividuallyandruntherequiredITenvironment.Rather,dedicateddigitalplatformscouldprovidesuchtoolsasaserviceondemand.Source:AdaptedfromNissen(2021a).Figure16.2ConsultingbusinessmodelsbasedondigitalplatformsInviewofthetypicalresourcesituationinsmallandmedium-sizedenterprises(SMEs),manycompanieswillnotbeinapositiontomeaningfullyevaluatetherapidlyincreasingheteroge-neousdatavolumesarisinginthecontextofdigitalizationandbigdata(Wieneretal.2020)fortheirbusinessdecisions.Inthedatafacilitatorbusinessmodel(Nissen2021b),suchtasksareoutsourcedtoaconsultingfirmthatspecializesinthisarea.Theaimistoidentifymarketshifts,deficienciesinbusinessprocesses,ITproblems,andsoon,atanearlystage.Likewise,ideasforbusinessimprovementscouldemergefromtheanalysisofdata.ConsultantsthenVolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

255240Handbookondigitalbusinessecosystemsalerttheirclientstosuchissues.Thisistoensurethattheclientdoesnotoverlookcriticaldevelopmentsthatwouldhavebeenidentifiableintheavailabledatasets.Fortheinterpreta-tionoftheresultsandconclusions,personalinteractionbetweenconsultantandclient,on-siteoronline,isstillnecessary.Also,theclientalwaysretainsresponsibilityformanagementdecisionsderivedfromdata.Thebusinessmodelconsultingcontentasaserviceisaimedatatradingplatformthatsellsdigitizedconsultingcontenttoclients,consultingcompanies,andfreelancers(forintegrationintotheirprojects).Itthusgoesbeyondthetoolsasaservicemodelandfocusesonstand-alonesolutionsindefinedapplicationareas.Suchasset-basedconsultingcontributestoaconsistentandrepeatableoutcome,whichcanincreaseconsultingquality.Italsosecuresandmultipliesconsultantknowledge.Forclients,expertknowledgebecomesimmediatelyavailableglobally.Duetoeconomiesofscale,thisformofconsultingcanbeofferedatlowprices.Thisinturncouldattractclientstotheplatformwhowouldnotturntotraditionalconsultants.Alternatively,contentcanalsobecreatedusingacrowdapproach.Crowdsourcingoffersinterestingopportu-nitiestosolvetasksefficiently,quickly,andcreatively(BoudreauandLakhani2013).Inthiscontext,crowdsarelargelyintrinsicallymotivated.Thisisalreadybeingusedsuccessfullybypioneersinconsulting(Christetal.2018),whichoftenrelyonalargepoolofsubjectmatterexpertsinsteadofhighlypaidconsultantswhocreatesolutionsforclientproblems.Indoingso,theplatformsupportsthecollaborationofitscrowdworkers.Despitejustifiedcriticism,theintegrationofsuchapproacheshereappearstobeaninterestingandflexibleoptionthatusefullycomplementstheratherrigidasset-basedsolutions.TheDigitalConsultingEcosystemasaFutureFullServiceProviderInthefollowing,anewbusinessmodelforconsultingisconceptualizedthatisbasedonadigitalplatformandasurroundingecosystem.Itintegratesmanyideasoftheothermodelsbrieflydiscussedaboveandalsobuildsonsomeanalogywithlogistics.ValuepropositionThebusinessmodelpresentednowcanbeseenasafullserviceconsultingindustryplatformwhereaplatformleaderpoolsexternalcapabilitiesfromcomplementors(Gawer2014)toprovideacomprehensiverangeofservicestoclients.Inmyview,thisbusinessmodelwilltruelydisrupttheconsultingmarket.However,duetoitstechnicalandorganizationalcom-plexity,itisalsoabusinessmodelthatcomeswithhighinitialandcontinuedinvestmentsandsignificantrisks.Theplatformownerofadigitalconsultingecosystem(DCE)takesovertheleadingroleforthemanagementofcomplexconsultingprojectsintheowner’sfunctionasaserviceintegrator.Suchaproviderhastheabilitytotakeoveralltasksinvolved.Theaimistoachievethegreatestreasonablevirtualizationofserviceprovision,tailoredtotheindividualcase.Theplatformcompanycombinesitsownskillsandresourceswiththoseofitsclientsandcomplementaryserviceproviderstocreateacustomizedoverallsolution.Platformsandassociateddigitalecosystemsareshiftingcompetitionfromcorporatetonetworklevelinconsulting.Theymaybeviewedasanequivalenttosupplychainsintheproductionofphysicalgoods.Combiningandextendingmanyofthepreviouslydescribedplatform-basedconsultingmodelsandtheirvaluepropositions,itisthemostfar-reachingvisionofadigitalfullserviceproviderinconsulting.TheplatformownerofaDCEactsastheVolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

256Thedigitalconsultingecosystembusinessmodel241headandintegratorofapotentiallyverylargeanddynamicnetworkofserviceproviders.Thisresultsinthefollowingrequirementsforitsservicestocustomers:●Anything.Clientsareofferedallrelevantservicesfromonesource(theplatformwithitsecosystem).Ideally,theplatformowneristheonlyclienttouchpoint:onefacetothecustomer.Complexservicesareorchestratedbytheplatformcompany,butthecomplexityofserviceprovisionishiddenfromtheclients.●One-stop.Ideally,clientscanexecutetheirtransactionsinonestop.Theydonothavetowaitfortheavailabilityoftheserviceprovider,withtheexceptionofpossiblephysicalpartsoftheconsultingprocessthatrequirethepresenceofhumanconsultantseitheronsiteorsynchronouslyremotely.●Anyhow.Advicefortheclientisprovidedinthecustomer’spreferredmanner.Theamountofvirtualizationappliedistailoredtotheindividualproject.●Anywhereandatanytime.TheDCE’sglobalnetworksenableittoofferclientscompre-hensiveservicesinanyregionoftheworldandatanytime.Ideally,thisenablesclientstoachieveindependenceoftheservicesofferedintermsoftimeandspace.●Anyone.ADCE,althoughworkingfordifferentcompanies,mustactwithoutlossofqualityandattentiontoallofitsindividualclients.ThehightechnologicalcompetenceoftheplatformownerinaDCEenablesend-to-endpro-cessesbetweentheserviceprovidersintheDCE,theplatform,theclients,andfurtherstake-holders(suchaspaymentplatforms)oftheecosystem.Throughthedigitalizationofprocessesandcommunication,advantagesinprocesscosts,speed,andservicequalityareachieved.ValuearchitectureandvaluenetworkAsnoexamplesofdigitalconsultingecosystemsareavailabletoday,anditmighttakeyearstogetthere,ananalogywithlogisticscanbehelpfultobetterunderstandtheconceptandpotentialofafullservicedigitalplatformecosystem.Onecangetinspirationfromtheconceptoffourth-partylogistics(Nissen2001;NissenandBothe2002).Fourth-partylogistics(4PL)isaformoflogisticsoutsourcing.A4PLprovider,asasupplychainintegrator,assumestheleadingroleforthemanagementofcomplexsupplychains.Theuseofdigitaltechnologiesisoneofthekeycompetencesofa4PL,aswellastheabilitytomanagecomplexcross-companybusinessprocesseswhileextendingitsowncapabilitiesthroughcomplementaryserviceproviders.Essentially,the4PListhebridgeheadintoalargenetworkofservicepartnerswithspecializedskills,requiredtoputtogetheranoverallsolutionthatcoversallsupplychainrequirementsofthe4PL’scustomers.Cost-effectivenetworkingisofcentralimportancewithinthisserviceintegratorfunction.Forthispurpose,the4PLusesadigitalplatform,whichconnectstocustomersandlogisticsserviceproviders.Italsoincludesthesoftwarefunctionsfortheimplementationofthe4PLtasks.Ifonetransfersthisideafromlogisticstoconsulting,theresultcouldlooksomewhatsimilartoFigure16.3.Here,theplatformownerintegratesawiderangeofinternalandexternalressourcesbydigitalizingprocessesandcommunicationasfaraspossibleviathedifferentlevelsofplatformservices.Theplatformcompanydynamicallyselectsandintegratesthemostsuitableserviceproviderstofulfilltasksaccordingtothecriteriaofitsclients.Thesupportedcross-companyprocessesandplatformfunctionalityaresketchedinFigure16.4.Myvisionisthatconsultantsandsalesrepresentatives,independentofwhethertheyareworkingremotelyoron-siteattheclientcompany,starttheirworkbyaccessingthedigitalVolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

257242Handbookondigitalbusinessecosystemsplatformthatprovidesthemwithcontent,connectivity,andtoolstosupporttheirdailywork.Toolswouldincludecommunicationandcooperationfunctionalitysuchaswebconferencesanddesktopsharing,forinstance;butalsomodeling,knowledgemanagement,processmining,andanalyticaltoolstospeedupdifficultroutinetasksintheanalysisandproblemsolvingphaseofconsultingprojects.AfullintegrationwiththemainITsystems(inparticular,enter-priseresourceplanningsystems)ofclientswouldeasethesetasksandprovidethebasisformonitoringandalertoptionsasoutlinedinthedatafacilitatorbusinessmodel.Basically,thewholelifecycleofconsultingandsalesshouldbesupportedbycorrespondingtools,availa-bleviathedigitalplatform.Contentcouldbemadeavailabletosupportconsultingprojectsthroughaccesstoknowledgeanddatabases,projecthistories,customizedindustrysolutions,templates,andguidelines,tonameonlyafewoptions.AnotherstreamoffunctionalityonthisITplatformwouldsupporthumanresourcesdepartmentsindealingwithjobapplicationsonline,andprovidecontentthatattractsapplicantsinthewarfortalent.Note:Black=serviceproviders,white=serviceenablers/externalsupport,grey=serviceconsumers.Source:AdaptedfromNissen(2018).Figure16.3DigitalconsultingplatformastheintegratorofafullservicedigitalecosystemSomeofthevalue-addingtoolscouldbemadeavailabletoqualifiedclientstoo,whoalsologontotheplatformtoconsumecontentmarketing,postcallsforproposals,configurecomplexconsultingservicesinteractivelyinpre-sales,oruseself-serviceconsultingsolutionsforstand-ardproblems,suchasdigitalassessmentsandintelligentchatbots.Clientscouldbeofferedpredefinedandvalidatedanalyticalservicesthatenablethemtoexploretheirdataeitherautonomouslyorguidedbyanexpertoftheconsultingprovider.Moreover,adial-an-expertfunction(nanoconsulting)createstheopportunityforclients(andconsultants)toquicklyclarifypressingissueswithafunctionalexpertfromwithintheecosystemofpartners,whoarealsolinkedtothedigitalplatform.Chatrooms,blogs,forums,andsuchlike,areavailabletoenableusercommunitiesthatcouldbemanagedormonitoredbyrepresentativesoftheplatformprovider.Valuablepre-salesVolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

258Thedigitalconsultingecosystembusinessmodel243informationwouldbegeneratedthisway.Moreover,newgroupsofclientscanbereachedusingtheseonlinepossibilitiesthatwouldnotbefinanciallypreparedtoemploytraditionalconsultingoptions.Thisincreasessaleswithverylittlemarketingeffort.Anetworkofspecializedpartnersisalsoaccessiblethroughthedigitalplatform;maybeevenamanagedcrowdoffreelancesubjectmatterexpertsonaninternationallevel.Thisenablestheconsultingfirmtoscalebusinessatverylowcost.Thedigitalplatformprovidesclientsandpartnerswithabroadrangeofservices.Furthermore,theecosystemgrantsaccesstospecializedskillsandalargeknowledgebaseofpeople.Thisraisesthequalityandopera-tionalefficiencywithinconsultingprojects,andimprovestheagilityinprovidingsolutionstoclients.Platformsofdifferentprovidersandspecializationsmaybelinkedtofurtherincreasethecapacities,knowledge,andcapabilitiesreachable.Excesscapacitiesoftheecosystemcouldbemadeavailabletodigitalconsultingmarketplacesorbeadvertisedviatheirownplatform.NewmodelsofinteractionwithpartnersandconsultingclientscanbeimplementedinDCEs,includingforinstanceopeninnovation,consultingself-servicesandconfigurableconsultingproducts,crowdsourcedconsultingapproaches,anddigitalizedconsultingprocurement.Source:AdaptedfromNissen(2018).Figure16.4SupportedprocessesandfunctionalityontheDCEplatformThecrucialchallengeforplatformprovidersistoconstantlysustainandfosteraninnovativeecosystemaroundtheirplatform.Majorchallengesmustalsobemasteredonthetechnicallevel,keepingupwithevolvingrequirementsofplatformstakeholdersandthepaceofmoderntechnologies.TheITarchitectureofadigitalplatformshouldbecharacterizedbyahighlevelofmodularity(TiwanaandKonsynski2010).Theheterogeneityofthepartners,ITsystems,anddatatobeintegratedrequirestheapplicationofcross-manufacturerandcross-industrystandardswithregardtointerfaces,technologies,technicalprocessesontheplatform,anddataformatsprocessed.Verticalandhorizontalintegrationoftechnologiesfordigitalcontinuityisrequired.Moreover,theplatformmustbeabletoaddmoreclientsorotherexternalstakehold-VolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

259244Handbookondigitalbusinessecosystemserswithreasonableeffort.Atthesametime,highdemandsareplacedontheperformanceofthedigitalplatform,asmostprocessesmustruninteractivelyandinrealtime.Consequently,solvingissuesofITarchitectureandplatformtechnologyiscrucial.Additionally,itmustbeensuredthattheplatformcanbecontinuouslyupdatedtoevolvingtechnicalstandards.Alongwithtechnicalissues,themanagementofadigitalecosystemisalsonotaneasytask.Itinvolvesfindingtherightbusinessmodelsandaddressingrelatedstrategicissues,settinggovernancestandardswhilekeepingtheoverallsystemevolvableandclient-centered,design-ingthestructuralorganizationandend-to-endbusinessprocesses,ensuringtherequiredkeyqualificationsatthestafflevel,aswellasplanningandmonitoringregularoperation.Finally,theimplicittrustprobleminpartnermanagementmustbesolved.Itisbasicallyamatterofwhohoststheplatform,getsthedata,thatis,whoisinthestrongestpositionamongmarketplayers.Thiscanmakeitdifficulttobalancerelationswithdifferenttypesofplatformpartners.Thismasteringofcomplexityatdifferentlevelsisagreatchallengeforanycompany.However,complexitycreatessignificantmarketbarrierstoentryforpotentialchallengers.Highdemandsareplacedontheplatformownerwithregardtovariousareasofcompetence:●Managementcompetence:strategicforesight,efficientoperations,processmanagement,establishingstandardsandgovernancestructuresthatsupportqualityandinnovationofservices,entrepreneurialtalentandinnovativemindset,abilitytobuildpartnerships,partnermanagementandcoordination,changemanagementthatcancopewithhighinter-nalandexternaldynamics,creatingbarrierstomarketentryforcompetitors,recruitinghighlyskilledstaffinthewarfortalent.●Technologycompetence(oftenbesupportedbycloudproviders):useofmodernmediaandadherencetoestablishedstandards,agileandmodulardevelopmentofownplatform,securingscalabilityofservicesanddigitalcontinuity,dataprotectionanddatasecurity,technicalconnectionwithpartnersandclients,integrationofdifferentdataprovidersandvariousdataformats.●Digitalcompetence:creatingdigitalbusinessmodelsandatransformationstrategy,knowl-edgeofdigitalchannelsinallaspectsofthevaluechain,designfordigitalservices,knowclientexpectationsandqualitycriteriafordigitalservices.●Legalcompetence(withexternalsupport):knowledgeoftherelevantlegalregulationsandfurtherregulatoryrequirementsofdigitalserviceprovision,possiblyataninternationallevel.●Consultingcompetence:developmentandmaintenanceofownserviceportfolio,selectionandcoordinationaswellasmonitoringofservicepartners,client-orientedmindset.●Methodandtoolcompetence(toolsmaybeexternallyprovided):advancedanalytics,processmining,machinelearning,naturallanguageprocessing,modelling,reporting,andsoon.●Industryexpertise:scopedependsontheadressedclients;theDCEcouldfocusonalimitednumberofclientindustriesorthemes,orhaveabroadscope.Wheretopositionthefirmwithinthedigitalecosystemisanothercrucialandcomplexdeci-sionfortheplatformowner.Itmustbeclarifedwhichcapabilities,skills,andtechnologiescomplementandsupportthestrategicambitionsoftheDCEthroughtheecosystemofpartners.Moreover,theplatformownershouldthinkofhowtosecurethecompany’svaluableassetsinnetworkedcooperation.Abasicquestiontobeanswerediswhethertheplatformcompanyneedsitsownconsultingresources,thatis,teamsofconsultants.Alternatively,itcouldalsoVolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

260Thedigitalconsultingecosystembusinessmodel245offerconsultingserviceswithoutsuchassetsandpurchasetheseondemandfromthedigitalecosystem,forexampleintheformofqualifiedfreelancers.Inthisway,theproviderdoesnothavetocarrythefixedcostsofunstaffedtime,expensivebuildings,recruiting,andtraining,allowingformorecompetitiveratesinsales.SimilarlinesofthoughtcanbeappliedinotherserviceareasoftheDCE.Forinstance,shouldtheplatformcompanyprovideadvancedanalyticalservices(datafacilitatormodel)withinternalstaffandtools,oruseexternalexpertsforthis?Theanswerwilldependontheinitialresourcesoftheplatformcompany,attainablemargins,andstrategicgoals.Andwhatcomplementorsshouldbegrantedaccesstothedigitalecosystem?Onestrategycouldbetobackupthecapacityoftheplatformcompanywithadditionalcapacitiesfromotherserviceproviders.Inthisscenario,whentheresourcesoftheplatformcompanyarealreadyfullyusedincurrentclientprojects,newclientscouldstillbeservicedthroughthird-partyresources.However,inalesscomfortabledemandsituation,thismayintroduceunwantedcompetitionamongsttheplatformcompanyandexternalpartners.So,adifferentstrategycouldbetohaveonlypartnersontheplatformthatactuallyaddtothevarietyofservicesofferedbytheplatformcompany.ThismakestheoverallserviceportfoliooftheDCEgreaterandprobablyattractivetomoreclients.Butwhendemandforaparticularserviceishigh,theDCEmightrunoutofresourcestoperformthetask.Manymorefacetsaretobeconsideredwhencreatingandgoverningthedigitalecosystem.Here,theplatformownermusthandledifferentlevelsofcontrolandflexibility,dependingontheautonomyofthecomplementors(ParkerandvanAlstyne2018).AsHeinetal.(2020)pointout,digitalplatformscanbuilduponhigh-andlow-autonomycomplementors.Incon-sulting,low-autonomycomplementorscould,forexample,refertofreelancersthatsupplymostoftheirservicesviatheplatformandarethustightlycoupledandfullyintegratedpart-ners.Otherpartnerswithahighlevelofalignmentcould,forinstance,includeprovidersofdigitalconsultingtechnologies.High-autonomycomplementors,bycontrast,areonlylooselycoupledtothedigitalplatform,suchascrowdworkers,membersofclients,orconsultanciesthatonlyoccasionallyparticipateontheplatform.Theplatformcompanycanonlybesuccessfulifitisabletoquicklyreachacriticalmassonboththeclientsideandtheserviceprovidersidethatjustifiesitshighinitialinvestmentandmakesthedigitalplatformattractiveenoughtogeneratecontinuousbusiness.Anotherkeytosuccessishavingasufficientnumberofspecialists,whichisamajorchallengegiventhediversityofqualificationsrequired.Insomeareas,suchaslegalaspects,externaladvicemaycompensatefordeficitsinskillsoftheplatformcompany.ValuefinanceTherevenuechannelsoftheplatformownercanconsistofabasicfeeforconnectingcompa-nies(inparticular,serviceproviders),transaction-based(pay-per-use)orvolume-basedfees(forinstanceinmatchmaking),packagedprices(forexample,forself-services)andotherrevenuecomponentssuchasflatfeesfordatafacilitating.Servicesprovidedintheformoftra-ditionalhumanconsultingwouldcontinuetobechargedperdiemorhour.Difficultquestionsthatcanonlybehintedatariseindistributingrisksamongstplatformstakeholders,butalsosharingrewardsinthenetwork.Astheplatformshouldprovidemanycommunityandfeedbackfunctionsthatmakejoiningitevenmoreattractivefordifferentusergroups,revenuestreamsbasedonfocusedadvertisingareconceivable.VolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

261246HandbookondigitalbusinessecosystemsCONCLUSIONSInthischapter,itwasarguedthatforavarietyofreasonstheconsultingindustryisfacingadigitaltransformation.Servicevirtualization,basedonstandardization,digitalization,andinterconnectivity,appearsasareasonablemeasuretoensurefuturecompetitiveness.Therefore,consultingmanagementshoulddeviseadigitalstrategyfortheircompanyandthoughtfullyanalyzetheserviceportfolioforvirtualizationpotential(NissenandSeifert2018;Nissenetal.2018;Nissenetal.2021).Digitalplatformsofferexcellentopportunitiestoincreasethetraditionallybadscalingofconsultingservices,withpotentialimprovementsalsointhereach,speed,cost,flexibility,andevenqualityofserviceprovision.Thechaptercontributestoboththeknowledgebaseondigitalbusinessecosystemsandtheconsultingliterature.Itanalyzesexistingbusinessmodelsintheconsultingsectorandsuggestsadditionalplatform-basedbusinessmodelsnotyetapplied.Whilebrieflyhighlightingsixsuchmodels,thefocusisonthemostcomplexanddisruptivescenario,thedigitalconsultingecosystem(DCE).Itcombineselementsoftheotherbusinessmodels,andtakescompetitionfromthecompanytothenetworklevel.Here,thequestionarisesofwhatkindofcompanycouldactuallycreateaDCEsuccessfully.Avarietyofcompanytypescomesintomind,namely:(1)dedicatedstart-ups;(2)digitalmatchmakerplatformswishingtobroadentheirbusiness;(3)providersofdigitalconsultingtools;(4)technologyproviders(hardware/software);(5)largedigitalplatformsofotherindus-triesdiversifiyingintoconsulting;(6)biginternationalconsultingcompanies;andfinally(7)aconsortiumofpartneringcompanies.Realizingthefullvisionrequireslargefinancialandhumanresourcesandcarriesasignifi-cantbusinessrisk.Therefore,suchacomprehensivetargetisonlysuitableforverylargeandfinanciallystrongorganizations,andshouldbeimplementedinmodulesandparalleltoanexistingconsultingbusinessinordertoeliminateasfaraspossibletheriskoffailurefortheentirecompany.Itwouldbeconceivabletobuildupadigitalplatformasaninternalsolutionfirst,forexampletostrengthentheefficiencyintheareaofoperations,ortotesttoolsandalgorithmsinternallybeforegoingtotheexternalmarketwithanoffer.Inthisway,learningeffectscanbegeneratedanderrorscanbeeliminatedinafairlysafecontext.ITconsultingfirmswouldhaveanadvantageonthetechnologicallevel,managementcon-sultanciesonthecontentlevel.Ajointventureoflargeprovidersfrombothfieldsoranalli-anceofalargestrategyconsultancywithatechnologyproviderwouldthereforebeanoption.Verylargeinternationalconsultingcompaniescombinediversifiedknow-howwithstrongfinancialpower.Moreover,theyaretrustedpartnersofalargeclientbase.ParticularlythebigIT-focusedconsultancies,therefore,maybeinauniquepositiontoextendtheircustomerreachandimprovetheircompetitivepositionthroughdigitalplatformsthatintegrateownsolutionswithexternalpartnerservices,andmanageanecosystemthatisattractiveandvalue-addingforclients.TheycouldpossiblybuildthecoreofaDCEfromtheirownresources.Itisalsoconceivablethatexistingconsultingplatforms,whichtodayofferasubsetofser-vicesofaDCEontheirdigitalplatform,couldgraduallyexpandtheirabilities.Then,relevantexperiencewouldcombinewithanalreadybroadcustomerbase.Whoeveristhefirsttosuc-cessfullycreateaDCEwilltruelydisrupttheconsultingindustry.Muchassupplychainstodayformthebasisofcompetition,forinstanceintheautomotiveindustry,thefutureinconsultingwillseecompetingdigitalplatformecosystems.Thisdoesnotmeanthattraditionalconsultingbecomessuperfluous.Infact,itwillcoexistwithplatform-basedandothervirtualformsofVolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

262Thedigitalconsultingecosystembusinessmodel247consulting.Theamountofvirtualizationthatisattainablewillvarywiththetask,industry,andparticularclient.REFERENCESAl-Debei,M.andAvison,D.(2010).DevelopingaUnifiedFrameworkoftheBusinessModelConcept.EuropeanJournalofInformationSystems,19(3),pp.359‒376.Baldwin,C.andWoodard,C.(2009).TheArchitectureofPlatforms:AUnifiedView.In:A.Gawer(ed.),Platforms,MarketsandInnovation.Cheltenham,UKandNorthampton,MA,USA:EdwardElgarPublishing,pp.19‒44.Boudreau,K.andHagiu,A.(2009).PlatformRules:Multi-sidedPlatformsasRegulators.In:A.Gawer(ed.),Platforms,MarketsandInnovation.Cheltenham,UKandNorthampton,MA,USA:EdwardElgarPublishing,pp.163‒191.BoudreauK.andLakhani,K.(2013).UsingtheCrowdasanInnovationPartner.HarvardBusinessReview,91(4),pp.60‒69.Cardea&Newcoventure(2016).Consulting4.0—diemarktorientierteDigitalisierung.ResearchReport.Zurich&Neckarhausen:CardeaAG&NewcoventureGmbH.Availableat:https://docplayer.org/24501191-Consulting-4-0-die-marktorientierte-digitalisierung.html(accessedJune29,2021).Christ,O.,Czarniecki,M.andScherer,L.(2018).ImprovingBusinessDevelopmentThroughCrowdsourcingSupportedConsulting—AMethodicalApproach.In:V.Nissen(ed.),DigitalTransformationoftheConsultingIndustry.Berlin:Springer,pp.277‒298.Christensen,C.,Wang,D.andvanBever,D.(2013).ConsultingontheCuspofDisruption.HarvardBusinessReview,91(10),pp.106‒114.deReuver,M.,Sørensen,C.andBasole,R.(2018).TheDigitalPlatform:AResearchAgenda.JournalofInformationTechnology,33(2),pp.124‒135.Dietz,M.,Khan,H.andRab,I.(2020).HowdoCompaniesCreateValuefromDigitalEcosystems?McKinsey&Company.Availableat:https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/how-do-companies-create-value-from-digital-ecosystems(AccessedJune29,2021).Gawer,A.(2014).BridgingDifferingPerspectivesonTechnologicalPlatforms:TowardanIntegrativeFramework.ResearchPolicy,43(7),pp.1239‒1249.Gudmundsson,S.andWalczuck,R.,(1999).TheDevelopmentofElectronicMarketsinLogistics.InternationalJournalofLogisticsManagement,10(2),pp.99‒113.Hardt,C.(2018).TheBestofTwoWorlds—DigitizationofMatchmakingBetweenConsultingFirmsandIndependentConsultants.In:V.Nissen(ed.),DigitalTransformationoftheConsultingIndustry.Berlin:Springer,pp.389‒399.Hein,A.,Schreieck,M.,Riasanow,T.,Setzke,D.,Wiesche,M.,etal.(2020).DigitalPlatformEcosystems.ElectronicMarkets,30(1),pp.87‒98.Henderson,R.andClark,K.(1990).ArchitecturalInnovation:TheReconfigurationofExistingProductTechnologiesandtheFailureofEstablishedFirms.AdministrativeScienceQuarterly,35(1),p.9.Klimmer,M.andSelonke,J.(2016).DigitalLeadership.Berlin:Springer.McKinseyGlobalInstitute(2016).TheAgeofAnalytics:CompetinginaData-DrivenWorld.Availableat:https://www.mckinsey.com/~/media/mckinsey/industries/public%20and%20social%20sector/our%20insights/the%20age%20of%20analytics%20competing%20in%20a%20data%20driven%20world/mgi-the-age-of-analytics-full-report.pdf(accessedJune29,2021).Nissen,V.(2001).FourthPartyLogistikmarktplätzealsFormderIntegrationvonelektronischenMarktplätzenundSupplyChainManagement.Wirtschaftsinformatik/BISE,43(6),pp.599‒608.Nissen,V.(2002).UnternehmensübergreifendesSupplyChainManagement:InternetgestützteLösungenzurVerbesserungderKoordinationundTransparenzinderSupplyChain.JournalofManagementControl,13(1),pp.27‒46.Nissen,V.(2018).DigitalTransformationoftheConsultingIndustry—IntroductionandOverview.InV.Nissen(ed.),DigitalTransformationoftheConsultingIndustry.Cham:Springer,pp.1–58.VolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

263248HandbookondigitalbusinessecosystemsNissen,V.(2021a).EinflüssederDigitalisierungaufdieUnternehmensberatung—GrundlagenundTransformationendesGeschäftsmodells.In:S.RothandH.Corsten(eds),HandbuchDigitalisierung,München.Nissen,V.(2021b).DasGeschäftsmodellDataFacilitatorimConsulting,HMD,58,552–564.Nissen,V.(forthcoming):PlattformbasierteGeschäftsmodellederUnternehmensberatung.In:M.BruhnandK.Hadwich(eds),ForumDienstleistungsmanagement2022,Wiesbaden:SpringerGabler.Nissen,V.andBothe,M.(2002).FourthPartyLogistics—einÜberblick.LogistikManagement,4(1),pp.16–26.Nissen,V.,Halle,P.andEichelsbacher,J.(2021).WiedasVirtualisierungspotenzialvonLeistungenderUnternehmensberatungbestimmtwerdenkann.In:M.BruhnandK.Hadwich(eds),ForumDienstleistungsmanagement2021,Wiesbaden:SpringerGabler,pp.363‒396.Nissen,V.andSeifert,H.(2015).VirtualizationofConsulting—Benefits,RisksandaSuggestedDecisionProcess.In:P.PavlouandC.Saunders(eds),Proc.ofAMCIS2015,Vol.2,PuertoRico,pp.1380‒1391.Nissen,V.andSeifert,H.(2018).EvaluatingtheVirtualizationPotentialofConsultingServices.In:V.Nissen(ed.),DigitalTransformationoftheConsultingIndustry.Berlin:Springer,pp.191‒205.Nissen,V.,Seifert,H.andAckert,M.(2018).AProcessModelfortheVirtualizationofConsultingServices.In:V.Nissen(ed.),DigitalTransformationoftheConsultingIndustry.Cham:Springer,pp.207‒241.Osterwalder,A.andPigneur,Y.(2011).BusinessModelGeneration.FrankfurtamMain:Campus.Overby,E.(2008).ProcessVirtualizationTheoryandtheImpactofInformationTechnology.OrganizationScience,19(2),pp.277‒291.Overby,E.(2012).MigratingProcessesfromPhysicaltoVirtualEnvironments:ProcessVirtualizationTheory.In:Y.Dwivedi,M.WadeandS.Schneberger(eds),InformationSystemsTheory:ExplainingandPredictingOurDigitalSociety.NewYork:Springer,pp.107‒124.Parakala,K.(2015).GlobalConsultingandITServiceProvidersTrends,AnIndustryPerspective.InsightforDrivingGrowthinaDynamicIndustry.Availableat:http://nebula.wsimg.com/dbe6b0d757342e78faf6d290727d28bc?AccessKeyId=9C861BBEAD96F4990363&disposition=0&alloworigin=1(accessedJune29,2021).Parker,G.andVanAlstyne,M.(2018).Innovation,Openness,andPlatformControl.ManagementScience,64(7),pp.3015‒3032.Porter,M.(1980).CompetitiveStrategy.NewYork:FreePress.Sussan,F.andAcs,Z.(2017).TheDigitalEntrepreneurialEcosystem.SmallBusinessEconomics,49(1),pp.55‒73.Tiwana,A.andKonsynski,B.(2010).ComplementaritiesBetweenOrganizationalITArchitectureandGovernanceStructure.InformationSystemsResearch,21(2),pp.288‒304.vanderAalst,W.(2016).ProcessMining:DataScienceinAction,2ndedition.BerlinandHeidelberg:Springer.Waller,M.,Johnson,M.andDavis,T.(1999).Vendor-ManagedInventoryintheRetailSupplyChain.JournalofBusinessLogistics,20,pp.183‒203.Werth,D.andGreff,T.(2018).ScalabilityinConsulting:InsightsintotheScalingCapabilitiesofBusinessModelsbyDigitalTechnologiesinConsultingIndustry.In:V.Nissen(ed.),DigitalTransformationoftheConsultingIndustry.Berlin:Springer,pp.117‒135.Wiener,M.,Saunders,C.andMarabelli,M.(2020).Big-DataBusinessModels:ACriticalLiteratureReviewandMultiperspectiveResearchFramework.JournalofInformationTechnology,35(1),pp.66‒91.VolkerNissen-9781839107191DownloadedfromPubFactoryat05/28/202209:57:15AMviaColumbiaUniversityLibrary

26417.Theroleoflocationfornon-focalfirmsinemergingdigitalbusinessecosystems:relevanceofagglomerationfactorsintheGermanXRindustryChristianZabelandVerenaTelkmannINTRODUCTIONForsometimenow,thedigitaleconomyhasbecomeafocusforbothinternationalresearchersandpolicy-makers.Withtheproliferationofthestart-upeconomy,thecreationofnewfirmsinthesesectorsandtheirsubsequentorganizationinecosystemshavereceivedincreasedscrutiny(Jacobidesetal.,2018;Pitelis,2012).Oneareaofparticularinterestisthelocationdecisionofthesecompanies(YoungChungetal.,2020;Pe’erandKeil,2013).Successful“digital”clusterssuchasSiliconValley,London’sSoho,andBerlinunderscorethatphysicalproximitycanbeanimportantcornerstonefortheemergenceandtheshapingofdigitalecosystems(Engel,2015).Theseaspectsremainvital,asnewkeytechnologies(suchasartificialintelligence,cloudcomputing,andsoon)emerge,whichcouldreinforceexistingecosystemsorconstitutenewonesaltogether.Oneofthesecoretechnologies—andtheobjectofinvestigation—iscrossreality(XR),whichcomprisesvirtualreality(VR),mixedreality(MR),andaugmentedreality(AR)technologies.AccordingtoMilgramandColquhoun(1999),XRcanbedescribedasasetoftechnologieswhichenableuserstoimmersivelyexperienceanenvironmentbeyondreality.Withinorganizations,itencompassesboththeinternaluseofframeworksandapplicationsenablingXRandtheproductionanddistributionofXRcontentusingtheunderlyingtechnol-ogies(MütterleinandHess,2017).Itcanbeclassifiedasamediainnovationthatrequiresthecombinationof“humdrum”(Caves,2000)inputs(meaningtechnological,organizational,andadministrativefactors)andcreativeorcontent-relatedaspects(Dogruel,2013).Therefore,theXRindustrystraddlesboththemedia/creativeandtheinformationtechnology(IT)industries(ZabelandTelkmann,2020).Theaimofthischapteristoassesstherelevanceofspatialagglomerationfornon-focalfirmsparticipatinginanemergingdigitalbusinessecosystem(DBE),inthiscasebasedonarepre-sentativesurveyofGermanfirmsintheXRindustry.Therefore,theimpactof(DBE-related)agglomerationfactorsonXRcompanies’satisfactionwiththeirlocations(whichservesasproxyforlocationchoice)isanalyzed(researchquestion1,RQ1).Inaddition,differencesbetweencompanieslocatedwithinandoutsideofXRclusters(RQ2)andtheroleof(non-)localnetworktiesforXRfirms’(DBE-related)activities(RQ3)areconsidered.Thechapterisstructuredasfollows:itfirstintroducesthestateofresearchonDBEsandcluster/agglomera-tionresearch,thenprovidesanoverviewofthestudy’sresearchobjectivesandmethodology.Theresultsarepresentednext,startingwiththedescriptivepresentationandthenaddressingeachoftheresearchquestions.Thefinalsectionsdiscusstheresultsandprovideaconclusion.250ChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

265Theroleoflocationfornon-focalfirmsinemergingdigitalbusinessecosystems251STATEOFRESEARCHDigitalBusinessEcosystemsSinceitsinceptioninanEuropeanUnionproject(WhitleyandDarking,2006),theconceptofaDBEhasreceivedsignificantandgrowingresearchinterest.Basically,aDBEcanbeconsideredanextensionofMoore’s(1993)businessecosystem“forwhichdigitaltechnologyplaysadominantrole”(Senyoetal.,2019,p.53).DBEsconsistoftwomainlevels:adigital(technical)virtualenvironmentpopulatedbydigitalentitiessuchassoftwareapplications,hardware,andprocesses(Nachiraetal.,2007),andabusinessecosystem,aneconomiccommunityofindividualsandorganizations“thatcrossavarietyofindustries”(Moore,1993,p.76).DBEsarecharacterizedbytheexistenceofdigitalplatforms,thesymbiosisbetweendifferententitiestoco-creategreatervaluethroughcoordinationofeffortandresources(PrahaladandRamaswamy,2004),co-evolution,andself-organization(Senyoetal.,2018).Tothiseffect,DBEsrepresentaformofcollaborativenetworkscombiningheterogeneousandgeographicallydispersedentitiesthatcollaborateviatheinternettoachievecommonoutcomes(Camarinha-MatosandAfsarmanesh,2008).Beingcollaboratorsaswellascompetitors,“acoopetitiveenvironmentemergesinwhichvariousactorsformrelationshipsinordertoco-createvalueforthemselvesandothers”(KochandWindsperger,2017,p.9).Despitetheirtechnologicalnature,DBEshaveaphysicalcomponent—composedofthebusinessstakeholdersinacertaineconomicorindustrialsector—thatformsthebasisforthedigitalcomponent.“Therealpartgeneratesthevirtualone,but,giventhestrongrelationshipbetweenthetwo,allmodifications,changesorperturbationsoriginatinginoneofthemrapidlypropagatetothewholeDBE”(BaggioandDelChiappa,2013,p.6).Therefore,geographicallocation/proximityisstronglycoupledwiththestructureoftheDBE(BaggioandDelChiappa,2013;DelChiappaandBaggio,2015)andmaysignificantlyinfluencethecoopetitivedynamicbetweenthefirms(ChenandMiller,2015).However,non-focalfirms(thatis,theentitiesnotoccupyingthecentralnodeintheDBE,forexamplebyrunningthecentraltechnologicalplatform)maynotmaketheirlocationdecisionentirelydependentontheparticipationinasingleDBE;forexample,thesecompaniesmaynotbetiedexclusivelytoaspecificDBEbasedonasingletechnologicalplatform(Selanderetal.,2013).Thus,theirlocationdecisionmay(also)begovernedbybroaderagglomerationeconomies,forexamplelocation-specificorindustry-specificconsiderations.Here,thetheoryofindustryclusters/districtsprovidesabroadframeworkforanalysis.ClusterResearchTheliteratureon(industrial)clusterformationisextensive,datingbackmorethan120years(Markusen,1996;Marshall,1890[2006];Rasmussenetal.,1992).Differentfactorscanbedistinguished,rangingfromexogenousfactors(whichexistindependentlyoffirmsinthecluster—forexample,transportinfrastructure—andarethusnon-DBE-related)toendoge-nousfactors(whicharetheresultoftheproximityofcompaniestowardeachother;McCannandFolta,2008).Thus,firmslocatinginaclustermayprofitfromfourtypesofefficiencyadvantages(Capello,2007;Branzanti,2015):thereductionofproductioncosts(forexample,lowertransportcosts,availabilityofaspecializedworkforce),thedecreaseoftransactionChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

266252Handbookondigitalbusinessecosystemscosts(forexample,matchingoflaborsupplyanddemand,networkofinformalrelationships),anincreasedefficiencyofproductionfactors(forexample,availabilityofspecializedinputs,industrial/creativeatmosphere),andanenhanceddynamicefficiency(localaccumulationofknowledge,sharedriskofinnovativeactivities,competition/cooperation-driveninnovation).Thedynamicefficiencyisofparticularimportancefor(developing)high-techsectors.Itincreaseswhenmultiplefirmstrytosolvethesameentrepreneurialproblem:“benefitsareenhancedbytheeaseofinteractionacrossdifferentbodiesofknowledgewhenthesamelocalcircumstancesareshared”(MalmbergandMaskell,2002,p.440).Theaccumulationoflocalknowledgedependsonthetiesbetweenfirmsrestingonacommonandsharedworkframework(Grabher,2004).This“milieuinnovateur”enablesexchangeprocessesleadingtocollectivelearningwithinorbetweenfirms.Itisstronglyinfluencedbylocalcultureandregu-lativefactors.Competitionandcooperationhelptodriveinnovation:“inter-firmcompetition,collectivelearningandimitation—thepillarsofdistricteconomies—mayindeedgeneraterapidinnovation”(Branzanti,2015,p.1413).Theeffectsmayvarywiththeclustertype(verticalclustersrelyingontrustinordertoseamlesslyconnectspecializedfirms;horizontalclustersfocusingonahighdegreeofvariation,oftencreatedbyinstitutionalarrangements),andthelevelofdifferentiationoffirmswithinthecluster.Ahighdegreeofdifferentiationhamperslearningopportunities;theremayalsobethresholdeffectswheredifferencesareeithertoolargetobeabsorbableortoosmalltobeworththelearningeffort(Pe’erandKeil,2013).Theselearningadvantagesmayultimatelyvarywithtime.Learningmightbeparticu-larlyimportantinthegrowthphaseofanindustry,wheninnovationactivitiestakecenterstage(Kukalis,2010).Ithastobesaidthattheunderlyingconceptof“regionalclusters”isquiteambiguous.Porterdefinesregionalclustersasthegeographicalconcentrationofcompaniesandinstitutions(suchasuniversities,andsoon)whoseactivitiesarelinkedwiththesecompanies(foranactor-basedoverview,seeSölvell,2009).Theseexchangesareeitherbasedoncommonalities,suchastheusageofthesametechnologies,oroncomplementaryskills(Porter,1999).Theyaredrivenbybothdemand-andsupply-sidefactors,aswellasgovernment-relatedfactorssuchasedu-cationandresearchactivities.Clustersarealsoinfluencedbypathdependencyandaccidentalcircumstances(Porter,1990).Markusenidentifieddifferenttypesofclusters(Marshallian,hub-and-spoke,platformandstateanchored)thatreflecthistoricspecificities(Markusen,1996).Inanycase,firmscanalsosuccessfullyspecializeacrossnationalborders,notonlyinlocalorregionalclusters(Claveretal.,2012).Toassesstherelevanceoftheagglomerationfactors,in-clusterandout-of-clusterfirmsshouldbecompared.Thisavoidsfallingforcirculararguments(thatis,aclusterissuccessfulbecauseitexists;SwannandPrevezer,1996).Theeffectsideallyshouldbeobservableandcomparable,forexamplebyfocusingonperformancemeasures,sincetheseultimatelycount(Kukalis,2010).Nevertheless,thisapproachmaybelimitedwhenstudyingsectorswheredynamicefficienciesareimportant,sinceinformationexchangesorcollectivelearningareparticularlydifficulttomeasure(MalmbergandMaskell,2002).AgglomerationfactorsformediaandcreativeclustersWithregardtothedualnatureofXR,theliteratureoncreative/mediaclustersandonIT(service)firmsisofparticularimportance.Regardingcreative/mediaclusters—suchasinmetropolitanareasincludingParis,Stockholm,andBerlin(Boixetal.,2015)—some“classic”advantagesofindustrialdistrictsarelessimportant.Forexample,transportcostsareonlyanChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

267Theroleoflocationfornon-focalfirmsinemergingdigitalbusinessecosystems253afterthought,sincemostcreativeindustriesproducenon-materialproductsandarelocatedinmetropoliseswithgoodtrafficconnections(Branzanti,2015).Aspecializedmobileworkforceandoutsourcingareimportantfactors,asmostcreativeactivitiesareproject-basedandrequire“specializedcontractlaborwhenprojectsrequireworkforceexpansion”(Picard,2008,p.4).Easyface-to-facecommunicationiscrucialasawaytoreducehightransactioncosts(Scott,2010).Thisisfacilitatedthroughbelongingtoaspecificcommunity,understoodasasetof“conventions,informalrulesandhabitsthatcoordinateeconomicactorsunderconditionsofuncertainty”(Storper,1997,p.5);especiallywhenworkingroutinesstillhavetobedeveloped(thatis,innewmedia,Pratt,2000).Creative/mediaclustersrelyonadditionalagglomerationeffects,especiallydistrictandurbanizationeconomies(LorenzenandFrederiksen,2008),whichgeneratepositiveexternal-itiesintermsofdynamicbutalsostaticefficiency.Here,thecloseproximitytospecializedinputs,infrastructure,andfacilitiesareimportant:positiveexternalitieswhichaffectthestaticefficiencyofthefirmsinvolvedaregeneratedbytheavailabilityofintermediateinputsandaspatiallycloseendmarket(Potts,2011).Proximitymayincreasecooperation,althoughthesecollaborativeprocessesarecomplexandcannotbesimplyreducedtoproximity(Branzanti,2015).Anotherfactoristheindustrialatmospherethatenhancesthedynamicefficiency.Acreativeatmospherecanbeunderstoodastheintensityandqualityofsocialandeconomicrelationsbetweenpublicandprivateactorsatonelocation(Drake,2003;SantagataandBertacchini,2011).Itisshapedbyurbansemiotics:culturalheritage,butalsolocalculture,traditions,andsharedculturallanguages(Lazzerettietal.,2012).Aconducivecommunicationecologycanfacilitateinformationexchangeandlocalcollaborativelearningprocesses,sincecreativeclustersare“typifiedbyastrongdegreeofcontinuitybetweensocial,culturalandprofessionallife”(Branzanti,2015,p.1413).Thisisespeciallytrueforthetransferoftacitknowledge,whichtendstobelocallyanchoredincongenial“creativehabitats”(Lazzerettietal.,2012,p.1246)withstronglinkagestoacommonsharedyouthculture(Florida,2002).Thestructureoftheseclusterscanvaryfrombeingverysimpletoverycomplex.Althoughspatiallyconcentratedfirmsmaybehaveinsimilarpatterns,thereisalsoahighdegreeofcollocationofdifferentculturalsubindustries(Boixetal.,2015).Thevarietywithintheclusterdefinestheextenttowhichtheprocessesofmutualexchangeandknowledgespillovertakeplaceamongdifferentsubsectorsandfostercreativity,innovation,andcross-fertilization(LorenzenandFrederiksen,2008).However,thereareonlyafewstudiesindicatingwhetherthismobilityorworkinglinkexistsonlywithinaclusteroralsobetweenclusters(Branzanti,2015).Basedontheirreviewofcreativeandmediaclusterliterature,KomorowskiandFodor(2018)identifyfoursetsoffactorsdrivingtheadvantageousnessofclusters.Exogenousfactorscompriseurbanizationeffects(accesstotransportinfrastructure,proximitytoclients,andsoon)andlocalizationfactors(governmentsupport,accesstonecessaryfacilities).Endogenousfactorsconsistofagglomerationeconomies(proximitytosimilarbusinesses,locallaborpool,knowledgespillovereffects)andperceptioneconomies(image/hipnessofplaceofbusiness,attractivenessforclientsandinvestors).Drawingonthisframeworkandextensiveliteratureanalysis,Zabeletal.(2020)identified26factorsintheirstudyoflocationfactorsintheGermanonlinevideoindustry.Theyconsideredfiveconstructstobeespeciallyimportant:industryecosystemandaccesstohumanresources(asagglomerationeconomies),publicinfrastructure/fundingandnetworkbuilding(aslocalizationeconomies),andpersonallifestyle(urbanizationeconomies).ChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

268254HandbookondigitalbusinessecosystemsAgglomerationfactorsforITclustersTheXRindustrycannotbeplacedentirelywithinthemediaindustry;manycompaniescon-siderthemselvespartofthemediaandITindustries(seebelow).Therefore,theagglomerationfactorsofITfirmsarealsoofinteresthere.ITcanbedescribedasafootlooseindustry(Laschetal.,2013),sincefoundersarequiteflexiblewhenpickingtheirlocation.InhercasestudyofGermanregionalITclusters(Hamburg,Dresden,andKarlsruhe),Matuschewski(2006)iden-tifiessevenkeyelementsofITclusterdevelopment:businessrelations/inter-firmcooperation,researchcooperation,networks/institutionalsetting,locallabormarket,supportorganizations,governancestructure,andlocalenvironment.LeBlanc(2000)pointstocomplementaritiesbetweendifferentITsectors,proximitytothelabormarket,andtheimportanceoftheuniver-sityandresearchenvironment.Overall,locationfactorssuchasofficecosts,pricelevelsofenergyandwater,accesstorawmaterials,andtransportconnectionsareconsideredtobeofrelativelylowimportancewhencomparedtomanufacturingfirms,sincenophysicalproductsaremanufactured(forexample,forinformationandcommunicationtechnologycompanies,Laschetal.,2013;SongandLiu,2013).Alargenumberofstudieshaveshownthatfactorssuchasjointbuyersandsuppliers,askilledlaborpool,theaccumulationandtransmissionoftacitknowledge,andgreaterspecialization,playakeyroleintheselocalclusters(e.g.,BoschmaandFornahl,2011;GordonandMcCann,2000).SincetheITindustryisquitelargeandcanbetracedthroughstandardizedindustryindi-cators,statisticalanalysesoflocationeffectshavealreadybeenconducted,inwhichexternalfactors(populationdensity,distancetometropolitanareas,andhighwayconnections;Caderetal.,2013)wereanalyzed.Previousstudiespointtotheimportanceoflocalizationeffects(Claveretal.,2012)focusingonthespecializationoffirmsratherthantheadvantagesderivedfromadiverseindustrystructure.ThisissupportedbyLaschetal.(2013)intheiranalysisofnewICTfirms,accordingtowhichthedrivingfactorsarethefocusonmarketandcustomeropportunities,especiallytheproximitytoestablishedinformationandcommunicationtechnol-ogycompanies(ICT)firms;andlessonbroadclusterstructures(withtheexceptionofknowl-edgespilloversfromresearchinstitutions)orentrepreneurialactivity.WhereasearlierstudiesonlocationdecisionsbyICTfirmspointedtostrongeragglomerationeffects(LeBas,2005),thiseffectcouldnotberepeatedinlaterstudies.Inhisstudy,Kukalis(2010)foundthatICTfirmswithrelativelyweaktiesoraweakresourcebasetendtoagglomerateoutsideclusters,profitingfromlowercostsoflivingorcostsforofficespace.Therearealsowiderdifferentia-tionswithintheICTsector:firmssuchasmultimediaorsoftwaredesignersarelessdependentonveryhighbroadbandspeedsorexcellentmobilityconnectionsthanwebdesignagenciesorinternetserviceoutsourcingfirms,whichtendtobemorecentrallylocated(Moriset,2003).Forexample,ifITbusinessservicesareconsidered,demandfactors(presenceofinternationalfirms,reputation)andtheoverallagglomerationlevelareofparticularimportance(Rubalcabaetal.,2013).RESEARCHQUESTIONSANDDESIGNAimofResearchTheXRindustryisarathersmallindustryinGermany(seebelow),straddlingboththemedia/creativeandtheICTindustries.Thefirmsinthissectorcanbeconsiderednon-focalfirmsinChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

269Theroleoflocationfornon-focalfirmsinemergingdigitalbusinessecosystems255theXRDBE,relyingonseveralXRtechnologyplatformsprovidedbylarge,internationalplayers(thatis,Android/Google,iOS/Apple,Oculus/Facebook).XRisconsideredanemerg-ingtechnology(andthusunderlyingDBE),sincebothVRandARareatthetimeofwritingin2020stillattheearlystagesoftheadoptioncurve(ZabelandTelkmann,2020).Therearenoindustrycodesinofficialstatisticsorbusinessregistersforthissector,whichpreventsastatisticalanalysisoflocationdecisionsbasedonoutcomes(revenues,employment,andsoon).Thus,theanalysisisbasedonarepresentativesurveyofGermanXRfirms.Intwopriorstudies,the28mostrelevantlocationfactorswerederivedfromliteratureandvalidatedinrep-resentativeonlinesurveysfortheXRindustryinNorthRhine-Westphalia(Zabeletal.,2019;ZabelandHeisenberg,2019),oneofGermany’slargestfederalstateswithroughlyaquarterofGermany’spopulation.Theseitemsareusedinourstudy,andexpandedbythreeadditionalitemsthatmeasuredynamicefficiencies(suchascollectivelearning)moreprecisely.Intotal,31itemsareusedtoidentifytherelevanceofthesefactorsforthefirms’satisfactionwiththeirchosenlocation.Location/clusterattractivenessismeasuredthroughseveralitemsandservesasaproxyforlocationsuccess.Inaddition,anin-cluster/out-of-clusteranalysisallowsustoevaluatewhethersatisfactionwiththesefactorsdependsonthecompaniesbeinglocatedwithinoroutsideofacluster.Regardingthestateofresearch,thefollowingresearchquestionsareaddressed:RQ1:Which(DBE-relatedandnon-DBE-related)locationfactorsimpactthesatisfactionwithanXRcompany’slocation?RQ2:Whatdifferencesarisewhenlocationsatisfactionbetweenin-clusterandout-of-clusterXRfirmsisconsidered(thatis,arethereobservableclustereffects)?RQ3:Whatistheroleof(non-)localnetworktiesregardingXRfirms’(DBE-related)activities?AfteradescriptiveanalysisoftheGermanXRsector,aregressionanalysiswillbecarriedoutinordertoanalyzetheimpactofthedifferent(DBE-relatedandnon-DBE-related)agglomer-ationfactorsontheoverallsatisfactionwiththefirm’sphysicallocation(RQ1).Furthermore,differencesinthesatisfactionwiththeagglomerationfactorsbetweencompanieslocatedwithinandoutsideaclusterwillbeconsideredbyusingavarianceanalysis(RQ2).Inaddi-tion,theimpactof(non-)localnetworkfactorsonthefirms’(DBE-related)activitieswillbeanalyzed(RQ3).MethodologyThestatisticalpopulationofthisstudyconsistsofthefirmsintheGermanXRindustry.Thisincludessoftwareandhardwaremanufacturers,applicationdevelopers,andsystemintegra-tors;thatis,allcompaniesthatenablecustomerstouseXRordevelopXRcontent.XRusers—business-to-business(B2B)andbusiness-to-customer(B2C)—arethereforenotexamined.Sincetheindustryissmallandcannotbetrackedviastandardizedindustrycodesorbusinessregisters,thefirmshadfirsttobeidentifiedviaonlineresearch.Forthispurpose,searchtermslinkedwithBooleanoperatorsweregeneratedandappliedforresearchviavarioussearchengines(forexample,Google,Bing),portals(forexample,dasauge.de,firmenregister.de),onlinejobexchanges(forexample,Indeed,Stepstone)andsocialmediaplatforms(forexample,Facebook,LinkedIn).Inaddition,theprivatecompanydatabaseNorthdatawasused.ChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

270256HandbookondigitalbusinessecosystemsTable17.1SatisfactionoftheXRcompanieswiththeirlocationsOnlinesurveyIn-clusterOut-of-cluster(n=126)(n=60)(n=58)MeanStandardMeanStandardMeanStandarddeviationdeviationdeviationAtourlocation,thequalityoflifeandleisurefacilities5.991.296.051.125.911.46areverygood.Atourlocation,theculturaloffersandthepossibilities5.641.686.211.295.021.83togooutareverygood.Thecompanylocationoffersgoodtrafficconnections.5.561.635.811.555.311.68Afastinternetconnectionisavailableatourlocation.5.551.645.431.815.641.47Atourlocation,therearemanycompaniesfromthe5.161.756.071.214.161.70media/creativeindustry.Atourlocation,therearemanycompaniesfromthe5.121.625.901.124.301.68IT/digitalindustry.Atourlocation,manypotentialemployeesare5.101.535.561.324.611.60availableineconomicprofessions(e.g.,marketing,sales).Atourlocation,therearemanypotentialemployees5.091.695.861.264.241.71availableincreativeprofessions(e.g.,design,storytelling).Theeconomyisdevelopingpositivelyintheregion.5.071.515.171.414.941.60Therearepoliticalinitiativesforcompaniesin5.061.785.331.734.781.81thedigitaleconomytobelocatedatourlocation(entrepreneurship/start-upsupport).Atourlocation,thereareuniversitiesandresearch5.021.925.311.714.692.10institutesthatdealwithXR.Atourlocation,therearediscussionforumsoncurrent4.911.875.611.574.151.88industrytopics(e.g.,tradefairs,meetups).Manypotentialemployeesintechnicalprofessionsare4.661.755.021.584.261.84availableatourlocation(e.g.,programmers).Atourlocation,therearenumerousfreelancers(e.g.,4.571.615.241.433.891.51programming,design).Thereisanassociation/initiativethatactively4.542.285.101.963.962.43promotesthetopicVR/AR/MRatoursite.Atourlocation,thereisagoodtrainingandfurther4.441.834.681.664.181.97educationofferavailable.Intheregion,thereisintensivecooperationbetween4.361.654.521.504.201.79theuniversitiesandresearchinstitutionsandthecompaniesintheindustry.Atourlocation,thecostoflivingisnottoohigh.4.221.973.661.764.861.97Atourlocation,thepersonnelcostsarenottoohigh.4.171.903.771.864.651.82TherearealargenumberofXRcompaniesatour4.111.925.131.373.041.82location.Atourlocation,therearemanybuyers/B2Bcustomers4.101.844.631.673.571.85forourproducts/services.Thelocationoffersacreativeatmosphere(e.g.,4.062.034.871.823.251.91throughproximitytoothercreativeindustries/professions).ChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

271Theroleoflocationfornon-focalfirmsinemergingdigitalbusinessecosystems257OnlinesurveyIn-clusterOut-of-cluster(n=126)(n=60)(n=58)MeanStandardMeanStandardMeanStandarddeviationdeviationdeviationAtourlocation,therearealargenumberof3.991.995.021.462.921.92serviceproviders/suppliersspecializedinXR(e.g.,programming,design).Anintensiveexchangeofknowledgebetween3.911.884.391.783.421.87companiesintheindustrytakesplaceatourlocation.Atourlocation,therearenumerousproject-based3.801.784.291.673.301.78cooperationsofcompaniesfromtheindustry.Thecompanysiteislocatedinacoolenvironment3.782.174.502.073.092.06(trendyneighborhood/district,an‘in’district).Atourlocation,thecostsforoffices/workrooms,etc.3.721.952.981.704.451.93arenottoohigh.Localtaxesanddutiesarenottoohighintheregion3.431.753.191.833.721.63(e.g.,tradetaxrate).Raisingcapitalisuncomplicatedintheregion.3.411.693.161.653.671.73Atoursite,thereisfinancialsupportforXRofferings3.252.013.612.132.861.83fromthepublicsector.TheareaisknownasanXRlocation.2.832.023.552.092.171.72Thefinalresearchstepincludedresearchonplatforms,conferences,universities,andtradefairsrelatedtotheXRindustryinGermany.Theidentifiedcompanieswerefurtherdetailedwithlocationinformation,numbersofemployees,legalcompanyform,andfoundingdate.Inadditiontotheheadquartersofthecompanies,thesecondarylocationswerealsotracked.TheXRfirmsweretheninvitedinthreewavesviae-mailtoparticipateinanonlinesurveyduringJune2020.Asfarastheycouldbeidentified,eitherthemanagingdirectors(inthecaseofpureXRcompanies)orthepersonsresponsibleforXR(inthecaseoflargercompanieswithanXRdepartment)werecontacted.Theywereaskedtoevaluatetheirsatisfactionwithavarietyoflocationfactorsonaseven-pointLikertscale(from1=Idonotagreeatall;to7=Icompletelyagree)(seeTable17.1).Overallsatisfactionwiththelocationwasmeasuredonanumericalscalefrom0percentto100percentwith11scalevaluestoavoidacommonmethodbias(Podsakoffetal.,2012).Intotal,126firms(responserate:12percent)evaluatedthelocationfactors.Thesampleisrepresentativeofthestatisticalpopulation(includingmainandsecondarylocations)intermsofthelocation,age,andsizeofthecompanies.Regardingthenormaldistributionofthesample,thethresholdsforskewnessandkurtosiswerenotexceeded(Kline,2016),soweassumethereisnoseriousviolationofthenormaldistribution.Thecentrallimittheoremcanalsobeappliedduetothesamplesize.Additionally,thevarianceanalysisrequiresvariancehomogeneityofthetwoindependentsamples:thecom-panieswithinandoutsideacluster.TheLevenetestonlyshowssignificantdeviationsfromvariancehomogeneityforsinglevariables.Themethodcanstillbeapplied,sincethevarianceanalysisisrobustagainstheterogeneousvariancesaslongasthesizesofthesamples(n)arecomparable(KohrandGames,1974).Toexaminesignificantdifferencesintheevaluationofthesatisfactionwiththelocationfactorsbythecompanieswithinandoutsideclusters,amul-tivariatesinglefactorvarianceanalysiswasutilized.Thenominalscaledindependentvariableinthiscaseisthecompanies’locationwithinoroutsideacluster,andthemetricallyscaleddependentvariablesarethesatisfactionwiththeindividualagglomerationfactors.ItshouldChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

272258HandbookondigitalbusinessecosystemsbenotedthatitiscontroversialwhetherLikert-typescalescanbeinterpretedasinterval-scalelevels;wefollowedDöringandBortz(2016)andhavethereforeusedthisanalysishere.RESULTSDescriptiveAnalysisoftheGermanXRIndustryAtotalof1065XRcompanieswereidentified,37ofwhicharehardwareandsoftwaremanu-facturers,and1028ofwhichareXRapplicationdevelopers,designers,andsystemintegrators.Thesefirmshave396additionalsecondarycompanylocations.TheXRindustryisregionallydispersedacrossGermany.ThehighestnumbersoffirmsarelocatedinthefederalstatesofNorthRhine-Westphalia(n=335,mainandsecondarylocations),followedbyBavaria(n=228),Berlin(n=224),andBaden-Wuerttemberg(n=167).ThelargestagglomerationofXRfirmsonthecitylevelcanbefoundinBerlinwith224XRcompanies,Hamburg(n=131),Munich(n=113),Cologne(n=104),Düsseldorf(n=51),andStuttgartandFrankfurtamMain(eachwithn=37).TheXRfirmsinGermanyaremainlysmallandmedium-sized:51percentofthecompaniesemployfewerthantenpeople,31percenthave11to50employees,andonly18percentmorethan50employees.Almosthalfofthefirms(48.8percent)werefoundedafter2010.Since2015,theentrepreneurialdynamichasincreasedsignificantly,uptomorethan70companycreationsperyear(incomparison,onlytenofthecompaniesinvestigatedcloseddownbetween2017and2020).Thefirmspredom-inantlyconsiderthemselvestobepartofthemedia/creativesector(39percent);29percentassigntheirfirmtotheIT/digitalsector;and24percentsaytheybelongtobothindustriesequally.Only8percentassignthemselvestoatotallydifferentindustry.Correspondingly,mostoftheXRfirmsbelongingtothemedia/creativeindustrywork(amongothers)forclientsinthemedia,informationandcommunication,orart/entertainmentsectors.However,thoseviewingthemselvesasITcompaniesfocusoncustomersfromthemanufacturingindustryorthetransport/logisticssector.Regardinggeographicdistribution,thecreative/mediaXRcompaniesappeartohaveahigheraffinityforclustersthantheIT/digitalcompanies,whicharealsolocatedinsmallercitiesthroughoutGermanymoreoften.Ingeneral,theXRcompaniessurveyedare(rather)satisfiedwiththeirlocation:onascaleof1(0percent)to11(100percent),themeanvalueis8.32.Regardingindividualfactors,thecompaniesshowthehighestsatisfactionoverallwiththesoftfactorsrelatingtoleisureandculture,thespeedofinternetconnection,thetrafficinfrastructure,andthegeographicalproximitytorelevantplayersinthecreativeandmediaindustriesandtheIT/digitalsector.Ontheotherhand,thecompaniesaredissatisfiedwiththeawarenessoftheirregionasanXRlocation,publicfinancialsupportforXRproductions,andthepossibilitiesofraisingcapital.However,thestandarddeviations,whichareratherhighforaseven-pointscale,indicatethatassessmentsvary,forexamplebylocationorcompanytype(seeTable17.1).RQ1:Impactof(DBE-related)LocationFactorsonLocationSatisfactionInafirststep,thecorrelationbetweenthe31factorspotentiallyinfluencinglocationsatisfac-tion(seeTable17.1)andthesatisfactionwiththeirchosenlocationwasassessed.Onlyafewfactors—qualityoflife,positiveeconomicdevelopment,culturaloffers,andgoodtrafficChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

273Theroleoflocationfornon-focalfirmsinemergingdigitalbusinessecosystems259Table17.2ResultsofthestepwiseregressionanalysisSignificanceStandardizedbetacoefficientAdjustedR-squaredQuality-of-lifeandleisurefacilities0.003*0.319Localtaxesandduties0.000*-0.395Positiveeconomicdevelopment0.050*0.2240.443Costofofficespace0.0270.219Goodtrafficconnections0.0350.219Notes:Dependentvariable:satisfactionwiththecompanies’location.*Alsoincludedintheregressionmodelwith0.05levelforexclusionoffactors.connections—showmoderatecorrelations(r>0.4,seeAppendixTable17A.1).Thismeansthatonlyexogeneous(andthusnon-DBE-related)factorsshowmoderatecorrelationvalues.Toevaluatethedirectionalinfluenceofsingleagglomerationfactorsonthefirms’overallsatisfactionwiththeirchosenlocation,aregressionanalysis(ordinaryleastsquares,OLS,method)wascarriedout(seeTable17.2).Ofthe31locationfactors,onlythreeyieldedsig-nificantresults(inastepwiseregressionat0.05level)—quality-of-life/leisureoptions,taxes,andpositiveregionaleconomicdevelopment—explaining39.6percentoftotalvariance.Inthestepwiseregressionwiththe0.10level,goodtrafficconnectionsandcostofofficespacealsobecomesignificant,increasingtheexplanativevalueto0.443.Theanalysisshowsnomulti-collinearityandendogeneity,butbecauseofsignsofheteroskedasticityinthescatterplotofthestandardizedresiduals,theanalysiswasadditionallyperformedwithrobuststandarderrors(HayesandCai,2007).Thisanalysisconfirmsthesignificantinfluenceofqualityoflife,taxes,andapositiveeconomicdevelopment.Strikingly,allthesefactorsareexternalagglomerationfactors,indicatingthattheXRindus-tryisalsoafootlooseindustrythatisnotprimarilydrivenbyendogenousandDBE-relatedagglomerationfactors.Thisisalsotruewhenseparateregressionanalysesareconsideredforsubsamplesofin-clusterandout-of-clusterfirms,whereendogenouslocationfactorswerealsonotsignificant.Regardingtheregressionandresults,ithastobepointedoutthatourdependentvariable(locationsatisfaction)isonlyaproxyforlocationchoice.Otherimportantfactorssuchaspathdependencyorintertemporalheterogeneityarenotconsideredhere.ThefactthatrelativelyfewlocationfactorshaveastatisticallysignificantimpactonlocationsatisfactionmayalsoreflectthefactthatXRfirmsdonotconsidertheirspecificlocationtobetooimportantfortheircompanysuccessoverall.Thesampledfirmsratedtheimportanceoftheirspecificcompanylocationforcompanysuccessat2.34(mean)onafive-pointLikertscale.Thisassessmentisalsoconsistentifcontrolledforcompanyage(firmsyoungerthantenyearsratetheimportanceonlyslightlyhigher,at2.54),companysize,oraffiliationwithITormedia/creativeindustries.XRfirmslocatedinaclusterratedlocationimportancealittlehigher(2.67).However,thereisasmallsubsetoffirms(n=18)thatratethisfactorat4orhigher(seebelow;aseparateregressionforthisgroupcouldnotbecarriedoutduetoinsufficientsamplesize).RQ2:VarianceAnalysis:In-ClusterandOut-of-ClusterEvenifregressionanalysisshowedthatonlyafewexogenousfactorsdrivethefirms’locationsatisfaction,companiesmayneverthelessprofitfromadditionaleffectsarisingfromtheirlocationwithinacluster.Inordertoidentifythis,thefirmslocatedinthesevenlargestXRfirmChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

274260Handbookondigitalbusinessecosystemsagglomerations(eachcontainingmorethan30XRfirms)wereconsolidatedintoanin-clustergroup;therestwereconsideredasbeingout-of-cluster(aseparateanalysiswiththetopfourclusters,with100XRfirmsormore,yieldedcomparableresults).Thevarianceanalysisshowsthatin-clusterfirmsindeedindicatedahighersatisfactionnotonlywithexogenousfactors,butalsowithendogenousfactors.Thesecompaniesshowedhighersatisfactionthanout-of-clusterfirmsforallfactorsexceptcosts(whichisunderstandable,sincealltheclustersarelocatedinGermany’slargestandmostexpensivecities).AT-testconfirmedsignificantdifferencesbetweenthein-clusterandout-of-clustergroupsintermsofagglomerationadvantages(numberofXRcompanies,specializedserviceproviders,freelancersandpotentialemployees,andproximitytothemedia/creativeindustryandIT/digitalsector),urbanizationeffects(cul-turalofferingsandopportunitiesforgoingout,trendyneighborhoodandcreativeatmosphere),and(informal)networkingandknowledgeexchange.Thiswastobeexpected,sincetheXRclustersarelocatedinmetropolises,whichunderscorestheexistenceofurbanizationeffects.Ithastobenotedthatalltheitemsdisplayrelativelyhighstandarddeviationsandthusvaria-tions.Thispointstodifferencesbetweenclusters:ifsingleclustersareanalyzed,thestandarddeviations(SDs)decreasefrom1.8(averageofSDsintotalsample)to1.47(averageofSDsforfirmslocatedinBerlin).Nevertheless,thein-clustercompaniesareonlyslightlymoresat-isfiedwiththeirlocationthantheout-of-clustercompanies(8.6vs.8.16onan11-pointscale).Thisreplicatesthefindingsfromtheregressionanalysisandindicatesthatgenerallocationsatisfactionmaybeinfluencedbyaspectsotherthanagglomerationfactors.RQ3:Importanceof(Non-)LocalNetworkFactorsforDBE-RelatedActivitiesTheregressionandvarianceanalysespointedoutthatsomeexogenous(non-DBE-related)factorsdrivelocationsatisfaction,andalmostallagglomerationfactorsareratedhigherbyin-clusterfirms.Inanycase,thelocationisconsideredtobeofrelativelylowimportanceforthefirms’overallsuccess;atleastforthemajorityoffirms.Thispointstothefactthatother,non-localfactorscanplayadecisiveroleforcompanycompetitivenessandsurvivalintheXRDBE.Thisisfurtherhighlightedwhenthegeographicalfocusofcorevalue-addedactivitiesisconsidered.Differentiationfromthecompetition(52percent),theacquisitionofcustomers(50percent),andtheexchangeofexpertise(47percent),mainlytakeplacesomewhatorcompletelynationallyorinternationally.Therecruitingofemployees(52percent)andcooper-ationintermsofresearchanddevelopment(38percent),ontheotherhand,haveasomewhatstrongerfocusontheregionwherethefirmislocated.DifferentpatternsofDBE-specificcollaborationcanbeobserved.Thesmallgroupoffirms(n=18)thatconsidertheirlocationtobesomewhatorveryimportantforcompanysuccessfocusonlocalnetworkingfactors.Comparedtothemeanvaluesoftheentiresample,theyratelocalinformalnetworks(meanvalueof4.94vs.4.22onaseven-pointLikertscale),trustfulcooperation(5.35vs.3.82),thecreativeatmosphereofthelocation(4.94vs.3.49),andinterlinkagesbetweenpersonalandprofessionallife(5.06vs.4.00),asparticularlyimportant.Localcooperationpartnersalsoplayabigrole,particularlytheproximitytomedia/creativecompanies(5.89vs4.61)andcompanieswithsimilarproducts(5.12vs.3.86).Regardingtheentiresample,differentpatternsofspatialpositioningemerge,dependingonhowthecompaniespursuestaticordynamicefficiencies.First,almosthalfoftheXRfirmsputanemphasisonphysicalproximitytoXRcompanieswithsimilartechnologies(48percent),withsimilarcustomers(43percent),and/orwithsimilarChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

275Theroleoflocationfornon-focalfirmsinemergingdigitalbusinessecosystems261products(45percent).Thesethreefactorsarecloselycorrelated(onaverage,89percentofthefirmsinthisgrouprateatleasttwoofthefactorsasimportant).However,thecooperationsinthisgrouparerelativelyloose.TheyratelocalinformalnetworksasmoreimportantthantheentireXRfirmsample(meanvalueof4.93vs.4.22),andpointouttheimportanceofprox-imityfortrustfulcooperation(4.50vs.3.82);non-localcooperationisslightlylessimportantthanfortheentirepopulation(4.17vs.4.30).Moreformalizedformsofcooperation,suchasjointcustomeracquisitionorjointproductdevelopment,playonlyaminorroleforthesecompanies.Strikingly,(formalized)learningfromotherlocalplayersisalsoconsideredtobeoflowimportance(2.85);afactthatisalsotruefortheentireXRpopulation(2.55).Thisindicatesthatthesefirmsprimarilypursueindirectendogenousagglomerationeffects(thatis,morefirmsleadingtoalargertalentpoolfacilitatedbyinformalnetworks).Fittingly,thesecompaniesdisplayanabove-averagesatisfactionwithnetworkingopportunitiesattheirlocations:discussionforums(5.98),politicalinitiatives(5.89),industryassociation(5.67),andotherXRcompanies(5.07);seeTable17.1.Thesefirmsstemfromboththemedia/creativeandITindustries,haverelativelylowrevenues(85percentlessthan€500000)andaremostly(76percent)locatedinoneofthelargeGermanXRclusters(Berlin,Düsseldorf,Frankfurt,Cologne,Hamburg,Munich,Stuttgart).Thisleadstotheconclusionthattheseloose,horizon-talcluster-styleformsofexchangeandnetworkingplayanimportantroleforapartoftheXRindustryattherespectivelocations.Asecondgroupcanbeidentified,onethatcouldbeassociatedmorewithaverticalclustermodel.Thisgrouppursuescloserformsofcooperation,workingonjointproductdevelopment,andaddressingthesamecustomers(overlap83percent).ThesefirmsrelyontheproximityofITcompaniesandespeciallymedia/creativecompanies(6.17vs.4.61),andfindtheproximitytofirmswithsimilarproductsandtechnologies,internationalbranchesoflargecompanies,andresearchinstitutionsenticing.Trustfulcooperation(5.14vs.3.82)andacreativeatmos-phere(5.15vs.3.49)arealsohighlyappreciated.Third,somecompanieschosetheirlocationforspecificreasons,suchasthephysicalproximitytoresearchinstitutionsandbranchesofinternationalconglomerates.Thesefirmsratelocationassignificantlymoreimportantforcompanysuccessthanotherfirms.Theyputadecidedlyhigheremphasisonjointproductdevelopmentandcustomeracquisition(4.25/4.25vs.3.00/2.87fortheentiresample,respectively).Trustfulcooperationisalsohighlyimportantforthisgroup(4.73/5.11vs.3.82),thoughitpresumablytakesamoreintensiveformthanforthefirstcategoryoffirmsdescribed.Thetenfirmsthatconsiderpublicsupport(thatis,subsidies)tobeveryimportantshowroughlythesamepattern,withastrongfocusonresearchandjointproductandcustomerdevelopmentactivities.Fourth,anotherobservablestrategyistheMarshallianapproachtospecialization.Onlyasmallminority(ninefirms)ratethepossibilityofproducingcheaper/faster/moreefficientlyasespeciallyimportant.Assomefactorsindicate,theyconcentrateondevelopinginnovativeproducts(5.63vs.3.08),relyonlocal,specializedserviceproviders(5.22vs.3.45),andarereadytolearnfromlocalactors(4.25vs.2.55).Theexistenceoflargecompaniesintheregionisalsoconsideredimportant(4.63vs.3.22).Proximitythenfacilitatestrust-based,unbureau-craticcooperation(5.00vs.3.82).Whenitcomesto(non-)localdynamicefficiencies(thatis,effectsthatcanresultfrominter-regionalnetworking),ablendoflocalandinterregionalcooperationcanbeobserved.Evensupposedlycontradictoryconceptssuchastrustfulcooperationbasedonphysicalproximity,andcooperationwithpredominantlynon-regionalpartners,arenotmutuallyexclusiveforChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

276262Handbookondigitalbusinessecosystemsmanycompanies.Only13ofthe25companiesforwhomphysicalproximityisimportanttocooperatetrustfullystatedthattheyactuallyprimarilyworkwithregionalplayers.Thesameblendoflocaland(inter)nationalactivitiescanalsobefoundforthetwo-thirdsofthecompaniesforwhichstrategicalliancesareacentralaspect(importantorveryimportant,mean:5.01).Giventhelargeshareofthisgroup,thedifferencescomparedtothemeanvalueforthetotalpopulationaresmallerthanfortheothergroupsanalyzed.FirmsinthisgroupratetheproximitytoITcompanies(5.54vs.4.77)asimportant,asalongwithlong-termworkingrelationships(5.31vs.4.72)andproject-orientedcooperationswithcustomersandpartners(5.30vs.4.71).Localandnon-localcooperationsareconsideredrelevant(4.58non-localcooperationvs.4.15trust-based,localcooperation).Thegroupof37firmsfocusingoninterregionalandeveninternationalcooperationswerepredominantly(65percent)locatedoutsideoneoftheidentifiedclusters.Theyconsideredproject-basedcooperationtobeimportantforcompanysuccess(5.16vs.4.71),possiblyindi-catingthattheirlocationmakesrepeatbusinessmoredifficult.Thesefirmsputanadditionalemphasisonstrategicalliances(5.43vs.5.01),but—asexpected—ratedmostlocation-specificnetworkingfactorsaslessimportantthantheentiresample.Regardingtheroleoflocalinter-firmexchanges,companiesthatvaluetrustfulandunbu-reaucraticcooperationthroughphysicalproximitydisplayhigherthanaverageimportanceonoverlapsbetweenprivateandprofessionalcontacts(4.96vs.4.00),andconsiderproximitytothemedia/creativeindustryandanoverallcreativeatmospherecrucialforthesuccessofthecompany(4.60vs.3.49).Sincethesefactorsarepredominantlytobeassignedtothemediaindustry,areferencetotheconceptofacreativeclustercanbeassumedhere.DISCUSSIONRegressionanalysis(RQ1)pointedoutthattheXRindustry(ormorespecifically,thenon-focalfirmsintheXRDBE)seemstobeafootlooseindustry;onlysomeexogenouseffectsimpactoveralllocationsatisfaction,mirroringKukalis’s(2010)resultsfortheITindustry.Theidentifiedfactors—qualityoflife/leisureoptions,taxes,positiveregionaleconomicdevelop-ment,goodtrafficconnections,andcostofofficespace—explain44.3percentofthevariance,anintermediateexplanativevalue.However,thelimitedscaleofthesamplehastobekeptinmindhere.Thecoronaviruspandemicpresumablydepressedresponserates,soarepeatstudywithalargersamplecouldhelptovalidatethesefindings.Itwillbeinterestingtoseewhetherotherlocationfactorsbecomestatisticallysignificantifthesamplesizeincreases,thuspossiblyincreasingtheexplanatoryvalue.Despitethefactthatonlyexogenousfactorswerefoundtosignificantlyinfluencelocationsatisfaction,thevarianceanalysis(RQ2)showedthatfirmswithinoroutsideclustersdifferintheirsatisfactionwithagglomerationfactors.Thisindicatesthatclustersdoindeedprovideadvantageswithregardtoendogenousandexogenousfactors.However,asmentionedabove,thisisnotreflectedinasignificantlyhigherlevelofoveralllocationsatisfaction.Infact,theanalysisshowedthattheoverallimportanceofalocationforcompanysuccessisconsideredratherlowforthesampleintotal.Thesedifferencesthereforepresumablyonlyplayamajorroleinlocationdecisionsforasmallgroup.Alargersample,whichwouldallowregressionanalysisforthissubgroup,couldallowinterestinginsightshere.ChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

277Theroleoflocationfornon-focalfirmsinemergingdigitalbusinessecosystems263FromaDBEperspective,thesefindingshighlightthat—atleastforthenon-focalfirmsoftheXRDBEstudiedhere—locationsatisfactionisnotsignificantlypositivelyinfluencedbyDBE-specificaspects,atleastontheaggregatelevel.IfthespatialfocusofXRfirms’DBE-relatedactivitiesisanalyzed(RQ3),differentpatternsofhowXRfirmspursuestaticordynamicefficiencies(andthuspositionthemselvesintheDBE)couldbeobserved.Theseactivitiesarenotpredominantlylocal:mostDBE-relatedactivitiesofXRfirmsareatleastpartiallycarriedoutonanationallevel.Onlyrecruitingandresearchanddevelopment(R&D)collaborationsarepredominantlyregionalactivitiesforthemajorityofthefirms.Thisisreflectedintheimportanceofnon-localnetworkingtiesandtheheterogeneityofnetworkingapproachesfound.Alargergroupfocusesonlocalinterlinkages,albeitinaratherloosemanner.Thisapproachresemblesagglomerationstrategiesassociatedwithcreativeclusters/urbanizationeconomies:trustfulcollaborationininformalnetworks,andregulatingtheaccesstoindirectendogenouseffects(suchasaccesstotalentpools).Otherfirmsattributedahighimportancetotheproximitytoaspecificplayer(researchinstitution,branchofaninternationalcompany),hintingatahub-and-spoke/platformmodelfollowingMarkusen(1996).AsmallsubsetthenpursuedamoreMarshalliandistrictapproachorotherwisefocusedonmoreintensecooperation(whichcouldbeattributedtoaverticalclustermodel).AbstractingfromdifferentagglomerationtypesofXRfirms,thestudyalsohighlightedthecomplexnatureof(non-)localnetworkingactivities.Trustfulcooperationthroughproximityseemstobeespeciallyimportantincreativeclustersettings,withahighaffinityforthemedia/creativeindustriesthatarealsocharacterizedbyanoverlapbetweenprivateandprofessionalcontactsandrelyonacreativeatmosphere.Theroleofnon-localnetworkingisfurthermoreaffectedbythelocationoffirmswithinoroutsideofclusters.Thefirmsoutsideareobviouslydependentonnon-localcooperation;theyalsotendtoassesslocalconditionsassomewhatworsethantheirpeerslocatedinacluster(seevarianceanalysis).Thestrongerfocusonproject-orientedworkmayalsohintatthechallengesofestablishinglong-termworkingandcommercialrelationships.Inafurtherstep,itwouldbeinterestingtoquantitativelyanalyzehowfirmsthatpredominantlyworkwithnon-localactorsbutarelocatedwithinaclusterassesstherelevanceoflocalagglomerationfactors,andhowtheyapproachandinteractwiththeirlocalindustryecosystem.Thiswouldalsoshedlightontherolethatlocationfactorsplayinshapingcompanies’strategiestoharnessdynamiceffi-ciencies,whichthenmayfeedbackintotheevaluationandbuild-upoflocation/agglomerationfactors.CONCLUSIONThefindingspointtoaheterogeneityoftheagglomerationeffectspursued.Thismayalsoexplainwhytheregressionanalysisonlyfoundmoregeneralexogenous(andnon-DBE-related)agglomerationfactorstobestatisticallysignificant.Ithastobesaidthattheagglomerationapproachesaregeographicallynotmutuallyexclusive:theycanbefoundwithinthesameclusters.Therefore,thefindingsindicatethattheuniformdefinitionofasingleclustertypeforacertainindustryatagivenlocationcouldbeanoversimplification.Thismayatleastbetrueforayoung,dynamicsubindustryanditscorrespondingDBEthathasnotyetbeenabletoestablishdominantpatterns,oristoosmalltoformgeographicalclusters“onitsown,”ratherthanhavingtonavigatebetweenpre-existingclusters.Asalimitationofthisstudy,however,ChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

278264Handbookondigitalbusinessecosystemsthesmallnumberofcasesresultingfromthedifferentiatedconsiderationofthesubgroupsshouldbetakenintoaccount.Also,thefindingsherearebasedonsurveyresultsanddidnotmeasure“objective”performancecriteria,andthereforemaybesubjecttopotentialbiasesoftherespondents.Thisleadstopromisingavenuesforfurtherresearch:Abetterunderstandingofthe(non-)localnetworkingtypespointstothepossibilityofinvestigatingagglomerationeffectsbasedonfirmstrategytypesorstrategicgroupsoffirms,notonlyonthebasisofgeographicallocationandindustryaffiliation.Thisofcourseposesadditionalchallenges,especiallyforthequan-titativeanalysisofcluster/agglomerationeffectsintheseindustries.RegardingDBEs(wheredynamicefficienciesandnon-localnetworkingareespeciallyimportant),abetterunder-standingofthedifferenttypesanddegreesofnetworkingalsoseemshighlyrelevant.Sinceourstudyindicatesthattheseareshapedbycompanystrategy,resourcebaseandgeographiclocation(andviceversa),furtherresearchcouldelucidatetheinterplaybetweenlocalandnon-localagglomeration/networkingfactorsinemerginghigh-techindustries,andthustheirroleintheformationofDBEs.Finally,thecoronaviruspandemicandtheresultingchangesinworkpatterns(thatis,anincreaseinworkingfromhome),mayfurtheraffecttheimportanceoflocationfornon-focalcompaniesparticipatinginaDBE.Fromapolicy/regulatoryperspective,thefindingsindicatethat—atleastfornon-focalfirmsintheXRDBEstudied—itisworthwhiletoimproveexogenouslocationfactorstoattractfirms/activitiesrelatingtotheXRDBE(eventhoughthesefactorsalsoseemtobevalidforotherhigh-tech/ITandmediaindustries).Inaddition,specialattentionshouldbepaidtounderstandingandfacilitatingthenetworkingactivitiesofthesenon-focalfirms,inordertodrivedynamicefficiencies.These,asispointedoutabove,maybelocalaswellasnon-local,soagoodunderstandingoftheXRfirmpopulationataspecificlocationisnecessaryforpolicy-makerstocraftadequatesupportinitiatives.REFERENCESBaggio,R.andDelChiappa,G.(2013).Realandvirtualrelationshipsintourismdigitalecosystems.InformationTechnologyandTourism,14(1),pp.3–19.Boix,R.,Hervás-Oliver,J.andDeMiguel-Molina,B.(2015).Micro-geographiesofcreativeindustriesclustersinEurope:fromhotspotstoassemblages:micro-geographiesofcreativeindustriesclusters.PapersinRegionalScience,94(4),pp.753–772.Boschma,R.andFornahl,D.(2011).Clusterevolutionandaroadmapforfutureresearch.RegionalStudies,45(10),pp.1295–1298.Branzanti,C.(2015).Creativeclustersanddistricteconomies:towardsataxonomytointerpretthephe-nomenon.EuropeanPlanningStudies,23(7),pp.1401–1418.Cader,H.,Crespi,J.andLeatherman,J.(2013).WhatfactorsaffectinformationtechnologyfirmlocationchoicesinMiddleAmerica?AnExaminationofregionalandindustrialvariationinKansas.InternationalRegionalScienceReview,36(2),pp.207–234.Camarinha-Matos,L.andAfsarmanesh,H.(2008).Onreferencemodelsforcollaborativenetworkedorganizations.InternationalJournalofProductionResearch,46(9),pp.2453–2469.Capello,R.(2007).RegionalEconomics.London:Routledge.Caves,R.(2000).CreativeIndustries:ContractsbetweenArtandCommerce.Cambridge,MA,USAandLondon,UK:HarvardUniversityPress.Chen,M-J.andMiller,D.(2015).Reconceptualizingcompetitivedynamics:amultidimensionalframe-work:reconceptualizingcompetitivedynamics.StrategicManagementJournal,36(5),pp.758–775.Claver,N.,Castejón,C.andGracia,F.(2012).ExternaleconomiesasamechanismofagglomerationinEUmanufacturing.AppliedEconomics,44(34),pp.4421–4438.ChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

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281Theroleoflocationfornon-focalfirmsinemergingdigitalbusinessecosystems267Zabel,C.andHeisenberg,G.(2019).Justanothermediacluster?EinflussfaktorenderAgglomerationvonVirtual-undAugmentedReality-UnternehmeninNordrhein-Westfalen.MedienWirtschaft—ZeitschriftfürMedienmanagementundKommunikationsökonomie,16(2),pp.22–31.Zabel,C.,Heisenberg,G.andTelkmann,V.(2019).XRinNRW:PotenzialeundBedarfedernordrhein-westfälischenVirtual,MixedundAugmentedReality-Branche.Köln:THKöln.Availableat:https://epb.bibl.th-koeln.de/frontdoor/index/index/docId/1413(accessedSeptember10,2020).Zabel,C.,Pagel,S.,Telkmann,V.andRossner,A.(2020).Comingtotown.Importanceofagglomer-ationfactorsformediaclusterdevelopmentintheGermanonlinevideoindustry.JournalofMediaBusinessStudies,17(2),pp.148–171.Zabel,C.andTelkmann,V.(2020).Theadoptionofemergingtechnology-drivenmediainnovations.Acomparativestudyoftheintroductionofvirtualandaugmentedrealityinthemediaandmanufac-turingindustries.JournalofMediaBusinessStudies,1–32.doi:10.1080/16522354.2020.1839172.ChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

282268HandbookondigitalbusinessecosystemsAPPENDIXTable17.A1Correlationsbetweenthelocationfactorsandthesatisfactionwiththecompanies’locationsandsignificancevaluesofthe(excluded)factorsintheregressionPearsonRegressioncorrelationsignificanceManypotentialemployeesintechnicalprofessionsareavailableatourlocation(e.g.,0.3040.848programmers).Atourlocation,therearemanypotentialemployeesavailableincreativeprofessions(e.g.,0.3300.730design,storytelling).Atourlocation,manypotentialemployeesareavailableineconomicprofessions(e.g.,0.3670.749marketing,sales).Atourlocation,thepersonnelcostsarenottoohigh.-0.0370.297Atourlocation,therearediscussionforumsoncurrentindustrytopics(e.g.,tradefairs,0.2570.926meetups).Therearepoliticalinitiativesforcompaniesinthedigitaleconomytobelocatedatour0.2980.830location(entrepreneurship/start-upsupport).Thereisanassociation/initiativethatactivelypromotesthetopicVR/AR/MRatoursite.0.3070.564TherearealargenumberofXRcompaniesatourlocation.0.1660.515Atourlocation,therearealargenumberofserviceproviders/suppliersspecializedinXR0.1780.622(e.g.,programming,design).Atourlocation,therearenumerousfreelancers(e.g.,programming,design).0.3370.421Atourlocation,therearemanycompaniesfromthemedia/creativeindustry.0.3110.552Atourlocation,therearemanycompaniesfromtheIT/digitalindustry.0.2640.966Anintensiveexchangeofknowledgebetweencompaniesintheindustrytakesplaceatour0.0860.330location.Atourlocation,therearenumerousproject-basedcooperationsofcompaniesfromthe0.1570.562industry.Intheregionthereisintensivecooperationbetweentheuniversitiesandresearchinstitutions0.2580.872andthecompaniesintheindustry.Atourlocation,thereisagoodtrainingandfurthereducationofferavailable.0.3670.213Atourlocation,thereareuniversitiesandresearchinstitutesthatdealwithXR.0.3150.990Afastinternetconnectionisavailableatourlocation.0.2310.700Atoursite,thereisfinancialsupportforXRofferingsfromthepublicsector.-0.0020.209Atourlocation,thequalityoflifeandleisurefacilitiesareverygood.0.5170.003Atourlocation,theculturaloffersandthepossibilitiestogooutareverygood.0.4430.602Atourlocation,thecostoflivingisnottoohigh.-0.0870.196Thecompanysiteislocatedinacoolenvironment(trendyneighborhood/district,an‘in’0.0850.699district).TheareaisknownasanXRlocation.0.0610.493Thelocationoffersacreativeatmosphere(e.g.,throughproximitytoothercreative0.2560.385industries/professions).Localtaxesanddutiesarenottoohighintheregion(e.g.,tradetaxrate).-0.2090.000Theeconomyisdevelopingpositivelyintheregion.0.5050.050Thecompanylocationoffersgoodtrafficconnections.0.4500.035Raisingcapitalisuncomplicatedintheregion.0.2950.309Atourlocation,therearemanybuyers/B2Bcustomersforourproducts/services.0.3030.417Atourlocation,thecostsforoffices/workrooms,etc.arenottoohigh.0.0850.035ChristianZabelandVerenaTelkmann-9781839107191DownloadedfromPubFactoryat05/28/202209:57:47AMviaColumbiaUniversityLibrary

28318.AdigitalbusinessecosystemmaturitymodelforpersonalservicefirmsRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemonINTRODUCTIONInrecentyears,companiesworldwidehavebeenfacingsignificantandfundamentalchallengesduetoincreasingtrendstowardsdigitalization.Nowadays,theenvironmentoforganizationsischangingfasterandhasbecomemorevolatile,uncertain,andcomplexthaninthepast.Rapidchangesinabusinessecosystem(BE)concerningaspectsrelatedtothestrategy,businessmodel,collaborationpractices,solutionsportfolio,technology,knowledgemanagement,andcommunication,makeitmoreimportantthaneverforfirmstobeabletorespondandadapttotheirenvironments(KaufmanandHorton,2015;SchuchmannandSeufert,2015).Inthiscontext,firmsfromallindustriesmustseekappropriateworkingmodestobecomemoreagile,buildupdynamiccapabilities,andsearchforadequateorganizationalformsthatenableinno-vationandvaluecreationatunprecedentedspeed,scale,andimpact(Gorissenetal.,2016).Inthepastyears,theindustrialproductionandmanufacturingsector,aswellasafewservicesectorssuchasfinancial,logistics,healthcare,andtelecommunications,havefoundwaystodevelopdigitalbusinessecosystems(DBEs)byapplyingconceptsofIndustry4.0(Ibarraetal.,2018;Mattetal.,2020;Valdez-de-Leon,2016).FirmssuchasTesla,Rolls-Royce,andVolkswagenserveasexamplesinthemanufacturingsector(Ngetal.,2012;SmolnickiandSołtys,2016).Inthelogisticsandfinancesector,companiessuchasDHL,Hermes,N26,andTransferWise,alsoserveasexamples(Kerstenetal.,2017).FirmssuchasHuaweiandZavaaretremendousexamplesfromthetelecommunicationandhealthcaresector(Hermesetal.,2020;TaoandChunbo,2014).AlthoughmanyfirmsfrommultiplesectorshavesucceededinestablishingDBEs,theso-called“personalservices”(PS)(Larsson,2015;Lattemannetal.,2019)representoneofthefewservicesectorsstrugglingthemosttoachievethetransitionfromanaloguetodigital,andthusprimarilyrelyontraditionalandnon-digitalBEs.PSareservicesthattakeplaceatthelevelofthehumanbeingastheserviceobject,andarecharacterizedbyhavinghigh-contactlevelsofinteraction,beingusuallyco-created,andtailoringindividualneedsanddesires(Lattemannetal.,2019).PSaimtostabilizeorimproveahumanbeing’slifesituation.Theyareessentialforsocietyandeverydaylife.Theseservicescanbefoundinsectorssuchaseducation,retail,hospitality(hotels,restaurants),andcrafts-manship(Guerreroetal.,2020;MattilaandEnz,2002;Parasuramanetal.,1985).Forsolong,PShavebeenpurelyrelyingonanalogueprocesses,front-deskandface-to-faceactivities(Guerreroetal.,2020;Lattemannetal.,2020).Thishasledthesekindsoffirmstosufferextremeconsequencesandchallenges,especiallyduringthecoronavirus(COVID-19)pan-demictimes,whereinmanycountrieshaveimposedlockdownsandsocialdistancingnorms(Agarwaletal.,2020;Bartiketal.,2020).Inthiscontext,suchasinotherindustries,PSmust269RicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

284270HandbookondigitalbusinessecosystemsalsogothroughadigitalizationprocessallowingthesefirmstobuildDBEsthatinvolvestheapplicationofinformationandcommunicationtechnology(ICT).DigitalizationcanmakeanimportantandsupportivecontributiontoPSandchangetheinteractionspacewithinallitsfacets(Lattemannetal.,2020).However,whatmanyofthesefirmslacktodayarestrategicinstrumentsthatallowthemtoimplementadequateprocessesandpracticestoeffectivelymanageandguidethetransitiontowardsdesigningaDBEsystem-atically(Larsson,2015).AninstrumentthatallowsfirmstoidentifygapsforimprovementsconcerningthedevelopmentofDBEsisamaturitymodel(MM)(Beckeretal.,2009;CukierandKon,2018;Jansen,2020).MMshelpassessfirms’currentdevelopmental(digitalization)stageandshowtrajectoriestoguidethetransitiontowardsaDBEinawell-structuredway(Teichert,2019).SeveralMMshavebeenproposedforvariousbusinesssectors(forexample,softwaredevelopment,manufacturing,publicservices),allowingthesefirmstoadequatelydevelopDBEs(Jansen,2020;Pullen,2007).However,noneoftheseMMsareapplicablenorspecifictoPS,andassuch,donotofferspecificguidanceforthissector.Toaddressthisgap,thisresearchaimsatdevelopinganMMthatfocusesonprovidingspecificandtargetedinitiativesforimprovementtowardsthedevelopmentofaDBE.Inthischapter,westrivetoanswerthefollowingresearchquestions:(1)Whichfunction,process,orcapabilityareaneedtobecon-sideredwhendefiningaDBEforPSfirms?(2)WhatarethematuritystagesneededtodevelopaDBEwithinPSfirms?Toaddressthesequestions,wefollowadesignscienceresearch(DSR)approach(Hevneretal.,2004).Theremainderofthechapterisstructuredasfollows.Firstly,wepresentthetheoreticalbackgroundonthedigitalizationofPS.Secondly,wediscussresearchonDBEsandMMs.Thirdly,wediscussresearchontheservice-dominantlogic(S-Dlogic).Fourthly,ourappliedresearchmethodisintroducedandourinterviewresultsarepresentedanddiscussed.Finally,thechapterendswithadiscussionoftheresultsandconclusions.THEORETICALBACKGROUNDThissectionprovidesanoverviewofcoreconceptsandpresentshowPSfirmsandDBEresearchstreamsareinterconnected.DigitalizationofPersonalServicesPSare“servicesincludinghigh-contactlevelsofinteraction”(KelloggandChase,1995,p.1737)withthecustomers.Theyarecharacterizedbyintimacy,theexchangeofcontent-richinformation,andlonginteractiontimes.Theyencompassfeelingsandemotionalstatessuchasfriendliness,helpfulness,andempathy(KingandGarey,1997;Parasuramanetal.,1985)andaredevelopedinaco-createdmanner(Lattemannetal.,2020).PSareallaboutthefulfillmentofindividual,humanneedsinthesituationof“using”theservice—theso-called“value-in-use”(Grönroos,2008;VargoandAkaka,2009)—andalsoaboutthefulfillmentofuserexperiencesininteraction—theso-called“value-in-interaction”(Geigeretal.,2020).Here,bothvalue-in-useandvalue-in-interactioncouldbehighlyinfluencedbyICT.AccordingtoLattemannetal.(2020),throughtheapplicationanddynamicdevelopmentsofICT,thenatureandexchangeofPSundergoradicalshifts,affectingthedesignandprovisionofsuchRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

285Adigitalbusinessecosystemmaturitymodelforpersonalservicefirms271services(forexample,video-streamingsellinginsteadoffront-lineselling).ICTresultsinopeningnewperspectivesofPSregardingvalue,communication,interaction,collaboration,andco-creation,whicharefundamentalaspectswhendevelopingaDBE(Robra-Bissantzetal.2020).Finally,accordingtoastudyconductedbyBartiketal.(2020)inanattempttoexploretheimpactofCOVID-19acrossmultiplePSfirms(thatis,retailers,artsandentertainment,andhospitality)intheUnitedStatesofAmerica(USA),resultsrevealedthatamongasampleofmorethan5800businesses,43percentofthemhadtemporarilyclosed.NearlyalloftheseclosureswereduetoCOVID-19.Consequently,theirresultsalsorevealedthatifbyDecember2021theCOVID-19regulationssuchaslockdownsandsocialdistancingnormsimposedbytheUSAcontinue,53percentofsuchbusinessescouldsufferbankruptcy.Therefore,theyconcludedthatasotherforbusinessindustries,andespeciallyduetoCOVID-19strictsocialdistancingnorms(forexample,minimizingpersonalinteractionattheveryleast),PSfirmsmustfindwaystodesignanddeveloptheirservicesrelyingontheapplicationofICT.DigitalBusinessEcosystemsBEshavebeencontinuallydefined,redefined,andstudiedoverthepastthreedecades(Moore,1993;Selanderetal.,2010).Inspiredbythelogicofbiologicalecosystems,JamesF.Mooreintroducedthemetaphoricconceptofa“businessecosystem”in1993(Moore,1993).Inhiswork,aBEisdefinedas“aneconomiccommunitysupportedbyafoundationofinteractingorganizationsandindividuals—theorganismsofthebusinessworld”(Moore,1993,p.76).Thiseconomiccommunityproducesgoodsandservicesofvaluetocustomers,whothem-selvesaremembersoftheecosystem.Nonetheless,theadvancementsinICThaveledtothedevelopmentofnewcollaborativeorganizationalnetworkssuchasDBEs(Senyoetal.,2019).DBEsextendtheconceptofBEsbyemphasizingICT.DBEstranscendtraditionalindustryboundariestofosteropenandflexiblecollaborationandcompetition(Senyoetal.,2019).ScholarlyworkdifferssignificantlyinthedefinitionandinterpretationofDBEs(Razavietal.,2010;Senyoetal.,2019).Buildingonapurelytechnicalperspective,Nachiraetal.(2007)defineDBEsas“avirtualenvironmentpopulatedbydigitalentitiessuchassoftwareapplica-tions,hardwareandprocesses”(Nachiraetal.,2007,p.9).Abroaderperspectiveincorporatestheviewofnetworktheory,whichassessestheunderlyingissuesofexchangeprocessesthattakeplacethroughinteractionbetweenentitiesandanumberofindividualactorswithinadigitalecosystem(Camarinha-MatosandAfsarmanesh,2008).Camarinha-MatosandAfsarmanesh(2008)defineDBEsas“aclassofcollaborativenetworkswithawiderallianceofheterogeneousandgeographicallydispersedentitiesthatcollaborateviatheInternettoachievecommonoutcomes”(Camarinha-MatosandAfsarmanesh,2008,p.62).Another,evenbroaderperspectivefocusesontheS-Dlogicandlaysthefocusonvalueco-creation(Senyoetal.,2019;VargoandLusch,2004).AccordingtoSenyoetal.(2019),DBEscanbedefinedas“socio-technicalenvironmentsmadeupofdifferentindividualsandorganizationswithcollab-orativeandcompetitiverelationshipstocollectivelyco-createvaluethroughICTandthecoor-dinationofsuperbmanagementpractices”(Senyoetal.,2019,p.125).Forthepurposeofthischapter,wefollowthedefinitionestablishedbySenyoetal.(2019)andarguethatco-createdvalueispresumedtobegreaterthanthatcreatedbyasingleorganization(Adner,2006).Consequently,otherauthorssuchasBreidbachandMaglio(2016)haverevealedthatICTcanbeusedtotransformandenhancevalueco-creationprocesses.Thus,giventhefactthatDBEsRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

286272Handbookondigitalbusinessecosystemsrelyonsynergiesbetweendifferentactorstogeneratevalue,weseevalueco-creationthroughtheuseandapplicationofICTasanimportantdriverinDBEsformationandoperation.Service-DominantLogicTheS-Dlogicisrootedinmarketingresearch,whereitgainedmomentumsinceitsinceptionwiththelandmarkstudyofVargoandLusch(2004),followedbyfurtheramendments(VargoandLusch,2016,2008).TheS-Dlogicisoneofthemostrelevantservicetheoriesthat,basedonnetworktheoryassumption,conceptualizesmarketsasnetworksofco-creatingactors(Vargo,2009;Vargoetal.,2008).BasedonAkakaandVargo(2014),themainconsiderationsofS-Dlogicarethefollowing:“(1)servicesisthebasisofexchange,(2)valueisalwaysco-createdamongmultiplestake-holdersinabusinessecosystem,(3)allsocialandeconomicactorsareresourceintegrators,and(4)valueisalwayscontextuallyandphenomenologicallyderived”(AkakaandVargo,2014,p.370).TheS-Dlogiccontradictsothermarketingtheoreticalframeworkssuchastheso-called“goods-dominantlogic”(G-Dlogic),whichisbasedontheassumptionthattheproducerandcustomerarestrictlyseparatedfromeachother,andthatthevalueofthetangibleassetorproductisdefinedbythemarketpriceorwhattheclientiswillingtopay(value-in-exchange)(Jallat,2004).UndertheS-Dlogic,companiescannotcreatevaluebythemselves,butratherfocusonthecooperationofdifferentactors(forexample,serviceproviders,customers)andstakeholderstoapplycollectiveknowledgetocreatevaluefortheindividualandtheentirebusinessecosystem(co-creation)(VargoandLusch,2004).Inthisview,customersandotherstakeholdersareincreasinglyinvolvedintheprocessofservicedeliveryandallofthemcontributetothecreationofvalue.Additionally,fromanS-Dlogicperspective,ICTitselfisconsideredasanindependentactoraswellasaresourceforvaluecreation(LuschandNambisan,2015).Inthiscontext,byviewingICTasanactor,otheractorscanextendtheirabilitytoreconfigureresourceintegrationwithintheecosystemitself,suchasinformationtechnology(IT)capability,andknowledgesharingandcoordination(Nambisan,2013),thusoftenleadingtothedesignanddevelopmentofDBEs(Senyoetal.,2019).Thishighlightshowthefundamentalfunctionofco-creation,theparticularviewtowardsICT,andtheinherentecosystemperspective,maketheS-DlogicanaturalfittobetakenintoconsiderationwhendesigninganddevelopingDBEs(Senyoetal.,2019;Sklyaretal.,2019).MaturityModelsMMsarestrategicframeworksthatallowfirmstoassessinternalandexternalimprovementprocesses,enablingatransformationfromadhocprocessimplementationtodefinitiveanddisciplinedprocessexecution(Beckeretal.,2009;deBruinetal.,2005).ThemainpurposeofMMsistoprovidespecificandtargetedimprovementinitiativestowardsaspecificbusinessfunction,process,orcapabilityarea.Theyhelpfirmstoencounterdigitalizationaccordingtopredefineddimensions(Schäfferetal.,2018).EspeciallyinthecaseofthetransitiontowardsDBEs,MMscanassistinunderstandingthecurrentstateof“maturity”andthecapabilitiesofanorganizationineffectivelymanagingandguidingdigitalizationeffortsinasystematicway.Thus,leadingtoastageof“digitalmaturity”(Teichert,2019).Here,digitalmaturitygoesbeyondameretechnologicalinterpretationandalsoreflectsamanagerialunderstandingRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

287Adigitalbusinessecosystemmaturitymodelforpersonalservicefirms273describingchangesintheBE.Thus,digitalmaturitycomprisestechnologicalandmanagerialaspects.TheunderlyingstructureofMMsisalwayssimilar.Firstly,criticalcapabilitiesaredefinedforaspecificareaofaction(forexample,strategy,collaboration,knowledgemanagement).Secondly,improvementinitiativesareproposedforthecapabilitiesdefinedateachofthedifferentmaturitystages,wherebytheloweststagestandsforaninitialstatethatcanbecharacterizedbyanorganizationhavinglittlecapabilitiesinthedomainunderconsideration;incontrast,thehigheststagerepresentsaconceptionofhighmaturity(Beckeretal.,2009).Finally,dependingonwhichrequirementsarefulfilledconcerningthedifferentmaturitystages,acertaindegreeofmaturityisawarded(Schäfferetal.,2018).METHODOLOGICALAPPROACHDesignScienceResearch(DSR)TodevelopourMM,wefollowedtheMMdevelopmentprocessproposedbydeBruinetal.(2005),sincethisprovidesawell-definedprocessthatisbasedonDSRguidelines(Hevneretal.,2004).DSRstrivestobuildandevaluate“artifacts”thataretobeunderstoodasconstructs,models,guidelines,methods,orinstantiationstosolveorganizationalproblems(Hevneretal.,2004).FromaDSRperspective,MMscanserveasreferencemodels,andhenceareartifactsthatshow“ananticipated,desired,ortypicalevolutionpath”(Beckeretal.,2009,p.213).Thedevelopmentprocessisbasedonsixphases:(1)scope;(2)design;(3)populate;(4)test;(5)deploy;and(6)maintain.Phases1to3arecrucialtodevelopthedesignspecificationsofaMM,whereasphases4to6concernitsapplication,evaluation,andlong-termrefinement.Theresearchdescribedinthischaptercomprisesthedevelopment,application,andevaluationofthemodel(thatis,scope,design,populate,test,anddeploy),whilesubsequentphases(maintain)areplannedforfutureresearch,asthismustbedoneonalong-termbasis.Finally,forthedevelopmentofourMM,initiallyaliteraturereview(LR)inaccordancewithWebsterandWatson(2002)wasconducted,whichatthesametimeledtothedevelopmentofaninitialMM.OncetheLRwasconducted,ourinitialMMwasfurtherrefinedandvalidatedthroughexpertinterviewsand,lateron,testedbytwoPSfirms’representativestoaddressissuesofreliabilityandvalidityofourMM.Table18.1depictsourmethodologicalapproachindetail.LiteratureReviewPivotalcapabilitiesofaPSDBEThroughtheanalysisofexistingMMsinDBEsanddigitalization(Alvesetal.,2011;AzevedoandSantiago,2019;Gollhardtetal.,2020;Schumacheretal.,2016;Valdez-de-Leon,2016),commoncapabilitiescouldbeidentified,whichatthesametimecouldbeappliedinaPScontext.Thisprocessresultedinthederivationofover30capabilities.InordertocreateaholisticperspectiveandtoidentifycriticalcapabilitiesapplicableinthecontextofaPSDBE,wefollowedtheapproachestablishedbyFraseretal.(2002).Theyrecommendsepa-ratingMMcapabilitiesinamultidimensionalmanneranddiscardingthosecapabilitiesthatdonotdirectlyhaveanimpactinthedomainunderconsideration(thatis,PS).Thisprocessresultedinselectingeightcapabilities(visionandstrategy;businessmodel;digitalculture;RicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

288274HandbookondigitalbusinessecosystemsTable18.1DesignscienceresearchapproachtodevelopourfinalmaturitymodelPhase1:BuildingaMMcanassistPSfirmstounderstandtheircurrentdigitalizationstateandtoprovidespecificandScopetargetedimprovementinitiativestowardsthedevelopmentofDBEs.Phase2:ALRinaccordancewithWebsterandWatson(2002)wasconducted.ThefocuswassetonliteraturerelatedtoDesignMMsandDBEsaswellasdigitalizationandPS.WebofSciencewasusedasadatabase.Atotalof15articleswereselectedandanalyzedindepth.ItbecameapparentthatnoneoftheMMswereapplicablenorspecifictoPS.TheinitialMMwassetup,indicatingtheidentifiedstages,dimensions,capabilityareas,andimprovementinitiativesforsomeofthecapabilityareasateachofthedifferentstages.Capabilityareas(e.g.customersatisfaction,customerinteraction,customersempathy,andproduct/serviceindividualization)haveneverbeenproposedbeforeinpreviousDBEsnordigitalizationMMs.Wedefinetheirinitiativesforimprovementinphase3(populate)throughtheconductionofinterviews.Phase3:TheinitialMMwasdiscussedwithexperts.Thefocuswaslaidoninterviewingeitherfounders,chiefexecutivePopulateofficers(CEOs),managers,andservice/productdesignersfromPSallovertheglobe(seeTable18.2).Ourstudyisbasedonaconveniencesample:intervieweeswereexpertsinthefieldofPS,digitalization,andBE.Consequently,intervieweeswereselectedbasedontheauthors’network.Asemi-structuredinterviewguidelinewasconceptualizedandatotalof11semi-structuredinterviewsofapproximately45‒60minuteswereconducted.Here,questionstotheintervieweeswereaskedregardingwhethertheywouldconsiderthestages,dimensions,andcapabilityareasfirstlyidentified,relevantornot.TheexpertswerealsoofferedtheopportunitytoprovidefeedbackontheinitialarchitectureoftheMMinwaysthattheycouldadd,modify,orremoveanyofthepreviouslyidentifiedstages,dimensions,capabilityareas,aswellasimprovementinitiatives.Theexpertinterviewswererecorded,transcribed,andsubsequentlycodedusingMAXQDAasacomputer-basedqualitativeanalysistool.Thetranscribeddatawereindependentlyanalyzedbytworesearchers,usingcodesasanefficientdata-labellinganddata-retrievalmethod.Phases4and5:TheMMwasinitiallyrefinedandvalidatedthroughtheconductionofsemi-structuredinterviews,andthenitwasTestandDeployfurthertestedwithtwoPSfirmsfromourinterviewnetworktogainmorepracticalinsights.Table18.2InterviewpartnersCompany(Focus)PositionBusinessasUnusual(Retailing)Co-FounderBusinessasUnusual(Retailing)FounderandCEONeurosales(Consulting)FounderandCEOClarke&Partners(Eventmanagementandcoordination)CommercialManagerPg40ConsultingGroup(Consulting)DesignerEndobrand(Communicationagency)CEOFriotem,C.A.(Retailing)FounderandCEOBostonConsultingGroup(Consulting)Product/ServiceDesignerNeurosales(Consulting)ServiceManagerDirectorBusinessasUnusual(Retailing)ChiefTransformationOfficerSOHICA,C.A.(Healthcare)FounderandCEORicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

289Adigitalbusinessecosystemmaturitymodelforpersonalservicefirms275knowledgemanagement;collaboration;agilityandflexibility;ICTinfrastructure;andICTsystemapplication).Further,throughananalysisofthePSliterature(Lattemannetal.,2020,2019;MattilaandEnz,2002;Parasuramanetal.1985),weidentifiedfouruniquecapabilitiesofPS(customersatisfaction,customerinteraction,customersempathy,andproduct/serviceindividualization).Intotal,12capabilitieswereselectedforthedevelopmentofourinitialMM.Finally,basedonFraseretal.(2002),thesewerefurtherclusteredandgroupedintofivedimensions(customer-centricity,strategy,products/services,processandorganization,andtechnology).Thedimensionsaredescribedinthefollowing:1.Customer-centricitymeasuresthecompany’sabilitytouseICTtocollaboratewithitscus-tomersandotheractorsintheBE.Itincludesconceptssuchasco-designandco-creation.Here,customersareconsideredasresourcesforvaluecreation.Itisanalyzedbymeansofthefollowingcapabilities:customersatisfaction,customerinteraction,andcustomerempathy.2.Strategymeasuresthecompany’sabilitytodevelopastrategicbusiness/ITalignmentplanandeffectivelyimplementitacrossalllevelsoftheorganizationinsuchawaythataDBEcouldbeguaranteed.Itisanalyzedbymeansofthefollowingcapabilities:visionandstrategy,businessmodel,andculture.3.Products/servicesmeasuresthecompany’sabilitytodesignproducts/servicesthroughcollectiveeffortsbyacollaborativenetwork,aswellastheabilitytointegratedifferenttechnologiesinthedevelopmentprocess.Itisanalyzedbymeansofthefollowingcapabil-ity:product/serviceindividualization.4.Processandorganizationmeasuresthecompany’sabilitytoimplementtechnological,management,andagilemanagementpracticestoimprovetheBE.Itisanalyzedbymeansofthefollowingcapabilities:knowledgemanagement,collaboration,andagilityandflexibility.5.Technologymeasuresthecompany’sabilitytounderstandwhichtechnologiesarebecom-ingrelevantandcouldinfluencetheBE.Here,companiesdeterminewhichsuitableICTsystemsareneededtosupporttheiremployeesincarryingouttheirtasks.Itisanalyzedbymeansofthefollowingcapabilities:infrastructureandICTsystemapplication.MaturitystagesandtheircharacteristicsWedecidedtofollowthematuritystagesproposedbyTeichert(2019)ashebuiltontheconceptofdigitalmaturity,andweconsideredhimtoprovidethemostaccurateandsolidviewtowardsachievingaDBE.Inthiscontext,weclassifiedthedifferentmaturitystagesinto:(1)infancy;(2)developing;(3)transforming;(4)optimized;and(5)digitalmaturity.Thestagesaredescribedinthefollowing.●Stage1:Infancy.TheorganizationhaslowtozeroawarenessofthebenefitsofusingICTandhowtobuildaDBE.Theinitiativestowardsinnovationinproducts/servicesarepoorlyaddressed.Thefirmreliespurelyonanalogandundisciplinedprocesses.●Stage2:Developing.OrganizationsrecognizetheneedtoimplementICTtoimprovetheirBE.However,ICTisstillinconsistent,withlowstrategyimplementationtowardshowaDBEshouldbeachieved.Mostofthefirm’soperationprocessesarestillanalog.●Stage3:Transforming.BasicICTsystemsarepresentedinordertoimprovecollaborationandinteractionamongcustomersandotherBEactors.Someprocessesbecomedigital;however,theyarenottotallyundercontrol.Therefore,theoutcomesarenotpredictable.RicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

290276HandbookondigitalbusinessecosystemsThefirmhasamoresophisticatedmanagementstructure,whichencouragesemployeestolearnanduseICTsystems.●Stage4:Optimized.TheapplicationanduseofICTisreflectedinthefirm’sstrategy.Theorganization’sprocessesarewellunderstood,andtheresponsibilitiesandrolesofallBEactorsareclearandwelldefined.HighlevelsofcollaborationandcoordinationareachievedthroughtheuseofICT.AnalogbusinessfunctionsdisappearandprocessestakeshapethroughdeeplyembeddedICTsystems.●Stage5:Digitalmaturity.ThefirmcancontinuallyimproveitsBEwithincrementalorradicalinnovation,technologies,andresources.ConcretestrategytoimproveserviceexperiencethroughacompleteunderstandingofthecustomersanduseofICT.Table18.3describesourinitialMMderivedfromtheLR.Table18.3InitialdesignofthematuritymodelderivedfromliteratureStagesDimensionsCapabilitiesInitiativesforimprovementStage1:InfancyCustomer-Customersatisfaction(KingandGarey,1997;MattilaandEnz,–centricity2002;Parasuramanetal.,1985)Stage2:DevelopingCustomerinteraction(KingandGarey,1997;Lattemannetal.,–2020,2019;Parasuramanetal.,1985;Robra-Bissantzetal.,2020)Stage3:TransformingCustomerempathy(KingandGarey,1997;MattilaandEnz,2002;–Parasuramanetal.,1985;Vink,2018)Stage4:OptimizedStrategyVisionandstrategy(Canettaetal.,2018;Gollhardtetal.,2020;VisionandstrategyValdez-de-Leon,2016)(stages1–5)Stage5:DigitalmaturityBusinessmodel(Gollhardtetal.,2020;Lattemannetal.,2020,Businessmodel2019;Robra-Bissantzetal.,2020;Schumacheretal.,2016;(stages1–5)(Teichert,2019)Teichert,2019)Digitalculture(AzevedoandSantiago,2019;Gollhardtetal.,Digitalculture2020;Teichert,2019)(stages1–5)ProductandProduct/serviceindividualization(Lattemannetal.2020,2019;–servicesLindhandNordman,2018)ProcessandKnowledgemanagement(Gollhardtetal.2020;Schumacheretal.,Knowledgeorganization2016;Teichert,2019;Valdez-de-Leon,2016)Management(stages1–5)Collaboration(Lattemannetal.,2020,2019;Schumacheretal.,Collaboration2016;Teichert,2019)(stages1–5)Agilityandflexibility(Gunsbergetal.,2018;Teichert,2019;AgilityandValdez-de-Leon,2016)flexibility(stages1–5)TechnologyInfrastructure(Carvalhoetal.,2019;Lattemannetal.,2020,2019;InfrastructureTeichert,2019)(stages1–5)ICTsystemapplication(Carvalhoetal.,2019;Lattemannetal.,ICTsystem2020,2019;Teichert,2019)application(stages1–5)RicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

291Adigitalbusinessecosystemmaturitymodelforpersonalservicefirms277RESULTSValidationandRefinementoftheInitialMMthroughSemi-StructuredInterviewsInterviewresultsconcerningthepivotalcapabilitiesofaPSDBEAllintervieweesrecognizedourcapabilityareasidentifiedtobesuitabletomeasureaPSDBE.Nonetheless,sixoutof11intervieweesexpressedthenecessitytoincludeleadershipasakeyaspectofourMM.Inthiscontext,expert2commented:Forustobeabletochangeouranalogworkingmodestowardsmoredigitalanddynamicones,astructuredformofleadershipisrequired.PSfirmsneedleadersthatallowthemtoachieveasolidbusiness/ITalignmentandpromoteICT-Systems(thatis,digitalplatforms,enterpriseresourceman-agementsystems,cloud-basedservices).ThesetypesofICTsenhancemanagementpracticesinwaysthatpromoteaspectsconcerningcollaborationandco-creation.Alongthesamelines,expert7commented:“Leadershiphastodoalotwithencouragingyouremployeestoattainyourbusinessgoalsandobjectivesbutitalsoplaysapivotalroleindefiningadigitalbusinessmodelaswellaspromotingadigitalculture,whichareessentialelementsofaDBE.”Forinstance,theinitialdimension“strategy”wasrenamedas“leadershipandstrategy”toachieveabetterfitandunderstandingofourMM.Consequently,allinter-vieweesexpressedthattheonlypossibilitytoassessastageofdigitalmaturitywithregardtocustomersatisfactionandcustomerinteractionwasbyimplementingtrendtechnologiessuchasartificialintelligence(AI),augmentedreality(AR),chatbots,machinelearning(ML),aswellasbyleveragingthebusinesstoane-commercelevel(thatis,buildinganintegratedplatform).Expert1commented:MakinguseoftechnologiessuchasAIandMLcouldaccelerateyourbusinessinwaysthatyoureachnewstandardstoanalyzecustomers’data.Dataisthefuelthatmakesthewholecustomerjourneyworks.AIandMLallowyoutotrackallcustomerinteractions(thatis,touchpoints),andthus,youareabletoknowwhatacustomerwantsatanygiventime.Thiswillallowyoutodesignmuchmoreindividualizedsolutions.Expert8alsocommented:Weweremostlyafirmthatmanagedeverythingonananalogbasis.However,whenCOVID-19arrived,everythingchangedforus.Wehadtocloseourbusinessforawhileandwewerenotabletosellanything.Wewereforcedtoleverageourbusinessintoane-commercescalebysellingourproductsonadigitalplatform.Consequently,therewasaconsensusamongtheintervieweesexpressingthatalthoughtheuseofICTcanincreasinglyinfluencerelationshipsbetweendifferentactorsintheBE,anempathicconnectioncanbeputatrisk.Thus,astageofdigitalmaturityconcerningcustomerempathydoesnotnecessarilyresembletheapplicationoftrendtechnologies,butrathertheactionoffavorablemanagementpracticesbyhavingthecustomeralwaysinfocus.Expert3commented:Ourcustomersareoneofthemostand,ifnot,themostimportantactorsfromourBE.However,itisquitedifficulttothinkofwaysonhowICTmighthelpcustomers’empathy.Ifeellikehumanscanonlyempathizewithotherhumans.However,ifyoupromoteyourfirm’semployeestoreachanRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

292278Handbookondigitalbusinessecosystemsemotionalconnectionwiththeircustomersandadoptacustomer-centeredperspectiveatalltimes,Idoubtthatyouwillenduplosingcustomers.Similarly,whendiscussingaspectssuchasproducts/serviceindividualization,knowledgemanagement,collaboration,agilityandflexibility,ICTinfrastructure,andICTsystemsappli-cation,therewasaconsensusamongtheintervieweesaddressingthatinordertoreachadigitalmaturitystageinsuchcapabilityareas,theapplicationoftrendtechnologieswasextremelyimportant.However,theassessmentofthedifferentaspectsvarieddependingoneachcase.Forinstance,inthecaseofproduct/serviceindividualization,sixoutof11intervieweesclaimedthatreachingastageofdigitalmaturitydependedmoreonthetypeoftechnologiesappliedwhendevelopingaproduct/service.Expert11commented:Thefirststepforsuccessfulindividualizationistogathercomprehensiveandaccuratedatasets.This,youcandobymakinguseoftechnologiessuchasAIandML.Ifyoubecomeanexpertonthesetechniques,youwillbeabletotrackandimproveusers'experiencesatanytime.Thus,youwillbeabletoalwaysprovidevaluetoyourcustomersanytimeInthecontextsofknowledgemanagementandcollaboration,allintervieweesclaimedthatreachingastageofdigitalmaturitydependedmoreonthetypeoftechnologiesappliedtoimprovemanagementpractices.Expert4commented:HavingadigitalplatformallowsustoenhanceourBEtoanotherlevel.Aspectssuchastimeandspacearenotrelevantanymore.Withourdigitalplatform,multipleanddifferentactorsareabletointeractwitheachotheratalltimes.WehavecustomersintheUSA,LatinAmericaaswellasinEurope,anditisoftenthecasethatyoucanseethemcommunicatingwitheachother.ItgivesnotonlyusasafirmbutalsothemanothersenseofcollaborationInthecontextofICTinfrastructureandICTsystemsapplication,allintervieweesclaimedthatreachingastageofdigitalmaturitydependedmoreonthetypeoftechnologiesbuiltontheICTsystemsaswellasinfrastructureofthefirm.Expert2commented:AfterCOVID-19,analogfunctionsandpaper-basedprocessesaresimplynotpossibleanymore.Formanyofus,evenpersonalinteractionaswellasin-doorsellingisnotpossibleanymore.HavingICTtoolssuchasZoom,Skype,oranyotherICT-Systemsarethenewmeanstocollaboratewithourcustomersandpartners.Infact,theseICTtoolsaretheleastyoucanhave.Manybusinessesarerightnowusingtechnologiessuchasvirtualagents,digitalplatforms,etc.,whichgivesthemanothersenseofcollaborationandinteractionwiththedifferentactorsoftheirBEFinally,whendiscussingtheaspectofagilityandflexibility,sixoutof11intervieweesempha-sizedtheuseofagilemethods(thatis,Scrumanddesignthinking)asactivitiestoenhanceaDBEduetothefactthattheseweremanagementpracticesthatallowedfirmstoachievenewkindsofinnovationswithregardtoproductsorservices,aswellastocollaboratewiththeircustomersandotheractorsfromtheBE,thusenablingnewformsofco-creation.TheyalsoindicatedthattheexecutionofthesepracticesthroughtheimplementationofICTtools(forexample,digitalwhiteboards)couldrepresentadigitalmaturitystage.InterviewresultsconcerningthematuritystagesandtheircharacteristicsTheinitialmaturitystagesderivedfromtheLRwerediscussedwiththeexperts.Thedis-cussionrevealedthatalthoughTeichert(2019)builtontheconceptofaDBEbyproposingRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

293Adigitalbusinessecosystemmaturitymodelforpersonalservicefirms279aviewondigitalmaturity,thecharacteristicsofsuchstagesweretoonarrow,astheyimpliedamoregeneralperspectiveratherthanbeingindustry-specificandbeingapplicableforthePSsector.Asaresult,wesuggestafitbetweenthecharacteristicsprovidedbyTeichert(2019)andourfindingsgatheredfromourinterviews.ThematuritystagesandtheirdescriptionsareillustratedinTable18.4.Table18.4RevisedmaturitystagesandtheirdescriptionsStage1:PSfirmreliespurelyonanalogandundisciplinedprocesses.Business/ITalignmentisnotachievedoraimedtoInfancyimproveBE,butinsteadthefirmtriestoreducecostsasmuchaspossibleandseesICTasahigh-costunitcenter.Ineffectivemanagementdecisionsaretaken.Thefirmisshort-termfocused.Co-creationisunknown.Stage2:PSfirmbeginstounderstandtheapplicationanduseofICTasanecessitytoimproveBE.Nonetheless,mostDevelopingfirms’operationprocessesarestillanalog.Business/ITalignmentisnotachieved,rathercharacterizedbyinformalandlimitedemployees’heroicactions.Outputsandcustomerinvolvementareinconsistent,butthefirmbeginstorecognizethatfocusingonthecustomermightenhancetheBEanddevelopinnovativeservice/productsoutputs.Stage3:ThePSfirmhasunderstoodtheapplicationanduseofICTasanecessitytoimproveBE.ThefirmhasdefinedTransformingplansandstrategiesonhowtoachievebusiness/ITalignmentinsuchawaythatithasaformalandomnipresentrelation.Managementismoresophisticated,open,andengagedtowardsapplyingtrendtechnologies(i.e.AI,AR,virtualagents,digitalplatforms).Thefirmmakesitsfirstco-creativeeffortstoimprovecollaborationandinteractionaspectsamongdifferentactorsintheBE.Stage4:TheapplicationanduseofICTisreflectedinthefirm’sstrategy.ThePSfirmappliestrendtechnologies(seestageOptimized3)toimproveaspectsrelatedtointeraction,collaboration,andco-creation,thusenablingnewrelationshipsettingsamongalldifferentactorsinvolvedintheBE.Business/ITalignmentisachieved,leadingtowell-prioritizeddigitalprojectsandengagementinthestrategydevelopmentprocess.CustomersandallotheractorsintheBEareconsideredasmajorsourcesofvaluecontribution.Innovativeoutputsarevisibleandacknowledgedduetoco-creationandco-designpractices.Stage5:ThePSfirmgoesbeyondbusiness/ITalignments,andformulatesandexecutesanorganizationstrategybyDigitalleveragingdigitalresourcestocreatedifferentialvalue.ThePSfirmreliesmainlyontheuseandapplicationMaturityoftrendtechnologiestoimproveaspectsrelatedtointeraction,collaboration,andco-creation,leadingtogoodrelationshipsamongalldifferentactorsinvolvedintheBE.Thefirmhasacoherentdigitalbusinessstrategy,whichiswellcommunicatedthroughouttheorganizationandshouldbetreatedasabusinessstrategyinthedigitallandscape.Co-creationisembeddedinafirm’smindsetandculture.ValidationoftherevisedMMthroughreal-worldapplicationWefurtherevaluatedtheusefulnessandapplicabilityofourMMinareal-worldscenariowithtwoPScompaniesfromourinterviewnetwork.Bothcompaniesareontheroadtodigitaliza-tionandarelookingforwaystoimprovehowtheyachieveaDBE.ThefeedbacktoourMMwaspositiveoverall,inthatthemodelshowedacoherentpathforhowPSfirmscouldleadtoachieveaDBE.However,bothintervieweesemphasizedthatthemodelshouldbeconsideredasindustry-specificratherthancontext-specific,asitisobviousthatnotallPSfirmsareequalnorhavesimilarbehaviors.CompanyAintervieweecommented:TheMMcouldbemoreprecise.However,forthistohappen,youwouldhavetoadapttheMMtotherequirementsandcharacteristicsofaspecificfirm.Thismeans,theMMwouldbethen“context-specific”.However,IseetheadvantagesofthemodelbeingappliedonanyPSfirmembark-ingitswaytowardsdigitalizationandachievingaDBE.Consequently,theyalsoemphasizedthatjustbecauseacompanydoesnotpossessastageoftotaldigitalmaturityinallcapabilityareas,itdoesnotmeanthatthecompanyhasnotachievedRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

294280HandbookondigitalbusinessecosystemsaDBE.Alongtheselines,bothintervieweesclaimedthatreachingastageofdigitalmaturityhighlydependsonthesizeaswellasresourceavailabilityandcapacityofthefirm.However,aDBEwasconsideredtobeachievedwhenthecompanyhasreachedacertainbusiness/ITalignment,whichledthecompanytohavefruitfulandnotableimprovementsandoutputs.CompanyBintervieweecommented:IunderstandthattherearealwaysnewwaysonhowtomakeyourBEmoredigitalthanitalreadyis.Thismightmeanrelying,mainly,ontheapplicationoftrendtechnologies(forexample,AI,AR,virtualagents,digitalplatforms).However,oncethecompanyachievedaproperbalanceofgoodICT-Systemsandpracticeswithfavorablemanagementpractices(i.e.co-creation),weconsiderhavingaDBEaswell.ThefinalDBEMMforPSfirmsispresentedinTable18.5.DISCUSSIONRecently,researcherssuchasCanettaetal.(2018),Jansen(2020),AzevedoandSantiago(2019),andGollhardtetal.(2020)havepresentedsystematicwaystoachieveDBEsthroughthedevelopmentofMMs.However,theapplicationofsuchMMsisconsidered“context-specific”(Canettaetal.,2018),meaningthattheyarehardlytransferableandapplicableinthecontextofPSfirms.ThisledustodevelopanewMM,whichincludestherequirementsofPSfirms.Basedonourresults,wefoundthatitisnotonlytheuse,application,andimplementationofmultipletechnologies(forexample,AI,ML,integratedplatforms,virtualagents,video-streamingsoftwares)whichleadcompaniestoachieveaDBE,butrathertheapplicationofsuchtechnologiesincombinationwithgoodmanagementpractices(forexample,collaboration,co-creation).ThesefindingsareinlinewithTeichert(2019),whoarguesthataDBEgoesbeyondamerereflectionoftheextenttowhichafirmperformstasksandhandlesinformationflowsbyICT,butalsorequiresamanagementandleadershipperfor-mancetoassessissuesrelatedtothecompany’sstrategy,collaboration,customerintegration,mindset,andculture.Similarly,ourresultsindicatehowtheimplementationofICTallowsPSfirmstofindnewsettingstoincreaseuserexperiencesandtoimproveaspectsrelatedtocommunication,interaction,collaboration,andco-creation,whicharefundamentalaspectsfortheirDBEdevelopment.ThesefindingsareinlinewithauthorssuchasRobra-Bissantzetal.(2020)andLattemannetal.(2020),whoemphasizedthatPSareallaboutthefulfillmentofauser’sneeds(thatis,value-in-use)aswellasthedesignofexperiencesfortheuserininteraction(thatis,value-in-interaction),wherebybothcouldbehighlyinfluencedbyICT.Consequently,inlinewithGunsbergetal.(2018),ourresultsalsoshowthatbytheapplicationofagilemethods(forexample,designthinkingandScrum),firmsareablenotonlytoachievenewkindsofinnova-tionswithregardstoproduct/services,butalsotoimproveDBEssothatcompaniesenhancetheircapacitytocollaborateandco-createwithcustomersandotheractors.Similarly,studiessuchasVink(2018)havesuggesteddifferentwaysthatfirmscanusesocialmedianetworks(forexample,Facebook,Instagram)toenhanceaspectsrelatedtocustomerempathy.Thisiscontrarytoourresults,wheretherewasagreementamongtheintervieweesthatICTcouldnotenhancecustomerempathy,butratherdiscouragesit.RicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

295Adigitalbusinessecosystemmaturitymodelforpersonalservicefirms2815.DigitalmaturityFirmisanexpertondesigninganddevelopingindividualizedproducts/servicesandreliesonapplyingtrendtechnologiessuchas(e.g.ML,AI,programmableroboticsystems,crowdsourcing,3-Dprinting).Themajorityoffirm’sincomeisachievedthroughthedevelopmentofindividualizedproducts/services.4.OptimizedAbilitytodesignanddevelopindividualizedproducts/servicesisenhancedbyapplyingtrendtechnologies(e.g.ML,AI,programmableroboticsystems,crowdsourcing,3-Dprinting).Ahighamountoffirm’sincomeisachievedthroughthedevelopmentofindividualizedproducts/services.3.TransformingGroupsofindividualizedproducts/servicesbecomemorevisibleduetohigheffortsonanalogpracticesaswellasbyimplementingcustomerrelationshipmanagement(CRM)tools(e.g.GoogleTrends,GoogleAnalytics,SocialMediaAnalytics)andvisualconfigurationsoftwares(e.g.Axonom,Powertrak).Firm’sincomestartstobecometangibleduetothesaleofindividualizedproducts/services.2.DevelopingSmallinitiativestowardsindividualizedproducts/servicesstarttoappear.Inthiscontext,thefirm,inananalogmanner,inspectsaspectsrelatedtothecustomersbuyingrecords,andconductssurveystodeterminecustomers’behaviorandneeds.FirmrecognizestheimportanceofinvestingonICTtobetterdevelopindividualizedproducts/servicesbuthasneitherthefinancialresourcesnortheknow-howtoputthemintopractice.1.InfancyFirmconsidersproduct/serviceindividualizationtobeofnopriorityandmanagementseesnoneedtofindwaystoachieveit.Firmearnsnoincomefromthesaleofindividualizedproducts/services.DigitalbusinessecosystemmaturitymodelforpersonalservicefirmsCapabilityareaProduct/serviceindividualizationProductsandservicesTable18.5DimensionRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

296282Handbookondigitalbusinessecosystems5.DigitalmaturityKnowledgemanagementprocessesarereviewedandimprovedregularly.Knowledgemanagementcanbeeasilyadaptedtotheorganization’snewneeds.Integratedplatforms(e.g.digitalplatforms)areusedforcustomersandotheruserstoco-createandexchangeknowledgeatalltimes.Collaborationisfullydigitalizedthroughtheapplicationanduseoftrendtechnologies(e.g.integratedplatforms,cloud-basedservices,chatbots),andthefirmremainsproactiveinfindingnewwaystomakeimprovements.4.OptimizedKnowledgemanagementisdeeplycombinedthroughtheapplicationofICTtoolstofosterknowledgesharingatalltimesinsideandoutsideoftheorganization.ICTtoolsforknowledgemanagementandknowledgesharingarecompletelyestablishedandacceptablyusedbytheorganization.Collaborationismasteredbyapplyingandusingtrendtechnologies(e.g.integratedplatforms,cloud-basedservices,chatbots),leadingthefirmtohaveco-createdoutputs.3.TransformingManagementisawareoftheinfluenceofICTonknowledgesharing.Firmstartstoadoptinternet-basedapplications(e.g.socialmediaplatforms),enterpriseresourcemanagementsystems(e.g.SAP,Oracle),anddocumentmanagementsoftwares(e.g.GoogleDrive,Dropbox)tofostertheexchangeofknowledgeatalltimes.Internet-basedapplications(e.g.socialmediaplatforms),documentmanagementsoftwares(e.g.GoogleDrive,Dropbox),andinteractivewhiteboards(e.g.Mural)areusedtooptimizeinternalaswellasexternalcollaboration.2.DevelopingManagementrecognizesthatknowledgemanagementmaybeofvaluebutisunwillingtosearchforwaystoimproveit.Exchangeofknowledgeisbasedpurelyonanalogpractices,andithappenswithintheorganizationbuthasnopowertoreachexternalactors.Collaborationstilltakesplacemostlyinfunctionalsilos.However,firmrecognizestheimportanceofinvestingonICTtoolstoimprovecommunicationandfindbetterwaysofcollaboration.1.InfancyNoproperknowledgetransfer,creation,sharing,andapplication.Firmhasnointentiontomanageorganizationalknowledge.Collaborationtakesplacepurelywithinfunctionalsilos.Departmentalthinkingispronouncedwithinthefirm.CapabilityareaKnowledgemanagementCollaborationProcessandorganizationDimensionRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

297Adigitalbusinessecosystemmaturitymodelforpersonalservicefirms2835.DigitalmaturityFirmpracticesagilemethods(e.g.Scrumanddesignthinking)onadigitalscalebymakinguseofICTtools(e.g.interactivedigitalwhiteboards)toachievefirm'sinnovationsaswellastoimprovemanagementpractices(i.e.collaboration,co-creation).Allemployeesandmanagershavethecompetenciestoworkinanagileandchangingenvironmentsuccessfully.Collaborationandcooperationareimportantaspectsofeverydaywork.OperationalaswellasICTinfrastructureisflexibleenoughtoreacttoupcomingchangesquickly.ICTinfrastructureisfullysupportedbyimplementingtrendtechnologies(e.g.real-timemessaging,AI,chatbots,ML,integratedplatforms).Firmsearchesforcontinuouswaystoimproveitsbusinessoperations.4.OptimizedFirminvestsinexecutivetrainingforemployeesandmanagerstolearnagilepractices(e.g.Scrumanddesignthinking).Firmmanagestoestablishapropertechnologicalbasisthroughouttheentireorganizationandagilevalues(i.e.user-centeredness,opennesstocollaboration,acceptancetouncertainty,opennesstonewrisks)aresharedandacceptedamongfirm’semployees.FirmextendsICTinfrastructurethroughtheuseandapplicationofICTsystems(e.g.intelligentcallrouting,interactivevoiceresponses,virtualreceptionist).3.TransformingOperationalaswellastechnologicalchangesarewelcomedandhandledaccordingly.Inmanyinstances,thefirmcarriesoutactivitiestosupportandpromoteteamwork,andestablishesorganizationalstructuresthatareflexibleenoughtocopewithupcomingchanges.FirmextendsbasicICTsoftwaresthroughtheapplicationofInternet-basedapplications(e.g.socialmediaplatforms)aswellasbyincludingvideo-conferenceservices(e.g.Zoom,MicrosoftTeams).2.DevelopingAgileactionsandtechnologicalimplementationarepartlyimplementedinsomebutnotthemajorityofdepartments,businessareas,teams,orstructurallevelsoftheorganization.Minorityofemployeesshareagilecompetenciesregardingcommunication,learning,responsibility,andcustomer-orientation.Onlysomeemployeesareabletomanagechangeappropriately.FirmstartstousebasicICTsoftwares(e.g.documentmanagementsoftwares,Microsoft365),enterpriseresourcemanagementsystems(SAP,Oracle),communicationandmessagingsoftwares(Slack,Skype)tohandleoperationalpurposesandgetridofpaper-basedsystems.1.InfancyAgileactionsareprincipallyunknown,andthetechnologicalbasisisfragmentedandunabletosupportagileprocesseseffectively.Organizationalactivitiesforimprovingcollaborationandcooperationdonottakeplace.Firmreliesonpaper-basedsystems.Communicationandcollaborationtakesplacebyusingonlytexttechnologies(e.g.fax,e-mails)aswellasviatelephone.Informationsharingwithintheorganizationoccursviainternalpapercourierservices.CapabilityareaAgilityandflexibilityInfrastructureTechnologyDimensionRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

298284Handbookondigitalbusinessecosystems5.DigitalmaturityICTsystemsarefullyimplementedoverthefirm.Firm’semployeesbecomeexpertsinhandlingsuchtoolswithoutfacinganycomplications.ICTsystemsareconstantlyevaluatedandimprovedaccordingly.Customersarealwayssatisfiedbecauseoftheuseoftrendtechnologies(e.g.AI,AR,chatbots)andthefirmpossessesadigitalplatform,wherecustomersandotheruserscanco-createandassistinthecreationofcustomersolutionsatalltimes.Customerinteractionisachievedatallscalesthroughthepresenceoftrendtechnologies(e.g.real-timemessaging,AI,chatbots)aswellasomni-channelservicestooptimizeuserexperience.Firmdisposesadigitalplatformforcustomersandotheruserstoco-createandinteractwitheachother,evadingaspectssuchastimeandspace.4.OptimizedICTsystemsbecometangibleandwellintegratedintheICTinfrastructure.Firm’semployeesarealmostexpertsonhandlingsuchtoolsandthus,facefewtoalmostnocomplicationswhenusingthem.Customersatisfactionispartofthefirm’scultureanditincreasesthroughtheapplicationoftrendtechnologies(e.g.AI,AR,chatbots)toallowfasterandmoreoptimizedsolutionsforcustomers’problems.Customerinteractionincreasesthroughtheapplicationoftrendtechnologies(e.g.real-timemessaging,AI,chatbots)aswellasbyhavingthepresenceofomni-channelservices.3.TransformingFirm’semployeesactproactivelyandareactivelyencouragedthroughthemanagementlevelstolearnandmakeuseofICTsystems(e.g.computerprograms,hardware,softwares).Customersatisfactionisrecognizedasimportant,anditincreasesthroughtheapplicationofICTsystems(e.g.intelligentcallrouting,interactivevoiceresponses,virtualreceptionist)tosupportfront-lineemployeepractices.CustomerinteractionisextendedthroughtheapplicationofInternet-basedapplications(e.g.socialmediaplatforms),allowingcustomersandotheruserstointeractbycreating,sharing,orexchanginginformationatanytime.2.DevelopingInitiativestosetupICTsystemsdependpurelyonafewheroicsemployees’practices,duetolackofknow-howfromthemajorityofemployees.Customersatisfactionisbecomingimportant,butitdependspurelyonheroicfront-lineemployees’practices.Customerinteractionreliesmainlyonfront-deskaswellastelephoneencounters.Customerinteractiontakesplacebyusingonlytext-technologies(e.g.e-mail)aswellasbasicICTapplications(e.g.website).1.InfancyFirm’semployeeslackknowledgeaswellasexpertisetomakeuseofICTsystems(e.g.computerprograms,hardware,softwares).Customersatisfactionisnotapriorityforthefirm,andmanagementhaslittletonointerestinfindingwaystoachieveit.Customerinteractionreliespurelyonfront-desk(e.g.face-to-face)aswellastelephoneencounters.CapabilityareaICTsystemapplicationCustomersatisfactionCustomerinteractionCustomer-centricityDimensionRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

299Adigitalbusinessecosystemmaturitymodelforpersonalservicefirms2855.DigitalmaturityFirmcreatesanemotionalconnectionwiththecustomersandcondiders,atalltimes,thecustomer’sperspective.StrategyisfullysupportedwiththeimplementationofICTsystemsanditmostlyaimstocreatecompetitiveadvantagesandstrategicdifferentiation.Business/ITalignmentisfullyachieved,andshowspositiveresultswhenhandlingorganizationalfunctionsandprocesses.Digitalizationbecomesacentralcomponentoffirm’svision,mission,andstrategy.4.OptimizedFirmconnectswiththecustomerbytakingintoconsiderationtheirideas,needs,andexperiencestoreflectandbeabletounderstandwhatthecustomerwants.Firmmanagestoconnectonanemotionallevelwiththecustomerbytakingintoconsiderationtheirfeelingsandresonateswiththecustomer’sexperience.Urgencyofachievingatransitionfromanalogtodigitalisfullyrecognizedatalllevelsofthefirm.FirmreliesondifferenttypesofICTsystemstosupportstrategicgoals.Firm’sfocusisonachievingabusiness/ITalignmenttoassessefficiencyandeffectivityissues.3.TransformingFirmtakesanactiveroleandstartstobecuriousaboutthecustomer’sworld.Firmstartstoacquireacustomer-centeredmindsetbyfocusingonthecustomerasitsbiggestsourceofvalue.Urgencyofachievingatransitionfromanalogtodigitalisrecognizedasimportant.BusinessseesICTasanindependentactorandacknowledgesthatbusinessprocesseshavetoberevisedtotakeadvantageofICT.2.DevelopingFirmstartsapproachingthecustomer,andcuriositystartstoincrease,resultinginthefirm’swillingnesstoexploreanddiscoverthecustomersituationandexperience.Urgencyofachievingatransitionfromanalogtodigitalisnotsufficientlyrecognizedandconsciouslyignored.Developmentplansmostlyhavesilosandstaticstructures.1.InfancyFirmproblemsareonlyfacedfromthefirm’sperspective,ignoringthecustomerperspective.Noformalstrategy,noraclearanddefinedvisiononhowtoassessissuesrelatedtodigitalization.Theurgencytotransitionfromanalogtodigitalforfirm’sownsurvivalisnotrecognized.CapabilityareaCustomerempathyStrategyandvisionStrategyandleadershipDimensionRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

300286Handbookondigitalbusinessecosystems5.DigitalmaturityBusinessmodeliscompletelydigitalizedthroughtheapplicationanduseoftrendtechnologies(e.g.integratedplatforms,AI,cloud-basedservices,chatbots).Firmconstantlysearchesforwaystoredesignandempowernewformsofinteractionandcollaboration.FirmencouragesemployeestolookoutwardandengagewithcustomersandpartnersthroughICTsystems,tocreatenewsolutions(e.g.co-creation).Firmencouragesboldnessovercaution.Employeesareencouragedtotakerisks,failfast,andlearn.Firmsupportstheneedforspeedandpromotescontinuousiterations(e.g.prototyping)ratherthanperfectingaproductorideabeforelaunchingit.4.OptimizedBusinessmodelisbasedontheapplicationanduseoftrendtechnologies(e.g.integratedplatforms,AI,cloud-basedservices,chatbots)thatenablethefirmtoachievenewwaysofinteractionaswellastooptimizecollaboration.Digitalcultureisembeddedinfirm’sstrategyandmindset.FirmpromotestheuseandapplicationofICTsystemsatalllevelsofthefirm.TheimplementationofICTsystemsleadstonewformsofcollaboration(e.g.co-creation)andinteraction.3.TransformingFirstdigitalinitiativesarelaunchedthroughtheuseandapplicationofICTsystems(e.g.enterpriseresourcemanagementsystemssuchasSAPorOracle),socialmediaplatforms,andmarketingchannelstomanageday-to-daybusinessoperationsandactivities.FirmstartstoacquireamindsetbasedoninclusionandimplementsbasicICTsystemstocreatedigitalsolutionstoexpandthecustomerbase,transformthecustomerexperience,andachievenewformsofcollaboration.2.DevelopingFirmrecognizestheimportanceofdigitalizationandmakesuseofafewICTtoolstoimprovethebusinessmodel.FirmlacksICTresources.FirmrecognizestheimportanceofinvestinginICTinfrastructure,acquiringtherespectivelicensesaswellasnecessaryICTsystemstoassessthefirm’sprocesses.1.InfancyBusinessmodeliseithercompletelyunknownorpredominantlyanalog.Digitalizationhasnosignificanceforthebusinessidea.Firmneglectstheimportanceofaspectsrelatedtoinnovation,collaboration,andopenness.Firmconsidersthatitcansurvivebasedonindividualefforts.CapabilityareaBusinessmodelDigitalcultureDimensionRicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

301Adigitalbusinessecosystemmaturitymodelforpersonalservicefirms287Nowadays,tosuccessfullyridethewaveofchange,PSfirmsneedtoevaluatehowdigitaldisruptionischangingcustomerbehaviorcontinuously,rethinktheirbusinesstowardsdevelopingmoreindividualandcustomizedsolutions,andredesigncustomerrolestoformco-creationpractices(VargoandLusch,2008).EspeciallyPSfirms,whichareservicesconsideredtorelyhighlyonhigh-contactlevelsofinteraction,itisallaboutunderstandingcustomerrequirementsandpreferences,anddeliveringanoutstandingexperienceateverycustomertouchpoint.Consequently,forDBEstobeasuccess,collaborationiscrucial.Whiletechnologyenablesnewwaysofworking,collaborationisthekeycatalystforpromotingtheagileandmanagementpracticesrequiredtoachieveDBEs(Camarinha-Matosetal.,2019).Theneedtoshareandcombineinformation,knowledge,andotherresourcesinthecompany,aswellastodevelopagilecoordinationmechanismstosupportefficiencyinbusinessesprocesses,correspondstoimportantfacetsofcollaboration.Additionally,theemergenceofstrategiclong-termpartnershipssuchasDBEsrequiresneworganizationalstructuresandadvancedmodelsofcollaboration,inwhichthefocusliesonthecooperationofdifferentactors(thatis,serviceproviders,customers)andstakeholderswiththeaimofapplyingcollec-tiveknowledgetocreatevaluefortheindividualandtheentireecosystem(AkakaandVargo,2015).Finally,digitalizationisreducingdemandforcentralizedandstandardizedroutines,analogueandmanualtasks,andsiloworkingstyles,whileincreasingdemandfordecentralizedroutinesandvirtualcollaborationskills(Robra-Bissantzetal.,2020).MostPSfirmsstartwithacentralizedmodel,wherenotonlydoesafounderormanagermakeallthedecisions,butalsomostofthecompany’sprocessesareanalogue(Bartiketal.,2020).Asbusinessesgrowanddiversify,theirenvironmentsbecomemorecomplex.PSfirmsneedtobecomemoreflexibleandresponsiveconcerningtheuseofICT,resultingindecentralizeddigitalnetworkstructures,wherebycollaborationandco-creationpracticesareexecutedamongallcompanylevels,alsoinvolvingexternalpartners.Inthiscontext,PSfirmsmustquestionandre-evaluatetraditionalapproachestoorganizingwork,andsearchforneworganizationalstructures(forexample,DBEs)thatcanachieveefficiencybutalsohavetheflexibilityforsuccessintoday’sdigitalage.CONCLUSIONPSfirmsmustrecognizetheadvantagesofICTinwaysthatmightleadthesefirmstoimproveinformationflowsandaspectsrelatedtocommunication,interaction,collaboration,andco-creation,whicharefundamentalaspectswhendesigninganddevelopingDBEs.Yet,thedesignofaDBEiscomplex,asitusuallyrequirestheadaptationofacertaintypeofICTinfrastructure,andtheadaptationandimplementationofmanagementpractices.OurDBEMMforPSfirmsallowssuchcomplexitytobedeconstructedinthreeways.Firstly,itallowsPSfirmstoidentifywhatkindoftechnologiesandmanagementpracticestheyneedtoapplyandcombinetoachieveaDBE.Secondly,italsodepictsthebusinessfunctions,processes,orcapabilityareasthatneedtobeaddressedbyusingsuchtechnologiesandman-agementpractices.Bydoingthis,ourMMallowsPSfirmstoidentifyroomforimprovementsintheirmanagementaswellasICTinfrastructure.Thirdly,ourMMmightallowPSfirmstodevelopmoresuccessfulproducts/servicesandtobemorecustomizedandgearedtocustom-ers’needsanddesires.RicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

302288HandbookondigitalbusinessecosystemsConsequently,wecontributetocurrentliteratureandpracticeinseveralways.Firstly,wearethefirsttoprovideanindustry-specificandnotcontext-specificMMforPSfirmsbyindicatingseveralstages,dimensions,capabilityareas,andinitiativesforimprovementsthatdescribetheevolutionpathtowardsdevelopingaDBE.Secondly,fromanacademicperspec-tive,werespondtorecentcallsformoreresearchonbuildingastrategicinstrumentthatallowsPSfirmstoimplementadequateprocessesandpracticestoeffectivelymanageandguidethetransitiontowardsdigitalinasystematicway(Larsson,2015).Thirdly,fromapracticalper-spective,ourMMallowsPSfirmstoimprovetheirbusinessmodel,functions,andprocessesaswellastoassesstheircurrentdigitalizationstage.Thisresearchalsohasitslimitations.Firstly,apossiblelimitationregardingqualitativeresearchisthatitemploysinterviewstocollectdata,andassuchcouldbesusceptibletoretrospectivereconstructionsandfalsefindings.Secondly,weareawarethatourresultswerederived,includingalimitednumberofcompanyrepresentativesasadatasample.However,toovercometheseproblems,wefocusedoncompanyrepresentativesbasedontheirexpertiseandfirst-handexperienceinPSfirms,digitalization,andBE.Consequently,toaddressissuesrelatedtothereliabilityandapplicabilityofourmodelaswellastooffermorepracticalinsights,ourMMwaslatervalidatedbytwocompaniesfromourinterviewnetwork.Finally,wefurthersuggestexploringtheissueofhowtheapplicationanduseofICTmightimpactcustomerempathy,toseewhetherthereareotherwaystorefineourMM.ACKNOWLEDGEMENTThischapterispartoftheproject“BegleitforschungPersonennaheDienstleistungen”(BeDien),fundedbytheGermanFederalMinistryofEducationandResearch(BMBF),grantnumbers02K17A080and81.REFERENCESAdner,R.,2006.MatchYourInnovationStrategytoYourInnovationEcosystem.HarvardBusinessReview84,98–107.Agarwal,S.,Punn,N.S.,Sonbhadra,S.K.,Nagabhushan,P.,Pandian,K.K.S.,Saxena,P.,2020.UnleashingthePowerofDisruptiveandEmergingTechnologiesamidCOVID-19:ADetailedReview.MedRxiv1,1–61.Akaka,M.A.,Vargo,S.L.,2014.TechnologyasanOperantResourceinService(Eco)Systems.InformationSystemsande-BusinessManagement12,367–384.Akaka,M.A.,Vargo,S.L.,2015.ExtendingtheContextofService:FromEncounterstoEcosystems.JournalofServicesMarketing,29,453–462.Alves,A.M.,Pessoa,M.,Salviano,C.F.,2011.TowardsaSystemicMaturityModelforPublicSoftwareEcosystems.In:O’Connor,R.V.,Rout,T.,McCaffery,F.,Dorling,A.(eds),SoftwareProcessImprovementandCapabilityDetermination,CommunicationsinComputerandInformationScience.BerlinandHeidelberg:Springer,pp.145–156.Azevedo,A.,Santiago,S.B.,2019.DesignofanAssessmentIndustry4.0MaturityModel:AnApplicationtoManufacturingCompany.In:ProceedingsoftheInternationalConferenceonIndustrialEngineeringandOperationsManagement,1–10.Bartik,A.W.,Bertrand,M.,Cullen,Z.,Glaeser,E.L.,Luca,M.,Stanton,C.,2020.TheImpactofCOVID-19onSmallBusinessOutcomesandExpectations.ProceedingsoftheNationalAcademyofSciences117,17656–17666.RicardoGuerrero,ChristophLattemann,SimonMichalke,andDominikSiemon-9781839107191DownloadedfromPubFactoryat05/28/202209:57:49AMviaColumbiaUniversityLibrary

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30619.Businessecosystemsindigitaljournalism:cross-bordercollaborativeinvestigationsasanovelorganizationalformChristopherBuschowandMaikeSuhrINTRODUCTIONInthewakeofdigitization,mediaindustriesingeneralandjournalisminparticulararemovingintoaneraofneworganizationalforms,providingidenticalorsimilarproductsinneworgani-zationalways,comparedtothetraditionalmediafirm(BuschowandSuhr,2022).Inlinewithorganizationalecologyresearch,wedefineanorganizationalformasanarchetypicalorgani-zationalconfiguration(“templatefororganizing”)(e.g.Hannan,2005;HannanandFreeman,1989).Fromatechnologicalpointofview,suchnewjournalisticorganizationalformsarelargelymadepossiblebydigitizationandnetworkmediadevelopment.Forexample,theCOVID-19pandemichasshownthatanentirenewspapercanbeproducedsolelythroughdis-tributedandremotework,enabledbydigitalnewsroomtechnologiesandinfrastructures.Thisexperiencefundamentallychallengestheprevailingsocietalandindustry-wideassumptionthatjournalismdependsonphysicalnewsroomstructuresastheonebestwayoforganizingnewswork.WhiletheCOVID-19pandemichasactedasanacceleratorfordigitallynetworkedmodesofcollaboration,newformsoforganizationhadpreviouslyexisted(e.g.Alexander,2015;Baumann,2013),especiallyatthemarginsofjournalismandincertainniches.Valuecreationinthenewsindustrynolongertakesplaceexclusivelyinclearlydistinguishable,relativelyclosed,privatelyheldorpublicservicemediaorganizations,aswasthecaseduringtimesofindustrialmassmediaproduction,“wherecontractedlaborerswouldproducecontentunderinformalyethighlystructuredworkingconditionsgenerallyarrangedwithinthephysicalenvironmentofanewsroom”(DeuzeandWitschge,2020,p.10).Project-based,globallyorientedinvestigativejournalismcollaborationssuchasthePulitzerPrize-winningPanamaPapers(ObermaierandObermayer,2017)andFinCENFiles(InternationalConsortiumofInvestigativeJournalists,2020)areexamplesofsignificantlydif-ferentwayscomparedtonewsproductioninjournalism’spre-digitalera(BuschowandSuhr,2022).Inthisnovelorganizationalform,transnationalcollaborationsbetweendiversenewsactorsareenabledbyshareddigitaltechnologies,infrastructures,andresources(forexample,investigativematerial,leakeddatasets)inordertorespondtothecomplexandinterwovenglobalchallengesofnewsreporting(forexample,internationalfinanceflowsandtaxhavens),partlycausedbytheincreasingdigitalinterconnectednessofsocieties.Whiletheclassicmediacompany“isnot[completely]extinct”(Anderson,2011,p.160),itismerelyapartnerinsuchcross-bordercollaborativeinvestigations.Thesefurtherincludeactorssuchassmall-scalenon-profitentities,individualmediaworkers,andfreelancersthatareoftensupportedbyakeystoneorganization,aleadingpartnerthatalignsthesediverseactorsandhandlessome292ChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

307Businessecosystemsindigitaljournalism293centralizedtasks.Inthislight,thetraditionalorganizationalformofthe20thcenturynews-roomappearstobeavestigeofindustrialnewsproduction.Injournalismresearch,cross-bordercollaborativeinvestigationshavereceivedafairamountofscholarlyinterest(e.g.Alfter,2019;CarsonandFarhall,2018;Heftetal.,2017;Konow-Lundetal.,2019;Sambrook,2018),butlittleattentionistypicallypaidtotheirnovelorganizationalandmanagementcharacteristics.Inthisconceptualchapter,weaddresstheprevailingresearchgapfromthetheoreticalangleofdigitalbusinessecosystemsresearch,whichoffersaparticularlypromisinglens.Digitalbusinessecosystemsresearch1isastreamofliteraturefrommanagementstudiesthatinvestigatesgroupsofdigitallyinteractingfirmsthatdependoneachother’sactivities,collectivelycontributingtothevalueofafocalofferwhilestrengtheningtheirindividualbusinesses(e.g.Adner,2017;DeManetal.,2019;Jacobidesetal.,2018;Kapoor,2018).Thisperspectiveprovidesagoodstartingpointforexaminingwhathappensincross-bordercollaborativeinvestigations,asweargueinthischapter.Equippedwiththesetheoreticalinstruments,weaimtoanswerthefollowingresearchquestion(RQ):RQ:Howcancross-bordercollaborativeinvestigationsindigitaljournalismbeunderstoodthroughthelensofdigitalbusinessecosystemsresearch?Byreviewingandsystematizingthegrowingstateofresearchoncross-bordercollaborativeinvestigations,thischapter’sobjectivesarethreefold.First,byapplyingthelensofdigitalbusinessecosystemsresearchtoarelativelynewandemergingorganizationalformofdigitaljournalism,wefocusonorganizationalandeconomiccharacteristicsthathavelargelybeenneglectedbyjournalismresearchinthepast(BuschowandSuhr,2022).Second,despiteampleopportunitiesforprogress,generalbusinessandmanagementresearchstillpaystoolittleattentiontospecificandexceptionalcases.Acomprehensiveunderstandinganddetailedexaminationofecosystemsindigitaljournalismwouldthereforebeofgreatbenefit,astheypresumablydifferfromconventionalbusinessecosystemsintermsofthecrucialroleofjour-nalismin(democratic)societies(Christiansetal.,2009),aswellastheenormouseconomicupheavalsintheindustry(Lowe,2016).Third,fromasocietalpointofview,exploringnovelorganizationalformsinjournalismaddstoourunderstandingofcentralconditionsfortheproductionofnews,astheseexertastronginfluenceonmediacontent,andthus,eventually,onthenormativeperformanceofjournalismindemocracies(McQuail,1992;WestlundandEkström,2019).Thischapterisstructuredasfollows.Wefirstintroducejournalismasaspecificcase,detailingthechallengesofitsdigitaltransformationandoutliningthelandscapeofneworganizationalformsinnewswork.Buildinguponliteratureonbusinessecosystems,mediamanagementresearchandjournalismstudies,wethenfocusoncross-bordercollaborativeinvestigationsandcompilethestateofresearchontheiremergence,aimsandmotivations,actorsandtheirpositions(particularlytheroleofkeystoneorganizations),andactivitiesandlinksinjournalismecosystems.Wethenaskwhatmanagement-basedresearchonbusinessecosystemscanlearnfromthespecificcaseofdigitaljournalism.Webrieflycontextualizeourresults,givinganoutlookon(empirical)follow-upresearchonecosystemsindigitaljournal-ism,anddetailingthelimitationsofthechapter.ChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

308294HandbookondigitalbusinessecosystemsNEWORGANIZATIONALFORMSINDIGITALJOURNALISMJournalism’sroleinthedisseminationofreliableinformation,formationofapublicsphere,andasabasisforsocietaldecision-making(suchasinelections)remainsunquestioned,atleastinresearch,growingmoreimportantagainsttoday’sbackdropofdebatesonmisinformation,propaganda,filterbubbles,andanallegeddeclineininstitutionaltrust(Reese,2020).Indeed,itsfunctionasa“fourthestate”(Christiansetal.,2009;McQuail,1992)andtheparticularide-ologyoftheprofession(Deuze,2005)makejournalismaspecialcase,differingconsiderablyfromotherfieldsofbusinessinitsuniqueproductcharacteristicsandactorobjectives(Lowe,2016;Wellbrocketal.,2020).Inthecontextofdigitization,journalismfindsitselfconfrontedbymajorupheavalsthatgobeyondthosethatareusualfordigitaltransformation(Buschow,2020).Mostobviously,inwhatcanbeconsideredaneconomiccrisisofjournalism,theestablishedbusinessmodelhaslostitsviabilityinthedigitalmarket,wherenewscontentmustcompetefiercelyforuserattentionandlargeportionsofadvertisingarecapturedbyafewglobaltechcompanies(thatis,GoogleandFacebook).Thesedevelopmentsleadtoexceptionallyhighfinancialuncertainty,aswellasprecariousandatypicalworkingconditions(Buschow,2020;DeuzeandWitschge,2020).Atthesametime,neworganizationalformsinwhichnewsworkisconductedarecreatedforthepurposeofdeliveringidenticalorsimilarjournalismtothatcreatedbytraditionalmediafirms(BuschowandSuhr,2022).2Theyare,ontheonehand,areactiontocurrenttransformationsthatpavethewayforjournalism’sorganizationaladjustmentstoanaltereddigitalenvironment(Buschow,2018;DeuzeandWitschge,2020).Ontheotherhand,these“post-industrial”organizations(Andersonetal.,2012)takeadvantageofrecentdevelopmentsintechnologyanddigitalnetworkmedia.Thesehavebecomefundamentalresourcesthroughwhichcollaborationscanberapidlyandcost-effectivelyaccomplishedacrossspaceandtime(Benkler,2006;Jarvis,2014).Journalismtodayisincreasinglydetachedfromlargemediacompaniesandnewsrooms,asdemonstratedbyemergingorganizationalformsofpeerpro-duction(opencollaborativestructuresforparticipativenewsproductionwithusers),platformi-zation(thatis,organizationswhicharespecificallydesignedtocreatejournalisticcontentinandforplatformenvironments)andprojectification(project-based,temporaryjournalismcollaborations)(BuschowandSuhr,2022).Cross-borderinvestigativecollaborations,asintroducedintheprevioussection,areaclearexampleofprojectificationinjournalism.Whileproject-basedcollaborationingeneralisnotanewphenomenoninmediaindustries(LundinandNorbäck,2016;WindelerandSydow,2001),temporarycollaborationsbetweenavarietyofglobalnewsactors,madepossiblebyshareddigitaltechnologiesandinfrastructures,allowtheevaluationofextensiveinvestiga-tions(suchasthehugedatasetsoffinancialflowsinthePanamaPapers)inawaythatcontrastswiththeconventionalcompetitiveproductionmodeofthesinglenewsfirm(Alfter,2019;CarsonandFarhall,2018;Heftetal.,2017;Konow-Lundetal.,2019;Sambrook,2018).Althoughcurrentjournalismresearchhasproducedagrowingbodyofstudiesthatshedlightoncross-borderinvestigativecollaborations,therehasbeenalackofconsiderationthroughanorganizationallens.Totacklethisresearchgap,weapplyadigitalbusinessecosys-temsperspectivewhichisarguablywellsuitedtodescribingandexplainingprojectification(e.g.Adner,2017;DeManetal.,2019;Jacobidesetal.,2018;Kapoor,2018).ChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

309Businessecosystemsindigitaljournalism295CROSS-BORDERCOLLABORATIVEINVESTIGATIONSINJOURNALISMInmanagementliterature,businessecosystemsaredefinedas“agroupofinteractingfirmsthatdependoneachother’sactivities”(Jacobidesetal.,2018,p.2256),collectively“contribut[ing]tothefocaloffer’suservalueproposition”(Kapoor,2018,p.2),andtherebyalsostrength-eningtheirindividualbusinesses(Adner,2017;DeManetal.,2019).Thesustainabilityofajointvaluepropositionis“thefoundationoftheecosystem”(Adner,2017,p.43),andthereasonforactorstocooperateinthefirstplace.Thisdefinitionprovidesausefulstartingpointfordescribingcross-bordercollaborativeinvestigations,showingthepotentialofapplyingtheperspectiveofdigitalbusinessecosystemsresearchtothecaseofjournalism.InformedbyAdner’s“ecosystems-as-structure”perspective(Adner,2017),wefocusontheemergenceofcross-bordercollaborativeinvestigationsindigitaljournalism;aimsandmotiva-tionsthatfavortheirdevelopment;actorsandtheirpositions;thespecificroleofthekeystoneorganization;andonactivitiesandlinksinsuchecosystems.Thesecharacteristicsarecom-paredtoexistingresearchondigitalbusinessecosystemsfromgeneralmanagementstudies.TheEmergenceofCross-BorderCollaborativeInvestigationsCross-bordercollaborativeinvestigationsarebuiltaroundthejointvaluepropositionofaninvestigativestory,andbasedondigitaltechnologiesanddigitalnetworkmediaascentralmeansofproduction(Alfter,2019;AlfterandCândea,2019;Bunceetal.,2018;CarsonandFarhall,2018;Krügeretal.,2019;Heftetal.,2017;HeftandBaack,2021;Konow-Lundetal.,2019;Konow-Lund,2019;Sambrook,2018).ExamplesofsuchdigitaljournalismecosystemsincludethePanamaPapersandParadisePapers(dataleaksfromoffshoretaxhavens),withtheInternationalConsortiumofInvestigativeJournalists(ICIJ)playingacentralrole,andthe“FootballLeaks”(regardingcorruptioninthefootballindustry),organizedaroundtheEuropeanInvestigativeCollaborations(EIC).Intheorganizationalformofcross-bordercollaborativeinvestigations,journalism’svaluecreationactivities—suchasresearchingrawmaterial,filteringinformation,andeditingstories(e.g.LewisandWestlund,2015)—arenolongerintegralcomponentsofdistinguishableorganizations(suchasinpresspublishersandtheirnewsrooms),butrathertaskscollabo-rativelyperformedbyconstellationsofdiverseandinterrelatedactors,sometimesspreadacrosstheglobe,collaboratingforalimitedperiodonly.Thus,unlikethetraditionalmediaorganization(whichisintendedtolast),projectsareusuallystartedwithanexanteterminationinmind,typicallywhenanendresult—acertaininvestigation—iscompleted(SydowandWindeler,2020).Sincesuchecosystemscaninvolvemoreanddifferentactorsonatemporary,case-by-casebasis,theyprovetobemoreflexibleandadaptive(tospecificinvestigationsorstories)thanjournalism’straditionalorganizationalformofthenewsroom.Byapplyingsocialnetworkanalysis,Krügeretal.(2019)haveshownthatthenumberofsuchcross-nationalprojectsincreasedfrom1998to2018,confirmingtheexpansionandgrowthoftheorganizationalform.However,digitalbusinessecosystemsinjournalismcanalsobeobservedatlowerlevels,suchasindividualnationstatesandevenlocally(CookandBakker,2019;FerrucciandAlaimo,2019).3Heftetal.(2017)haveidentified“top-down”initiatedecosystemssuchastheEIC,createdbyleadingEuropeannewspapersandmagazines,and“bottom-up”ecosystems,builtbynewlyChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

310296Handbookondigitalbusinessecosystemscreatednewsventuresorindividualjournalists(alsoseeHeft,2021).Hybridformsexist,asisshownbythePanamaPapersinvestigations,wheretheinitiatorsofthisparticularecosystemweretwoindividualreportersfromtheGermanlegacymediacompanySüddeutscheZeitung,whotheninvolvedtheecosystem’skeystoneorganization,theICIJ(Konow-Lundetal.,2019).TheanalysisbyKrügeretal.(2019)suggeststhat,overthelast20years,suchorgani-zationshavebeenmostlyinitiatedfromthebottomup.ObjectivesandMotivationsInthemediaindustryandjournalismtherehasnotbeenapronouncedtraditionofcooperation,andthereforeitcomesasnosurprisethattheseecosystemshaveusuallybeeninitiatedasgrassrootsmovements.Corporatecultureandlegalbarriersusuallystandinthewayofclosercooperation(BuschowandWellbrock,2020).Legalbarriersarecreatedbycompetitionlawswhich,incapitalistsocieties,seeeconomiccompetitionbetweenmediaentitiesasaprerequi-siteforjournalisticdiversityandplurality(Gostomzyketal.,2019).Pooreconomicincentivesforpastcooperationmaybewhytheindustryhasnotdevelopedageneralcultureofopennesstocollaboration(Geraci,2016).Therecontinuestobeaperceptionthatlonewolfinvestigatorshavetosearchforthelatestscoop,reinforcedbyfilmandtelevisionrepresentationssuchas2017’sThePost.However,today,inanincreasinglycomplex,interwovenanddigitallynet-workedworldwhereresourcesforinvestigativejournalismhavebecomescarce,acompetitivemediaenvironmentcanhardlybeofbenefittojournalism,especiallyincross-borderinvesti-gativereporting(CarsonandFarhall,2018).Kostovskaetal.(2020)believethatthecreationofmediaecosystemsinthe(European)televisionindustrycanbeinterpretedasastrategytocounteractnewlyemergingglobalcom-petitors,suchasthesubscriptionvideo-on-demand(S-VoD)streamingservicesNetflixandAmazonPrime.Thepoolingandsharingofresourcesandexpertise,madepossiblethroughdigitaltoolsandplatformsforcollaboration(Bunceetal.,2018),createscostadvantagesandeconomiesofscale.Apparently,economicmotivesalsoplayaroleinthedevelopmentofcross-bordercollaborativeinvestigations,especiallyinfieldswherereportingcostsarehighandsinglefirmsarenolongerabletocompletethistaskontheirown(duetocost-cuttinganddownsizingtendenciesinnewsrooms)(CarsonandFarhall,2018;Konow-Lundetal.,2019).However,itisunclear(andunder-researched)whethertheseresource-intensiveprojectsareactuallyprofitableformediacompaniesor,astheformerSüddeutscheZeitung’sdigitaleditor-in-chiefJuliaBönischnotes,rathergainattentionfordigitalnewsinanevermorecompetitiveattentioneconomy,aswellasattractingandretainingjournalistictalent(Schütz,2017).Therelationshipsonwhichvaluecreationisbasedinsuchjournalismecosystemsarenotsolelyconstitutedinthemarketplaceorgroundedineconomicmotivationsalone(BuschowandWinter,2017).Allpartners(ideally)pursuethesamegoal—thesuccessfulrealizationofthereportingandthecreationofthejournalisticoffer’sjointvalueproposition(Adner,2017)—butdonotnecessarilysharethesamemotives.Becausetherangeofinterestsfromwhichparticipationarisesismuchmorediverse,themarketlosesitspositionasthedominantpointofreference(WinterandBuschow,2017).Whenitcomestomotivesandobjectives,thereareatleastthreesignificantdifferencestoconventionalbusinessecosystems.Thefirstofthesedifferencesisthatcross-bordercollaborativeinvestigationsareperceivedasaresponsetomorecomplexandinterwovenchallenges,inpartbroughtaboutbyanewChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

311Businessecosystemsindigitaljournalism297globaldigitalinterconnectedness,towhichnationalandlocaljournalismalonecannolongerrespond(Heftetal.,2017).Ifjournalismservesthefunctionofself-observationofsociety,atransformed(forexample,globalized,digitalized)societyneedsnewformsofjournalisticorganizations,alongwithworkingstructures,thatenablesuchself-observation.Theseconddifferenceisthatecosystemscanbejournalistic“powercontainers,”inwhichactorspooltheirresourcestoaccumulatecommunicationanddistributionpower(Castells,2009),thusovercomingthebarriersoftoday’sattentioneconomyindigitalnetworkmedia(dominatedbygatekeeperssuchasGoogleandFacebook),gaingreaterreachwiththeircontentand,ultimately,leverageanincreasedimpactfortheirreporting,suchaschangesinpoliticsorlaw-making(Buschow,2018).Throughsharedresourcesandagreateraudiencereach,journalismcompensatesforreporting’sgraduallossofinfluence.Collaborationhasthusbeenlabeledaformof“fieldrepair”(Konieczna,2018,p.63).Thethirddifferenceisthattheorganizationalformofcross-bordercollaborativeinvesti-gationscanenhancethequalityofaninvestigation(forexample,byextendingthenumberofanglesonastory),whichshouldbenefitfromthediversityandpluralityofthedifferentjournaliststhatcometogetherinthisconstellation(Alfter,2019).However,itisalsothoughtthatecosystemscanreducethediversityofperspectives,givingrisetoanAmericanizationorWesternizationofjournalism,andthusglobalstandardizationofreporting(CarsonandFarhall,2018;Konow-Lundetal.,2019).ActorsInmanagementresearch,ecosystemsareprimarilyperceivedasbeingformedbyalimitedsetoffirms,whicharecommercialentitieswithprofit-orientedgoals(Adner,2017;Kapoor,2018).Asdifferentcompetenciesarerequiredtodeliverthefundamentalvalueproposition,actorsfrommultipleindustriescollaborateinthetypicalbusinessecosystem,whereastradi-tionalindustryorgeographicalboundariesnolongerdetermineitsscale.Researchoncross-bordercollaborativeinvestigationsrevealsanumberofdifferences.First,thereisabroaderspectrumofactorswhoparticipateintheprocessofvaluecreation,whichalsoexplainsthediversemotivations.Contrarytotheconventionalfocusofbusinessresearch,itisnotonlycommercial,privatelyownedenterprisesthatcontributetothefocaloffer’svalueproposition,butorganizations“ofvarioussizes,businessmodels,andmotives”(Jarvis,2014),aswellasindividualjournalistsfromwithintheseorganizationswhopossiblycooperatewithfreelancerssuchasreporters,datascientists,coders,photographers,anddesigners(Buschow,2018;Kosterich,2019).Inprojectswithcross-borderinvestigations,theseareusuallypartnersfromdifferentnationalcontexts(Alfter,2019).Inparticular,theindividualfreelancerswhoparticipateintheseecosystemsaresymptomaticofajournalismthatischaracterizedbythedissolutionofpermanentemploymentcontracts,leadingtoincreasinglyprecariousworkingconditions(DeuzeandWitschge,2020).Second,eventhoughmultipleactorsareinvolvedintheseecosystems,theyareinnowayopentoanyonewhowantstoparticipate.Onthecontrary,partnersarecarefullyselectedandinvitedorrecruitedbythekeystoneorganization(s),basedontheassumptionthattheycancontributespecificcompetenciesorfunctionstotheecosystemandprovetrustworthy(Alfter,2019).Selectionprocessesareparticularlyrigorousinsecurity-criticaljournalismprojects,suchasthosewhereleakeddataisinvolved,forexample.Itcanbeassumedthatthemoreconfidentialtheinformationthatisprocessedinacross-borderproject,themoreclosedtheseChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

312298Handbookondigitalbusinessecosystemsecosystemsare.Thus,intermsofaccessibility,cross-bordercollaborativeinvestigationsdifferconsiderablyfromplatformecosystemssuchastheAppleAppStore(Kapoor,2018)andfromformsofpeerproductionsuchasWikipedia(Benkler,2006)where,inprinciple,anybodywhowantstocontributeisfreetodoso(BuschowandSuhr,2022).Thehighlevelofprotectionoftheseecosystemsandtheirclosednaturearecertainlycharacteristicsthatdistinguishthemfromgeneralbusinessecosystems.However,thisdoesnotmeanthattheycanneverreceivesupportfromusersandmembersoftheaudience,forexample,viacrowdsourcingtechniques(Konieczna,2020).Thisistypicallythecaseif,forexample,largeamountsofpublicdatahavetobemanuallyretrievedorevaluated.Duetothelimitedstateofresearch,westillknowlittleaboutthepositioningofcertaineco-systemactors,abouttheir“positions,whichspecifywhereintheflowofactivitiesacrossthesystemactorsarelocatedandcharacterizewhohandsofftowhom”(Adner,2017,p.43).Suchin-depthstudiescouldstartwithasinglefocalactorandspecificallyinvestigateitsstrategies,position,links,andactivitiesintheecosystem(Kapoor,2018).Dependingontheresearchperspectiveandwhethertheresearchquestiongoesbeyondtherealmofjournalismproduc-tion,theseanalysesmayalsoconsidermoreperipheralecosystemactorssuchasadvertisers,technologyproviders,andjournalismeducators.KeystoneOrganizationsEcosystemstypicallyrelyononeorafewcoreorganizationsthatactasleadpartners,alignthediverseactorsoftheecosystem,andhandlesomecentralizedtasks.Inbusinessliterature,theyareattributedacrucialroleas“keystoneorganizations”(IansitiandLevien,2004),eventhoughtheycannotexerthierarchicalcontrolorauthoritytodecidewhattheparticipantsshoulddoindetail(Adner,2017;Jacobidesetal.,2018).Forcross-bordercollaborativejournalismprojects,recentyearshaveseentheemergenceandinstitutionalizationofanincreasingnumberofspecializedhubsstartedforthebenefitofthejournalisticprofessionandnewsindustry(Krügeretal.,2019).OrganizationssuchastheICIJ,theEICandtheOrganizedCrimeandCorruptionReportingProject(OCCRP)repeatedlycoordinate(temporary)projects,buildtrustamongmembers,developroutinesandinformalgovernance,andtosomeextentmirrorthecharacteristicsofmoretraditionalorganizationalforms(BuschowandSuhr,2022).Justasinothermediaindustriessuchastelevisionormusic(BuschowandWinter,2017;Sydow,2009;Winter,2013),keystoneorganizationssupport,fosterand(occasionally)institutionalizetheecosystempartners’valuecreationactivities,primarilybyadoptingthefollowingtasks:●Beingresponsibleforselecting,invitingandconvincingtherightpartnerstojointheseecosystems,allowingcertaintaskstobeaccomplishedinordertoprovidethefundamen-talvalueproposition.Motivesandgratificationsdifferamongtheecosystem’sdiverseactors.Specific(oftennon-monetary)incentivesaswellascommonnormsandvaluesplayacentralroleinthisprocess,especiallyasnotallrelationshipsaremediatedviathemarketplace(WinterandBuschow,2017).●Keystoneorganizationsbuildlong-lasting,trustingconnectionsamongtheecosystempar-ticipants,especiallybycreatingmutualexperiencesandsharedknowledge(Konow-Lundetal.,2019).Theirjobistomanagethesocialcapitalwithintheseecosystems.Indoingso,theyperpetuateanoftentemporaryecosystemtiedtoasinglestory,creatingcon-ChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

313Businessecosystemsindigitaljournalism299ditionsforrecurringcooperation.Continuityofecosystemsiscrucial,especiallyintheknowledge-intensivemediaindustry(Buschow,2018).●Centraltotheirworkisthealignmentofpartnersandthemergingoftheirmodularfunc-tions.Sinceecosystemsare,inprinciple,lesshierarchical(incomparisontojointventuresandstrategicalliances),coordinationismoredependentonthequalityoftheinitialselec-tionprocesses(seeabove),communicationmeasuresandinformalrules,andpossiblytheimpositionofsanctions,whichareprimarilyfocusedonapartner’sreputation.Thatalackofmotivationandevenfree-ridingbehaviorcanoccurinjournalisticecosystemsisdocu-mentedintheliterature(e.g.Kayser-Brill,2018).●Keystoneorganizationsprovidethedigitalenvironmentforjournalisticworkinecosys-tems:theydevelopstand-alonetechnologyandmedia,forexample,specificsecurityorencryptiontechnology,algorithmsfordataanalysis,andcollaborationsoftwareforteamwork(AlfterandCândea,2019;Bunceetal.,2018;Heemsbergen,2018).●Somekeystoneorganizations(suchastheICIJ)alsocarryoutcentralizedsupportivevalueactivitiesfortheecosystem(tasksthatnopartnercanbringtothetable),suchasdataanal-ysisorlegalsupport(Konow-Lundetal.,2019;Sambrook,2018).Afewevenprovidethefinancialmeansforinvestigations.●Keystoneorganizationsoftenoffertraining,coaching,andnetworkingopportunitiesthroughconferences,events,anddigitalformats(Alfter,2019).Keystoneorganizationsincross-bordercollaborativeinvestigationsarefrequentlynot-for-profitandfundedbyfoundations,individualdonations,andstateauthorities(Krügeretal.,2019).Thisunderlinestheproblemthattheeconomicprofitabilityofsuchecosystemsisnotguaran-teed.Thiscontrastsstronglywithtypicalbusinessecosystems,whicharecreatedspecificallybecauseoftheirpotentialtogenerateahigherprofitthananindividualfirmcould.ActivitiesandLinksFromtheperspectiveofdigitalbusinessecosystemsresearch,themaininterestliesinhowecosystemcollaborationdeliversthefocaloffer’svalueproposition,andwhichresourcesaresharedortransferredbetweentheparticipantsinthisproductionprocess(“activities”and“links,”tousetheterminologyofAdner,2017).However,littleisknownaboutspecificactivitiesinjournalismecosystems.Thereisalackoflongitudinalin-depthethnographies—suchasintraditionalnewsroomproductionstudies(e.g.Cottle,2007)—thatcouldhelpustounderstandpreciselyhowmediaproductionpracticesareaccomplishedinsuchecosystemsettings.Fromasocietalperspective,developingsuchanunderstandingiscentraltograspinghowecosystemsasorganizationalformsexerttheirinfluenceontheproductionofmediacontentand,eventually,onthedemocraticfunctionofjournalisminsociety(McQuail,1992;WestlundandEkström,2019).Heftetal.(2017)identifiedsometypicalactivitiesforcollaborativecross-borderjournalism:Partners“shareinformationoftheirsources,compile,cross-check,discussandmergetheirfindingsandreportthemindividuallytotheirrespectivenationalorsub-nationalaudiences”(Heftetal.,2017,p.4;alsoseeAlfter,2019).Thesecomplementaryactivitiesbyindividualparticipantsareintegratedinanecosystem;theyarepotentiallyspecifictotheecosystemandmayconstituteitscompetitiveadvantage.ChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

314300HandbookondigitalbusinessecosystemsWhileasingleproductorserviceisusuallyrealizedbythepartnersinconventionalbusinessecosystems,theautonomyofthesepartnersregardingthefocusofferissignificantlyhigherincross-bordercollaborativeinvestigations.AsHeftetal.(2017)pointout,theecosystemvalueproposition(acollaborativeinvestigation)isindividuallypublishedbymediapartners—typicallyonepartnerineachcountry—andadaptedtothelocalmarket.Forexample,whentheGermannationalnewspaperSüddeutscheZeitung(onepartnerinanecosystem)publishedcoverageonthePanamaPapers,Germanactorsandaffairswerefocusedupon.Theregularityofadaptingtheecosystem’svaluepropositiontolocalcontextsisaspecificincentiveforpar-ticipation,andanotabledistinctiontocommonbusinessecosystems.Accordingtorecentstudies(e.g.Konow-Lundetal.,2019),theactorsincross-bordercollaborativeinvestigationsareprimarilylinkedbythefollowingtransfersandexchanges(Adner,2017):●Storyideas,sources,(leaked)data,rawinvestigations,andcontentnaturallyconstitutetheprimarylinksbetweentheecosystem’sactors.Itisthe“informationpool”(HeftandBaack,2021,p.10)andthecommonreportingthatbindthisecosystemanditsactorstogether.●Furthermore,thereisanexchangebetweenparticipantsintermsofexpertise,skills,andworkingmethods.●Resources(technology,securityandencryptioninfrastructure,algorithms)areshared.Here,thekeystoneorganizationoftenplaysapivotalrole.SummaryTable19.1showstheframeworkforthemainfindingsofouranalysisofcross-bordercollab-orativeinvestigationsthroughthelensofdigitalbusinessecosystemsresearch,andcomparesthemwithconventionalbusinessecosystems.Fromtheexceptionsandspecificsdescribedinthischapter,itisevidentthatecosystemsindigitaljournalismarecontrastingcasesthatcansparknewresearchinterestsingeneralmanagementandbusinessstudies.First,asthecaseofjournalismhasunderlined,motivesandobjectivesfromwhichparticipationinbusinessecosystemsarisemustbeaddressedinamoreopenway.Thecaseofjournalismillustrateshowactorobjectivesarediverseandbynomeanssolelyprofit-driven.Thisisalsoevidentinsomemoreconventionalbusinesseco-systems,suchastheAppleAppStore,wheresomeappsareofferedforsocietal,cultural,oraestheticreasons.Implicationsforthemanagementofecosystemsmustbecloselymonitoredinfollow-upresearch.Second,basedonthecaseofjournalism,researchshouldaskwhattheconsequencesareifabusinessecosystemdoesnotmakeaprofit,butneverthelesscontinuesitscollaboration.Injournalism,itseemstobethatcross-borderinvestigationspromisenofinancialgainbut,instead,competitiveadvantagesthroughreputation,marketing,humanresourcesrecruitment,retentionofjournalistictalent,andsoon.Researchmustlookevenmorecloselyatindirectandnon-economic(forexample,social)benefitsofecosystemsasnovelformsoforganizing.Third,ourcaseshowsthatwhileavarietyofdifferentactorsmaycollaborateinanecosys-tem,thisdoesnotautomaticallycorrelatewithahighdegreeofdynamismoropennessinthesystem.Theecosystemsexaminedindigitaljournalismwereopentodiversity,butthepartnerswerehand-pickedaccordingtothehighstandardoftheirworkandtheirleveloftrustworthi-ness.ThisremarkabledifferenceemphasizesthecrucialroleofthekeystoneorganizationasChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

315Businessecosystemsindigitaljournalism301Table19.1Comparisonofkeycharacteristicsofconventionalbusinessecosystemsandcross-bordercollaborativeinvestigationsConventionalbusinessecosystemCross-bordercollaborativeinvestigationsObjectivesandFinanciallymotivated,promiseshigherGoesbeyondeconomicobjectives(especiallysincetheprofitabilitymotivationsprofitsthanindividualfirmsofecosystemsisnotguaranteed):●Responsetomorecomplexandinterwovenchallengesofnewsreporting●Powercontainersforpoolingresources/“fieldrepair”●Enhancementofastory’squalitythroughdiversityandpluralityActorsLimitedsetofcommercialfirmsfromMorediverseaswellasmoreclosed:multipleindustriesthatareessentially●Organizationsofvarioussizes,businessmodels,andmotivesasprofit-drivenwellasavarietyofindividuals●Highlevelofprotectionandclosureduetotheprocessingofcon-fidentialinformationKeystoneOneorafewcoreorganizationsthatactSpecifictasksforkeystoneorganization(s):organization(s)asleadpartners,alignthediverseactors●Alignmentviasocialcapitalwithinecosystems(partnerselection,andhandlesomecentralizedtaskscoordinationbynon-monetaryincentivesandcommonnorms/values)●Developmentofvirtualspacesandtechnologicalinfrastructureforcross-nationalcollaborationActivitiesandPartnersintheecosystemrealizeasingleHigherautonomyforthepartnersregardingthefocaloffer:linksstandardizedproductorservice●Publishedindividuallybyregionalmediapartners●Speciallyadaptedtothenational/localcontextresponsibleforpartnerselectionandretention,whichneedstobeinvestigatedforothersectorsaswell.Fourth,thecaseofjournalismhighlightsthepossibility(andoftenthenecessity)ofindi-vidualandlocaladaptationofmediaproductsinrelatingcomplexandgloballyinterconnectedinvestigationstoconcretelocalcontexts.Whilethelocaladaptationofproductsseemspar-ticularlysuitedtonon-materialinformationgoodssuchasjournalism,itcouldalsohelptostrengthenconventionalbusinessecosystems.CONCLUSIONResearchonjournalismandmediamanagementcontinuestoabandonitsconceptualappara-tus,whichwasprimarilyshapedintheeraofmassmedia,andadaptitstheoreticalinstrumentsandterminologytoapost-industrialmedialandscapesothatcurrentupheavalscanstillbemeaningfullycapturedandexplained(BuschowandSuhr,2022).Toaddtothisadvancement,wehaveoutlinedthefundamentalsofadigitalbusinessecosystemperspectiveonvaluecrea-tioninthenewsindustry,drawingfromthecaseofcross-bordercollaborativeinvestigations.Theecosystemsinvestigatedinthischapterarenotthespontaneouslyemergingphenomenaofcollectiveaction,butdeliberatelydesignedorganizationalformsforthepurposeofdeliv-eringjournalisticworkthroughmultipleactorcollaboration,oftencoordinatedbyakeystoneorganization.Lookingthroughthelensofdigitalbusinessecosystems,researchhasshedlightonissueswhichhavenotoftenbeensystematicallytakenupinresearchonnetworkedformsofnewsChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

316302Handbookondigitalbusinessecosystemswork,forexample,innewsecosystemstudies(e.g.Anderson,2016)orliteratureoncollabo-rativecross-borderinvestigations(e.g.Konow-Lundetal.,2019).Byansweringourresearchquestion,weaimedtocontributetoprogressindigitalbusinessecosystemsresearchbyinvok-ingnewresearchtopicsandquestionsthroughthesystematiccomparisonofconventionalecosystemstothedistinctivecaseofdigitaljournalism.Ourfocusonthenovelorganizationalcharacteristicsofdigitaljournalisticecosystemsalsopavesthewayfortheorydevelopmentinjournalismresearch.Followinguponthecurrentstateofresearchanditslimitations,wecanseethatthereisneedforresearchinthefollowingkeyareasofbusinessecosystemsindigitaljournalism:●Inlinewiththecurrentfocusofresearchandbasedontheirrecentpublicrecognition,thischapterhasconcentratedoncross-bordercollaborativeinvestigations.However,thereisaneedtoinvestigatefurtherjournalisticareasandlevels(national,local)wherebusinessecosystemsarebecomingincreasinglyrelevant.●Weknowlittleaboutcompetitiononthelevelofjournalismecosystems.Moreresearchisneededonthequestionofwhetherandhowecosystemsthatwereinitiatedbottom-upbystart-upsareincompetitionwiththosethatwerecreatedtop-downbylegacymediaorgan-izations(forexample,theGermanjournalismnetworkofpublicbroadcastersNDR,WDR,andtheprivatelyownednewspaperSüddeutscheZeitung)(Buschow,2018).●Coopetition—meaningthatcompaniescompeteinonefieldwhilecooperatinginanother—hasprimarilyfocusedonplatformecosystems(NielsenandGanter,2018).However,mediacompaniescancompeteinonemarketandjoinforcesinanecosystem.Tothebestofourknowledge,thesesituationshavenotyetbeenresearched.●Whilethischapterhasclearlyhighlightedthesocietalrelevanceofcross-bordercollabora-tiveinvestigationsfordigitallynetworkedsocieties,thereisaneedtofurtherexaminetheperformanceofthisnovelorganizationalformforthequalityandfunctioningofmediaindemocracies(McQuail,1992).Afteridentifyingtheseresearchgapsincurrentstudies,thelimitationsofourcontributionneedtobehighlighted.First,whilesystematizingandconsolidatingthegrowingbodyofliteratureoncross-bordercollaborativeinvestigations,nooriginalempiricalresearchhasbeenconductedforthischapter.Second,weprimarilyfocusedonthebest-knownandmostwidelyresearchedcaseofmoreinstitutionalized,large-scalecross-borderinvestigations,leavingotherdigitaljournalismecosystemsaside(forexample,small-scalecollaborations;forthecaseofEurope’sFarRight,seeHeftandBaack,2021).However,onecannotdrawgeneralconclu-sionsforeveryecosysteminjournalismfromasingleorganizationalform.Third,intheframeofthechapter,thepotentialnegativeeffectsofbusinessecosystems(suchasdiversity-limitingstandardizationorWesternizationofperspectivesinglobaljournalism)couldnotbefullyexamined.Despitetheselimitations,ourchapterdemonstratesthepotentialofnovelorganizationalformsindigitaljournalism,somethingthatisincreasinglyseentodayandacceleratedbythecurrentCOVID-19pandemic,aswellasthesuitabilityofdigitalbusinessecosystemsasananalyticalperspectiveforsuchemergingorganizationalforms.ChristopherBuschowandMaikeSuhr-9781839107191DownloadedfromPubFactoryat05/28/202209:57:53AMviaColumbiaUniversityLibrary

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32120.ImproveddecisionsfordigitalizationprojectsindigitalbusinessecosystemsVinzenzJeglinskyandHerwigWinklerINTRODUCTIONDuetochangingcustomerneedsandtheever-growingtechnologicalpossibilities,digitalbusinessecosystems(DBEs)aremovingtotheforefrontofmanybusinesses’considera-tions(Senyoetal.,2019).DBEsaredefinedascollaborativeenvironmentsconsistingofdifferententitiesthatco-createvaluethroughtheuseofinformationandcommunicationtechnology(Nachiraetal.,2007).WiththeriseofDBEs,morecompaniesarenowdevelopingcustomer-focuseddigitalnetworksforofferingtheirproductsandservices.Whilethesenewmarketscanbringmanybenefitsforcompanies,theyalsobringmanychallenges.Forinstance,theever-changingcustomerneedsthatariseinthismarketarepushingnewdemandsandrequirementsoncompaniesintermsoftheirproducts,services,andvaluechains.InordertofulfilltheserequirementsandtounlockthefullpotentialofDBEs,manufacturingcompaniesneedtofurtheroptimizetheirentirevaluecreationnetwork.Thismeans,ontheonehand,thatcompaniesneedtostrengthenthehorizontalintegrationoftheirentirevaluechainbyensuringanintelligentcross-linkinganddigitalizationofallthevaluecreationelementsinthechaininordertocreateahighlydynamicandresponsiveecosystem(Peresetal.,2018;StockandSeliger,2016);while,ontheotherhand,manufacturersalsoneedtointensifytheirverticalsystemintegration,rightfromtheshopflooruptothemanagementlevel,notonlyinproduc-tionenvironmentsbutalsoinalltheassociatedvaluechainelements,includingdevelopmentandsales(Peresetal.,2018;StockandSeliger,2016),aswellastoapplyoptimizationmeas-uresingeneral.AsuccessfuldigitalizationofactivitiesintheproductionsystemcansupporttheseeffortsandensurecompaniesarebetterpreparedtoparticipateinDBEs.Companiesareconstantlystrivingforefficiencygains,andinthisregard,digitalizationintheirproductionareascanoffergreatopportunitiesforgains.Therearenumerousscientificapproachestowardsdigitalization.Inthenarrowestsense,digitizationistheconversionofanalogsignalsintodigitaldata(Loebbecke,2006).Thus,digitalizationinindustrycanmeanthefullorpartialsubstitutionofanalogserviceswithadigitalorcomputer-manageablemodelthatreflectstheoriginalaspectsintheintendedpracticalenvironment(WolfandStrohschen,2018).Givenitsimportance,digitalizationhasbeenwidelydiscussedintheliteratureandhasbeensuccessfullypracticedforsometime.Also,thisdiscourseondigitalizationcoversawidespectrumofactivity,rangingfromthedevelopmentofpaperlessprocessestothedisruptionofentirebusinessmodels(WolfandStrohschen,2018).Withregardtothemanufacturingindustry,digitalizationisoftendiscussedinthescientificcommunityandamongpractitionersundertheterm“Industry4.0,”whichwasfirstcoinedin2011attheHanoverexhibition(TortorellaandFettermann,2018)andthenincorporatedintoaGermangovernmentprogrammeanttoimprovethecompetitivenessoftheGermanmanufacturingindustry(Kargermannetal.,2013).Intheacademicliterature,theIndustry4.0307VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

322308Handbookondigitalbusinessecosystemsconceptisalsosometimesreferredtoasthefourthindustrialrevolution(e.g.,Rajetal.,2020;daSilvaetal.,2020;Tortorellaetal.,2020).However,whenitcomestothespecificcontentoftheIndustry4.0concept,thescientificlandscapeishighlyfragmented,andopinionsdifferwidelyonwhichelementsmakeupIndustry4.0andhowthosearerelatedtoeachother(Bueretal.,2018).Arecentreviewofthestudiesinthisfieldshowedthattherearemorethan100differentdefinitionsofIndustry4.0(Moeufetal.,2018).Inthepresentwork,weusetheterm“digitalization”andapplyitinthecontextofproductionandproduction-relatedareasinthemanufacturingsector.Furthermore,werefertothedigitalizationinitiativescarriedoutinaproductionenvironmentasdigitalizationprojects.Todescribethecourseofadigitalizationproject,weuseamodifiedphasemodelforshowingthedecision-makingprocessesthroughouttheproject(basedonHeinen,1991;Lauxetal.,2014;Schreyögg,2016).Themodelstructuresthedecision-makingprocessintoindivid-ualelements,butwithoutspecifyingtheirrelativesignificanceandchronology.Thecourseoftheprojectcanthereforehaveaniterative,linear,orpartialcharacterofeitherone.However,thedecision-makingprocessforpreparing,decidingon,implementing,andevaluatingsuchdigitalizationprojectsisusuallycomplexinpractice,andnumerousobstaclesthroughoutthewholedecision-makingprocesscanpreventordelaydigitalizationprojects.Thereisamultitudeofscientificpapersthataddresstheseobstaclesinthecontextofdigi-talizationprojectsperformedinproductionenvironments,includingreviewarticles(e.g.,Lu,2017;Moktadiretal.,2018;Schneider,2018).However,thesestudiesallseemtobefocusedoncertaintypesofobstacles(forexample,managerial,technological,social),anddonotapplyastructuredgeneralizedframework,ortheycoveradoptingdigitalizationconceptsinaproductionenvironmentandfocusonovercomingcertainobstacleswithregardtoimple-mentation(e.g.,Hecklauetal.,2016;Hübneretal.,2017;Schumacheretal.,2016).However,fewstudieshavesystematicallyanalyzedtheprojectobstaclesintermsofwhentheymightoccurinthecourseofthedecision-makingprocessesofsuchdigitalizationprojects,whichissomethingwewantedtoinvestigate.Therefore,toclosethisgapinthescientificliterature,weformulateourfirstresearchquestion(RQ1)asthefollowing:RQ1:Whataretheobstaclesinthedecision-makingprocessesforapplyingdigitalizationinaproductionenvironmentinordertoprepareandoptimizedigitalplatformbusinesses?Mostprojectmanagementapproachestendtobundletogetherasetofprinciplesandguide-linestodefinehowprojectscanbespecificallymanaged(Iivarietal.,2000).Manyoftheseprinciplesoftraditionalprojectmanagementapproachesgobacktothe1950s(Špundak,2014;Williams,2005),andso,unsurprisingly,thereisanabundanceofliteratureontheseaspects.Thetraditionalprojectapproachesarebasedontheideathatprojectsarepredictable,linear,andclearlydelimited,whichmakesiteasiertoplansuchprojectsindetailandtoimplementagivenplanwithouttheneedformajorchanges(Saynisch,2010;TurnerandCochrane,1993).Therearemanylong-standingandrecognizedprojectmanagementmethodsforthestructuredprocessingofsuchprojects,includingtheProjectManagementBodyofKnowledge(PMBOK),ProjectsinControlledEnvironments(PRINCE2),andtheIndividualCompetenceBaselineoftheInternationalProjectManagementAssociation(IPMAIBC),whicharewellknownworldwide.Alltheseprojectmanagementmethodsofferextensiveknowledgeandtoolsaswellasarangeofbestpracticeapproachesforalmosteveryprojectphase,andcanguideusersthroughprojectsinastructuredmanner.Theyofferstructuredandholisticsolu-tionsforovercomingtheobstaclesthatmightariseintraditionalprojectenvironments.VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

323Improveddecisionsfordigitalizationprojectsindigitalbusinessecosystems309Inadditiontothetraditionalapproaches,agileprojectmanagementapproaches(sometimesalsoreferredtoasleanapproaches)haveincreasedinpopularityinrecentyears,withtheiremergenceparticularlylinkedtosoftwareengineeringandsoftwaredevelopment(Williams,2005).Agileapproaches(forexample,designthinking)canbecharacterizedbytheirabilitytointegratechangesthatmightoccurinthecourseofaproject(Aguanno,2004).Therefore,agileprojectmanagementapproachesareespeciallyusefulinprojectswithgreatuncertaintyorwithvagueprojectgoalsormethods(DijksterhuisandSilvius,2017;Wysocki,2009).Duetotheongoingchangerequests,theseprojectscanberuniterativelyandnon-linearlywithconstantupdatesoftheprojectplan,andhencetheyusuallyinvolveregularcommunicationwithfutureusers(Boehm,2002).Unliketraditionalprojectmanagementapproaches,agileapproachescanalsobefoundinadigitalcontext.Forinstance,theleanstartupapproach—oftendescribedasalearning-orientedinnovationapproachtoincreasethespeedandminimizetheriskoffailure—recentlyemerged(Eckert,2017).Duetotheirfocusonsolvingemergingproblems,agileapproachesdonotusuallyofferspecificsolutionstospecificproblems,neitherinadigitalnorinanon-digitalprojectcontext,sincetheproblemisalwaysspecificforeachcase.Inprinciple,agileapproachescanbeusedtoovercomeobstacles,butspecificsolutionsmustalwaysbedevelopedfromscratch,becauseprojectknowledgegenerallyremainsasimplicitprojectknowledgeandnon-transferrable(Chin,2004).Putinanutshell,therearenoexplicitscientificapproachesinthedomainofprojectman-agementthatincludeanapproachforovercomingalltheobstaclesthatmightarisethroughoutthedecision-makingprocessindigitalizationprojectsinproductionenvironments.Therefore,oursecondresearchquestion(RQ2)wasformulatedasfollows:RQ2:Arethereapproachesshowinghowobstaclesinthedecision-makingprocessesforestablishingdigitalbusinessecosystemsinaproductionenvironmentcanbesystematicallyovercome?Toanswerthesetworesearchquestions,RQ1andRQ2,weinitiallycarriedoutareviewoftheexistingacademicliteraturetoidentifythecommonobstaclesinthedecision-makingprocessesofseveralreporteddigitalizationprojectsperformedinproductionenvironments,asthepreparationandoptimizationofaDBEisoftenrelatedtothedigitalizationapproachestakenintheproductionenvironment.ThenweaddedtothisbyperforminganempiricalstudyofdifferentdigitalizationprojectsperformedinGerman-speakingcountries.Thus,wemakethefollowingcontributiontothefield:First,weidentified,classified,andlocated,andreporthere,thecommonobstaclesthatsystematicallyariseinthecontextofdigitalizationprojectsthroughoutthedecision-makingprocess.Second,wedevelopedrecommendationsforactiontohelpovercomesuchobstaclesindigitalizationprojects.Third,wecreatedanapproachthatcanhelpmanufacturingcompaniesinDBEstobetteraligntheirproductionwithcustomers’changingrequirementsastheyarise,throughimprovingtheirdecision-makingqualityandspeedwhencarryingoutdigitalizationprojects.Thischapterisstructuredasfollows.First,wedescribetheresultsoftheliteraturereviewandtheempiricalstudyweperformedtoidentifytheobstaclesindigitizationprojectsandwaystoovercomethem.Next,wedevelopaconceptualapproachwithsomerecommendationsforactiontoovercomesuchobstacles.Finally,wehighlightthebenefitsofourworkaswellasitslimitations,andwesuggestsomefurtherresearchpossibilities.VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

324310HandbookondigitalbusinessecosystemsOBSTACLESTHATCANARISEINDIGITALIZATIONPROJECTSINAPRODUCTIONENVIRONMENTTHROUGHOUTTHEDECISION-MAKINGPROCESSTheessenceofdecision-makingliesintheprocessofgaugingseveralalternatives(Hörschgen,1992),suggestingthatdecisionscanbeunderstoodasproceduralprocesses.Aspartoftheseprocesses,typicallyseveralkeytasksmustbecarriedout.Ingeneral,thesetasksarenotprocessedsequentially;rather,aniterativeprocedureisinvolvedthatultimatelyleadstothefinaldecision(Heinen,1991).Thesekeytasksmayincludeproblemdefinition,specificationofthetargetsystem,researchintopossiblealternativecoursesofaction,andtheselectionofalternatives(Lauxetal.,2014).Heinen(1991)describesthedecision-makingprocesswithafive-phasemodel,coveringthephases:suggestion,search,selection,execution,andcontrol.Schreyögg(2016)definestheprocessesas:problemdefinition,informationgathering,gen-erationofalternatives,comparisonandevaluation,decision,implementation,andcontrol.Bysynthesizingthesethreeapproaches,weobtainedaphasemodelforthedecision-makingprocess,aspresentedinFigure20.1.Source:BasedonHeinen(1991),Lauxetal.(2014),andSchreyögg(2016).Figure20.1Phasemodelofthedecision-makingprocessInthemodel,therearetwobasicphases,namelydefinitionofintentionandimplementationofintention,whichcanbesubdividedintoadditionalelements.Informationispassedbackandforthtothe“informationprocesses,”whichconcernthesupplyandalignmentofinfor-mation.Itcanbeseenthatthemodeldoesnotspecifytherelativesignificanceorchronologyoftheindividualelements.Further,thecourseofadigitalizationprojectpassingthroughthedecision-makingprocesscanhavealinear,iterative,orpartialcharacter.Forexample,afterresearchingalternativecoursesofaction,activitiesbundledtogetheraspartofthespecificationofthetargetsystemmayneedtobecarriedoutagainduetothedependenciesbetweenthetwophases.Thedecisionphase,whichispartoftheimplementationofintention,mayresultinthedecisionforanalternative.Thischosenalternativeisimplementedinthesubsequentimplementationphaseandfinallyexaminedinlightoftheobjectivesinthereviewphase(Figure20.1).VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

325Improveddecisionsfordigitalizationprojectsindigitalbusinessecosystems311LiteratureReviewWecarriedoutasystematicliteraturereviewfirsttoidentifycommonobstaclesinthedecision-makingprocessofdigitalizationprojectsperformedinproductionenvironments.Figure20.2FlowchartofthepublicationselectionprocedurefortheanalysissetSearchstrategyReferringtoourtworesearchquestionsRQ1andRQ2,wefirstdevelopedasetofsearchterms.ThissetcontainedthefollowingsearchtermsinGermanandEnglish(alsotakingintoaccountthewordstem):digitalization,manufacturing,Industry4.0,technology,implemen-tation,decision-making,process,challenge,obstacle,hurdle,barrier.Theusedsearchstringvarieddependingonthedatabase.ThedatabasesusedfortheresearchwereScienceDirect,WebofScienceandadditionaldatabases,suchasOPACandEBSCOhost.LimitationsWesetnolimitationsregardingthepublishingyear,butexcludedarticlesinlanguagesotherthanEnglishorGerman.SelectionanddataextractionBasedontheseterms,thetitlesandabstractsofpotentialarticleswererecordedandthencheckedfortheirrelevance.ThetestresultsweresystematicallydocumentedandcategorizedVinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

326312Handbookondigitalbusinessecosystemsbasedontheirscientificcontext.Theselectionofthepotentialliteraturewascarriedoutthroughaninitialquickreviewoftheabstractsand,ifappropriate,thefulltextswereviewed.Inthefirststep,weexcludedpublicationswhosetitleorabstractwasnotrelatedtothetopic(85publications).Besides,werejectedalltheduplicates(ninepublications).Thisleft60potentiallyeligiblepublications.Next,weexcludedpublicationsthatwerenotavailableintheirentirety(threepublications).Consequently,weexaminedatotalof154publications,andfinallywhittledthisdownto57publicationsthatthenunderwentasystematicqualityreview.Anadditionaleightpublications(selectedafterperformingamanualresearch)wereincluded.Therefore,wequalitativelyanalyzedatotalof65publications.AflowchartforthestudyselectionprocedureisdisplayedinFigure20.2.Intheliteraturereview,wefirstwantedtoidentifyallthecommonobstaclesinthecontextofapplyingdigitalizationinaproductionenvironmentandsecond,welookedatthereportedapproachesproposedtosystematicallyovercomeoravoidtheidentifiedobstacles.ResultsRegardingRQ1,weidentified27differentobstaclesthatmightoccurinthecontextofdigital-izationinaproductionenvironment,andtheresultsarepresentedinTable20.1.Oursecondgoalwastoidentifyapproachesshowinghowtheidentifiedobstaclescouldbeovercome(Table20.2).Amongtheincludedpublicationsweanalyzed,27articlescontainmentionsofpossibleobstacles,witharticlespresentingtheobstaclesexplicitly,whereasotherarticlesjustmentiontheobstaclesinpassing.However,noneoutlineconcreteapproachesastohowthementionedobstaclescanbedealtwith.Overall,38articlesmentionapproachesforreducingsomeoftheobstacles,suchasbytheimprovementofqualificationsandknowledge(e.g.,Hecklauetal.,2016;Chryssolourisetal.,2013;Rentzosetal.,2015;Quintetal.,2015)orbytheuseofdigitaltechnologies(e.g.,IansitiandLakhani,2014;Weyeretal.,2016),butwedidnotfindanyworkthatholisticallyaddresseshowspecificobstaclescanbeovercomeindigitalizationprojectsperformedinaproductionenvironment.Consequently,weaimedtocontributetoclosingthisgapinthescientificliterature.EmpiricalStudyWecarriedoutastudyin2020inGerman-speakingcountriestoinvestigatetheobstaclestodigitalizationperformedinindustrialproductionenvironmentsthroughanonlinesurvey(JeglinskyandWinkler,2020).Theaimofthestudywastoextendthefindingsfromthescientificliteraturereviewwiththosefromanempiricalstudy.Wesentinvitationstotakepartinthestudytowell-knownexpertsfromnationalandsentsentinvitationstotakepartinthestudytowell-knownexpertsfromnationalandinternationalcompaniesthatwefoundonthebusinessnetworkXING.Giventhestudy’sfocusondigitalizationissuesinindustrialproduction,decision-makers,implementers,users,andconsultantsfromthefieldsofproduc-tion/operations,supplychainmanagement,andinformationtechnology(IT)wereinvitedtoparticipateintheonlinesurvey.Set-upandstructuraldataWecreatedastudyquestionnairebasedonourphasemodel(Figure20.1).Wemappedalltheobstaclestodigitalizationthatwehadidentifiedintheliteraturereviewtothemodelelements.Inaddition,wedividedtheobstaclesintothreecategories—namelytechnology,organization,VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

327Improveddecisionsfordigitalizationprojectsindigitalbusinessecosystems313Table20.1Obstaclesinthecontextofdigitalizationaddressedintheacademicliterature#IssueReferences1DifficultiesinanticipatingthemarketdevelopmentIansitiandLakhani,2014;PorterandHeppelmann,2014,2015;regardingtheimpactofdigitizationSchumacheretal.,20162LackofunderstandingoftheinfluencesofBurmeisteretal.,2016;Schneider,2018digitizationonthebusinessmodel3AbsenceofawarenessofthefutureroleofhumansBeckerandStern,2016;Chryssolourisetal.,2013;Moktadiretal.,2018;inthecontextofthedigitizationofproductionQuintetal.,2015;Rajetal.,2020;Rentzosetal.,2015;Schneider,2018;Schuhetal.,2015;Waibeletal.,2017;Zezulkaetal.,20164ChallengesindefiningaprocedureforsteeringHirsch-Kreinsen,2014;Schneider,2018andaccompanyingthechangeinthecontextofdigitalization5MissingintegrationofdigitalizationintoIansitiandLakhani,2014;Moeufetal.,2020;PorterandHeppelmann,higher-levelstrategies2014,2015;Rajetal.,2020;Schumacheretal.,20166LackofimplementationstrategyfordigitalizationHübneretal.,2017,IansitiandLakhani,2014;Moktadiretal.,2018;topicsPorterandHeppelmann,2014,2015;Schuhetal.,2017;Schumacheretal.,2016;VDMA,2015;Zhouetal.,20157DifficultiesindeterminingnewrequirementsforBeckerandStern,2016;Chryssolourisetal.,2013;Fantinietal.,2020;jobs,rolemodels,andqualificationprogramsHannolaetal.,2018;Quintetal.,2015;Rajetal.,2020;Rentzosetal.,2015;Schneider,2018;Schuhetal.,20158LackofexpertiseinstrategydevelopmentandGeissbaueretal.,2014;Hecklauetal.,2016;Leeetal.,2014;Moeufetimplementationofdigitizational.,2020;Moktadiretal.,2018;Rajetal.,2020;Zhouetal.,20159DifficultiesinidentifyingpreciseusecasesforBiereretal.,2016;BildsteinandSeidelmann,2014;Heluetal.,2015;digitizationprojectsSchuhetal.,201410LackofknowledgeofcollaborationmodelsandBretteletal.,2014;ChenandTsai,2016;Davisetal.,2012identificationofsuitablecooperationpartners11ShortageofknowledgeofthedevelopmentofnewBurmeisteretal.,2016;Schneider,2018businessmodelsinthecontextofdigitization12HighcostswithunknownbenefitsofdigitizationBiereretal.,2016;Geissbaueretal.,2014;Heluetal.,2015;Moeufetprojects(lowexperientialknowledge)al.,2020;Moktadiretal.,2018;Rajetal.,2020;Schuhetal.,201413ChallengesinevaluatingopportunitiesandrisksofBretteletal.,2014;ChenandTsai,2016;Davisetal.,2012digitalcollaborationbetweencompanies14ExistinginformationandcommunicationLiaoetal.,2017;OliveiraandÁlvares,2016;Moktadiretal.,2018;Rajtechnologyinfrastructureonlypartiallysupporttheetal.,2020;VargheseandTandur,2014;Xuetal.,2018digitizationofvaluechains15InsufficientdatasecurityBildsteinandSeidelmann,2014;Geissbaueretal.,2014;Gölzeretal.,2015;Kusiak,2018;Moeufetal.,2018;Moktadiretal.,2018;Rajetal.2020;Xuetal.,201816LackofprivacyprotectionLietal.,2012;Moeufetal.,2020;Xuetal.,2014;Xuetal.,2018;Yanetal.,2015;Yinetal.,2012;Yinetal.,201617Challengingmake-or-buydecisionsinthecontextBretteletal.,2014;ChenandTsai,2016;Davisetal.,2012ofopportunitiesofferedbydigitalization18DifficultyrecognizingtheneedandcorrecttimingBurmeisteretal.,2016;Schneider,2018toadaptbusinessmodel19ComplexityinplanningandimplementationofBiereretal.,2016;BildsteinandSeidelmann,2014;Franketal.,2019;integration,reconfiguration,andmigrationintoHeluetal.,2015;Leeetal.,2015;Lu,2017;Moktadiretal.,2018;Qinetexistingstructuresal.,2016;Rajetal.,2020;Sandersetal.,2016;Schuhetal.,2014;Weyeretal.,2015;Weyeretal.,2016VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

328314Handbookondigitalbusinessecosystems#IssueReferences20TechnicalproblemswithdigitalcollaborationofKhanetal.,2017;KuchandWestkämper,2017;Moktadiretal.,2018companies21InsufficientsupportatmanagementlevelinHirsch-Kreinsen,2014;Rajetal.,2020;Schneider,2018accompanyingthechange22ChallengesinimplementingacultureconduciveBatzetal.,2018;Hirsch-Kreinsen,2014;Rajetal.,2020;Schneider,ofinnovations201823Challengeinthescalabilityofthehard-andBiandCochran,2014;Gölzeretal.,2015;Lietal.,2014;Xuetal.,2018softwareofcyber-physicalsystems(CPS)duetorapidlyincreasingamountsofdata24TechnicalheterogeneityInternet-of-Things(IoT)Xuetal.,2018;Xuetal.,201425LackofstandardizationIoTCurideMouraLeiteetal.,2017;Rajetal.,2020;Xuetal.,2014;Xuetal.,201826DifficultiesinprovidingevidenceofincreasedObermaierandKirsch,2015productivity27ChallengesindealingwithlargeamountsofdataÅkermanetal.,2018;Batzetal.,2018;BeckerandStern,2016;Chryssolourisetal.,2013;Gölzeretal.,2015;Kargermannetal.,2013;Kargermann,2015;Leeetal.,2014;LeeandLee,2015;Quintetal.,2015;Rajetal.,2020;Rentzosetal.,2015;Santosetal.,2017;Schuhetal.,2015;Wachter,2014;Weyeretal.,2015;Xuetal.,2018Table20.2OverviewoftheanalyzedliteratureastohowobstaclescanbeeliminatedItemDescriptionReferencesTransparencyCitedobstacles,butarticlesÅkermanetal.,2018;BiandCochran,2014;Biereretal.,2016;Bretteletal.,2014;donotfocusonapproachesBurmeisteretal.,2016;CurideMouraLeiteetal.,2017;Hirsch-Kreinsen,2014;astohowtheseobstaclesKhanetal.,2017;Leeetal.,2014;Kusiak,2018;Liaoetal.,2017;Lu,2017;Moeufcanbeovercomeetal.2018;Moktadiretal.,2018;OliveiraandÁlvares,2016;Rajetal.,2020;Sandersetal.,2016;Santosetal.,2017;Schneider,2018;VargheseandTandur,2014;Waibeletal.,2017;Xuetal.,2014;Xuetal.,2018;Yanetal.,2015;Yinetal.,2012;Yinetal.,2016;Zhouetal.,2015ProposalsCitedobstacles,articlesBatzetal.,2018;BeckerandStern,2016;BildsteinandSeidelmann,2014;ChenpresentapproacheshowandTsai,2016;Chryssolourisetal.,2013;Davisetal.,2012;Fantinietal.,2020;certainobstaclescanbeFranketal.,2019;Geissbaueretal.,2014;Gölzeretal.,2015;Hannolaetal.,2018;overcomeHecklauetal.,2016;Heluetal.,2015;Hübneretal.,2017;IansitiandLakhani,2014;Kargermann,2015;Kargermannetal.,2013;KuchandWestkämper,2017;Leeetal.,2015;LeeandLee,2015;Lietal.,2012;Lietal.,2014;Moeufetal.,2020;ObermaierandKirsch,2015;PorterandHeppelmann,2014,2015;Qinetal.,2016;Quintetal.,2015;Rentzosetal.,2015;Schuhetal.,2014;Schuhetal.,2015;Schuhetal.,2017;Schumacheretal.,2016;VDMA,2015;Wachter,2014;Weyeretal.,2015;Weyeretal.,2016;Zezulkaetal.,2016VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

329Improveddecisionsfordigitalizationprojectsindigitalbusinessecosystems315andhuman—andmappedthemtothesecategoriesdependingonwheretheobstaclesoccur.Thisstructuringintothesethreeobstaclecategorieswasbasedonaconceptfromthefieldofergonomicsforsocio-technicalanalysis,evaluation,anddesign(Ulrich,2011)thatassumesthathumans,technology,andorganizationsareinterdependentandworktogethertocompletespecifictasks(Ulrich,2011).However,insteadoftheterm“human”weusetheterm“person-nel.”Theobstaclescanbeclassifiedasfollows:1.Technical/technologicalobstacles(technology).Technicalobstaclesincludealltheobsta-clesthatarerelatedtotechnicalsolutions,includingtheassociatedbusinessmanagementandtherequiredresources.2.Organizationalobstacles(organization).Thiscategoryincludesalltheobstaclesthatrevolvearoundtheorganizationalstructureinacompany.Thisincludes,forexample,thestructuralandproceduralorganizationaswellastheinformationprocesses.3.Personalobstacles(personnel).Personalobstaclesare,forexample,theknowledge,behav-ior,andeventheskillsofthepeopleinvolved.Inaddition,inthepre-tests,wenotedthatmanyintervieweesfrequentlyusedtheterm“deficit”insteadoftheterm“obstacle.”Wethereforechosetheterm“deficits”fortheempiricalstudy,anddefinedobstaclesasthesumofthedeficits;althoughwerecognizethatobstaclescanalsoresultfromonlyonedeficit.Still,thisgaveustheopportunitytosummarizedeficitsinameaningfulway.However,wedidnotmakeuseofthisoptioninthecourseofthefurtherresearchprocess,andsobothtermscanberegardedassynonyms,andwechosetomainlyusetheterm“obstacle”forourwork.Asalreadymentioned,digitalizationinaproductionenvironmentinmanufacturingcompa-niesisfrequentlydiscussedundertheterm“Industry4.0.”Also,thescientificliteraturedoesnotclarifywhichelementsmightcomprisedigitalizationinaproductionenvironment,andhowtheseelementsarerelatedtooneanother;albeitthatmostofthearticlesintheliteraturereviewdealwiththeimplementationofnewinformationandcommunicationtechnology(ICT)orproduction/logisticstechnologytosupportvalue-addedoradministrativeprocesses(e.g.,KuchandWestkämper,2017;Santosetal.,2017;Weyeretal.,2015;Zezulkaetal.,2016).Thechallengeforuswasthus,ontheonehand,tomakethecontentofsuchdigitalizationprojectsinaproductionenvironmenttangibleandrelevanttothesubjectsofthestudies,andontheotherhand,tobundlethecontentinapracticablethematicway.However,thisproveddifficultasthescientificliteratureprovedtobehighlyfragmented.Wethereforedecidedtocombineourimpressionsfromtheacademicliteraturewithourownknow-howtochoosefivefocalpointsregardingdigitalizationprojectscarriedoutinaproductionenvironment.Thefocalpointsweredesignedinsuchawaythatthetechnologywithinthedigitalizationprojectwasalsoadecisivefactorintheclassificationoftheproject.Thefivefocalpointswere:●Digitalizationofprocessesandobjects.●Processautomation.●Introductionofinnovativeplanningandcontrolsoftware.●Bigdata.●Introductionofinnovativetechnologies;forexample,three-dimensional(3D)printing.Theonlinesurveywasdividedintofiveparts,startingwiththeintroduction,inwhichtheparticipantsweregivenrelevantinformation(forexample,keydefinitionsandtheaimsofVinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

330316Handbookondigitalbusinessecosystemsthestudy.Inthesecondpart,therespondents’experiencewithdigitalizationprojectswasrecorded,andtheprojectswereclassifiedaccordingtotheirsubjectandfunctionalareas.Thethirdpartexaminedthevalidityofapplyingthephasemodelwepresentedearlierinthedecision-makingprocessforthedigitalizationprojects.Partfour,thecoreofthestudy,con-sistedofquestionsonthedeficits(orobstacles)inindividualelementsofthedecision-makingprocess.Theresponseoptionsprovidedwerebasedontheprecedingliteraturereview.Partfiveconcludedthestudywiththecollectionoftheparticipants’structuraldata.With123completerecordsoutof523invitationstothestudy,theresponseratewas23.5percent.Mostoftherespondentswerefromthemechanicalengineering,automotive,con-sulting,metalandsheetmetalprocessing,andelectronicssectors.Themajorityofthosewhotookpartinthestudywereemployeesoflargecompanies(≥250employees,≥€50millioninsales)ormedium-sizedcompanies(<250employees,<€50millioninsales).Mostthestudyparticipants,around29percent,wereinvolvedinproductionorstrategy/corporatedevelop-ment(24percent),followedbysupplychainmanagement(11percent),industrialengineering(8percent),informationtechnology(6percent),orplanning(4percent).Otherparticipantsworkedinresearchanddevelopment(R&D),management,digitalization,softwaredevelop-ment,sales,maintenance,productlifecyclemanagement,orproductmanagement,aswellasrecyclingandprocessoptimization.Themajority,around76percent,wereexecutives;while20percentwerespecialistsorprojectmanagers.Ownersandscientificexpertswereclassedtogetherinthecategory“Other”(4percent).Amongalltherespondents,34percenteitherhadalotofexperience(intheirdailybusiness)orregularexperiencewithdigitalizationprojects;25percentdidnotdealwithsuchprojectsonaregularbasis,and7percentrarelydid;whilenonehadnoexperiencewithdigitalizationprojects.ResultsItwasfoundthatinadditiontoproductionactivities,manydigitalizationprojectsreportedonoverthepreviousthreeyearswerelogisticsandcross-departmentalprojects.Intheseprojects,companiesprimarilyconcentratedonthefollowingfocalpoints:“digitalizationofprocessesandobjects”(27percentofallthementionedprojects;intotal,1073projectswerementioned),“automationofprocesses”(26percent),“introductionofinnovativeplanningandcontrolsoft-ware”(22percent),“bigdata”(14percent),andthe“introductionofinnovativetechnologies(e.g.,3Dprinting)”(9percent).Thatonly2percentofprojectswereclassifiedas“Other”validatedthechosenstructuresofthedigitalizationprojects.Furthermore,thestudyconfirmedthegeneralvalidityandapplicabilityofthepresentedphasemodel.Atthesametime,however,aneedforremedyingtheunstructurednatureofthevariousproceduresinadecision-makingcontextwasaddressed.Anexaminationoftheachievementsoftheobjectivesintheimplementeddigitalizationprojects,whichislackinginmanyotherstudies,wasalsoperformedandtheresultsarediscussedhere.Regardingtheobstacles,themostfrequentlymentioneddeficitswerethetechnicalobstacles,whiletheoverallcharacteris-ticsofthedeficitsweretechnicaltoo.Withregardstothe“problemdefinition,”“specificationoftargetsystem,”and“realization”elements,organizationaldeficitspredominate,while“lackofprotectionofprivacy”and“lackofdatasecurity”playsubordinateroles.Sometrendscouldbeidentifiedtoo,highlightingthattherearesomedeficitsthathaveaparticularinfluenceonthecourseofthedecision-makingprocessindigitalizationprojectsregardingcertaintopicsandincertainfunctionalareas.Dependingonthelocationofthedeficitsinthedecision-makingprocess,thiscanparticularlyaffectadministrativeandcross-departmentalprojects,aswellasVinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

331Improveddecisionsfordigitalizationprojectsindigitalbusinessecosystems317Table20.3Overviewoftheobstaclesmostcommonlyreportedinproduction-relateddigitalizationprojectsElementofTechnologyOrganizationPersonneldecision-makingprocessProblemdefinitionFinancialrestrictionsLackofapproachtochangeandDeficiency:end-to-endprocesssupportintegrationofdepartmentsconsiderationandknowledgeofdigitization(influence,pointsofcontact,androleof“human”)SpecificationoftheDifficultiesinclassifyingtheDeficiency:implementationstrategyDifficultiesindefiningrequirementstargetsystemgeneralconditionsandintegrationanddescriptionrequirementsinstrategies,“movingtarget”ExploringMissingresources,preconditionsDifficultyobtaininginformationDeficiency:willingnesstochange,alternativecoursesarenotmetanddata,lackoftechnologyknowledgeofdigitization(digitalofactionscouting,preconditionsarenotmetcollaboration,technologies,introduction,alternatives)EvaluationofDifficultiesindeterminingLackofdataandinformationLackofobjectivitywhenevaluatingalternativesargumentationofeffortandusesecurityandprivacyprotectionknownandunknownsolutionsDecisionLackofmethodologyforevaluatingMissing/ineptcommitteeandShort-termmindset,fear,andriskeffort/benefitrationinsufficientinvolvementofaversioninterfacepartnersImplementationMissingresources;difficultiesDeficiency:projectmanagementLackofcross-departmentalthinkingin:standardization,datatransfer,andwillingnessofexternalparties;andacting,cultureofinnovation,scalability,technicalintegrationdifficulties:integrationintoexistingandaccompanyingchangeandday-to-daybusinessReviewMissingresources,lackofDifficultiesincollecting,storing,DifficultiesinverifyingmethodologyformeasuringsuccessandevaluatingdataeffectivenessInformationLackofresourcesLackofcommunicationandDifficultiesinhandlinglargeprocessesexchange,difficultiesinhandlingamountsofreal-timedata(supplyanddatavolumesalignment)Source:BasedonJeglinskyandWinkler(2020).projectsinlogistics,andprojectscovering“processautomation,”“digitalizationofprocessesandobjects,”“introductionofinnovativeplanningandcontrolsoftware,”and“bigdata”clus-ters.Theempiricalstudyconfirmedtheresultsoftheliteraturereview,accordingtowhichall27identifiedobstaclescouldbequantified.Inaddition,furtherobstaclescouldbeaddedsothatatotalof41obstacles—clusteredaccordingtotechnology,personnel,andorganization—couldbeclassifiedinastructuredoverviewtomatchtheelementsinthepresentedphasemodel.ThisoverviewisshowninTable20.3.Finally,theempiricalstudyshowedtheneedforastructuringtasktobeperformedalong-sidethedecision-makingprocess.Thiscouldhelpacceleratetheprocessandimprovethedecision-makingquality,therebyenablingafaster,moreefficient,andmoreeconomicalimplementationofsuchdigitalizationprojectsinindustrialproduction.VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

332318HandbookondigitalbusinessecosystemsCONCEPTUALAPPROACHTOOVERCOMINGTHEOBSTACLESINDIGITALIZATIONPROJECTSINAPRODUCTIONENVIRONMENTThissectionpresentsanewconceptualapproachthatshowshowtoovercometheobstaclesthatmightemergeincarryingoutdigitalizationprojectsinaproductionenvironment.CatalogofRecommendationsforActionWiththehelpofthestructuredoverview(Table20.3),someexemplaryobstaclesthatcanoccurinthecourseofdigitalizationprojectsinaproductionenvironmentwereaddressedintheprevioussectionofthischapter.Now,somerecommendationsforactionaredevelopedtohelpinovercomingthoseobstacles.Theserecommendationsarenotonlyaimedattheobstaclesshownintheoverview,butarealsogenerallyapplicableforimprovingthedecision-makingprocessforanydigitalizationprojectinaproductionenvironmentsetting.Theidentifiedobstaclesareusedtocreateappropriaterecommendationsforactionforeachelementinthedecision-makingprocess.Foreachelementofthedecision-makingprocess,abundleofrecommendationswasderivedforactionsthatcanbetakentoovercometheobstaclesthatcanariseindigitalizationprojectsinproductionenvironments.Theobstaclesaresetoutinthestructuredoverview(Table20.3)andrecommendationsforactionaregiven.Theseactionsarenotrestrictedtodigitalizationprojects;forinstance,manyrecommendationsconcerningtheorganizationorpersonnelcanalsohelpinnon-digitalprojects.Asanexamplehere,wediscusstherecommendationsforactiontoaddressthe“problemdefinition”element;theserecommendationsinclude:●Obtaininganoverview(includingdocumentation)ofthebudgetandresourcesavailableforthedigitalizationtopics(short-,medium,andlong-term)onaregularbasis.●Developinganddeterminingaprocedurefordefiningthespecificproblemthatistobesolvedbytherespectivedigitizationproject.●Determiningaperspectiveonthewhole“end-to-end”processchain(forexample,fromthefirstcustomercontacttoinvoicingorlifecycleassessment)whentheproblemsindigitiza-tionprojectsarebeingdefined.●Makingstandarduseofclassiccreativitytechniques(forexample,problemtree,problemanalysis,suchascause‒effectanalysis)fordefinitionoftheproblemsinsuchprojects.●Developingaprocedurefortheproblemdefinitionandprojectimplementationaspectsbysettingupaworkshoporameetingwiththeinvolvementofallrelevantdepartments.●Establishingananalysismethodforclassifyingtheinterestandtargetgroups(stakehold-ers)(forexample,throughforce-fieldanalysis)forproject-relateduse.●Havingastandarddiscussionabouttheintegrationofchangemanagementtoaccompanychanges(dependingontheextentandscopeoftheforecastedchange).●Carryingoutregulartrainingandtheexchangeofbestpracticemanagementinformationonthetechnologies,potentials,andinfluencesaffectingthedigitalizationprojectintheproductionenvironment.●Havingregularexchangesbetweenemployeeswiththeknow-howaboutdigitalizationintheproductionenvironmentandemployeeswithspecificproblems.VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

333Improveddecisionsfordigitalizationprojectsindigitalbusinessecosystems319AssessingtheRecommendationsforActionBasedontherecommendationsforactionthatweredeveloped,thefollowingsectiondescribesamethodthatwedevelopedforhowtheserecommendationscanbeassessedandrankedforimplementationplanning.Evaluationoftherecommendationsforactioncomprisesthreedimensions,asfollows:●levelofeffectorimpact;●timeofonsetoftheeffect;●amountofeffort.Figure20.3Methodforevaluatingtherecommendationsforaction(filledinasanexample)Ingeneral,thecharacteristicsofthesethreedimensionsmustbeassessed,andunderastandardframework.Weconsiderthattheassessmentoftheimpactofarecommendationforactionshouldbebasedonthepercentageaccelerationtheactionwillbringtothedigitalizationproject.Thescaleisdividedintothreeareas:thefirstareaistheaccelerationofprojectsbyuptoamaximumof1percent;thesecondareaincludesarelativeaccelerationoftheprojectsbetween1and10percent;andthethirdareacoversalltherecommendationsforactionthatareestimatedcouldaccelerateprojectsbymorethan10percent.Theseconddimensionoftheevaluationisthepointintimeatwhicharecommendedactiontakeseffectafterimplementation.Here,too,theratingscaleisdividedintothreeareas:thefirstareaofthescaleismadeupofrecommendationsforactionthattakewilleffectwithinamaximumofsixmonths;thesecondareaincludesrecommendationsthatwilltakeeffectVinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

334320Handbookondigitalbusinessecosystemswithinatimeframeofsixto12months;andthethirdareacoversrecommendationsforactionthatwilltakeeffectmorethan12monthsafterimplementation.Amatrixisthensetupbasedonthesetwoassesseddimensions,namelythe“levelofeffect”and“timeofeffect,”creatinganumberofareasofeffect.Theareaofeffectinwhichtherecommendationsforactionareclassifiedwitharelativeaccelerationofmorethan10percentandapointintimeatwhichtheeffectoccursofuptoamaximumofsixmonthshasthebestrank(rankI).Recommendationsforactionthathavearelativeaccelerationofamaximumof1percentandapointintimeofmorethan12monthsfallintotheworsteffectrange(rankV).Therecommendationslistedinthislastrankingshouldnotbeimplemented.Thethirdassessmentdimensionistheamountofeffortrequired.Forthispurpose,therec-ommendationsforactionincludetheperson-daysrequiredaswellasthecostandinvestmentrequirements.Loweffortisexpectediftherecommendationsforactioncanbeimplementedwithresourcesthatcanbecoveredbyanexistingbudgetthatcanbeaccessedatshortnoticeandwithoutapprovalfromhighermanagement.Mediumeffortisassumediftherecommen-dationscanbeimplementedwithresourcescoveredbyabudgetthatcanbeaccessedatshortnotice,butonlywiththeapprovalofhighermanagement.Ahighlevelofeffortisnotediftheneededresourcesarenotcoveredbyabudgetandmustbeplannedandapprovedfirstbyhighermanagement.Thedescribedmethodforevaluatingtherecommendationsforactionforimprovingthedecision-makinginourcovereddigitalizationprojectsisshowninFigure20.3.AnalysisoftheDependenciesamongtheRecommendationsforActionInadditiontotheevaluationandprioritizationoftherecommendationsforaction,knowledgeoftheinterdependenciesamongtherecommendationsalsoplaysaroleinplanningimple-mentation.Forexample,end-to-endprocesschainsmustalsobeconsideredwhendefiningproblemsinordertobeabletoholisticallyestimatetheeffortrequiredforadigitalizationprojecttoproceed,andtoproperlyallowevaluationofthealternatives.Thisdependencycreatesanecessaryimplementationsequencethatmustbetakenintoaccountwhenplanningimplementation.Overall,therearefiveclustersofrecommendationsforactionthathelptospecifythenecessaryimplementationsequencesandthatmustbeincorporatedintothepracti-calimplementationofthepresentedconcept.ApproachforApplyingtheRecommendationsforActioninPracticeTheresultsoftheprevioussectionsmustnowbemergedinawaythatallowsdecision-makersandthoseresponsibleforcarryingoutthedigitalizationprojectinaproductionenvironmenttoapplythepresentedconcept.Todothis,fourspecificstepsshouldbeimplemented,asfollows:1.Reviewoftheobstaclemaptoidentifyandraiseawarenessoftheobstaclesinthedecision-makingprocessforcarryingoutdigitalizationprojectsinaproductionenvironment.2.Reviewoftherecommendationsforactionwithregardtoexcludingrecommendationsthatarenot(meaningfully)feasible,orthatalreadyexistduetothecharacteristicsoftheprevailingframeworkconditionsanddocumentation.VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

335Improveddecisionsfordigitalizationprojectsindigitalbusinessecosystems3213.Evaluationoftherecommendationsforactionaccordingtotheiranticipatedlevelofeffec-tivenessandthepointintimethattheyarelikelytohavearealeffect,aswellasaroughestimateofthecostsrequiredaccordingtoagivenevaluationmethod.4.Planningoftheimplementationsequenceoftherecommendationsforactionbymergingtheresultsfromtheevaluationmethod(rankingoftheareasofactionandconsiderationofthenecessaryeffort)andtheidentifiedrecommendationsforactionandhowtheybuildoneachother.CONCLUSIONPreviousresearchhasshowntheneedtocomprehensivelycapturetheobstaclesthatmightariseinthecourseofperformingdigitalizationprojectsinaproductionenvironment,andtheneedtoproperlystructuretheminaprojectenvironmentandthewaystoovercomethemsystematically.Ourscientificchapteraddressesthisresearchneedandprovidesthefollowingacademicandpracticalcontributions.First,wesystematicallyextractedtheobstaclesreportedinpreviousstudiesofdigitalizationprojectsperformedinproductionenvironmentsfromthescientificliteratureandconfirmedtheirvalidity,andextendedtheknow-howgleanedfromthesebyperforminganempiricalstudytoaddfurtherinsights.Furthermore,aphasemodelofadecision-makingprocessforthecourseofdigitalizationprojectswasdevelopedandverifiedempirically.Second,wedevelopedrecommendationsforactiononhowtoeliminatetheobstaclesthataremostlikelytoariseindigitalizationprojects.Third,wedevelopedafour-stepapproachthatcanenabledecision-makersinmanufacturingcompanies:(1)torecognizethelikelyobstaclesthatmightarise;(2)toselecttheappropriaterecommendationsforactiontoovercomethem;(3)toprioritizetheseusingtheavailabletechnologyportfolio;and(4)toplantheactionschronologically,takingintoaccounttheirdependencies.Thepositiveeffectstobeachievedbythisapproachcanimproveacompany’sabilitytocopewiththeever-changingrequirementsfornewproducts,services,andvaluechains,triggeredbycustomerswhowanteverythinganywhere,quicker,cheaper,andmoretailoredtotheirneeds(Hopkins,2021).Thisisdrivingcompaniestoseektostrengthenthehorizontalandverticalsystemintegrationoftheirentirevaluecreationnetwork.Relatedtotheproductionenvironment,successfuldigitalizationprojectscansupportproductionflexibility,efficiency,andproductivity(Baietal.,2020;Ibarraetal.,2018)andhelpcompaniestokeeppacewiththeirgrowingcustomerexpectations.Here,theadoptionofemergentinformation,communication,intelligence,andadvancedmanufacturingtechnologies(forexample,theindustrialInternetofThings,cyber-physicalsystems,bigdataandanalytics,cloudcomputing,autonomousrobots,additivemanufacturing)canenablemanufacturerstounlockthefullpotentialofDBEs.Finally,wewouldliketopointoutthelimitationsofourresearchwork.Withourstructuredoverview,wealsoaddresssomeobstaclesthatdonotnecessarilyjustoccurinthecontextofdecision-makingprocessesofdigitalizationprojects,butalsoplayaroleintraditionalprojects.Furthermore,itshouldbenotedthattheresultingoverviewshouldnotbeconsideredarigidconstruct.Rather,itisa“dynamicdocument”thatshouldbeadaptedwhenfurtherknowledgeisacquired.Basically,thisoverviewisintendedtogivethereaderanimpetusforconsideringVinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

336322Handbookondigitalbusinessecosystemswhichobstaclesindigitalizationprojectsmightariseintheirproductionenvironment,andthepossiblewaystoovercometheseobstacles.Furthermore,wegavesomegeneralrecommendationsforactiontoimprovethedecision-makingprocessesfordigitalizationprojectsinaproductionenvironment.Notalloftheserecommendationsapplytoeverymanufacturingcompanyortoeveryareaofpro-duction.Forverysmallcompanies,forexample,itislikelynotanoptiontosetupaseparatestructurefordigitalizationprojects.Also,thedevelopmentofin-houseexpertiseininnovativetechnologiesandthehandlingoflargeamountsofdata(datascience)maybeverydifficultforsmallercompaniesbecausetheymaynothavethenecessaryskillsavailable.Demographicaspectsalsoplayaroleinthiscontext.Therefore,thespecificprevailingframeworkconditionsmustbeconsideredindividuallybytheuserandthesedonotconstituteapartoftheapproachforapplyingtherecommendationsforaction.However,theyaretakenintoaccountintheapproach,inthattheusershouldindividuallydeterminetheselectionandprioritizationoftherecommendedactions.Thisconceptualapproachisbasedonanempiricalvalidationofourfindingsfromascien-tificliteraturecarriedoutinGerman-speakingcountries.Thescientificworkinthosestudiescoveredproductionareasandproduction-relatedareasinmanufacturingcompanies.However,theobstaclesinitiallyidentifiedintheGermanandEnglish-languageliteratureledustoassumethattherelationshipspresentedwouldapplybeyondjusttheGerman-speakingarea,aswellastoothercompanyareasandothereconomicsectors.Thisoffersaperspectiveforfurtherscientificwork.REFERENCESAguanno,K.(2004).ManagingAgileProjects.Lakefield,Canada:Multi-MediaPublications.Åkerman,M.,Lundgren,C.,Bärring,M.,Folkesson,M.,Berggren,V.,etal.(2018).Challengesbuildingadatavaluechaintoenabledata-drivendecisions:apredictivemaintenancecasein5G-enabledman-ufacturing.ProcediaManufacturing,17,pp.411–418.Bai,C.,Dallasega,P.,Orzes,G.,andSarkis,J.(2020).Industry4.0technologiesassessment:asustaina-bilityperspective.InternationalJournalofProductionEconomics,229,107776.Batz,A.,Kunath,M.,andWinkler,H.(2018).DiscrepanciesbetweenclusterservicesandSMEs’needsconstrainingthecreationofacultureofinnovationamidstIndustry4.0.ScientificJournalofLogistics,18(3),pp.387–405.Becker,T.,andStern,H.(2016).Futuretrendsinhumanworkareadesignforcyber-physicalproductionsystems.ProcediaCIRP,5,pp.404–409.Bi,Z.,andCochran,D.(2014).BigDataanalyticswithapplications.JournalofManagementAnalytics,1(4),pp.249–265.Bierer,A.,Götze,U.,Köhler,S.,andLindner,R.(2016).ControlandevaluationconceptforsmartMROapproaches.ProcediaCIRP,40,pp.699–704.Bildstein,A.,andSeidelmann,J.(2014).Industrie4.0-readiness:MigrationzurIndustrie4.0-Fertigung.In:T.Bauernhansl,M.tenHompel,B.Vogel-Heuser(eds),Industrie4.0inProduktion,AutomatisierungundLogistik:Anwendung.Technologien.Migration.Wiesbaden:Springer,pp.581–597.Boehm,B.(2002).Getreadyforagilemethods,withcare.Computer,35(1),pp.64–69.Brettel,M.,Friederichsen,N.,Keller,M.,andRosenberg,M.(2014).Howvirtualization,decentralizationandnetworkbuildingchangethemanufacturinglandscape:anIndustry4.0perspective.InternationalJournalofMechanical,Aerospace,IndustrialandMechatronicsEngineering,8(1),pp.37–44.Buer,S-V.,Strandhagen,J.O.,andChan,F.T.S.(2018).ThelinkbetweenIndustry4.0andleanman-ufacturing:mappingcurrentresearchandestablishingaresearchagenda.InternationalJournalofProductionResearch,56(8),pp.2924–2940.VinzenzJeglinskyandHerwigWinkler-9781839107191DownloadedfromPubFactoryat05/28/202209:57:56AMviaColumbiaUniversityLibrary

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34121.Meta-studyofsuccess-relatedfactorsofSaaSprovidersbasedonacloudcomputingecosystemperspectiveSebastianFloereckeandFranzLehnerINTRODUCTIONThecommercialintroductionofcloudcomputinginthemid-2010sbyinformationtechnology(IT)giantssuchasAmazonandMicrosoftledtoanexpansionandpartialreplacementoftra-ditionalvaluechainsinITserviceprovisionbynetwork-likerelations(Leimeisteretal.,2010).Theresultisanincreasinglycomplexandopaquebusinessecosystem,inwhichincumbentITserviceprovidersaswellasstart-upcompaniesaregiventheopportunitytoassumenewroles(KellerandKönig,2014).Aroleintheecosystemcontextisasetofsimilarvaluepropositions,offeredtosimilarcustomersbyorganizations(Böhmetal.,2010).Organizationscantakeuponeormoreoftheserolesatthesametime(FloereckeandLehner,2016).Thekeydriverforthecloudcomputingecosystem’semergencewasitsenablingofnew,innovativebusinessmodels,bothontheprovider’ssideandthecustomer’sside(Marstonetal.,2011).Thebasicrolesofthecloudcomputingecosystemcompriseprovidersofthethreeinterre-latedcloudservicelayerswhichareasfollows:InfrastructureasaService(IaaS),PlatformasaService(PaaS),andSoftwareasaService(SaaS)(MellandGrance,2011).Basedonthese,amultitudeoffurtherroles,suchasaggregators,integrators,managedserviceproviders,andmarketplaceoperators,haveevolved(FloereckeandLehner,2016).Overtheyears,thecloudcomputingecosystemhasbecomeincreasinglycomplexandnon-transparentduetothecontinuousexpansionofthenumberoforganizations,roles,andservicelinkages(Herzfeldtetal.,2018).Inordertogainanoverviewandimprovetransparency,researchershaveattemptedtofacilitateunderstandingbydesigningdescriptivemodels(FloereckeandLehner,2015).ArecentandcomprehensivemodelisthePassauCloudComputingEcosystem(PaCE)model(Floereckeetal.,2021).Itwasdevelopedbyconductingasystematicanalysisandsynthesisofthepreviouslypublishedmodels,andbyevaluatingitsstructuralequivalenceandcomplete-nessaccordingtotherealcloudbusiness.Asawhole,thePaCEmodelrepresentsadetailedcategorizationschemathatpromotesunderstandingandprovidesvariouswaysofinvestigat-ingtheorganizationsbelongingtothecloudcomputingecosystemandtheirrelationships;forexample,withafocusonbusinessmodels,risks,andvaluestreams(Floereckeetal.,2021).Incontrast,ecosystemrole-independentexaminationsoforganizationsarenotentirelyconclu-sive(FloereckeandLehner,2018).TheroleofSaaSproviderssubsumesthelargestcloudmarketsegmentandoffersready-to-usesoftwareapplicationsaccessibleonline(Buxmannetal.,2008).Gartner(CostelloandRimol,2020)forecastsagrowthof15.6percentin2021toatotalofUS$121.0billion,comparedtotheUS$104.7billionin2020.Thiswouldcorrespondto39.4percentoftheoverallcloudmarketvolume.AccordingtoGartner(CostelloandRimol,2020),themaingrowth327SebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

342328Handbookondigitalbusinessecosystemsdriversarethecontinuedshiftsfromon-premiselicensesoftwaretosubscription-basedSaaSmodels,inconjunctionwiththeincreasedneedfornewsoftwarecollaborationtoolsduringtheCOVID-19pandemic.Despitenumerousconsolidations,mergers,andacquisitionsoverthepastyears,theSaaSmarketsegmentstillremainsrelativelyfragmented(GP.Bullhound,2018).MicrosoftistheleadingSaaSvendorwithaworldwidemarketshareofaround17percentin2019,followedbySalesforce,Adobe,Oracle,andSAP(Technavio,2019).Arivalrybetweenborn-in-the-cloudandtraditionalsoftwarevendorsattemptingtoconverttheirhugebaseofon-premisesoftwarecustomerstoSaaSusersisevident(SynergyResearchGroup,2018).NotalleffortsofbothgroupsofSaaSprovidershavebeencrownedwithsuccess,quitethecontrary:numerousSaaSprovidershavedifficultiesindesigning,implementing,andmanag-ingsuccessfulbusinessmodels(Clohessyetal.,2016;Floerecke,2018;HabjanandPucihar,2017).Severalresearchers(e.g.,ErnstandRothlauf,2012;Schirmetal.,2015;Waltheretal.,2012;Wienekeetal.,2013)haverecognizedthisproblemandpursuedthequestionofwhichfactorsdeterminetheSaaSproviders’success.Theresultoftheirresearchactivitiesarehypothesesonsuccess-drivingbusinessmodelcharacteristics(SDBMCs)andsuccessfactors.TheecosystemrolethathasbeenaddressedmostfrequentlybyresearchersistheSaaSprovid-er’srole.However,thestudiesfailtoconnecttoeachother,resultinginagrosslyincompleteholisticoverviewofthecurrentstateofresearch(Floerecke,2018).Underthesecircumstances,executiveswithinSaaSproviderslacknecessarysupportfortheirdecision-makingprocesses.Thegoalistoimprovethisunsatisfactorysituationbymeansofacomparativeandintegrativemeta-studyofstudiesonSDBMCsandsuccessfactorsofSaaSproviders.Inthischapter,thecloudcomputingandthebusinessecosystemconceptperse,andpar-ticularlythePaCEmodel,whichservesastheresearchframeworkofthisstudy,areexplainedfirst.Thechapterthendescribestheresearchdesignindetail,andpresentstheobtainedresults.Inadditiontotheproposedsuccess-relatedfactors,theinvestigatedconceptswithinthemeta-studycomprise:(1)levelofabstraction;(2)coverageofbusinessmodelcomponents;(3)domain;(4)providersize;(5)foundationalconcept;(6)researchmethod;(7)publicationdate;(8)researchers’origin;and(9)publicationsource.Thechapterconcludeswithasummary,acriticalreflectionoftheresults,andfutureusagescenariosofthePaCEmodel.CLOUDCOMPUTINGANDBUSINESSECOSYSTEMBasedonthestandarddefinitiondevelopedbytheNationalInstituteofStandardsandTechnology(NIST),cloudcomputingis“amodelforenablingubiquitous,convenient,on-demandnetworkaccesstoasharedpoolofconfigurablecomputingresources(forexample,networks,servers,storage,applications,andservices)thatcanberapidlyprovisionedandreleasedwithminimalmanagementeffortorserviceproviderinteraction”(MellandGrance,2011,p.2).Thekeycharacteristics(on-demandself-service,broadnetworkaccess,resourcepooling,rapidelasticity,andservicemeasurement)distinguishcloudcomputingservicesfromtheirtraditionalcounterpart:theon-premiseIT(Marstonetal.,2011).Bothscientistsandexpertsfundamentallydifferentiatebetweenthreeservicemodelswhichforminterrelatedlayersthatarebuiltuponeachother:IaaS,PaaS,andSaaS(Armbrustetal.,2010).Cloudcomputingservicesoneachservicelayercanbeprovidedviafourmaindeploymentmodels(public,private,hybrid,andcommunity).AdeploymentmodelprimarilydefineswhereanSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

343Meta-studyofsuccess-relatedfactorsofSaaSproviders329applicationand/ordataisstored,andhowcustomerscaninteractwiththem(Zhangetal.,2010).Thetechnologythatenablescloudservicesisnotnew.CloudcomputingisanITopera-tionmodelthatcombinesasetofexistingtechnologiesandconceptssuchasvirtualization,autonomiccomputing,gridcomputing,andusage-basedpricing(Fosteretal.,2008).Despiteitslowdegreeofnoveltyintechnologicalterms,cloudcomputinghasfundamentallyalteredthelifecycleofITresourcesandapplications,meaninghowtheyaredesigned,imple-mented,deployed,provided,managed,maintained,billed,andused(Armbrustetal.,2010).Severalscholarsthereforeclassifycloudcomputingnotexclusivelyastechnology,butasaco-evolutionofcomputingtechnologyandbusinessmodels(FloereckeandLehner,2018).Furthermore,cloudcomputingisatthecoreofenablingdigitaltransformationinitiativesthatarecurrentlytakingplaceacrossallindustries(Benlianetal.,2018).TheimportanceofcloudcomputinginthiscontextwillprobablyincreaseinthemediumtermduetotheCOVID-19pandemic.ThedebateonbusinessecosystemswasinitiatedbyMoore(1993).Heusedbiologicaleco-systemsasametaphortodepictmulti-organizationalnetworks,inwhich“companiescoevolvecapabilitiesaroundanewinnovation:theyworkcooperativelyandcompetitivelytosupportnewproducts,satisfycustomerneeds,andeventuallyincorporatethenextroundofinnova-tions”(Moore,1993,p.76).Numerousscholarsadoptedthisapproachinsubsequentyears,investigatedbusinessecosystemsfromvariousperspectives,andapplieddifferentresearchmethods.Thisisconsideredakeyreasonwhynoconciseandcommondefinitionhasyetbeenestablished(Rongetal.,2018).Thegeneralconsensusisthatabusinessecosystemcontainsamultitudeoflooselycoupledentitiesactingaspartners,subcontractors,complementors,customers,orcompetitors,whichconstitutetheinnerpartoftheecosystem.Furtherorganiza-tions–legal,political,cultural,andsocialforces–formtheperiphery(environment)formtheperiphery(environment)oftheecosystem(Adner,2017).Businessecosystemsareconsideredatdifferentabstractionlevels,forexample,atenterprise(forexample,Apple’secosystem),sector(forexample,cloudecosystem)orregional(forexample,SouthernGermany)levels(Jacobidesetal.,2018).Withtheexceptionoftheenterpriselevel,anorganizationcannotactivelydecidewhethertobecomeamemberofabusinessecosystemornot.Regardingthesectorlevel,eachorgan-izationthatoffersorusesthespecifictechnologyautomaticallybecomespartofthebusinessecosystem(Nischaketal.,2017).Asorganizationscontinuouslyenter(forexample,businesscreations)andleave(forexample,businessbankruptcies)therespectivebusinessecosys-tem,andrelationshipsareformed,renewed,anddissolved,abusinessecosystemrepresentsahighlydynamicsystem(Basoleetal.,2015).ThisunderstandingisinaccordancewiththebiologicalperspectivedescribedbyMoore(1993).Inadditiontobusinessecosystems,someothertypesofecosystems,suchasdigital,innovation,platform,service,software,ortechnol-ogyecosystems,arementionedintheliterature(Benedict,2018).Theyarecharacterizedbyslightlydivergentpropertiesanddifferentperspectives,buttheboundariesarehighlyfluid.Consequently,thetermsareoftenutilizedsynonymously(JärviandKortelainen,2017)andarenotexplainedinanyfurtherdetailshere.Inordertounderstandtherelationshipsandinterdependenciesbetweentherolesformarketactorsinabusinessecosystem,theso-calledecosystemmappingisoftenusedforvisualization(Baharietal.,2015;Benedict,2018).Withinarole-basedecosystemmodel,eachorganizationisdescribedasanindependentagentwhichcanassumeoneormultipleroles(FloereckeandSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

344330HandbookondigitalbusinessecosystemsLehner,2015).Businessecosystemmodelscanbeclassifiedasdescriptivemodelsandafter-images,definedbystructuralsimilarityandcompleteness(Lehner,1995).Role-basedbusinessecosystemmodelshavebeenproposedforavarietyofdomains,forexample,appgenerators(FriedlandFloerecke,2020),blockchain(Riasanowetal.,2018a),FinTech(Riasanowetal.,2018b),andInternetofThings(PapertandPflaum,2017).Authorsofecosystemmodelscommonlyhighlightthattheirmodelcreatestransparencyandallowsorganizationstoreflectontheirrolesandassignthemtoarolecluster(FloereckeandLehner,2016).CLOUDCOMPUTINGECOSYSTEMThecloudcomputingecosystemproducesservicesinalooselycouplednetworkthroughservicerefinementandresourceintegration(Leimeisteretal.,2010).Thisisfacilitatedinparticularbythemultilayeredarchitectureofcloudservices(IaaS,PaaS,SaaS),andalsobytheincreasinglymodularstructurewithineachlayer,thegrowinglevelofstandardizationandusageofopen-sourcecomponents,andlastbutnotleast,byon-demandself-service(FloereckeandLehner,2016).Sinceitsemergence,thecloudcomputingecosystemhasbeencontinuouslyexpandingthenumberoforganizations,roles,andservicelinkages,wherebyithasbecomeincreasinglycomplexandnon-transparent(Herzfeldtetal.,2018).Togainanoverviewandimprovetransparency,severalattemptshavebeenmadetoformallydepictthecloudcomputingecosystemthroughadescriptivemodel(FloereckeandLehner,2015).However,theproposedmodelsshowconsiderabledifferenceswithregardtotheirconstructs(forexample,numberofroles,typesofrelationships,andscopeofthemodel)andtheirformofpresentation(forexample,non-standardizedgraph-basedandprocessmodels)(FloereckeandLehner,2016).Thissituationhasbeenconsiderablyimprovedbyarecentlypublishedmodel,thePaCEmodel(Figure21.1)(Floereckeetal.,2021),whichwasdevelopedbasedonasystematicanalysisandsynthesisofthepreviouslypublishedmodelsandevaluatedregardingitsstructuralequivalenceandcompletenessaccordingtotherealcloudbusiness.ThePaCEmodelcontains31rolesformarketactors,whicharegroupedintofivecategories(client,vendor,hybridrole,support,andenvironment);italsodisplaystherelationshipsbetweentheroles.Avendorprovidesbasicservicesand/orproductsfortheircustomers.Vendorsfocusingoninfrastructuralproductsand/orservicesarepartoftheso-calledinfrastructurearea.Inlinewiththecentralprincipleofservicerefinementandresourceintegrationtowardstheendcus-tomer(c1),oneorganizationcanbothassumetheroleofacustomerandavendor.Thisrolecategoryislabelledasthehybridroleandillustratedbysplitnodes.Theendcustomer(c1),whoistheonlyrepresentativeoftheclientcategory,doesnotdeliverservicestoanyotherrole.Supporterscompriserolesofferingnon-technologicalservices,suchascertification,training,andconsulting,whicharefundamentaltoenablingoptimumusageandsupplyingofcloudser-vices.Thecategoryenvironmentincludesrolesintheperipheryoftheecosystem.Theactorsaremostlypublicadministrationsornon-governmentalorganizations.Thelabellingofthedirectededgesexplainswhichmainservicesand/orproductsareassignedtoanindividualrole.Itispossibletoidentifyprevailingroleclustersbylinkingarepresentativesetofconcreteorganizationstotheircorrespondingecosystemroles.Dominantroleclustersallowinsightsintowhichrolesleadtosynergyeffectsandwhicharedisjunctiveorevenmutuallyexcluding(Schwarzetal.,2017;Winterhalteretal.,2016).Basedonaquantitativecross-sectionalanaly-siscomprising758organizations,followedbyatwo-stepclusteringapproach,Floereckeetal.SebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

345Meta-studyofsuccess-relatedfactorsofSaaSproviders331(2021)identifiedthefollowingfivedominantroleclustersinthecloudcomputingecosystem(thesetsofabbreviatedrolesarenotedinbrackets):●Serviceproviderssupportingnewcloudadopters(sup5,hyb8,hyb4,hyb9).●Thebigplayersofcloudbusiness(hyb1,hyb2,hyb3,hyb9,vend4,vend5,sup2,sup3,sup4,sup5,env5).●Telecommunicationscompanieswithcomplementarycloudofferings(hyb1,vend4,vend1).●SaaSdevelopersandproviderswithsupportservices(vend5,hyb3,sup4).●Certificationandtrainingproviders(sup2,sup3).ThefollowingrolesarecommonlyinisolationasdemonstratedbyFloereckeetal.(2021):standarddeveloper(env1),hardwaredeveloper(vend3),researchinstitute(env3),datacentredeveloper(vend2),andlegislator(env2).Insummary,itwasshownthatthecloudcomputingbusinesstakesplaceinroleclusters,andthatonlyveryfewrolesarefoundisolated.Thesuccessinthecloudbusinessisthereforecharacterizedbyamultitudeofactivities,whichgobeyondthetraditionalcoarse-grainedmarketsegmentationofmarketresearchinstitutes.Source:Floereckeetal.(2021).Figure21.1ThePassauCloudComputingEcosystem(PaCE)modelSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

346332HandbookondigitalbusinessecosystemsTable21.1GeneralconditionsofthestructuredliteraturereviewCharacteristicsCategoriesFocusResearchOutcomesResearchMethodsTheoriesApplicationsGoalIntegrationCriticismCentralIssuesPerspectiveNeutralRepresentationEspousalofPositionCoverageExhaustiveSelectiveRepresentativeCentral/PivotalOrganizationHistoricalConceptualMethodologicalAudienceSpecializedScholarsGeneralScholarsPractitionersGeneralPublicSource:Cooper(1988).ThebasicrolesofthecloudcomputingecosystemcompriseprovidersofIaaS(hyb1),PaaS(hyb2),andSaaS(hyb3).Asexplainedintheintroductorysection,thischapterfocusesontheSaaSprovider’srole(hyb3).TheSaaSmodelisanadvancementoftheapplicationserviceproviding(ASP)approachwhichoriginatedinthe1990s.Thecentraldifferenceisthat,con-trarytotheASP’ssingle-tenantarchitecture,SaaSusesamulti-tenantarchitecturethatallowssubstantiallyhigherscalabilityandlowercosts(Buxmannetal.,2008).Eachecosystemroleisrelatedtoandrestrictedbyspecificbusinessopportunitiesformarketactors.Therefore,eachecosystemrolemustbeinstantiatedbyanappropriatebusinessmodel(Iivarietal.,2016).Abusinessmodelcanbedefinedasadetailedspecificationofhowanecosystemroleisrealizedbyanindividualactor(FloereckeandLehner,2018).Inthisstudy,thePaCEmodelisappliedinordertoconductafine-grainedanddifferentiatedanalysisofSaaSbusinessmodels.RESEARCHDESIGNTheaimofthischapteristopresenttheconductedcomparativeandintegrativemeta-studyofresearchonSDBMCsandthesuccessfactorsofSaaSproviders.Forthispurpose,atwo-stepapproachwascarriedoutcomprising:(1)aliteraturereview;and(2)acomparativeanalysisandsynthesis.ThefirststepwastheidentificationofavailableacademicliteratureonSDBMCsandsuccessfactorsofSaaSproviders.Therefore,astructuredliteraturereviewwascarriedoutaccordingtotheguidelinesdescribedbyWebsterandWatson(2002).TherecommendationsmadebyVanBrockeetal.(2009)werealsoapplied.AssuggestedbyVanBrockeetal.(2009),thegeneralconditionsoftheliteraturereviewwerespecifiedinadvance,usingamuch-citedtaxonomydevelopedbyCooper(1988).Thistaxonomycomprisessixcharacteristics,whichcantakevariouspredefinedvalues.Table21.1illustratesthetaxonomy(Cooper,1988);thefieldsrelevantforthisliteraturereviewareinbold.ThefocusoftheliteraturereviewwasprimarilyontheidentificationofresearchresultsfromexistingstudiesonSDBMCsandsuccessfactorsofSaaSproviders,aswellastheappliedresearchmethodsandtheories.Furtherrelatedaspectswhichwereconsideredrelevantwillbediscussedbelow.Thegoalwastoidentifycentralissues,toanalyseavailableliteraturecriti-cally,andtopresentitintheliteraturereview.Forthispurpose,awidelyneutralperspectivewastaken.Thetargeteddegreeofcoverageofsourceswasexhaustive.Inordertoorganizetheliteratureanditsfindings,aconceptualapproachwasadopted.ThefactorsthatinfluenceSaaSSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

347Meta-studyofsuccess-relatedfactorsofSaaSproviders333providers’successareofparticularinteresttoscholarswhodealwiththebusinessperspectiveoncloudcomputing,aswellasexperts.Thus,thesecanbeconsideredtheintendedreadership.Afterdeterminingthegeneralconditionsoftheliteraturereview,thedatabasestobeusedtosearchforrelevantliteraturewerechosen.InaccordancewithKnackstedtandWinkelmann(2006),databasesallowingbothaninterdisciplinaryandafield-specificsearchwereselected:AISeLibrary,EBSCOHost,EmeraldInsight,GoogleScholarandScienceDirect.Afterwards,thefollowingkeywordswerederivedfromthestudy’sgoal:“SuccessFactors.”“Success,”“Profitability,”“BusinessModels,”“Strategy,”“Guidelines,”and“Recommendations.”ThesekeywordsaswellastheirGermanequivalentswerecombinedbyalogicalANDoperationwith“SoftwareasaService”and“SaaS,”respectively.Thetitleandabstractofeachofthelistedpublicationswerescreenedinordertochecktheirrelevance.ContributionswereconsideredrelevantwhentheyprovidetheirownoranextendedlistofSDBMCsorsuccessfactorsofSaaSproviders.Thismeansthatpublicationswhichonlymarginallyaddressthetopic,forexamplebydiscussingsinglefactors,weredisregarded.Inthecaseofapositiveassessmentoftitleandabstract,thepublicationwasreadcompletely.Toavoidoverlookingliterature,thebibliographiesofrelevantarticleswerechecked(backwardsearch).Inaddition,aforwardsearchwascarriedout.Thisapproachwasrepeatediterativelyuntilnofurtherrelevantpublicationscouldbeidentified.Studiesonothercloudcomputingecosystemrolesaswellasecosystemroleoverarchinganalyseswereexcluded,becauseitisuncleartowhatextenttheirfindingscanbetransferredtoSaaSproviders.Asaresult,37publications(theyarenotalllistedintheReferencessectionofthischapter)wereassessedasrelevant;seeAppendixTable21A.1.SincethegoalwastocompareandsynthesizetheliteratureonSDBMCsandsuccessfactors,thecreatedliteraturebasewasinvestigatedbyusingaconcept-centric,bottom-upapproach(seeTable21.2),notanauthor-centricapproach.AllthementionedSDBMCsandsuccessfactorswerelistedbeforetheywereassignedtoaggregatedconceptsintheconceptmatrix.Inthisaggregationstep,synonymsandvaryingabstractionlevelswereharmonized.ItisimportanttonotethatinthisstudytheindividualSDBMCsandsuccessfactorswerenotcheckedforplausibility,soasnottoloserelevantaspectsinthisearlystage.Thegeneralandcomparativequantitativeevaluationofthefactors’individuallevelofimpactonsuccessandtheirinteractionsinaccordancewiththebehaviouralscienceresearchparadigm(MarchandSmith,1995)shouldbepartofafollow-upstudy.Thechallengeduringtheanalysisandsynthesiswastopreventoverlapping(mutualexclusiveness)oftheresultingfactors,andatthesametimetoachieveamaximumdegreeofcompleteness.Inordertoreachameaningfulstructuring,theconsolidatedfactorsweresortedintothecomponentsofthebusinessmodelcanvasbyOsterwalderandPigneur(2010).Thecomponentsofthiscomprehensivebusinessmodelframeworkcomprisevaluepropositions(VP),keyresources(KR),keyactivities(KA),partnernetwork(PN),customersegments(CS),channels(C),customerrelationships(CR),revenuestreams(RS)andcoststructure(CO)(OsterwalderandPigneur,2010).Thosefactorsthatwereallocatedtomorethanonecomponentwereconsideredandthenassignedtothemostrelevantcomponent.Besidetheproposedsuccess-relatedfactors,themeta-studycoveredthefollowingninecriteria:(1)levelofabstraction;(2)coverageofbusinessmodelcomponents;(3)domain;(4)providersize;(5)foundationalconcept;(6)researchmethod;(7)publicationdate;(8)researchers’origin;and(9)publicationsource.SebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

348334HandbookondigitalbusinessecosystemsLiteratureSourcesAaenandGjerløff,2015;Aleemetal.,2019;Benlianetal.,2010;Biggelebenetal.,2009;ChauhanandJaiswal,2015;Fontana,2009;Garrisonetal.,2012;JohaandJanssen,2012;Kangetal.,2010;NedbalandStieninger,2019;Pervezetal.,2010;Repschlaeger,2013;Repschlaegeretal.,2012;Resceanuetal.,2014;Schirmetal.,2015;SøilenandHasslinger,2012;Stuckenbergetal.,2011;TakandPark,2018;Waltheretal.,2012;Waltheretal.,2013;Wienekeetal.,2013AaenandGjerløff,2015;Aleemetal.,2019;Biggelebenetal.,2009;Daasetal.,2013;Duttetal.,2017;Floerecke,2018;Fontana,2009;GerhardterandOrtner,2013;Kangetal.,2010;LuomaandRönkkö,2012;Popp,2011;Repschlaeger,2013;Repschlaegeretal.,2012;Resceanuetal.,2014;Stampfletal.,2013;TakandPark,2018;TyrväinenandSelin,2011;Waltheretal.,2012;Waltheretal.,2013;Wienekeetal.,2013AaenandGjerløff,2015;Biggelebenetal.,2009;Duttetal.,2017;Floerecke,2018;GerhardterandOrtner,2013;JohaandJanssen,2012;LaandKim,2009;LuomaandRönkkö,2012;NedbalandStieninger,2019;Pervezetal.,2010;Repschlaegeretal.,2012;Resceanuetal.,2014;Schirmetal.,2015;Stuckenbergetal.,2011;TakandPark,2018;Tsaietal.,2010;Waltheretal.,2012;Waltheretal.,2013;Wienekeetal.,2013AaenandGjerløff,2015;Benlianetal.,2010;Garrisonetal.,2012;GerhardterandOrtner,2013;JohaandJanssen,2012;LaatikainenandOjala,2014;Popp,2011;Repschlaeger,2013;Repschlaegeretal.,2012;Schirmetal.,2015;Tsaietal.,2010;TyrväinenandSelin,2011;Waltheretal.,2012;Waltheretal.,2013;Wienekeetal.,2013AaenandGjerløff,2015;Aleemetal.,2019;Biggelebenetal.,2009;Daasetal.,2013;Garrisonetal.,2012;Kangetal.,2010;LaatikainenandOjala,2014;LaandKim,2009;LuomaandRönkkö,2012;Pervezetal.,2010;Repschlaegeretal.,2012;Schirmetal.,2015;Stampfletal.,2013;Stuckenbergetal.,2011Benlianetal.,2010;ChauhanandJaiswal,2015;Duttetal.,2017;ErnstandRothlauf,2012;Garrisonetal.,2012;GerhardterandOrtner,2013;LaandKim,2009;Linetal.,2015;NedbalandStieninger,2019;Repschlaegeretal.,2012;SøilenandHasslinger,2012;Stampfletal.,2013;TakandPark,2018;Waltheretal.,2013AaenandGjerløff,2015;ChauhanandJaiswal,2015;Garrisonetal.,2012;GerhardterandOrtner,2013;LuomaandRönkkö,2012;Popp,2011;Repschlaegeretal.,2012;Resceanuetal.,2014;Stuckenbergetal.,2011;TakandPark,2018;Tsaietal.,2011;Waltheretal.,2013;Wienekeetal.,2013AaenandGjerløff,2015;Daasetal.,2013;Floerecke,2018;Fontana,2009;GerhardterandOrtner,2013;MorganandConboy,2013;NedbalandStieninger,2019;Resceanuetal.,2014;Schirmetal.,2015;Stampfletal.,2013;Stuckenbergetal.,2011;TakandPark,2018;Waltheretal.,2013;Wienekeetal.,2013Daasetal.,2013;Duttetal.,2017;Fontana,2009;JohaandJanssen,2012;LaatikainenandOjala,2014;LuomaandRönkkö,2012;Mäkiläetal.,2010;Repschlaegeretal.,2012;Schirmetal.,2015;SøilenandHasslinger,2012;Stuckenbergetal.,2011;TakandPark,2018;Tsaietal.,2011Aleemetal.,2019;Biggelebenetal.,2009;Fontana,2009;LaatikainenandOjala,2014;LuomaandRönkkö,2012;Mäkiläetal.,2010;Repschlaegeretal.,2012;Schirmetal.,2015;SøilenandHasslinger,2012;TakandPark,2018;TyrväinenandSelin,2011;Waltheretal.,2013Frequency24241915141414141312ThetoptenfactorsBMcomponentKAVPVPVPVPVPKAVPRSVPTable21.2FactorSecurityandPrivacyCustomizationAvailabilityFlexibilityScalabilityFunctionsandFeaturesMaintenanceandSoftwareUpdatesUserExperience/UsabilityUsage-BasedPricingIntegrationSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

349Meta-studyofsuccess-relatedfactorsofSaaSproviders335RESULTSANDDISCUSSIONTheresultsoftheanalysisandsynthesisoftheSDBMCsandsuccessfactorsofSaaSprovidersproposedwithinthereviewedacademicliteraturewillbepresentedinthissection.Thecreatedconceptmatrixcomprises77factors,subdividedinthebusinessmodelcomponents.Mostfactorsrelatetovaluepropositions.Thecomponentscoststructure,partnernetwork,channels,revenuestreams,andcustomersegmentsareseldomlyaddressed.Thenumberoffactorssuggestedbythestudiesrangesfromsixto24(meanvalue:11.5)andthusvariesgreatly.Theconformitybetweenthestudiesisalsorelativelylow:onlythreefactorsarepartofmorethanhalfofthestudies;severalfactorsarementionedonlyonce(23)ortwice(10).Duetolimitedspace,theconceptmatrixissplitintothreetables.Table21.2showsthetenmostfrequentlymentionedfactors,Table21.4containsthefactorsthatareonlystatedonceortwice,andTable21.3summarizestheremainingfactors.Althoughnoimmediateconclusionscanbedrawnfromthefrequencyofcitationsofcertainsuccess-relatedfactors,afirstinsightintowhichaspectsmightbeparticularlyrelevantisoffered.Thetoptenfactorsarebrieflydescribedinthefollowing:●Securityreferstoprotectionagainstunauthorizedaccessandmanipulationofdata.Privacyincludestheproperhandling,processing,storage,andusageofpersonalinformation.Privacyandsecurityaredifferentbutrelatedconcepts.●Customization:SaaScomprisesstandardsoftwarefordifferentindustries,companysizes,andusertypes.Individualneedsofsinglecustomersmaythereforenotbemet.Customizationleadstoadditionalcosts,butcustomersarewillingtopayfortheexpectedaddedvalue.Overall,customizationisawaytodifferentiateoneselffromcompetitors.●AvailabilityisthepercentageoftimeaSaaSserviceisaccessible(uptime).Ahighavail-abilityisimportantbecausecriticalprocessescanbedisruptedifaSaaSservicefails,resultinginasignificantlossofcustomerconfidenceandfinancialdamages.●Flexibilitydescribestheabilitytoquicklyrespondtochangingcapacityrequirementsofindividualcustomersandcompetitivepressure.●Scalabilitycomprisesallfeaturesregardingtheadaptionofavailableresources(forexample,useraccounts,storagevolume,servercapacity),whichcanbeusedsimultane-ouslybycustomers(forexample,duetoseasonalfluctuations).●Functionsandfeatures:aSaaSservicemustofferthenecessaryfunctionsandfeaturesdefinedbycustomers’needs.●Maintenanceandsoftwareupdates:developmentspeedisanimportantfactor.NewfeaturesshallbedeliveredcontinuouslyandquicklywithouttheSaaSservicebeinginter-rupted(seamless).●Userexperience/usability:customersdesireanintuitiveanduser-friendlyuserinterface.Thishastheadditionaladvantageofreducingtrainingcostsforstaff.●Usage-basedpricing:customersonlypayfortheactualusageandthustheyareonlychargedwhentheyusetheSaaSservice.Alternatively,subscriptionpricingisapricemodelcharacterisedbyacustomerpayingafixedpricewithinadefinedperiodoftimeinordertoaccesstheSaaSservice.●Integration:itshouldbeeasytointegratetheSaaSserviceintotheexistingITinfrastruc-tureandbusinessprocessesofacustomer.SebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

350336HandbookondigitalbusinessecosystemsLiteratureSourcesAleemetal.,2019;Kangetal.,2010;Laatikainen&Ojala,2014;La&Kim,2009;Mäkiläetal.,2010;Pervezetal.,2010;Resceanuetal.,2014;Stuckenbergetal.,2011;Tak&Park,2018;Tsaietal.,2011;Tsaietal.,2010Benlianetal.,2010;Chauhan&Jaiswal,2015;Ernst&Rothlauf,2012;La&Kim,2009;Linetal.,2015;Pervezetal.,2010;Schirmetal.,2015;Stuckenbergetal.,2011;Tak&Park,2018;Waltheretal.,2013;Wienekeetal.,2013Benlianetal.,2010;Duttetal.,2017;Fontana,2009;Morgan&Conboy,2013;Nedbal&Stieninger,2019;Pervezetal.,2010;Schirmetal.,2015;Tak&Park,2018;Waltheretal.,2012;Waltheretal.,2013Aaen&Gjerløff,2015;Biggelebenetal.,2009;Daasetal.,2013;Ernst&Rothlauf,2012;Floerecke,2018;Linetal.,2015;Morgan&Conboy,2013;Popp,2011;Schirmetal.,2015;Tak&Park,2018Biggelebenetal.,2009;Duttetal.,2017;Floerecke,2018;Fontana,2009;Repschlaegeretal.,2012;Schirmetal.,2015;Søilen&Hasslinger,2012;Tsaietal.,2010;Waltheretal.,2012Aaen&Gjerløff,2015;Ernst&Rothlauf,2012;Joha&Janssen,2012;Kangetal.,2010;Morgan&Conboy,2013;Schirmetal.,2015;Søilen&Hasslinger,2012;Stuckenbergetal.,2011;Tak&Park,2018Aaen&Gjerløff,2015;Chauhan&Jaiswal,2015;Garrisonetal.,2012;Kangetal.,2010;La&Kim,2009;Luoma&Rönkkö,2012;Popp,2011;Repschlaegeretal.,2012;Stuckenbergetal.,2011Aaen&Gjerløff,2015;Floerecke,2018;La&Kim,2009;Linetal.,2015;Popp,2011;Repschlaegeretal.,2012;Schirmetal.,2015;Tak&Park,2018Aaen&Gjerløff,2015;Floerecke,2018;Kangetal.,2010;Laatikainen&Ojala,2014;Nedbal&Stieninger,2019;Popp,2011;Schirmetal.,2015;Waltheretal.,2013Ernst&Rothlauf,2012;Linetal.,2015;Nedbal&Stieninger,2019;Repschlaeger,2013;Stampfletal.,2013;Stuckenbergetal.,2011;Tak&Park,2018;Waltheretal.,2012Daasetal.,2013;Laatikainen&Ojala,2014;Morgan&Conboy,2013;Resceanuetal.,2014;Søilen&Hasslinger,2012;Stuckenbergetal.,2011;Tak&Park,2018;Tsaietal.,2011Aaen&Gjerløff,2015;Daasetal.,2013;Duttetal.,2017;Floerecke,2018;Laatikainen&Ojala,2014;Linetal.,2015;Repschlaegeretal.,2012;Waltheretal.,2012Aaen&Gjerløff,2015;Duttetal.,2017;Floerecke,2018;Gerhardter&Ortner,2013;Laatikainen&Ojala,2014;Repschlaegeretal.,2012;Tsaietal.,2010Chauhan&Jaiswal,2015;Duttetal.,2017;Garrisonetal.,2012;Repschlaeger,2013;Schirmetal.,2015;Tak&Park,2018;Wienekeetal.,2013Aaen&Gjerløff,2015;Daasetal.,2013;Joha&Janssen,2012;Linetal.,2015;Resceanuetal.,2014;Søilen&Hasslinger,2012;Tak&Park,2018Frequency11111010109988888777BMComponentVPVPVPPNVPKACVPKAPNRSRSVPVPRSFactorsfrom11thplacedowntofactorswithatleastthreementionsTable21.3FactorMulti-Tenancy-ArchitectureQualityPerformancePartnership/NetworkCompatibility/ConnectabilityStandardsandStandardizingDirectEnduserConnectionSupportResearchandDevelopmentLegalSubscriptionDefinitionofaPricingModelModularityExpandablilityAdditionalFeesSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

351Meta-studyofsuccess-relatedfactorsofSaaSproviders337LiteratureSourcesBenlianetal.,2010;Garrisonetal.,2012;Pervezetal.,2010;Repschlaeger,2013;Tak&Park,2018;Waltheretal.,2013Fontana,2009;Linetal.,2015;Repschlaeger,2013;Repschlaegeretal.,2012;Stuckenbergetal.,2011;Waltheretal.,2012Ernst&Rothlauf,2012;Floerecke,2018;Garrisonetal.,2012;Morgan&Conboy,2013;Resceanuetal.,2014;Waltheretal.,2013Biggelebenetal.,2009;Daasetal.,2013;Garrisonetal.,2012;Nedbal&Stieninger,2019;Repschlaeger,2013;Stuckenbergetal.,2011Aleemetal.,2019;Garrisonetal.,2012;Repschlaeger,2013;Waltheretal.,2013;Wienekeetal.,2013Fontana,2009;Nedbal&Stieninger,2019;Schirmetal.,2015;Waltheretal.,2012;Waltheretal.,2013;Wienekeetal.,2013Aaen&Gjerløff,2015;Chauhan&Jaiswal,2015;Floerecke,2018;Linetal.,2015;Morgan&Conboy,2013;Stampfletal.,2013Ernst&Rothlauf,2012;Garrisonetal.,2012;Gerhardter&Ortner,2013;Repschlaegeretal.,2012;Tak&Park,2018La&Kim,2009;Luoma&Rönkkö,2012;Mäkiläetal.,2010;Schirmetal.,2015;Tyrväinen&Selin,2011Aaen&Gjerløff,2015;Resceanuetal.,2014;Stampfletal.,2013;Stuckenbergetal.,2011;Wienekeetal.,2013Popp,2011;Repschlaeger,2013;Repschlaegeretal.,2012;Schirmetal.,2015;Stuckenbergetal.,2011Biggelebenetal.,2009;La&Kim,2009;Mäkiläetal.,2010;Resceanuetal.,2014;Stuckenbergetal.,2011Laatikainen&Ojala,2014;Resceanuetal.,2014;Søilen&Hasslinger,2012;Stuckenbergetal.,2011;Tak&Park,2018Resceanuetal.,2014;Schirmetal.,2015;Søilen&Hasslinger,2012;Waltheretal.,2013Joha&Janssen,2012;Nedbal&Stieninger,2019;Stuckenbergetal.,2011;Waltheretal.,2013Chauhan&Jaiswal,2015;Garrisonetal.,2012;Gerhardter&Ortner,2013;Schirmetal.,2015Floerecke,2018;Luoma&Rönkkö,2012;Morgan&Conboy,2013;Tyrväinen&Selin,2011Biggelebenetal.,2009;Floerecke,2018;Linetal.,2015Benlianetal.,2010;Repschlaeger,2013;Repschlaegeretal.,2012Frequency6666666555555444433BMComponentVPCRKRCRKACOKRKRCKRVPKRRSKRKAVPCRKRKAFactorReliabilityPriceTransparencyEmployeesTrustRiskManagementCostReductionKnowledgeaboutClientsNewestTechnologySelf-ServicePurchaseElasticityConsultingReuseabilityLicensesMobilityofDataEfficiencyTrainingMarketingActivitiesCertificatesRapportandDocumentationSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

352338HandbookondigitalbusinessecosystemsTable21.4FactorsthathavebeenstatedonlyonceortwiceFactorsthathavebeenonlystatedonceortwicePersonalSelling(RS)(Floerecke,2018;TyrväinenandSelin,2011)ProvisionofMobileApplications(VP)(Resceanuetal.,2014;Waltheretal.,2013)InternetasCommunicationChannel(C)(AaenandGjerløff,2015;Stuckenbergetal.,2011)Reputation(CR)(Biggelebenetal.,2009;MorganandConboy,2013)Differentiation(VP)(Garrisonetal.,2012;Linetal.,2015)Marketplace(VP)(NedbalandStieninger,2019;Popp,2011)TargetSmallCompanies(CS)(AaenandGjerløff,2015;Popp,2011)TargetMedium-SizedCompanies(CS)(Floerecke,2018;Popp,2011)TargetLargeCompanies(CS)(Floerecke,2018;Popp,2011)BundelingPricingOptions(RS)(Daasetal.,2013;LaatikainenandOjala,2014)CloseRelationshipwithCustomers(CR)(MorganandConboy,2013)Compliance(CR)(Waltheretal.,2012)SocialAspectsRegardingOutsourcing(KR)(Waltheretal.,2012)Ubiquity(VP)(Wienekeetal.,2013)Analytics(VP)(Wienekeetal.,2013)OrganizationalCulture(KR)(ErnstandRothlauf,2012)SizeoftheProvider(KR)(ErnstandRothlauf,2012)SaaSMaturity(VP)(TakandPark,2018)Trialability(VP)(NedbalandStieninger,2019)AddressingallCompanySizes(CS)(Floerecke,2018)Pre-CloudCustomerBase(KR)(Floerecke,2018)OfferOn-PremiseandCloudApplicationsParallel(VP)(Floerecke,2018)UseAgileSoftwareDevelopmentMethods(KA)(Floerecke,2018)OfferPrivateCloudDeploymentModels(VP)(Floerecke,2018)ExplaintheCloudConcept(CR)(Floerecke,2018)SaaS-specificIncentiveSystemsforSalesDivision(CR)(Floerecke,2018)BroadSaaSPortfolio(VP)(Floerecke,2018)AdministrationofOwnServers(KR)(Schirmetal.,2015)ImageorStatusoftheCustomers(CR)(NedbalandStieninger,2019)ProvideHardware(VP)(Popp,2011)CostofTechnicalProblemsofNewProducts(CO)(TakandPark,2018)IntegrationofCustomer(CR)(Stuckenbergetal.,2011)NetworkEffects(KR)(Stampfletal.,2013)Uponcloserexaminationofthetoptenfactors,itbecomesapparentthattwodonotcorrespondwiththecommondefinitionofcloudcomputing.Thefirstofthetwoiscustomization,whichincludesaddressingcustomer-specificrequestsregardingvaluepropositions.Intheacademicliterature(e.g.,Buxmannetal.,2008;Marstonetal.,2011;MellandGrance,2011),SaaSservicesaredefinedbyahighlevelofstandardizationbecausethisisnecessarytoachievethetargetedeconomiesofscale.Theseconddivergentfactorispricingbasedonresourceconsumption(usage-basedpricing).Theacademicliteraturerecommendssubscription-basedpricing:thepurchaseofaSaaSserviceforaspecificperiodoftime(forexample,onemonth),foraspecificnumberofusers,forafixedprice(e.g.,FowleyandPahl,2016;Wuetal.,2019).Furthermore,thetoptenfactorsarenotsolelyspecifictoSaaS;allofthemcouldberelevantforothercloudcomputingecosystemrolesaswell(forexample,IaaSproviders,PaaSproviders,andaggregators).AccordingtoFloereckeandLehner(2018),thesemightbeclassifiedasecosystemrole-overarchingfactors.Examiningthewholelistoffactors(TablesSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

353Meta-studyofsuccess-relatedfactorsofSaaSproviders33921.2,21.3,and21.4)revealsthatonlyafewrole-specific(here:SaaSproviders)factors(forexample,offeringbothon-premiseandcloudapplications)seemtoexist.Thismayindicatethattheecosystemroleshaveacertainnumberofsuccess-relatedfactorsincommon,andifthecloudservicesdonotfulfilbasicrequirementssuchassecurity,scalability,flexibility,andavailability,theywillnotsucceed.Accordingtotheresearchers’knowledge,thereisonlyonecomprehensivelistofsuccess-relatedfactorsforacloudecosystemrole,namelyforIaaSproviders(Floereckeetal.,2020).AcomparisonwiththislistshowedthatsomefactorsrelevanttoSaaScouldbeapplicabletoIaaSaswell.Thisincludes,forexample,pricetransparency,reputation,disasterrecovery,trust,expandability,andknowledgeofthecustomer.Additionally,factorssuchasthelocationofdatastorage,costsofsoftwarelicensing,cross-sellingofproducts,andindivid-ualclientpricingmightbetransferablefromIaaStoSaaS.Overall,bothlistsshowarelativelyhighconsensus(forexample,usage-basedpricing,personalandself-serviceselling,partner-ships,focussingonacertaincliententerprisesize,possessingcertificates,andavailability).However,therearealsorole-specificfactors:usageofagilesoftwaredevelopmentmethods,modularityandtrialability,forexample,seemtobeSaaS-specific;whereas,interalia,managedservicesandmulti-cloudmanagementtendtobeIaaS-specific.Theanalysisandsynthesisofthestudiesaccordingtoninederivedcriteriarevealedthefollowingadditionalinsights:1.Levelofabstraction.Whilesomeauthorsdescribefactorsatahighabstractionlevel,forexample,costreduction,andthusfollowthetraditionofthesuccessfactorresearchstream(e.g.,Freund,1988;LeideckerandBruno,1984),othershaveselectedaconsiderablylowerlevelofabstraction,forexample,implementationandusageofintelligentarchitecturetooptimizeclients’costs.Alowlevelofabstractionsupportsaneasieradoptionbyexperts.Inthisstudy,themoreabstractfactorsservedasabasisfortheconceptmatrix.2.Coverageofbusinessmodelcomponents.Thestudiesvaryintheselectedscopeofbusinessmodelcomponents.Thecomponentscoststructure,partnernetwork,channels,revenuestreams,andcustomersegmentswererarelyaddressed.Althoughthevalueprop-ositionisthemostimportantcomponentduetoitscentralpositionwithinbusinessmodels,itisnecessarytofocusontheothercomponentsaswell.Ideally,thedatasetofeverysinglebusinessmodelcomponentwillbecompletedoverthelongterm.3.Domain.InsixofthestudiestheauthorsdonotaddressSaaSingeneralbutrestricttheirscopetoacertaindomain,amongthembusinessintelligence,enterpriseresourceplanning,andenterpriseinformation.Herethequestionarisesoftowhatextentdomain-specificresultscanbegeneralized.Theansweristhatmanyofthegeneralfactorscanbefoundinthesedomain-specificstudies.However,itisself-explanatorythatvariousdomainsofSaaSservicesrequireadditional,specificfactors.Aspublicationsmostlymentionverygenericfactors,thereisaneedformorein-depthresearchonvariousdomains.4.Providersize.Sixcontributionshavelimitedtheirscopetosmallandmedium-sizedSaaSproviders.AsignificantdifferencebetweensmallerandbiggerSaaSproviders,however,isnotrecognizable.ThestateofresearchthusfarindicatesthatthecompanysizedoesnotplayadecisiveroleregardingaSaaSprovider’ssuccess.Ifthisisindeedthecase,itiscompletelydifferenttothesituationofIaaSproviders,wherethecompanysizeisamajorprerequisitetoachievethenecessaryeconomiesofscale(FloereckeandLehner,2019).SebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

354340Handbookondigitalbusinessecosystems5.Fundamentalconcepts.Thescholarsusedeitherthesuccessfactor(19)orthebusinessmodelconcept(17).Onestudyappliedamixtureofboth.Sinceabusinessmodelisaholis-ticdescriptionofacompany,eachsuccessfactorcanbeassignedtooneormorebusinessmodelcomponents.Theresultingfactorsindicatenosignificantdifferencebetweentheconcepts.6.Researchmethod.Thestudiesarebasedoncasestudies,literaturereviews,interviews,surveys,andstatisticalapproachessuchasclusteranalysis.Predominantlyqualitativeresearchmethodswereapplied.Onlythreeoutof37studiesusedquantitativeresearchmethods.Thegeneratedconceptmatrix(Tables21.2,21.3,and21.4)providesabasisforadeeperempiricalevaluationofthefactors.7.Publicationdate.Nocontributionsbefore2009werefound.Itisnotablethatthereareonlyafewrecentstudies.Onlythreepaperswerepublishedbetween2018and2020.Itwouldappearthatthistopichaslostappealformainstreamresearchinthefieldofinformationsystems.Between2012and2013,duringtheeconomicbreakthroughofSaaSbusiness,interestinthisresearchareapeaked.8.Researchers’origin.ThesubstantialnumberofstudiesbyscholarsfromGermanyisnoteworthy(14).OnepossiblereasonforthisphenomenonisthelongtraditionofresearchonsuccessfactorsinGermany(AlbersandHildebrandt,2006;NicolaiandKieser,2002).GermanyisfollowedbytheUnitedStates(5),Korea(5),andFinland(4).9.Publicationsource.Sixty-twopercentofthepaperswerepublishedinconferenceproceed-ings,therestinacademicjournals(38percent).ThearticleswerecitedonGoogleScholar44.6timesonaverage.Onlysomearticleswerepublishedininfluentialandhighlyrankedscientificjournals.CONTRIBUTIONTODIGITALBUSINESSECOSYSTEMSRESEARCH,ANDCONCLUSIONThemeta-studyledtoaconsolidatedlistcomprising77presumablysuccess-relatedfactorsstemmingfrom37studies.Thetenmostfrequentfactorsaresecurityandprivacy,customi-zation,availability,flexibility,scalability,functionsandfeatures,maintenanceandsoftwareupdates,usage-basedpricing,userexperience/usability,andintegration.Thefactorsfoundintherelevantliterature,astonishingly,showconsiderabledifferences.Thiscircumstancecan,asthisstudyrevealed,beexplainedbydifferentresearchmethods,selectedscopeofbusinessmodelcomponents,chosenlevelofabstraction,butalsobyrestrictionstoapplicationdomains.Theprovidersizeandthefundamentalconcept(successfactorversusbusinessmodel)seemtocausenosignificantdifferenceintheresults.ThisstudyanalysedandconsolidatedthefragmentedliteratureonSDBMCsandsuccessfactorsofSaaSproviders.Theresultcanserveasastartingpointfortheinvestigationofbusi-nessmodelcomponentsthathavebeencomparativelyneglectedsofar.Sincealmostallthecitedstudiesarebasedonqualitativeresearchmethodsandthusfollowahypothesis-generatingapproach,themeta-studyoffersthebasisforasubsequentgeneralandcomparativequantita-tiveevaluationofthefactorsandtheirpossibleinterdependences.Evidencefortheirimpactonbusinesssuccesshasnotyetbeenprovided.ArecentlypublishedevaluationstudyonIaaSpro-viders(Floereckeetal.,2020),usingaweb-basedsurvey,canserveasareferencetothisend.Asapracticalcontribution,SaaSprovidersareofferedthemuch-neededlistofsuccess-relatedSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

355Meta-studyofsuccess-relatedfactorsofSaaSproviders341factors.Thislist,ifdeemeduseful,canbeutilizedforcomparisonsandrevisionsofcurrentbusinessmodels.Amaincontributionofthischapterliesinstrengtheningtheconnectionoftheresearchstreamswithregardtobusinessecosystemsandbusinessmodels,whichwereseenasindependentconceptsinthefieldofcloudcomputingsofar.Theauthors’perspectivewasrole-orientedandthusrepresentsanecosystemperspective,whichhelpedtogiveanintegratedviewoftheproblemdomainbyapplyingthePaCEmodel.Theauthorsareawarethatthisstudyisnotfreefromlimitations.Firstly,itcannotbeguaranteedthatrelevantliteraturewasfullycoveredbythestructuredliteratureresearchduetothelargenumberofresearchpublications.Furthermore,onlypublicationsinEnglishandGermanhavebeenincluded.Secondly,acertaindegreeofsubjectivitycanbeassumedregardingthecreationoftheconceptmatrix,theconsolidationandassignmentoftheidentifiedsuccess-relatedfactors.Thefactorsshowedadifferentlevelofabstraction,whichmightneedfurtherclarifications.ThePaCEmodelformedthebasisandservedasaresearchframeworkinthisstudy.However,itcanbeusedinavarietyofapplications.Overall,thePaCEmodelenablesresearcherstoidentify,formulate,andlocateresearchquestionsandtopicsinthefieldofcloudcomputing,andcomparestheresults.Researcherscanfocusonspecificpartsofthecloudecosystem–specificroles,theirinterrelations,orroleclusters–andinvestigatethemindetail,forexample,fromabusinessmodel,arisk,oranetworkeconomicperspective.Tothisend,appropriatequalitativedata(forexample,expertinterviewsandDelphistudies)orquantitativedata(forexample,experimentsandweb-basedsurveys)mustbecollected.Toconclude,althoughnumerousresearchershavealreadyaddressedthecentralquestionof“WhatarethefactorsthatdeterminethesuccessofSaaSproviders?”,thereisstill,asthismeta-studyhasrevealed,alotofresearchtobedone.Thisencompassesbothqualitativeandquantitativeresearch.InviewofthecurrentandfutureeconomicvalueofthewholecloudcomputingecosystemandparticularlytheSaaSmarketsegment,thetopicissimplytooimpor-tanttodriftoutoftheresearchcommunity’sfocus.ACKNOWLEDGEMENTTheauthorssincerelythankFlorianFelixRöck,formerMastercandidate,forhisvaluablesupportregardingtheliteraturereviewandtheinitialversionoftheconceptmatrix.REFERENCESAdner,R.(2017).EcosystemasStructure:AnActionableConstructforStrategy.JournalofManagement,43(1),39–58.Albers,S.andHildebrandt,L.(2006).MethodischeProblemebeiderErfolgsfaktorenforschung–Messfehler,formativeversusreflektiveIndikatorenunddieWahldesStrukturgleichungs-Modells.SchmalenbachsZeitschriftfürbetriebswirtschaftlicheForschung,58(1),2–33.Armbrust,M.,Fox,A.,Griffith,R.,Joseph,A.D.,Katz,R.,Konwinski,A.andZaharia,M.(2010).AViewofCloudComputing.CommunicationsoftheACM,53(4),50–58.Bahari,N.,Maniak,R.andFernandez,V.(2015).EcosystemBusinessModelDesign.PaperpresentedattheXXIVeConférenceInternationaledeManagementStratégique,Paris.SebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

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359Meta-studyofsuccess-relatedfactorsofSaaSproviders345APPENDIXTable21A.1IdentifiedpublicationsonSDBMCsandsuccessfactorsofSaaSprovidersfromliteratureAuthorYearTitleSuccessFactorSumofGeneric(g)/ResearchMethods(SF)/BusinessFactorsSaaS-Model(BM)Specific(s)Aaen,I.,&Gjerløff,N.2015ValueCreationinSaaSBM19g/sCaseStudyDevelopmentAleem,S.,Ahmed,F.,2019EmpiricalInvestigationSF6g/sLiteratureReview/Batool,R.,&Khattak,ofKeyFactorsforSaaSMultiLinearA.ArchitectureDimensionRegressionBenlian,A.,Koufaris,2010TheRoleofSaaSServiceSF7gSurveyM.,&Hess,T.QualityforContinuedSaaSUse:EmpiricalInsightsfromSaaSUsingFirmsBiggeleben,M.,Kolbe,2009PrüfkriterienfürSF11g/sNotDefinedH.,Schäfermeyer,M.,GeschäftsmodelleimKontext&Vranesic,H.vonSoftwareasaServiceChauhan,S.,&Jaiswal,2015ExploringFactorsAffectingSF8g/sCaseStudyM.ServiceQualityofERPonCloud:ARevelatoryCaseStudyDaas,D.,Hurkmans,2013DevelopingaDecisionBM10g/sCaseStudyT.,Overbeek,S.,&SupportSystemforBusinessBouwman,H.ModelDesignDutt,A.,Jain,H.,&2017ProvidingSoftwareasBM9g/sLiteratureReviewKumar,S.aService:ADesignDecision(s)ModelErnst,C.P.H.,&2012PotenzielleErfolgsfaktorenSF9gLiteratureReviewRothlauf,F.vonSaaS-UnternehmenFloerecke,S.2018SuccessFactorsofSaaSBM/SF24g/sMultipleCaseStudyProviders’Business/InterviewsModels–AnExploratoryMultiple-CaseStudyFontana,J.2009Big-PicturePlanningKeytoSF9gSurveySaaSSuccessGarrison,G.,Kim,S.,2012SuccessFactorsforSF14g/sQuestionnaire/&Wakefield,R.L.DeployingCloudComputingInterviewsGerhardter,A.,&2013FlexibilityandImprovedSF9g/sLiteratureReviewOrtner,W.ResourceUtilizationThroughCloudBasedERPSystems:CriticalSuccessFactorsofSaaSSolutionsinSMESebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

360346HandbookondigitalbusinessecosystemsAuthorYearTitleSuccessFactorSumofGeneric(g)/ResearchMethods(SF)/BusinessFactorsSaaS-Model(BM)Specific(s)Joha,A.,&Janssen,2012DesignChoicesUnderlyingBM7gCaseStudyM.F.theSoftwareasaService(SaaS)BusinessModelfromtheUserPerspective:ExploringtheFourthWaveofOutsourcingKang,S.,Myung,J.,2010AGeneralMaturityModelBM8g/sCaseStudy/SurveyYeon,J.,Ha,S.W.,andReferenceArchitectureCho,T.,Chung,J.M.,forSaaSService&Lee,S.G.Laatikainen,G.,&2014SaaSArchitectureandPricingBM11g/sCaseStudyOjala,A.ModelsLa,H.J.,&Kim,S.D.2009ASystematicProcessforBM9g/sNotDefinedDevelopingHighQualitySaaSCloudServicesLin,G.T.R.,Hsieh,P.2015CrucialFactorsforSuccessinBM11g/sLiteratureReview/H.,Chou,C.J.,&Hsi,Taiwan’sCloudInformationQuestionnaireP.H.ServicesIndustryLuoma,E.,&Rönkkö,2012Software-as-a-ServiceBM9g/sLiteratureReview/M.BusinessModelsSurveyMäkilä,T.,Järvi,2010HowtoDefineSF5g/sSurveyA.,Rönkkö,M.,&Software-as-a-Service–AnNissilä,J.EmpiricalStudyofFinnishSaaSProvidersMorgan,L.,&Conboy,2013ValueCreationintheCloud:BM10g/sCaseStudyK.UnderstandingBusinessModelFactorsAffectingValueofCloudComputingNedbal,D.,&2019FindingsfromaSuccessSF13g/sInterviewsStieninger,M.FactorAnalysisforSaaSUsagePervez,Z.,Lee,S.,&2010Multi-Tenant,Secure,BM7g/sNotdefinedLee,Y.K.LoadDisseminatedSaaSArchitecturePopp,K.2011SoftwareIndustryBusinessBM13g/sCaseStudyModelsRepschlaeger,J.2013TransparencyinCloudBM11g/sClusterAnalysisBusiness:ClusterAnalysisofSoftwareasaServiceCharacteristicsRepschlaeger,J.,Wind,2012SelectionCriteriaforSF19g/sLiteratureReview/S.,Zarnekow,R.,&SoftwareasaService:AnMarketAnalysis/Turowski,K.ExplorativeAnalysisofInterviewsProviderRequirementsSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

361Meta-studyofsuccess-relatedfactorsofSaaSproviders347AuthorYearTitleSuccessFactorSumofGeneric(g)/ResearchMethods(SF)/BusinessFactorsSaaS-Model(BM)Specific(s)Resceanu,I.C.,2014SaaSSolutionsforSF14g/sOnlineStudyReşceanu,C.F.,&Small-MediumBusinesses:Simionescu,S.M.Developer’sPerspectiveonCreatingNewSaaSProductsSchirm,N.,Frank,2015ErfolgsfaktorenSF22g/sLiteratureReviewT.,Henkel,M.,&cloudbasierterBusinessBensberg,F.IntelligenceLösungenSøilen,K.S.,&2012FactorsShapingVendorSF10gQuestionnaire/Hasslinger,A.DifferentiationintheInterviewsBusinessIntelligenceSoftwareIndustryStampfl,G.,Prügl,R.,2013AnExplorativeModelofSF8g/sLiteratureReview/&Osterloh,V.BusinessModelScalabilityInterviewsStuckenberg,S.,Fielt,2011TheImpactofBM21g/sLiteratureReviewE.,&Loser,T.Software-as-a-ServiceonBusinessModelsofLeadingSoftwareVendors:ExperiencesfromThreeExploratoryCaseStudiesTak,O.S.,&Park,S.2018InvestigatingSaaSProviders’BM23g/sMultivariateMarketSuccessbasedonApproachtheMultivariateLGCMApproachTsai,W.T.,Huang,Y.,2011EasySaaS:ASaaSBM5g/sCaseStudy&Shao,Q.DevelopmentFrameworkTsai,W.T.,Sun,X.,&2010Service-OrientedCloudSF5g/sSurveyBalasooriya,J.ComputingArchitectureTyrväinen,P.,&2011HowtoSellSaaS:BM6gMultipleCaseStudy/Selin,J.AModelforMainFactorsWebResearchandofMarketingandSellingInterviewsSoftware-as-a-ServiceWalther,S.,Plank,A.,2012SuccessFactorsandValueSF12gLiteratureReviewEymann,T.,Singh,N.,PropositionsofSoftware&Phadke,G.asaServiceProviders–ALiteratureReviewandClassificationWalther,S.,Sedera,D.,2013EvaluatingOperationalSF18g/sSurveySarker,S.,&Eymann,CloudEnterpriseSystemT.Success:AnOrganizationalPerspectiveWieneke,A.,Walther,2013ErfolgsfaktorenvonSF13g/sInterviewsS.,Eichin,R.,&On-Demand-Enterprise-Eymann,T.SystemenausderSichtdesAnbie-ters–EineexplorativeStudieSebastianFloereckeandFranzLehner-9781839107191DownloadedfromPubFactoryat05/28/202209:58:00AMviaColumbiaUniversityLibrary

36222.Data(r)evolution:theeconomicsofalgorithmicsearchandrecommenderservicesOliverBudzinski,SophiaGaenssle,andNadineLindstädt-DreusickeINTRODUCTIONInrecenttimes,theubiquitousavailabilityofinformation(so-calledbigdata)increasestheimportanceofsystematicdatacollection,processing,analysis,andimplementationinvariousbusinessesandvaluechains.Thepossibilityofbenefittingfromdataanalysisprofoundlychangesindustrializedprocesses,asinartificialintelligence(AI)andmachine-to-machine(M2M)communication;andservicesbasedonpersonalizedconsumerdata.Thelatterincludesboth“standard”data(mailaddress,name,paymentinformation,gender,andsoon)and“advanced”consumerdataregardingstatedpreferences(forexample,“like”buttononInstagram)andrevealedpreferences(forexample,videosIamactuallywatching,productsIamactuallybuying)(BudzinskiandKuchinke,2020).Bycombiningthosetwodatatypesandthroughconnectingdatafrompeoplewithsimilarbehaviorandinterests,so-calledderiveddataarisewhichalgorithmsthencanprocess.Advanceddataandsophisticatedmethodsofanalysismakeitpossibletodrawconclusionsabouttheconsumer’sindividualconsumptionhabitsandestimateconsumerpreference.Bydoingso,theneedsanddemandsof(individual)consumerscanbebettermatchedandproductsorservicesbettertargetedtotherespectiveconsumers,whichinturnbenefitsbothconsumersandcompanies,andthuscanpositivelycontributetodigitalbusinessecosystems(DBEs).Peoplehavebecomeaccustomedto“paying-with-data”;theyprovideinformationtousedifferentservicessuchasapps(forexample,YouTube),websites(forexample,Amazon),orsocialmedia(forexampleInstagram),oftenwithouthavingtopaymonetarilyinreturn.Threestylizedtypesofbusinessmodelsbuildontheideaof(consumer)dataaspayment(BudzinskiandKuchinke,2020):(1)userdataanalysisforthirdparties(forexample,companiesinupstreammarketsorcompanieswantingtargetedadvertising);(2)individualizedpricing(pricediscriminationbasedondata-basedestimatesofwillingnesstopayandconsumptionpatterns);and(3)individualizedservices(tailor-madeproductsandservicesforconsumers).Successfulmediaservices(suchasYouTube,Netflix,Spotify,andInstagram),butalsoonlineshops(suchasAmazonandZalando),benefitfromindividualizedsearchandrecommendationservices(SRSs),whichbelongtolattercategoryandarethefocusofattentionforthischapter.InDBEs,businesssuccessisoftenrootedintheirprofessionalimplementation.ThinkofproductrecommendationsonAmazonbasedonyourprevioussearchingbehavior,yourtopselectiononNetflixbasedonyourpreviousviewingbehavior,yourpersonalizedDiscoverWeeklyplaylistonSpotify,orprofilerecommendationsonInstagrambasedonprofilesyoualreadyfollow.Theprovidedconsumerdataisusedfortailor-madesearchresultsandrecom-mendationswithintheplatforminordertoincreasetheconsumers’consumption(time),whichinturnbenefitstheplatformdirectlysincethemoreuserinformationisavailable,thebetterthe349OliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

363350HandbookondigitalbusinessecosystemsSRSandalgorithmscanwork(BelleflammeandPeitz,2020).AccordingtoNetflix,already80percentofthecontentthatiswatchedisbasedonrecommendations(Morgan,2019).LookingatSpotify,over40millionpeopleturnedtotheDiscoverWeeklyplaylistin2016,notevenayearafterithadbeenlaunched(Prey,2018).ForAmazon,MacKenzieetal.(2013)hadalreadyrevealedthat35percentoftheconsumerpurchasesresultedfromalgorithm-basedproductrecommendations.Thus,serviceswithinDBEscanbenefitfromemployingSRSsandgainacompetitiveadvantage.Furtherstudiesconfirmconsumers’demandforpersonalizationaccordingtotheirprefer-encesandpersonalizedgoods(interalia,Accenture,2018;Deloitte,2019;PwC,2019).Inthisregard,algorithmicSRSprovidehelpfulprestructuringassistance(thatis,rankingsandrec-ommendations)inordertocopewiththevastamountofinformation(informationoverload)availableinthedigitalworld.However,otherauthorsvoiceconcernsaboutgatekeepereffects(Bozdag,2013)orcommercialhyper-nudgingstrategies(Morozovaite,2020)thatgohandinhandwith(algorithmic)personalizationservicesusedbydigitalplatforms.Takingthesecontrarystandpoints,thischapteraimsatprovidingadifferentiated,systematicoverviewanddetailedunderstandingofalgorithmicSRSsandtheircontributiontoDBEs.ItfirstdiscussestypesofrecommendationsandgoodscharacteristicsofSRSs.ThenextsectioncontainstheeconomicanalysisofpositiveandnegativewelfareeffectsofSRS.WeconcludewithmanagerialimplicationsandcontributionstoresearchonDBEs.SEARCHANDRECOMMENDATIONSERVICESASACOMMERCIALGOODWhatAre(orNot)SearchandRecommenderServices?Thissectionanalyzessimilaritiesanddifferencesbetweensearchservicesontheonehand,andrecommendationservicesontheother.Moreover,itdrawsalinebetweenSRS-typerec-ommendationsandothertypesofrecommendations.Fromatheoreticalpointofview,SRSsarecloselyconnectedtoinformationeconomics,sincethecoreserviceistheprovisionofsearchandrecommendationinformation.Thequalityofthisinformationcan(usually)onlybeevaluatedafterconsumption(so-calledexperiencegoodcharacteristics).Inspecificcases,evenafterconsumption,aperfectqualityestimationisnotpossible(so-calledcredencegoods)(Nelson,1970;Wolinsky,1995).Generally,SRSscanbedescribedasexperiencegoods,sinceconsumersonlyknowthequalityofarecommendationafterconsumption,thatis,beingdefinitely(un)satisfiedwiththeirchoiceafterwards.However,ifconsumersareunsureofthesystem’squality,SRSsmayalsohavecredencegoodcharacteristics.Thiscanbethecase,forinstance,ifconsumersoverlytrustthesystemandbelievewithoutfurtherconsiderationinthesuitabilityoftherecommendation.Experienceandcredencegoodsincreaseuncertaintyforconsumers.Ifonemarketside(eitherthedemandorthesupplyside)systematicallylacksinformation,thereareinformationasymmetries(Akerlof,1970;BudzinskiandKuchinke,2020).Automatizedandalgorithmicrecommendationsarebasedon(big)data;consumersdonot(perfectly)knowhowrecommendationsarecreated.Invariouscases,consumersareunderinformed,whichleadstoasymmetricinformationattheexpenseofconsumers.OliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

364Data(r)evolution:theeconomicsofalgorithmicsearchandrecommenderservices351Whiletheoryoninformationasymmetriesappliestobothrecommendationandsearch,searchandrecommendationsystemsareindividualizedservicesthataresimilar,yetnotcom-pletelythesame(BudzinskiandKuchinke,2020).1Searchalgorithmsarean“answerofthesystem”regardingactive(pull)searchactions,forexampleaGooglesearch.Theresultsneedtoberanked,whichinevitablycreates“recommen-dationinformation,”sincehigher-placedresultsare(orseemtobe)thebetterfitregardingthesearchcommand(Edelman,2011).Therefore,therankinginsearchresultsalsoentailsarecommendationforconsumers.Searchalgorithmsusuallyrecommenddifferentalternatives(substitutes).Purerecommendersystemswithoutactivesearchcommandsrecommendproductsorservices(push)onahomepagewithouttheconsumeractivelylookingforit,forexamplelanding-pageorauto-play2functiononYouTube.Thesystemguides(leadsorpushes)theconsumerthroughpages(BelleflammeandPeitz,2020),recommending(ostensibly)usefulcontent,products,andinformation.Whiletheconsumerpassivelyreceivesrecommendations,thesecanbesubstitutes(similaralternatives,laptopAorB)orcomplements(supplementinggoods/services,USBstickforlaptopA).Focusingevenfurtheronrecommendationsystems,differenttypesofrecommendationscanbedistinguished(seeFigure22.1).Recommendationscanbesuggestedusingmediatechnologies(thatis,viasometransmittingmedium,forexampledigitallywithSRSs)orviaanon-media-basedsystem(thatis,directlyfrompersontoperson).Figure22.1TypesofrecommendationsThischapterconcentratesonSRS,whicharemediabased(usinginformationtechnologiesandalgorithms)recommendationsfrombusiness(acompanyprovidingthisinformation)tocon-sumers.Itisimportanttodifferentiatebetweendifferentsuppliersofinformation,C2CorB2C.Ratingsandreviewsaregeneratedthroughconsumers(seeFigure22.1),forexamplefive-starratingsandproductreviewsonAmazon.Reviewsandratingsarecustomer-to-customer(C2C)recommendations,containinginformationon“intra-product”level,aboutthespecificgooditself,forexampletechnicaldetailsonlaptopA.Theirprimaryroleistoreduceinformationasymmetriesbetweensellerandconsumer.Reducingtransactioncosts(forexample,quicklyOliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

365352HandbookondigitalbusinessecosystemscomparingstarratingsbetweenlaptopAandlaptopB)isonlyasecondaryfunction.SRSsarebusiness-to-customer(B2C)recommendationsbecausetheyprovideinformationonthe“inter-product”level,compare,rank,andrecommenddifferentgoodswithinthesystem.Therefore,theymainlyreducetransactioncostsofsearchinganddecidingbetweensubsti-tutes,orfindingcomplementaryproducts,forexamplecomparinglaptopAandlaptopB.Thisoverviewshowsthatthetypesofrecommendationshaveadifferentfunctionalityfromatheoreticalpointofview:SRSsmainlyreducetransactioncosts(inter-product);reviewsandratingsmainlyreduceinformationasymmetries(intra-product).Additionally,C2Creviewsandratingsgenerateadditionaldata,whichcanbeusedasinputforSRS.RecommendationsintheDigitalAgeWiththeprogressofdigitization,SRSsgainimportanceinbusinessmodelssinceadvancedmethodsarenecessaryinordertocompeteforconsumers’attention.Yet,SRSsarenotpersenewphenomenaofthedigitalage.Formerly,sellersandshopassistantshandledB2Crecom-mendationsandsuggestedcertainproductsorservices.3Theserecommendationswerebasedontheproductsinstock,andtheindividualneedsofconsumers.Fromatheoreticalpointofview,SRSschangedwithregardtotwodimensions.First,tra-ditionalshopshavelimitedresources,regardingtheirservice/productportfolio,forexample,lackofspaceandstorageroomsforvariousalternatives.Onlinemarketsaresuperiorinofferingnicheproductsduetoaggregatedemandwithoutlocalrestraintsanddifferentstorage/shippingopportunities(seelong-tailtheory;Anderson,2004).Moreover,theindividualsales-persontraditionallyplaysavitalroleandhasknowledgeoftheproductportfolio,comparinggoodsexclusivelyfortheindividualconsumer(limitedhumanresources).Second,thedegreeofpersonalizationchangedwiththeavailableamountofconsumerdataandthemeanstoanalyzeit(BelleflammeandPeitz,2020).Whereasthetrainedsellerusedtoaskforwishesandpreferences,algorithmicanalysisofmassesofconsumerdatamakeitpossiblenotonlytocomparethenumberofproducts,butalsotogiveindividualizedrecom-mendations.4Ofcourse,aspecificsalespersonmayknowmoreaboutaspecific(regular)con-sumerthananyalgorithmicsystemmayeverdo.However,lookingatthemassofthecases,algorithmsarelikelytobesuperior.Automatizedrecommendationsbasedondetailed,individualinformationopennewqualitydimensionsforrecommendations,astheseadvancedsystemscanproducesuperiorcontentsuggestions,shoppingadvice,andsearchresults.Greatbusinessopportunities,butalsoalotofinnovativepressure,comewithsophisticatedSRSs.Companieswhichsuccessfullyimple-mentSRSsintheirbusinesscanprofithugely(forexample,GoogleorAmazon).Providingfittingandefficientsearchresultsandrecommendationscanincreasesales(thatis,upselling,cross-selling),sinceconsumersquicklyfindwhattheyneed.Toleadconsumersskillfullythroughproductsandcontentscankeepthemontheservicelonger,forexample,individual-izedvideorecommendationsonNetflixorYouTube.Consumerswholiketheconvenienceandqualityofrecommendationswillmaximizetheirtimeusingtheservice,andthusincreasetheprobabilityofconsumingadvertisingorfurthergoods.Moreover,theserviceprovidersbuildupareputation,sinceconsumersgetusedtothequalityofrecommendations,returntothewebsite,orevenrecommendittootherpeople(whichcouldkick-startdirectandindirectnetworkeffectsofmoderndigitalplatforms;BelleflammeandPeitz,2020).Lastly,theanal-ysisofconsumerbehavior,theirresponsetotherecommendations,anddifferentreactionstoOliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

366Data(r)evolution:theeconomicsofalgorithmicsearchandrecommenderservices353nudgesandsuggestions,canbeusedtofurtherimprovetheSRS.Moreover,thisinformationcanalsobepartofdataanalysesandtheirresultssoldtothirdparties.Hence,theoutputdataofSRSis,again,inputforbusinessmodels.ECONOMICEFFECTSOFALGORITHMICSEARCHANDRECOMMENDATIONSYSTEMSPositiveWelfareEffectsEffectsoncompaniesUsingalgorithmicSRSsisbeneficialandprofitableforthecompanies.Byprovidingindividu-alizedsearchrankingsandrecommendationservices,andthus(better)meetingtheconsumers’individualpreferences,companiescanintensifytheusers’transactionsandconsumptiontimewiththerespectiveservice,whichinturnincreasesdemandandturnover.AccordingtoFlederandHosanagar(2009),recommendersystemscanbebeneficialinthreeways:(1)turningbrowsingconsumersintobuyers;(2)cross-selling;and(3)increasingcustomerloyalty.Moreover,analgorithmicSRSmayalsobeusedasapromotionaltoolforothergoodsofferedbythesamecompany.Profitsarethenderivedfromtheupstreamgoodsofferedbytherespectivecompany.Thelongerusersspendtimewithaspecificserviceprovider,themorepersonalizeddatawillbeavailableforthecompanytogather.ThisincludeslearningfromthereactionsoftheconsumersconcerningtheactualsuggestionsoftheSRS,andfurtherimprov-ingthealgorithms.Thisadditionallygaineddatacanthenbeprofitablyusedbythecompanies(BudzinskiandKuchinke,2020)for:●FurtherimprovementsoftheindividualizedSRS,generatingaself-reinforcingmechanism.●Verticalorhorizontalintegratedservicesofthecompany.NetflixandAmazon,forinstance,takeadvantageofuserdatafromtheirstreamingservicesthatincreasethecom-petitivenessoftheirownupstreamproductionofaudiovisualcontentbecausetheycanbetterestimatewhatviewersprobablylike(Gaenssle,2021).Facebookservesasahorizon-talexamplebyusingpersonalizeddatafromWhatsAppinordertooptimizeitsInstagramservice.Profitabilitythenoriginatesfromimprovingrelatedgoodsandincreasingtheirusageand/orsales.●Thirdpartieswhoarewillingtopayfortheanalysisofthecompany’sdata.Spotify,forinstance,makesmoneybysellingdataanalyses(theanalysisresult,notthedataitself)upstreamtothemusicindustry.Anotherexampleistargetedadvertising.Inthiscase,onlineservicesindirectlyselltheresultoftheirdataanalysistoadvertisersbysellingtheplacementoftheiradstothoseconsumerswho,accordingtodata-basedestimations,arethemostprobableonestopurchasetheadvertisedgoods.●Data-basedpricediscrimination.Hereacompanyemploysitsuserdatatoestimatethewillingness-to-payofindividualconsumers,toadjustpricesaccordingly.Reapingcon-sumers’rentsbyindividualizedpricingisobviouslyhighlyprofitableforthecompanies.EffectsonconsumersFurthermore,algorithmicSRSsgeneratepositiveeffectsonconsumerwelfare.Ingeneral,transactioncostsand,specifically,searchcostsfortheconsumersarereduced(HinzandOliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

367354HandbookondigitalbusinessecosystemsEckert,2010;Brynjolfssonetal.,2011;BelleflammeandPeitz,2020;BudzinskiandKuchinke,2020).Ontheonehand,theinternetitselfreducessearchcostscomparedtotradi-tionalofflinemarkets.Ontheotherhand,digitalmarketscanofferamuchlargeramountofgoodscomparedtotraditionalbrickandmortarstoreswhich,inturn,considerablyincreasestheamountofinformationavailable(informationoverloadproblems).First,storagecostsareoftensignificantlyloweronline,whichisespeciallytruefordigitalgoodssuchasstreamingservices,makingtherangeofofferedgoods(andaccompanyinginformation)inthosemarketsgenerallybigger.Second,costsofgeographydecreaseinthedigitalworld,leadingtotheso-calledlong-taileffect.Againstthebackgroundofsuchinformationoverloadproblems,searchandrecommendationtoolsrepresentanimportantpre-structuringassistancelettingconsumersfindmorequicklywhattheyaresearchingfor(Brynjolfssonetal.,2006).Duetothepreference-orientedrankingofSRSresults,consumersbenefitfromabetteroverviewofrelevantoffers(increasingmarkettransparency).Inadditiontothis,recommendationscanprovidedecisionsupport(LeeandHosanagar,2015;Milanoetal.,2020).Byprovidingrecommendationsthatmatchtheusers’prefer-ences,decisioncostscanbereduced.Onlineinformationoverloadcreatestheso-calledabundance-of-choiceproblemforusersthatrequiresexternalrecommendations,withalgorith-micrecommendationsbeingmoresuitabletocopewiththevastamountofinformationanddata.Forinstance,SRSscanbenefittheconsumersbymakingthemawareofnewproductsandfacilitatingproductselection(FlederandHosanagar,2009),aswellasbyremindingthemofproductsthattheyexpressedpriorinterestin,andpointingtospecialoffers(Jannachetal.,2017).TheeffectivenessofalgorithmicSRSsisfurthersupportedbyempiricalstudiesconfirmingthatmostconsumerschooseamongthetop-rankedrecommendationsandsearchresultswhileignoringlower-rankedoffers(Lorigoetal.,2006;Panetal.,2007;GhoseandYang,2009).Inaddition,SenecalandNantel(2004)foundthatSRSsarethemostinfluentialamongdifferenttypesofonlinerecommendationsources(forexample,otherconsumers,humanexperts).5TheimprovedmarketoverviewthroughalgorithmicSRSsalsofacilitatesonlineone-stopshopping,providingvariousadvantagesfortheconsumercomparedtosingleshoppingactivitiesatdifferentshoppingvenues:namely,lessshoppingcosts(thatis,savingmultipledelivery/shippingcosts),timesavings(focusingononeonlineshopinsteadofbrowsingmul-tipleshops),convenienceaspects(log-indataforonlyoneshoppingvenue),privacyaspects(providingpersonaldatatojustoneonlineshop),andsoon.Thebenefitsareparticularlyhighforconsumerswhohaveahighlevelofadversityagainstsearchanddecisioncosts;andleastrelevantforconsumerswhoenjoythesearchanddecisionprocess.Transferringtheinsightsfrombehavioraleconomicsaboutrule-followingbehavior(interalia,Vanberg,1994,2002;Budzinski,2003)tothedigitalage,consumersshouldpar-ticularlybenefitfromalgorithmicSRSsforlow-keyandroutineconsumptiondecisions,ratherthanfortransactionsthatareexceptionalorofoutstandingimportance.AgoodfitoftheSRSs’data-basedestimationswiththepreferencesforroutineconsumption(whichisoftenconductedassatisfycingutilityratherthanmaximizingutility6)minimizestransactioncosts(assearchanddecisioncosts).Thisisbeneficialbecauseitsavescognitiveresourcesfornon-routinedecisionswheretheconsumptionactisofparamountimportancefortheconsumer.Here,theSRSresultsaremorelikelytobecriticallyreviewedandcomplementedbyadditionalinforma-tion,forinstancefromreviewsandratingsorexperts.TakingaSpotify-stylestreamingserviceasanexample,anindividualislikelytomoreorlessblindlyfollowplaylistrecommendationsOliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

368Data(r)evolution:theeconomicsofalgorithmicsearchandrecommenderservices355whentheycomefromeverydayworkandjustwanttorelaxabit;ratherthaninthecaseofafirstrendezvouswithanewlovewheretheindividualprobablywillwanttomakesuretherightmusicisplayedandnot“justsomething.”However,notonlyarethepreferencesofconsumersheterogeneous,butalsotheirsensitivitytowardsalgorithmicSRSsdiffers.Thespectrummayencompassextremepositions:ageneraldistrustandskepticismtowardsalgorithmicSRSs(strongpreferenceforself-determination)atoneend,leadingtorejectingSRSsuggestionsasamatterofprinciple;andattheotherend,thenotionthatthealgorithmicSRSknowsbetteraboutwhatIwantthanIdo,resultinginaratherblindfollowingoftop-rankedSRSresults.Ineconomicterms,therecommendationelasticityofdemanddiffersamongindividuals,andthisisbaseduponrelevanceofsearchanddecisioncostsaswellaspersonalattitudetowardsalgorithmicSRS.BenefitsofSRSs—butalsonega-tiveeffects—considerablydependontheindividualshapeofthisrecommendationelasticity.NegativeWelfareEffectsConsumptionbubbleThecreationofautomatizedalgorithmicrecommendationsbasedonindividualizedprefer-encescanleadconsumersinaspecificdirectionandcreatepathdependency.SRSsinfluencewhichcontentisdisplayedtorecipientsandeitherpresentedontopofsearchlistsorremainhidden,thatis,listedamongthelastresults(Bozdag,2013).Iterativefeedbackloopsleadtolearningprocessesandsuggestionsaccordingtotheconsumer’s(firstandsubsequent)inter-ests.Thiscanfuelthedevelopmentofso-calledfilterbubblesandechochambers.7Sincethesetermsaremainlyusedfornewsconsumption,werefertothisphenomenonmoregenerallyasconsumptionbubbles.Stuckinaconsumptionbubble,consumersonlyreceiverecommenda-tionscloselyrelatedtotheirmaininterestsandarenolongerconfrontedwithnew,surprisingcontent.Thisreducesdiversity,sothatthemainadvantageofSRSs—thatis,reducingtransac-tioncostsandinformationoverload—cansubsequentlyturnintoadisadvantage.Therearedifferentfactorswhichinfluencethedevelopmentofconsumptionbubbles.Themorepointsarematchedandthebettertheyarefulfilled,thehigheristheprobabilityofacon-sumptionbubble:●Homogeneouspreferencesfortherecommendedgood:SRSsrecommendaccordingtotheindividualconsumer’spreferences.Iftheyareveryhomogeneousregardingtherec-ommendedgood,thereisnoneedtoprovidefurtherorotherinformation.Thesystem’ssuggestionswillusuallyvaryamongthesamegood/servicetypeswithoutlargevariance.●Thepresenceofnaïveconsumers(HeidhuesandKöszegi,2017);thatis,consumerswhoarenotskepticaltowardsSRSandsimplyrelyonrecommendationswithoutfurtherresearchorcriticalconsideration.Theprobabilityofgettinstuckinaconsumptionbubbleincreaseswithnaivety(orhighrecommendationelasticityingeneral),asthereisnocriticalexaminationofoutsideopportunities.Moreover,thereisempiricalevidencethatmanyconsumersarenotawareofpre-selectionandalgorithmicfiltering(insocialmedia:RaderandGray,2015).●Preferenceforone-stopshoppingleadsconsumerstorelyontherecommendationofoneshop/service.●Buildingconsumptioncapital(StiglerandBecker,1977;Adler,1985):Consumerscollectspecificknowledgeontwodimensions(1)thesystemtheyareusing;and(2)thegoods/OliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

369356Handbookondigitalbusinessecosystemsservicestheyareconsuming.Onlevel1consumersgettoknowtheserviceanditsSRS;theyknowhowtousethesystem,wheretoclick,orwhatrecommendationstheylikeanduse,forexample,knowinghowtofilterAmazonshoppinglists.Onlevel2theygettoknowspecificoffersandproducts(especiallyforreoccurringorserialconsumption),forexample,NetflixOriginals.Thisway,consumerscanbuildtasteandknowledgeinaspecificdirection.Fromanormativeperspective,theindividualconsumermightbehappyinacomfortablecon-sumptionbubble,without(irrelevant)outsideinformation,whichcouldincreasedecisioncostsorcognitivedissonance.Yet,thispathdependencymightnotalwaysbewelfare-enhancing.Onlyexperiencedconsumerswithsettledandwell-establishedpreferences,whoknowexactlywhattheylike,aresurethattheydonotmisssomething.Theconsumerbuildsconsumptioncapitalinonedirection;butthereisnocreationoftaste,andsoon,inalternativedirections.Therefore,theconsumermissesopportunities,learningprocesses,andtaste-buildingchances.Moreover,fromacollectivepointofviewonsociety,consumptionbubblesmightleadtoproblemsonabiggerscaleandinthelongerrun.Ontheonehand,thesegregationofvarioussmallbubblescanreducesocialcohesion,mutualunderstanding,andcollectivedevelopment/innovation.Inmediasectors,8theco-existenceofvarioussmallbutsegregatedbubblescanweakenculturalidentity,whichcanbeimportantforsolidarityandsocialcohesion;forexample,lossofnationwidemusichitsthateverybodyknowsduetoindividualstreamingbubbles.Notwithstanding,studiesfindnoempiricalevidenceoftheseeffectssofar(GentzkowandShapiro,2011;BorgesiusZuiderveenetal.,2016;PogorelskiyandShum,2019).Ontheotherhand,thecreationofonemajorcommonbubblecanleadtoalossofdiversityandindividuality.Allconsumersbuildthesameconsumptioncapital,andcollectiveknowledgeisminimizedtothesamestandards(racetothebottom).Theindividualknowledgedoesnotdiffer;thus,thedependencyonaspecificsystemcanincrease(suchas,forexample,depend-ingonspecificknowledgeaboutApple/Windowssystems).Thespecificknowledgeincreasesswitchingcosts,whichcanstrengthenmarketpowerpositions(withallincentivesofabuse)inthelongrun.ScaleeffectsandmonopolizationOneofthemarkeddifferencesbetweentherecommendingsalespersoninaphysicalshopandanalgorithmicSRSimplementedbyanonlineservicerelatestotheresultingmarketstructure.Instarkcontrasttothemoredecentralizedclassicrecommendationcompetenceofhumanexperts(scatteredacrossmillionsofshops,organizations,andsoon),algorithmicSRSsrepresentastrongcentralizationofrecommendationknowledge.Baseduponbigdatainput,onesystemofintegratedalgorithmsproducesindividualizedsearchrankingsandrecommen-dations.Furthermore,thefundamentalcentralizationofknowledgeisaccompaniedbythedependenceofthequalityofsearchandrecommendationresultsontheamountofdatainput:moredatainputleadstobetterestimationsofconsumers’preferences,andthustobetterSRSperformance.ScaleeffectsgivebigSRSsuppliersanadvantageoversmalleronesandcreatebarrierstoentryfornewcomers.Thisfavorsamarketstructurewitheitheranarrowoligop-olyofafewbigglobalplayers,orevenoneleadingsupplierenjoyingadominantposition.Withoutanycountervailingeffects,evenamonopolywouldbefeasiblefortheSRSmarket.However,therearesomecountervailingfactors.First,thelawofdiminishingmarginalreturnsalsoholdsforalgorithmicSRSs:whilemoredataisalwaysuseful,theadditionalOliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

370Data(r)evolution:theeconomicsofalgorithmicsearchandrecommenderservices357advantageofmoredatadecreasesbeyondacertainthreshold.Thus,thequalitydifferencesamongsuppliersallworkingwithbigdataamountsbecomesnegligibleandhardlyrecog-nizableforimperfectlyinformed,behavioralconsumers.Second,personalizeddata,whichistheresourcefeedingthealgorithms,isnon-rivalincharacterandcanbereproducedbytheconsumers.Hence,itisnotexclusivetooneSRS.Consumerscanrevealtheirpersonaldatatomanyserviceswithoutexhaustionofthegood“personaldata”andmanyonlineservicescanparallel-trackthesameconsumerandtheirbrowsingandconsumptionbehavior.Consequently,thedatafeedingthealgorithmsisnon-exclusiveandeverysmallerSRSsupplierornewcomercanamassthenecessarydatatobecomecompetitivewiththeincumbents.Thisdoesrequiresomeinvestment,makingtheSRSmarketnotperfectlycontestable.However,thisishardlydifferentfromothermarkets.Third,technologicalswitchingcostsbetweenSRSarelow,sothatcompetingservicescanattractusersonmerit.9Altogether,itappearstobeunlikelythatalgorithmicSRSsleadtoamonopoly.However,providersofalgorithmicSRSsenjoymoremarketpowerthantraditionalSRSsdo.BiasIfprovidersofSRSsexperienceincentivestobiastherankingofsearchresultsandrecommen-dations,consumerwelfaremaybejeopardizedinfavoroftheprofitsoftheSRSproviders.Apriori,biasingSRSsshouldbenegativeforSRSprofits,becausemaximizingthefitwithindividualconsumerpreferencesisprofitable,anddeviatingfromthismaydriveconsumersawayfromusingtheservice.Assuch,algorithmicSRSsceterisparibusenhanceconsumerwelfare.Notwithstandingthisgeneralinsight,SRSprovidersmayexperiencescopeforprofitablebiasundercertaincircumstances.Thisscopediffersbetweennon-integratedandverticallyintegratedSRSproviders,andmattersamongstdifferenttypesofverticalintegrationaswell(seeFigure22.2).Figure22.2SRS:verticalintegrationFornon-integratedSRSproviders,biasescanbeprofitableiftheSRSproviderbenefitsfromconsumerschoosingspecificgoodsfromthesearchresultsandrecommendationsoverothers.AssumethatanSRSproviderearnsdifferentmarginsdependingonwhichgoodstheconsumerOliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

371358Handbookondigitalbusinessecosystemschoosesfromthesearchandrecommendationlists.Examplesincludecomparisonserviceswhereupstreamsupplierspayforeachconsumerdirectedtothemthroughthiscomparisonwebsite(pay-per-click)orsearchengineservices.Then,theSRSproviderexperiencesincen-tivestorecommendpreferablygoodswhereitsprofitmarginishighest,aswellastoranktheseitemssystematicallyhigherinsearchresults,independentlyoftheestimatedconsumer’spreference.IncentivesforbiasingSRSresultsthereforeoccuriftheretailserviceearnsmorefromsellinggoodsfromupstreamcompanyAthanfromupstreamcompanyB(biasinfavorofthemoreprofitablesales;DeCornièreandTaylor,2019).Obviously,thisincentiveisevenstrongerwhenupstreamsupplierspaydirectlyforbetterSRSrankings.Indoingso,anSRSproviderfacesatrade-offbetweensettingahighsubscriptionfeeandahighlevelofbias,becauseitneedstocompensatesubscribersforenduringthebiasviaalowersubscriptionfeetoensuretheirparticipation(BourreauandGaudin,2018).Thus,servicesofferedatazeroprice(suchastheGooglesearchengine)canaffordahigherbiasthanserviceswithapositivesubscriptionprice(suchastheNetflixstreamingservice).ThecaseofverticalintegrationI(seeFigure22.2)issimilar,butincreasesincentivestobiasbecausemorevariablesinfluenceprofitmargins,sothattheyaremorelikelytodifferbetweenupstreamgoodssuppliers.Forinstance,streamingservicesarelikelytonegotiatedifferentroyaltieswithdifferentupstreamcontentproviders,andmarketplaceservicesarelikelytodrawdifferingretailmarginsfromdifferentupstreamgoods.Theythenexperienceincentivestorankthecontentsandgoodswiththehigherprofitmarginsystematicallyhigher.Whilesuchabiasisprofitable,itreducesconsumerwelfareand,intotal,harmssocialwelfare(BourreauandGaudin,2018).Thescopeforbiasislimitedbytheintensityofcompetition(BourreauandGaudin,2018;DeCornièreandTaylor,2019;Hagiuetal.,2020)andthesensitivityofconsumerstobiasedrecommendations(BourreauandGaudin,2018;DeCornièreandTaylor,2019).VerticalintegrationII(seeFigure22.2)generatesanadditionalincentiveforharmfulalgorithmicsearchandrecommendationbias,namelytheso-calledself-preferencing.IftheSRSproviderisverticallyintegratedtotheextentthatsomeofthegoodsrankedinitssearchandrecommendationlistsarefromthesamecompanyorthesamegroupofcompanies,thenbiasingtheresultsinfavorofthesegoodscanevenbeprofitableifitdrivessomeconsumersaway.AslongastheadditionalsalesoftheupstreamgoodsoffsetthemarginallossesofSRSusage,anintegratedcompanyfindsitprofitabletobiasitsSRS.Forinstance,theEuropeanCommission(2017)foundinitsGoogleShoppingcasethatAlphabet-GoogledeliberatelybiaseditsGoogleSearchserviceinordertosteerthetraffictowardsGoogleShoppingandawayfromcompetingcomparisonservices.AccordingtotheEuropeanCommission(2017),thiswasdonebyimplementingapenaltypointssystemintothealgorithm,whichdowngradedtherankingofspecificcompetitorsofGoogleShoppinginthesearchrankings,sothattheydis-appearedfromthefirstpageofsearchresults.Thestrategywassuccessful,asitsignificantlychangedthemarketsharesofonlinecomparisonservicesinfavorofGoogleShoppingandattheexpenseofitscompetitors,butitharmedsocialwelfare(EuropeanCommission,2017).Accordingtothestateofresearch,theprobabilityofharmfulself-preferencingincreaseswiththefollowingcharacteristics:●HighermarketpowerintheSRSmarket.●HighermarketpowerintheretailingmarketwithwhichtheSRSisintegrated(BourreauandGaudin,2018;DeCornièreandTaylor,2019;Hagiuetal.,2020).OliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

372Data(r)evolution:theeconomicsofalgorithmicsearchandrecommenderservices359●Highermarketshares(evenbelowtraditionalmarketpowerthresholds,butofcoursealsobeyondsearchrankingsandrecommendations(DrugovandJeon,2018).●Greaterinsensitivityofconsumerstobiasedrecommendations(BourreauandGaudin,2018;DeCornièreandTaylor,2019),thatis,lowerbiaselasticityofdemand,forinstanceduetohighersearchcostsforconsumerswantingtocircumventthebiasingSRS(BourreauandGaudin,2018);butalsoduetootherfactors.●Theexistenceofessential“superstar”or“must-have”content/goodsbecause,again,consumersfinditmoredifficulttoavoidthebiasingretailservice(BourreauandGaudin,2018;GaenssleandBudzinski,2021).●Smallerqualityorutilitydifferencesbetweenthegoods/contentsfromtheintegratedandthenon-integratedupstreamproviders(DeCornièreandTaylor,2019;Padillaetal.,2020)becauseconsumersarelikelytofinditmoredifficulttodetectbias.●Moresaturatedormorematuremarkets(Padillaetal.,2020);thatis,whengrowthdynam-icsintheprimarymarketsofthebiasingservices(thatis,thestreamingmarketortheunderlyinghardwaremarketasinthecaseofSRSbysmartphoneappstores)starttoslowdown.●More,ormorelikely,optionstopersonalizesubscriptionprices(BourreauandGaudin,2018).Themoreofthesecharacteristicsaregivenandthegreatertheextentofthem,thehigheristheprobabilityoftheoccurrenceofharmfulself-preferencing.Furtherresearchislikelytoidentifymorecharacteristicsalongtheselines.Altogether,welfare-harmingbiasingofalgorithmicSRSplaysonlyaminorroleiftheSRSproviderisindependentorifverticalintegrationislimitedtotheretailerlevel.Inthesecases,theprobabilityofharmfulbiasisnotzero.However,itthendependsonconsiderablemarketpower,severelylimitingalternativestothedominantSRSforconsumers.Effectivecompe-titionerodestheincentivesforbiases.Thingslookdifferentifverticalintegrationextendstoupstreamlevelswhichprovide/sellthegoodsthatgetrankedbytheSRS(verticalintegrationIIinFigure22.2).Thisrepresentstheproblematiccasewhereharmfulbiasintheformofself-preferencingmustbeexpectedtoprevail.PrivacyWheneverpersonalizeddataiscollected,processed,andcommerciallyanalyzed,issuesofprivacyplayarelevantrole.Obviously,privacyisamultidisciplinaryissue.However,inthecontextofouranalysis,privacymatterswithrespecttoitseffectsonwelfare.Theeconomicsofprivacy(foranoverview,seeAcquistietal.,2016)analyzeunderwhichconditionsmarketplayers(includingconsumers)makewelfare-optimaldecisionsregardingtherevelationordisguiseofpersonaldata.Themodernliteraturethatfocusesononlinemarketsemphasizesinformationasymmetriesattheexpenseofconsumers:ifconsumerscannotknowforwhatandbywhomtheirdataiscommerciallyused,theycannotmakearationaldecisionaboutitsprovision,andinefficienciesoccur(interalia,Taylor,2004;AcquistiandVarian,2005;HermalinandKatz,2006).Similarly,alackofcompetition—thatis,alackofalternativesforconsumerstochoosebetween—causeswelfareharm(Kerber,2016).Personaldatamaybeoverprovidedcomparedtotheaspiredlevelofprivacy,andthecommercialvalueofdatamaybeundervalued(BudzinskiandKuchinke,2020).OliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

373360HandbookondigitalbusinessecosystemsConsumersunderstandrelativelywellthattheirdataisusedtoranksearchresultsandprovideindividualizedrecommendationswhenusingaservicewithanalgorithmicSRS.Usually,theywillnotknowhowthealgorithmexactlyworks.Yet,intheabsenceofhiddenbiases(seeabove)andthepresenceofeffectivecompetition,thisshouldbenoproblem,sincetheycanassesswhethertherecommendationsmatchtheirpreferencesornot(experiencegoodcharacteristics).However,iftheSRSproviderprocessesorsellsthepersonalizeddatatothirdpartiesforfurthercommercialpurposes,itbecomeslesslikelythattheconsumercananticipatethecommercialuseandvalueoftheirdataprovision.Thisisfurtherfueledbythecommonphenomenonthatconsumerslargelyignoreavailableinformationaboutdatausageandprivacyconditionsprovidedbyserviceprovidersintheirgeneraltermsandconditions(ObarandOeldorf-Hirsch,2018).TheCambridgeAnalyticacaseprovidesanexamplewheremostconsumerswerenotawareofathird-partyuseoftheirdata(althoughperhapsbasedmoreonpoliticalthancommercialpurposes),asdoestheGermanantitrustcaseagainstFacebook’snon-transparentdataextractionthroughthirdparties(interalia,Budzinskietal.,2021).Note,however,thatthisprivacyissuedoesnotapplyifanSRSprovidersellstheresultsofitsdataanalysis,anddoesnottradethedataitself.Spotify’sbusinessofsellingstreamingdataanalysistotheupstreammusicindustryrepresentssuchanexample.MANAGERIALIMPLICATIONSSRSspresentefficienttoolsfordigitallyoperatingcompanies(forexample,onlineshops,mediaandsocialmediaservices)byprovidingconsumerswithpre-structuringassistancefordealingwiththevastamountofavailablegoods/content,thusfacilitatingpurchasingand/orconsumptiondecisions(thatis,reducingtransactioncosts).Consumersvaluethiskindofpersonalizedrecommendation,asevidencedbyaconsiderablepercentageofconsumptionalreadybeingbasedonSRSs.AlgorithmicSRSshavethepotentialtoincreaseprofits,thatis,generatingcross-andupsellingopportunitiesbymakingtheircustomersawareofnewproducts,specialoffers,nicheproducts(inlinewiththelong-taileffect),aswellasremindingthemofgoodstheywerepreviouslyinterestedin.ThebetterthealgorithmicSRSmeetsthepersonalneedsoftheindividualconsumers,themoretimeand/ormoneytheywillspentwiththerespectiveservice.Bydoingso,reputationcanbebuilt,leadingto:(1)customerloyalty(consumersputtrustinthecompanies’recommendation);(2)one-stopshoppingbehavior;and/or(3)positiveC2Crecommendations.Companies,therefore,shouldcontinuouslyanalyze(consumer)dataaswellasevaluatethesuccessofthegivenSRS(thatis,evaluatewhethertherecommendationwasactuallyusedbytheconsumersandledtofurtherpurchasesand/orconsumption)inordertofurtherimprovethealgorithms.Thus,theavailabilityandthoroughanalysisof(big)data(thatis,basic,advanced,andderivedconsumerdata)playsacrucialroleforthefunctioningandenhancementoftheSRS.Inadditiontothis,furtherbusinessmodels,suchastheuseofthird-partyservices(forexample,targetedadvertising),verticalorhorizon-talintegratedservices,aswellasindividualizedpricing,canbepositivelyinfluenced.Thischapterhaselaboratedonadistinctionofdifferentformsofrecommendations,whichgohand-in-handwithdifferentfunctionalities(forexample,B2CversusC2Crecom-mendations).Companiesshouldbeawareofthesedifferencesandtrytocombinedifferentrecommendationtypestopositivelyinfluenceconsumers’consumptionand/orpurchasingdecisions.Forinstance,whereasforroutineconsumptionSRSsmightsuffice,moreimportantOliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

374Data(r)evolution:theeconomicsofalgorithmicsearchandrecommenderservices361transactionsshouldbeactivelyaccompaniedwiththepromotionofC2Crecommendationssuchasratingsandreviewsinordertostrengthencredibilityintherespectivealgorithmicrecommendationandreduceinformationasymmetries.Bydoingso,possibleprivacyconcernsoftheconsumersmaybereduced.Sincealgorithm-basedSRSsincreasinglycomeunderscrutinyfromregulatoryauthoritiesandgovernments,companiesemployingsuchSRSsshouldensurethattheycomplywithanti-trustandconsumerprotectionlaws.Thisparticularlyreferstoincentivesconcerningbiasedsearchrankingsandrecommendations.Whilesuchbiasingstrategiesmaybeprofitableintheshortrun,theyfuelthetighteningofcompetitionrulesandpromotepublicregulationofalgo-rithmicSRSs.Especiallythelatterentailsthedangeroffar-reachinginterventionsintobusi-nessmodelsandcommercialopportunitiesaswellasintomanagerialfreedom.Withstandingincentivestoself-preferencing—asprofitableasthatmaybeintheshortrun—representsanimportantelementtopreventfar-reachinggovernmentintervention.CONCLUSIONANDCONTRIBUTIONTODBE-RESEARCHOuranalysisofalgorithmicSRSsimpliesfiverelevantconsiderationsforthefurtherdevelop-mentoftheresearchfieldDBE(foranoverview,seeBaumannandLeerhoff,Chapter2ofthisHandbook;Kapoor,2018;Senyoetal.,2019;Kretschmeretal.,2020;RietveldandSchilling,2020).First,focusonplatforms.TheanalysisoftheroleofalgorithmicSRSwithinDBEsdemon-stratesthatplatformcharacteristics—definedastheexistenceoftwoormoredistinctdemandgroupsthatareinterconnectedbyindirectnetworkexternalitieswhichcannotbesufficientlyinternalizedbydirectcoordinationamongthedemandgroups(interalia,Armstrong,2006;RochetandTirole,2006;EvansandSchmalensee,2007;BudzinskiandKuchinke,2020)—arenotanecessaryingredientforrelevantecosystemphenomenatosurface.TheeconomiceffectsofalgorithmicSRSsdonotdependonwhethertheecosystemrevolvesaroundaplatformmodel(suchasclassicalYouTubeorAmazonMarketplaceplatforms)oran“ordinary”servicemodel(suchasNetflixortheSpotifypremiummodel).Moregenerally,theroleofdatawithinecosystemsdoesnotrequiretheexistenceofaplatformwithinthesystem;italsoworkswithmoretraditionalconceptsofchainsofsellersandbuyers(seealsoBudzinskietal.,2020,pp39‒41).RegardingthedebateonthedefiningelementsofDBEs,thispointsagainstanarrow,platform-centricview(interalia,Senyoetal.,2019;Kretschmeretal.,2020),andtowardsabroaderperspective(Kapoor,2018).Second,theallocationofdata.Therelevanceoftheallocationofdata(bothaccesstodataandcompetencetouseit)amongtheecosystemparticipantsplaysanimportantrole,becausetheplayersthatcontrolcrucialinterfaces,wheredataiscollectedaswellasmeaningfullycom-binedandanalyzed,cancapturethelargestsharesofthevaluecreationwithinthesystem.ThisrelatestoallthreestrategicdimensionsofKretschmeretal.(2020),namely:competitionwithtraditionalsuppliers(withinferiordatacollectionandanalysisoptions),between-ecosystemcompetition(superiordatacompetencegiftingcompetitiveadvantage,plusdatacompetenceallocationacrossecosystemsinfluencingcompetitionintensity),10andwithin-ecosystemcompetition.Inparticular,thelastofthesedimensionsisunder-researchedwithrespecttotheeffectsofdataaccessibilityandcompetence(includingdatapropertyrights;Kerber,2016,2019)forinter-firmrelationswithintheDBEandrelativebargainingpower.OliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

375362HandbookondigitalbusinessecosystemsThird,incentivesandownershipintegration.TheanalysisofalgorithmicSRSscarvesouthowdecisiveincentivesforstrategicfirmbehaviorchangewithshiftsintheownershipstruc-turewithintheecosystem;forinstance,throughverticalorconglomerateintegration.Whilenon-integratedcompaniesenjoyincentivestofocusonconsumervalue-creatingstrategies,integratedcompaniesexperiencerelevantincentivestoengagein(profitable)anticompetitivepractices.Thisaddressesresearchdesideratasuchasthelocusofintegrationwithinecosys-tems(Kapoor,2018,p.5),andthedarksideofcorporatescopewithinecosystems(RietveldandSchilling,2020,pp.19‒20,22‒23).Fourth,theroleofmarketpower.Thetwoprecedingaspectsleadtoanimportantconsid-erationregardingthegeneralphenomenonofpowerwithinDBEs,whichdeviatesfromandexceedstraditionalmarketpowerconcepts.Thisrelatestotheanalyticalresearchthemeofgovernanceandorchestrationofthecaptureofvalue(RietveldandSchilling,2020);thatis,whocanappropriatetherevenuesandprofitswithintheDBE.Furthermore,itaddressestwoofthestrategicdimensionsassuggestedbyKretschmeretal.(2020).Firstly,competitionamongecosystemsissignificantlyinfluencedbymarketpower,interaliawithrespecttopreventingdefectionfromcomplementorsandconsumerstosuperioroffersfromcompetingecosystems.Secondly,thepowertogovernandorchestratethelocusofvaluecreationaswellasthepowertocapturecentralvaluesbothcreates,andoffersscopetoexploit,economicdependenceofcomplementorswithinanecosystem(Bougetteetal.,2019).Thecrucialfactorsforthetippingpointsfromthepro-totheanti-competitiveeffectsofalgorithmicSRSsprovideanexemplarycase.Thenatureofpowerinecosystemsisasystemicmarketpowerfueledbyanoutstand-ingrelevanceacross(within-ecosystem)markets(“outstandingrelevanceacrossmarkets,”ORAM;Budzinskietal.,2020),whichcannotbegraspedbytraditionalmarketorbargainingpowerconceptsaloneandrequiresfurtherresearch.Fifth,governanceandregulation.SurveyliteratureonthestateofDBE-researchpointstotherelationofinternalandexternalgovernanceandregulationasanotherunder-researchedarea(interalia,Kretschmeretal.,2020;RietveldandSchilling,2020).Bypinpointingwhenandhowincentivesforconsumerwelfare-increasingusesofSRSswitchtoincentivesforanticompetitivestrategies,ouranalysiscontributestoaddressingthisresearchtheme.Whenconsumerwelfare-criticalaswellasdependence-exploitingfirmbehaviordominatesecosys-tems,callsforexternalregulationarelikelytosurface,andifsuccessfulwillleadtointernalecosystemmanagementbecomingpartlyreplacedbypublicregulation(interalia,Budzinskietal.,2020;MarsdenandPodszun,2020).NOTES1.Whilethismaydifferfromotherpointsofview,forexample,ininformationtechnology,thefocusofthischapterliesoneconomicaspectsbeyondprogramming(regardingutilityandfunctionforconsumers).2.Manymediaserviceprovidersuseauto-playfunctions;forinstance,YouTubeplaysthenextvideoafterthepreviousoneisfinished.3.Ofcourse,friendsandfamilywere(andarestill)importantrecommenders.Nevertheless,thischapterconcentratesonB2Crecommendations.4.Intheinformationtechnology-relatedliterature,threedifferenttypesoffiltersystemsaretypicallydistinguishedforrecommendations:(a)content-based,basedonindividualconsumerhistoriesandsimilarproducts;(b)collaborativefiltering,basedonbehavioralpatternsofconsumerswithsimilarOliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

376Data(r)evolution:theeconomicsofalgorithmicsearchandrecommenderservices363tasteandpreferences;and(c)hybridrecommendersystemscombining(a)and(b)(HinzandEckert,2010;Zhangetal.,2019;Gaenssle,2021).5.Nevertheless,therecommendersystemdidnotperformaswellasotherusersandhumanexpertswhenitcametotrustworthinessandexpertise(SenecalandNantel,2004).6.Behavioraleconomicshasidentifiedroutinebehaviorasanareawhereindividualseconomizeontheuseofcognitiveresourcesbytryingtoreachasatisfactorylevelofutility(called“satisfycing”)insteadofthemaximumlevelofutility(interalia,Vanberg,1994,2002;Budzinski,2003).7.Thereisabroadliteratureonmediabiasandfilterbubblesinnewsmarkets(interalia,BorgesiusZuiderveenetal.,2016;DelVicarioetal.,2016;Flaxmanetal.,2016;Sunstein,2017).8.Moresevereeffectscanbefoundinnewsmarkets,withimplicationsfordemocraticvaluesandpoliticaldecisions(BorgesiusZuiderveenetal.,2016).Thisimportantresearchfield,however,isnotthefocusofthischapter.9.Pathdependenciesbaseduponconsumerbehaviorarediscussedinthecontextofconsumptionbubbles.10.UsingtheirnarrowerdefinitionofDBEs,Kretschmeretal.(2020)refertobetween-platformcom-petition.Forthestateofresearchonplatformcompetition,however,seeEvansandSchmalensee(2007),HaucapandStühmeier(2016),aswellasBudzinskiandKuchinke(2020).REFERENCESAccenture(2018).Makingitpersonal.Whybrandsmustmovefromcommunicationtoconversationforgreaterpersonalization.Availableat:https://www.accenture.com/_acnmedia/pdf-83/accenture-making-personal.pdf(accessedNovember6,2020).Acquisti,A.,Taylor,C.andWagman,L.(2016).Theeconomicsofprivacy.JournalofEconomicLiterature,54(2),pp.442–492.Acquisti,A.andVarian,H.R.(2005).Conditioningpricesonpurchasehistory.MarketingScience,24(3),pp.367–381.Adler,M.(1985).Stardomandtalent.AmericanEconomicReview,75(1),pp.208–212.Akerlof,G.A.(1970).Themarketfor“lemons”:qualityuncertaintyandthemarketmechanism.QuarterlyJournalofEconomics,84(3),pp.488–500.Anderson,C.(2004).Thelongtail.WiredMagazine.Availableat:https://www.wired.com/2004/10/tail/(accessedOctober28,2020).Armstrong,M.(2006).Competitionintwo-sidedmarkets.RANDJournalofEconomics,37(3),pp.668–691.Belleflamme,P.andPeitz,M.(2020).Ratings,reviews,recommendationsandtheconsumptionofculturalgoods.In:R.TowseandN.Hernández(eds),HandbookofCulturalEconomics,3rdedn.Cheltenham,UKandNorthampton,MA,USA:EdwardElgarPublishing,pp.466–473.BorgesiusZuiderveen,F.J.,Trilling,D.,Möller,J.,Bodó,B.,DeVreese,C.H.andHelberger,N.(2016).Shouldweworryaboutfilterbubbles?InternetPolicyReview,5(1),pp.1–16.Bougette,P.,Budzinski,O.andMarty,F.(2019).Exploitiveabuseandabuseofeconomicdependence:whatcanwelearnfromanindustrialorganizationapproach?Revued’EconomiePolitique,129(2),pp.261–286.Bourreau,M.andGaudin,G.(2018).Streamingplatformandstrategicrecommendationbias.Availableat:https://ssrn.com/abstract=3290617(accessedOctober28,2020).Bozdag,E.(2013).Biasinalgorithmicfilteringandpersonalization.EthicsInformationTechnology,15(3),pp.209–227.Brynjolfsson,E.,Hu,Y.andSimester,D.(2011).GoodbyeParetoPrinciple,hellolongtail:theeffectofsearchcostsontheconcentrationofproductsales.ManagementScience,57(8),pp.1373–1386.Brynjolfsson,E.,Hu,Y.andSmith,M.D.(2006).Fromnichestoriches:theanatomyofthelongtail.SloanManagementReview,47(4),pp.67–71.Budzinski,O.(2003).Cognitiverules,institutions,andcompetition.ConstitutionalPoliticalEconomy,14(3),pp.215–235.OliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

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378Data(r)evolution:theeconomicsofalgorithmicsearchandrecommenderservices365Kretschmer,T.,Leiponen,A.,Schilling,M.andVasudeva,G.(2020).Platformecosystemsasmeta-organizations:implicationsforplatformstrategies.StrategicManagementJournal.https://doi.org/10.1002/smj.3250.Lee,D.andHosanagar,K.(2015).“Peoplewholikedthisstudyalsoliked”:anempiricalinvestigationoftheimpactofrecommendersystemsonsalesvolumeanddiversity.Availableat:https://www.krannert.purdue.edu/academics/mis/workshop/Rec%20Diversity%20Empirical%20DEC%202015.pdf(accessedNovember2,2020).Lorigo,L.,Pan,B.,Hembrooke,H.,Joachims,T.,Granka,L.andGay,G.(2006).TheinfluenceoftaskandgenderonsearchandevaluationbehaviorusingGoogle.InformationProcessingandManagement,42(4),pp.1123–1131.MacKenzie,I.,Meyer,C.andNoble,S.(2013).Howretailerscankeepupwithconsumers.Availableat:https://www.mckinsey.com/industries/retail/our-insights/how-retailers-can-keep-up-with-consumers(accessedOctober20,2020).Marsden,P.andPodszun,R.(2020).RestoringBalancetoDigitalCompetition—SensibleRules,EffectiveEnforcement.Berlin:Konrad-Adenauer-Stiftung.Milano,S.,Taddeo,M.andFloridi,L.(2020).Recommendersystemsandtheirethicalchallenges.AIandSociety,6(4),pp.957–967.Morgan,B.(2019).‘WhatistheNetflixeffect?’Availableat:https://www.forbes.com/sites/blakemor-gan/2019/02/19/what-is-the-netflix-effect/#7e6dd5025640(accessedOctober20,2020).Morozovaite,V.(2020).Commercialhypernudgingindigitalmarkets:shouldweworryaboutconsumerchoice?Availableat:https://law.haifa.ac.il/images/ASCOLA/Morozovaite_paper.pdf(accessedOctober20,2020).Nelson,P.(1970).Informationandconsumerbehavior.JournalofPoliticalEconomy,78(2),pp.311–329.Obar,J.A.andOeldorf-Hirsch,A.(2018).ThebiggestlieontheInternet:ignoringtheprivacypoliciesandtermsofservicepoliciesofsocialnetworkingservices.Information,CommunicationandSociety,23(1),pp.1–20.Padilla,J.,Perkins,J.andPiccolo,S.(2020).Self-preferencinginmarketswithvertically-integratedgatekeeperplatforms.CSEFWorkingPaper,582.Pan,B.,Hembrooke,H.,Joachims,T.,Lorigo,L.,Gay,G.andGranka,L.(2007).InGooglewetrust:users’decisionsonrank,positionandrelevance.JournalofComputer-MediatedCommunication,12(3),pp.801–823.Pogorelskiy,K.andShum,M.(2019).Newsweliketoshare:hownewssharingonsocialnetworksinfluencesvotingoutcomes.WarwickEconomicsResearchPapers,1199,pp.1–48.Prey,R.(2018).Nothingpersonal:algorithmicindividuationonmusicstreamingplatforms.Media,CultureandSociety,40(7),pp.1086–1100.PwC(2019).Gettingpersonal:puttingthemeinentertainmentandmedia.Availableat:https://www.pwc.com/gx/en/entertainment-media/outlook-2019/entertainment-and-media-outlook-perspectives-2019-2023.pdf(accessedNovember6,2020).Rader,E.andGray,R.(2015).UnderstandinguserbeliefsaboutalgorithmiccurationintheFacebooknewsfeed.In:JinwooKim(ed.),CHI2015:Proceedingsofthe33rdAnnualACMConferenceonHumanFactorsinComputingSystems,NewYork:ACM,pp.173–182.Rietveld,J.andSchilling,M.(2020).Platformcompetition:asystematicandinterdisciplinaryreviewoftheliterature.JournalofManagement,20(10),pp.1–36.Rochet,J.-C.andTirole,J.(2006).Two-sidedmarkets:aprogressreport.RANDJournalofEconomics,37(3),pp.645–667.Senecal,S.andNantel,J.(2004).Theinfluenceofonlineproductrecommendationsonconsumers’onlinechoices.JournalofRetailing,80(2),pp.159–169.Senyo,P.K.,Liu,K.andEffah,J.(2019).Digitalbusinessecosystem:literaturereviewandaframeworkforfutureresearch.InternationalJournalofInformationManagement,47(1),pp.52–64.Stigler,G.J.andBecker,G.S.(1977).Degustibusnonestdisputandum.AmericanEconomicReview,67(2),pp.76–90.Sunstein,C.R.(2017).#Republic:DividedDemocracyintheAgeofSocialMedia.Princeton:PrincetonUniversityPress.Taylor,C.(2004).Consumerprivacyandthemarketforcustomerinformation.RANDJournalofEconomics,35(4),pp.631–650.OliverBudzinski,SophiaGaenssle,andNadineLindstädt-Dreusicke-9781839107191DownloadedfromPubFactoryat05/28/202210:25:04AMviaColumbiaUniversityLibrary

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38023.Blockchaintechnologyinthesupplychain:learningfromemergingecosystemsandindustryconsortiaWafaaA.H.AhmedandBartL.MacCarthyINTRODUCTIONThedigitalsupplychainpromisesenhancedvisibilityandimprovedsupplychaincontrolthroughthecreationofasupplychaindigitaltwin(Sraietal.,2019).However,accurateandreliablealignmentofthedigitalrecordwithactualphysicalproductionandtheflowofmate-rialsacrossasupplychainischallenging.Althoughsomeactorsmaybeconnecteddigitallyinasupplychain,fulldigitaladoptionanddigitalconnectivityacrossalltiersofsupplyhasbeenlimitedhitherto.Blockchaintechnologyisapotentiallytransformativesolutiontoenabletrackingandproducttraceabilityacrossthesupplychainandtoprovideassuranceonproductprovenance.Blockchaintechnologyprovidesanimmutableandtraceabledigitalrecordoftransactionsthatissharedacrossadistributedpeer-to-peernetwork.Thecapabilityofblockchaintech-nologytoprovideasecuremediumforinformationsharingmakesitpotentiallydisruptivetoexistingbusinessmodelsandbusinessecosystems(Schneideretal.,2020).Blockchainandsmartcontracttechnologies(ChristidisandDevetsikiotis,2016)provideworkabledigitalsystemsthatshowpromiseinenhancingtransparency,visibility,andtraceabilitybetweensupplychainpartners.Thiscanleadtoimprovedquality,greaterassurancesofauthenticity,betterinformationsecurity,andimprovedriskmanagementacrossasupplychain.Severalpilotandtestprojectsareunderwayindifferentindustriesexaminingthepotentialofblock-chainforsupplychainapplications,withsomeseekingtoscaletofullsystems.Technologydevelopers,regulators,standardsorganizations,andenterprisesacrossbusiness,industry,andcommercearemakingincreasingeffortstosupportthedevelopmentofblockchainforsupplychainapplications.Thishasresultedintheformationofseveralconsortiatotackletheissuesthatarehinderingdevelopment.Formingablockchainconsortiumhasbeenrecognizedasanimportantstepinbringingdif-ferentstakeholdersandinterestgroupstogetherforblockchain-basedenterpriseapplicationstoaccelerateandscaleuptoindustry-widesolutions(WEF,2020).Blockchainconsortiamaybeconsideredasatypeofdigitalbusinessecosystem(DBE)withafocusontheuseand/ordevel-opmentofblockchaintechnology.Blockchainisinfluencingthecompetitivenormassomedegreeofcollaborationmaybeneededbetweencompetitorstorealizethefullpotentialofthetechnologyandtospeedupitsadoption.ESGIntelligence(2020)reportsthat27percentof320currentblockchainconsortiafocusonfinancialandbankservices,19percentoncross-industryapplications,andmorethan50percentareindustry-specificconsortia.Theincreasingnumberofconsortiathatseektouseblockchaininindustry-specificandsupplychainapplicationsisanacknowledgmentthatblockchaintechnologieshavesignificantpotentialinawiderangeof367WafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

381368Handbookondigitalbusinessecosystemsenterpriseapplications.Italsoindicatestheneedforindustry-widecollaborationtoovercomethechallengesinadoptingandusingblockchaintoensureitssuccessfuldeployment.Inthischapter,westudytheroleofblockchainconsortiainthedevelopmentofblockchaintechnologyforsupplychainapplications.Weseekto:●Identifythemajorchallengeshighlightedintheliteraturethathinderblockchaintechnol-ogyadoptioninthesupplychainandunderstandtherolethatblockchainconsortiacanplayinovercomingthesechallenges.●Highlightthekeyconsiderationswhenformingorjoiningablockchainconsortium.●Deriveinsightsfromananalysisofasetofprominentblockchainconsortiatobetterunderstandtheimplicationsofblockchainadoptionforexistingsupplychainandbusinessecosystems.Weusepubliclyavailablesecondarydata,includingtheexistingpublishedliteratureandprac-titionerdatasources,toidentifyandanalyzerelevantblockchainconsortia.Weselectsevenprominentconsortiathathaveemergedtodevelopblockchaintechnologiesinvarioussectors.Wedescribeandanalyzeeachconsortiumwithrespecttothetypeofpartnership,thescopeofactivitiesundertaken,theirobjectives,andeachconsortium’sbusinessmodel.Weusetheanalysistoinformthediscussionandderiveinsightsandpropositionsontherolethatconsortiaplayinthedevelopmentandadoptionofblockchaintechnologyforsupplychainapplications.Thechapterisorganizedasfollows.Itfirstprovidesanoverviewofblockchaintechnology,thenexaminestherelationshipsbetweenblockchainconsortia,digitalbusinessecosystemsandplatformecosystems.Next,ithighlightsmajorareasofchallengeforblockchaininenterpriseandsupplychainapplicationsthatblockchainconsortiaseektoaddress,beforediscussingkeyconsiderationswhenformingorjoiningablockchainconsortium.Wethenpresentandanalyzesevenprominentblockchainconsortia.Weprovideanin-depthdiscussionontheinsightsgainedfromthestudy,presentingfivepropositionsonthenatureandcharacteristicsofblockchainconsortiaecosystems.Weconcludethechapterwithasectiononlimitationsandfutureresearchopportunities.BLOCKCHAINTECHNOLOGYOVERVIEWBlockchaintechnologyisadigitaltechnologyconsistingofadigitalchainofblocksthatarestoredinadistributedledgersharedinapeer-to-peernetwork.Eachblockcontainsanumberoftransactionsthataretime-stamped,andeachblockreferstotheblockthatprecededitinthechainthroughacryptographickeycalledahash.Blockchaintransactionsarevalidatedthroughpeer-to-peerreviewbyadoptingaconsensusmechanism(ChristidisandDevetsikiotis,2016;Crosbyetal.,2016;Zhengetal.,2017).Thereareseveralconsensusmechanismsthatcanbeusedincludingproofofwork(PoW),proofofstake(PoS),proofofelapsedtime(PoET),andpracticalByzantinefaulttolerance(PBFT)(ChristidisandDevetsikiotis,2016).WafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

382Blockchaintechnologyinthesupplychain369Therearedifferenttypesofblockchainnetworks.Theblockchainnetworkforthecrypto-currencybitcoinisjustonetype.Blockchainnetworkscanbeclassifiedbasedonthreecharac-teristics:accessibilitytonetworkdata,abilitytotransact,andabilitytovalidatetransactions:1.Inpublicorpermission-lessnetworks,anyonecanaccessthenetwork,posttransactions,andparticipateinthevalidationprocess(Buterin,2015;ArasandKulkarni,2017;Farah,2018).2.Privateblockchainnetworks,ontheotherhand,provideaccesstoselectedparticipantsandareusuallyadoptedbyorganizationsforparticularbusinessneeds(Buterin,2015;Farah,2018).Nodesinthenetworkcantransactwitheachother,deploysmartcontracts,andengageinthevalidationprocess.3.Anotheremergingtypeofnetworkistheconsortiumblockchainnetwork,inwhichthetransactionvalidationiscontrolledbyselectedparticipants.Accesstotheinformationinthenetworkcanbepublicorprivate(Buterin,2015).Thelattertwotypesaremoresuitableforsupplychainmanagement(SCM)applicationsasorganizationsareconcernedabout,andwishtocontrol,accesstocommercialdata,whichplacesrestrictionsoninformationsharing.Thecharacteristicsoftheblockchainmakeitanattractivetechnologyforawiderangeofsupplychainapplications.Thetransparencyprovidedbytheblockchain’sdecentralizedstructureisoneofitsmosthighlightedadvantages(ArasandKulkarni,2017;Maulletal.,2017;Kshetri,2018;IBM,2018;ViriyasitavatandHoonsopon,2019).Withblockchain,alltheparticipantsinthenetworkmayhaveaccesstotheexactcopyofthedistributedledger,whichmayimprovethetransparencyofinformationandmaterialflows,andenablesecureinformationflowsbetweengloballydispersedsupplychainactors.Theimmutabilitycharacteristicandthetamper-proofarchitectureofblockchainmakeitarelevanttechnologytoconsiderwhenoperatinginuntrustedenvironments(SeebacherandSchüritz,2017).Furthermore,cryptographickeysareusedtoidentifyblocksandtrans-actions,whichensuresdataintegrity,privacy,andvalidity(SeebacherandSchüritz,2017).Immutabilityofthedigitalrecordisoneofthecharacteristicsthatmakesblockchainappealingforawiderangeofsupplychainapplications.Byprovidinganimmutablerecord,blockchaincanpotentiallyprovidedigitaltrackingacrossthesupplychainthatcannotbequestionedforauthenticity.Itisclaimedthatblockchaincanbeusedtoidentifyauthenticproductstofightagainstcounterfeitgoodsinthefoodandbeveragessector(Kshetri,2018),thepharmaceuticalindustry(Tsengetal.,2018),aerospaceanddefense(AerospaceIndustriesAssociation,2019),andtheautomotiveindustry(IBM,2018),andtoprotectpatienthealthrecords(Mettler,2016)inthehealthcaresector.Thechronologicalrecordofblockchainhasthepotentialtosignificantlyimprovetracea-bilityacrosscomplexsupplynetworks(Maulletal.,2017;AhmedandMacCarthy,2021).Traceabilitythroughblockchaincanenablethecollectionandanalysisofinformationrelatedtoproducttransformationandtransportationdataacrossthesupplychain,aswellasenviron-mentalimpact(Kshetri,2018).Thishasbeenthedriverformanyblockchainpilotprojectsindifferentindustries(e.g.KimandLaskowski,2018;Tsengetal.,2018;Higgins,2017;Wolfson,2019).Theuseofsmartcontractsaddsfurthercapabilitiestoblockchaintechnology.Smartcon-tractsarecomputerizedtransactionprotocolsthatexecutethetermsofacontract(Szabo,1994;Wangetal.,2019).Theycanbestoredintheblockchainnetworkandtriggeredbyothertrans-WafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

383370Handbookondigitalbusinessecosystemsactions.Smartcontractscanreflectarequiredbusinesslogicandimplementdifferentbusinessprocesses,marketingmechanisms,paymentmethods,andsophisticatedservicesinanautono-mousway(ChristidisandDevetsikiotis,2016;Glaser,2017;Xuetal.,2019).Smartcontractsprovidearangeofcapabilitiesandmaybeusedfordifferentpurposesinblockchain-enabledsupplychainstosupportnetworkgovernance,transactionvalidation,aswellasquality,envi-ronmental,andsustainabilitymanagement.BLOCKCHAINCONSORTIA,DIGITALBUSINESSECOSYSTEMS,ANDPLATFORMECOSYSTEMSDigitaltechnologiesanddigitalplatformshavetransformedhowbusinessesoperate,prompt-ingmanyorganizationstorestructuretheirbusinessmodelsandprocesses.Platformscreateopportunitiesfororganizationstobedevelopers,sponsors,and/orusersofdigitaltechnologies(RietveldandSchilling,2021).Examplesincludesocialnetworkingservicesandmobileoper-atingsystems(RietveldandSchilling,2021),eBay,andAmazon(Kretschmeretal.,2020).Digitalplatformshavebecomeadominantbusinessmodelthroughwhichorganizationscanreachandservemillionsofcustomers.Conceptssuchasthedigitalbusinessecosystemandtheplatformecosystemhaveemergedtodefinethecontextandenvironmentwithinwhichthesedigitaltechnologiesoperate.Senyoetal.(2019)defineadigitalbusinessecosystem(DBE)as“asocio-technicalenvironmentofindividuals,organisationsanddigitaltechnologieswithcollaborativeandcompetitiverelationshipstoco-createvaluethroughshareddigitalplatforms.”FourattributescharacterizeaDBE:platform,symbiosis,co-evolution,andself-organization(Senyoetal.,2019).Platformscomprisebothhardwareandsoftwaresystemslinkinganetwork.Symbiosisistheinterdependencebetweenpartners,processes,andtechnologies.Co-evolutionisthecollectiveabilityoftheDBEtotransformfromonestagetoanother.Self-organizationistheDBE’sabilityandprocessoflearningfromandreactingtoitsownenvironment(Senyoetal.,2018;Senyoetal.,2019).Heinetal.(2019)defineadigitalplatformecosystem(DPE)ascomprisingof“aplatformownerthatimplementsgovernancemechanismstofacilitatevalue-creatingmechanismsonadigitalplatformbetweentheplatformownerandanecosystemofautonomouscomple-mentorsandconsumers.”Kretschmeretal.(2020)conceptualizeplatformecosystemsas“meta-organisationsororganisationsoforganisations”withorganizationalfeaturesincludingpower,incentives,andgovernance.Powerandauthoritycomefromthedegreeofcontroltheplatformownerhasoverthetechnologyarchitectureandtheabilitytocoordinateeco-systeminteractions.Motivationandincentivescomefromtheaddedvaluecreatedfromtheinteractionbetweenthedifferentparticipantsenabledbytheplatform.Platformecosystemgovernancerelatestotherulesdevelopedbyplatformproviders,andthroughwhichecosystemparticipantsinteractindependently(Kretschmeretal.,2020).AdigitalplatformecosystemcanbeconsideredatypeofDBEthatevolvesaroundadigitalplatformownedbyaplatformproviderandisusedbyanecosystemofparticipantswhointeractindependently.Schatskyetal.(2018)defineablockchainconsortiumas“agroupofcompaniesthatcollab-oratetoadvancesharedobjectivesforthetechnology;thisincludesdefiningusecases,settingstandards,developinginfrastructureandapplications,andoperatingablockchainnetwork.”BlockchainconsortiasharemanyofthecharacteristicsofDBEsandsomecharacteristicsofWafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

384Blockchaintechnologyinthesupplychain371DPEs.Blockchainconsortiarequireacollaborationmodelwheremultipleorganizationsagreeonsharingtheirbusinessand/ortechnicalexpertisetowardsthedevelopmentofthetechnologyand/oritsusecases(WEF,2020).Someblockchainconsortiaincludemultipletechnologyprovidersworkingtogether(e.g.,EnterpriseEthereumAlliance,2020)whileothersmayhaveasoletechnologyprovider(e.g.,TradeLens,2020).Allmembersinablockchainconsortiuminteractaccordingtotheagreedgovernancemodel.ExamplesofmajorblockchainplatformsincludeHyperledger(https://www.hyperledger.org/),Ethereum(https://ethereum.org/),andR3(https://www.r3.com/).Thereisstronginterdependencebetweenthedifferentpartiesinablockchainconsortium,astransactionvalidationisbasedonaconsensusmechanism.Blockchainconsortiummembersworktogethertowardsthedevelopmentofthetechnologyanditsusecases(Schatskyetal.,2018).Thisenablestheco-creationofblockchainstandards,usecases,andthesharingoflessonslearned,whichleveragesthecapabilitiesofallmembers.SomeDPEcharacteristicsdescribedbyKretschmeretal.(2020)arealsorelevantforblock-chainconsortia.Technologyprovidersarekeymembersineveryblockchainecosystemastheyhavetheexpertiserequiredforthedevelopmentanddeploymentofblockchain,resultinginahighdependencyontheirknowledge,systems,andexpertise.However,blockchaindevel-operscannotdevelopsolutionswithoutin-depthunderstandingofthebusinessecosystemenvironmentandthenatureoftransactions.Blockchainisaninter-organizationaltechnologyanditsadvantagescanbeenhancedbythenetworkeffect.Organizationsareawareoftheneedforcollaborativeeffortstogainthemaximumpotentialbenefitsofthetechnology.Therefore,thereisawillingnesstocollaboratetoexperimentwiththetechnologywithothermembersoftheirsupplychains,whichmaymeancompetitiverivalscollaboratinginblockchainconsortia.AkeydifferencebetweenaDPEandablockchainconsortiumisthattheconsortiummemberscanparticipateinthedevelopmentoftheblockchainplatformanditsgovernancemodel,shareownershipandprofits,andcanalsobethemainusersoftheplatform.Blockchainconsortiashouldthereforebeconsideredasatypeofdigitalbusinessecosystemwithafocusontheuseanddevelopmentofblockchaintechnology.THEIMPORTANCEOFCONSORTIAFORBLOCKCHAINDEVELOPMENTBlockchainenablescollaboration,andcollaborationenablesblockchain.Collaborationisakeyprerequisiteforblockchainadoption.Severalconsortiahavebeenformedtoexperimentwithblockchainandtobringtogetherallrelevantpartiesthatwanttocollaborateandworktogethertoachieveacommongoal.Blockchainconsortiaareplayinganimportantroleinblockchaindevelopmentandinovercomingthechallengesthataffectitsadoptioninparticulardomainsandapplications.Wedescribethemajorchallengesandopportunitiesofblockchainadoption,andhowblockchainconsortiacanhelpintacklingthem.TechnologyDevelopmentandAdoptionTheimmaturityofthetechnologyisasignificantfactorthathindersitsmassscaleadoption.Blockchaintechnologycontinuestoevolveanddevelop.Itisunclearhowitwillbeincorpo-ratedintotheexistinglandscapeofdigitalbusinessprocesses,services,andinfrastructures(Glaser,2017).Currently,blockchainhasthreemainlimitationsinthecontextofinformationWafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

385372Handbookondigitalbusinessecosystemssystems:speed,scalability,andinteroperability.Improvingthroughputandscalabilityhavebeenthefocusofseveralresearchendeavors,especiallyforpermissionedblockchainnetworks(Thakkaretal.,2018;SankaandCheung,2018).Ablockchainconsortiumcanenablethedevelopmentofacommonunderstandingofthetechnologyanditskeycapabilities.Itcanalsoprovidea“safespace”fortechnologydeveloperstoworkontechnicalissuesthathindertheadoptionofthetechnology(forexample,throughput,scalability,andprivacy),andtoworkwithnon-technicalprofessionalswithotherareasofexpertisetoassessandidentifythebestusecasesforblockchainadoption.RegulatoryIssuesBlockchainsystemsfacemanychallengestofitwithinexistingregulatory,economic,social,andphysicalsystems(Lacity,2018).Therateatwhichtechnologicaldevelopmentstakeplaceexceedsregulationdevelopment(ArasandKulkarni,2017).Itisstillunclearhowtheexistingstandardsandregulationsgloballyandwithincountrieswillimpactblockchaintechnologyanditsadoptionacrossdifferentindustries(Wangetal.,2016).Forinstance,differentgovern-mentshavereacteddifferentlywithregardtocrypto-currencies(Liebkind,2019).Similarly,thereareseveralregulationsthatrestrictthepotentialofthetechnologyand/orlimititsuseforcommercial,enterprise,andsupplychainapplications.Organizationshavetoeitherdesignsolutionsthatcomplywiththeexistingregulationsoractivelylobbytochangethem(Lacity,2018).Forexample,recentGeneralDataProtectionRegulations(GDPR)intheEuropeanUnionhaveasignificantimpactonwhatdatacanbestoredonablockchainplatformandonhowtomanageuserpermissions(Truongetal.,2019).Insupportoftheuseofblockchaintechnology,somegovernmentbodies,suchastheUnitedStates(US)FoodandDrugAdministration(FDA),havebeeninvolvedinapilotprojectfordrugtraceabilityinthepharmaceuticalsupplychaininanattempttoachievecompliancewiththeDrugSupplyChainSecurityAct(Kshetri,2018).StandardsIssuesBlockchaincapabilitieshavemadeitapromisingtechnologyforavarietyofapplicationsindifferentsectors.Aswitheveryemergingtechnology,standardshavetobeinplacetomanagetheuseofthetechnologyandencouragelarge-scaleadoption.Standardizationisimportanttoprovideacommonunderstandingofthetechnology,itsterminology,tosupportandenableinteroperability,andtomaximizeitsusefulness(Anjumetal.,2017).Currently,therearenoclearoracceptedstandardsabouttheuseofblockchainingovernment,enterpriseorsupplychainapplications.TheInternationalOrganizationforStandardization(ISO)haslaunchedatechnicalcommittee(TC307)toworkonstandardizationofblockchainanddistributedledgertechnologies(ISO,2016;Anjumetal.,2017).ISO/TC307hasseveralworkinggroupsfocusingonstandardizationofdifferentaspectsincludinginteroperability,governance,smartcontractsapplication,andusecases(ISO,2016).Standardsdevelopmentrequiresinputfromexpertsfromrelevantfieldsincludingtechnical,legal,regulatory,management,andstandardsdevelopment.Theformationofablockchainconsortiumthatfocusesonstandardsdevelop-mentandinvolvesallrelatedpartiescancontributesignificantlytothedevelopmentofthetechnologyandaccelerateitsadoption.AgoodexampleofsuchaconsortiumistheEnterpriseEthereumAlliance(EEA)(https://entethalliance.org/).WafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

386Blockchaintechnologyinthesupplychain373EnablingInteroperabilityInteroperabilityistheabilityofinformationsystemstointeractwitheachother.Enterprisesystemsinteroperabilityhasbeenacommonandpressingchallengeforanumberofdecades(ParkandRam,2004;PanettoandCecil,2013).Blockchainhasthepotentialtohelpincreat-ingadigitalinteroperablesystembecauseofitsdecentralizedstructure,itsinherentcryptogra-phyandchronologicalrecords,andtheuseofsmartcontracts,whichenabledispersedpartiestointeractwitheachotherwithouttheuseofacentralizedauthority.However,theinterop-erabilityofthedifferentblockchainplatformswitheachotherandwithotherinformationorlegacysystemsisamajorchallengeinbusinessandcommercialdomains,requiringcollabo-rativeeffortstoovercome.Blockchainconsortiacansupporttheaccumulationofexpertiseininformationsystems,datamanagement,enterprises,andstandardsdevelopmenttoovercomeinteroperabilityissuesandexperimentwiththetechnologyanditsintegrationwithexistinginformationandlegacysystems.ThetechnologyhasbeensuccessfullyintegratedwithsomeERPsystemssuchasFinlync,whichintegratesSAPwithEthereumandHyperledgerblock-chains(Infosys,2018),andtheEYSkyefishblockchaintraceabilitysolutionthatisbuiltonacloud-basedSAPsystem(Barley,2019).DevelopingNewBusinessModelsBlockchaintechnologyhasthepotentialtotransformexistingbusinessmodels(Morkunasetal.,2019).Theuseofblockchainenforcesanewlevelofsecurity,transparency,anddecentral-izationofinformationthatmaynotfitwithexistingcentralizedbusinessinformationsystemsmodels.Tounderstandtheleveloftransformationbroughtbythetechnologyandexploititspotential,theremaybeaneedforachangeinmindsetsofenterprises,regulators,legalentities,standardsorganizations,andtechnologydevelopers.Thismaybeassistedthroughongoinglearninganddevelopment,whichacollaborativeblockchainconsortiumcanpromote.Exchanginglessonslearned,gettingup-to-dateinformationaboutusecases,andbeingpartofdiscussionsareessentialforvisualizingandrealizingthepotentialofthetechnologyandstimulatingtherethinkingrequiredtotransformexistingbusinessmodelsandcreatenewones.BlockchainKnowledgeandExpertiseThetermsusedinblockchaintechnology,smartcontracts,cryptography,anddecentralizationarenotsimpletograsp(Glaser,2017).Thereisanacknowledgedshortageinthetalentpoolwithsufficientexpertiseonthetechnology,howitworks,andtheterminologiesused(Glaser,2017).Lackofknowledge,experience,andexpertiseaboutthetechnologyanditscapabilitiesamongstsupplychainprofessionals,academics,andthewiderbusinesscommunitycanpoten-tiallyhinderitsadoptionandscalabilityinandacrossenterprises.KEYCONSIDERATIONSWHENFORMINGORJOININGABLOCKCHAINCONSORTIUMTheconsortiumcollaborationmodelhasbecomeapopularforumtotacklethechallengesinblockchainadoptionandtoexperimentwiththetechnology.DifferentparticipantsneedtoWafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

387374Handbookondigitalbusinessecosystemsworktogethertodevelopthetechnologyandbringittoalevelthatsupportsandfostersitsadoptioninpractice.Blockchainconsortiacansucceedorfailfordifferentreasons(Muelleretal.,2019).Wediscussthekeygovernance,technical,andparticipationconsiderationsthatarerelevantforthesuccessandsustainabilityofaconsortium.GovernanceConsiderationsHavingagovernancemodeliscrucialtoaconsortium’ssuccessasitclearlyidentifiestherulesofaconsortium,howitoperates,therolesandresponsibilitiesofeachmember,howdecisionsaremade,andhowdisputesareresolved(Masseyetal.,2020).Havingacleargovernancemodelfromthebeginningisalsoimportanttomanagetheexpansionandscala-bilityofaconsortiumandthesolutionsitdevelops.Thereisnostandardgovernancemodelforablockchainconsortium.However,commonapproachesandrolesareevidentinmanyconsortia,includingasteeringcommitteethatlooksaftertheoverallconsortiumstrategy,missionandvision;aprojectmanagementteamthatmanagestheday-to-dayworkstreamsandensurestheyfollowtheplannedworkactivities,schedule,andbudget;andworkinggroupsthatexecutetheday-to-dayactivities(WEF,2020).Manyconsortiaalsohaveanindependentlegalentitythatoverseeslegalaspects,includingtheownershipofintellectualproperty(forexample,Pharmaledger,EthereumEnterpriseAlliance).Deloittehasidentifiedfourgovern-anceandstructuralconsiderationsthatneedtobeaddressedwhenformingaconsortium:(1)thedecision-makingauthority(thatis,howdecisionsaremadeandhowdisputesaresolved);(2)fundingandrevenuesharing(thatis,fundssources,businessmodel,revenueshares,andsoon);(3)legalentitystructureandrisks;and(4)identificationandownershipofintellectualproperty(Masseyetal.,2020;WEF,2020).Governancemodelscanevolveovertimeandcanberevisitedandre-evaluatedasaconsortiummaturesandgrows(Masseyetal.,2020).TechnicalConsiderationsTheserelatetotheworkofaconsortiumintermsoftechnologyandsolutionsdevelop-ment.Acommonunderstandingofblockchaintechnologyanditskeycapabilitieshastobeestablished.Thescopeofworkoftheconsortiumandtheresourcerequirementshavetobeidentifiedandagreedupon.Organizationsthatareinterestedinexperimentingwiththetechnologyneedtobeagilewithrespecttoinformationtechnology(IT)deployment(WEF,2020).Blockchaintechnologyneedstofitwithinthespecificproductandbusinessprocesscharacteristics,technicalcapabilities,andexistinginformationsystemswithintheconsorti-um’secosystem.Consortiamayfocusspecificallyonblockchaintechnologydevelopment(forexample,Ethereum,Hyperledger),and/orthedevelopmentofsupplychainsolutionsontopofexistingplatforms(forexample,TradeLens,Mediledger).Moreover,thescopeofworkcanexpandacrossdifferentindustriesorwithmultiplestakeholdersinaparticularindustryeco-system.Thefocusandscopeofworkdeterminesthelevelofexpertiseandresourcesrequiredinablockchainconsortium.ParticipationConsiderationsOrganizationsjoiningaconsortiumneedtounderstandtheobjectives,structure,prerequisites,andplannedoutcomesoftheconsortiumandhowtheyrelateandmaybebeneficialfortheirWafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

388Blockchaintechnologyinthesupplychain375specificbusinessneeds.Clearstandardsareneededfortheconsortium’sdataownership,management,privacy,andsecurity(Muelleretal.,2019).Eachorganizationmustbewillingtocommittoprovidesomeresourcestoundertaketheworkoftheconsortium(Muelleretal.,2019).EXAMPLESOFBLOCKCHAINCONSORTIAThetotalnumberofblockchainconsortiahasincreasedsharplyfrom31in2016to320in2020(ESGIntelligence,2020).Wenotethatsomeexistingtrade,industry,andbusinessgroupswithwideraimshavebeguntolookatblockchainapplicationsinthesupplychain.Forinstance,TextileExchange,whichfocusesonstandardsdevelopmentandsustainabilityissuesinthetextileandclothingsectors(https://textileexchange.org/),hasstartedtoexperimentwithblockchaintocreateadigitalchainofcustodyacrossthetextilesupplychainforwoolandviscosefibers(Remington,2019).Wedonotconsiderthistypeofinitiativeasablockchainconsortiumunlessithasbeenexplicitlydeclaredassuch.Additionally,wenotethattherehavebeenmediareportsonsomeconsortia,butwithverylimiteddetailsprovidedonhowtheywereformed,theirmembershipandroles,andhowfartheirworkhasprogressed(Zavolokinaetal.,2020).Wedonotconsidertheseconsortiaeither.Herewediscusssevenprominentblockchainconsortiathatincludesupplychainandrelatedenterpriseapplications.Thissetofconsortiacomprisesofarangeofsectorswithdifferentobjectives,governancemodels,anddifferentunderlyingbusinessmodels.Weconductfurtheranalysisontheseconsortiainthenextsection.EthereumEnterpriseAlliance(EEA):Cross-IndustryApplicationsEthereumEnterpriseAlliance(EEA)isacross-industryconsortiumthatfocusesonenterprisesolutions.ItemergedfromthepublicEthereumplatform.Itisdrivenbyidentifiedenterpriserequirementsandoperatesthroughindustry-centricworkinggroupsthatinformthetechnicalspecificationworkinggroups,whichthenworkonthedevelopmentofblockchaintechnologytoaddresstheserequirements(EnterpriseEthereumAlliance,2020).Thegovernancemodelisbasedonmembershipclasseswhereeachclasshasdifferentrights(forexample,ClassA,BoardofDirectors;ClassB,allorganizations;ClassC,legalentities;andClassD,non-profitorganizations).EEAincludesotherconsortiaasmembers(forexample,Hyperledger,Alastria)(EnterpriseEthereumAlliance,2021),whichenablesittoleveragethequantityandqualityofderivedinsightsandsupportsdevelopmentofstandardsandinteroperablesolutionsforwide-scaleadoption.Pharmaledger:HealthcareIndustryPharmaledgerisapublic‒privateEuropeanpartnershipthataimstodevelopindustry-wideblockchain-enabledhealthcaresolutionsthatcanprovidebenefitsfortheentireecosystem(Pharmaledger,2020).Withthatspecificfocus,Pharmaledgerworksontacklingalltheissuesrelatedtothedevelopmentofindustry-widesolutions,includingidentificationofbestusecases,datamanagement,securityandprivacy,developmentofgovernance,regulatoryandlegalframeworks,andsolutionscalabilityandadoption.PharmaledgerhasdevelopedseparateWafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

389376Handbookondigitalbusinessecosystemsworkinggroupsthatworkoneachoftheseaspects.Theconsortiumincludesawiderangeofexpertisefromtoppharmaceuticalmanufacturers,academicandresearchinstitutions,legalandregulatorybodies,andblockchaindevelopers(Pharmaledger,2020).Itrepresentsoneofthekeyindustry-specificconsortiathathasaholisticapproachtotacklingthechallengesofblockchainadoptioninthehealthcareecosystem,includingpharmaceuticalsupplychains.Mediledger:PharmaIndustryMediledgeraimstodevelopblockchain-basedsolutionsfordrugtraceabilityacrossthesupplychain.Itprovidesnetworkmemberswiththeabilitytoshareandaccessinformationsecurelyinastandardizedmanner.TheUSDrugSupplyChainSecurityAct(DSCSA)hasforcedorganizationsinthepharmaindustrytoseektoensuredrugtraceabilityacrossthesupplychain(Kshetri,2018).SeveralmajorUSpharmacompaniesaremembersofthisnetwork,includingPfizerandAmerisourceBergen.TheMediledgermodelincludes:(1)privatenodes,whicharethebusinessandenterprisesthatusethenetworktosendpeer-to-peerprivatemessages,postandvalidatetransactions;(2)consensusnodes,whicharethesolutionprovidersconnectingtheprivatenodestothenetwork;(3)anetworkmanager,representedbytheChroniclednetworkteamthathandlessoftwareversionmanagement,systemaccessibility,capacityandperformance,andfinancialservices;and(4)technicalindustrymembersthatworkonbusinessrules,networkprotocols,softwarestandards,andoverseetheworkofthenetworkmanager(Mediledger,2020).ThegovernancestructureofthisconsortiumreliesheavilyondevelopingITpoliciesthroughaspecialistworkinggroup.Onlypublicinformationandtransactionproofsarestoredontheblockchain,whileprivateinformationisstoredoff-chain(Mediledger,2020).TradeLens:LogisticsIndustryLedbyMaerskandIBM,TradeLenshasbeendevelopedtoprovideentitiesinglobalshippingtradewithdigitaltoolstosecurelyexchangeinformation(TradeLens,2020).TheTradeLensnetworkinvolvesallrelevantpartiesinthemaritimelogisticsprocesses,fromshippersandfreightforwarderstoauthorities,portsandterminals,oceancarriers,andfinancialservices.Theyhaveagreedontheuseanddevelopmentofthesolutiontomanagetheirbusinesspro-cessesandsharerelevantinformation.TradeLensisdesignedbasedonapermissionmatrixthatprovidesanorganizationwithaccesstospecificinformationbasedontheirrole.ItusesthesupplychainreferencemodelfromtheUnitedNationsCentreforTradeFacilitationandElectronicBusiness(UN/CEFACT)toenablestandardizationandinteroperability(TradeLens,2020).Theuseofblockchaintechnologyensurestheimmutabilityandsecurityofsharedinformation.Itisintegratedwithanenterprise’sin-housesystemsthroughopenapplicationprogramminginterfaces(APIs)toenablereal-timeinformationsharingandreducecosts(TradeLens,2020).Arianee:LuxuryIndustryThisconsortiumfocusesondigitalidentityandthedevelopmentofdigitalcertificationsforvaluableproductsandluxurybrandsusingblockchaintechnology(Arianee,2020).Digitalidentityisakeyissueinblockchaindevelopment(DunphyandPetitcolas,2018).TheArianeeconsortiumfocusesontacklingthisspecificissuebydevelopingstandardsfordigitalcertifi-WafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

390Blockchaintechnologyinthesupplychain377cationsthroughtheuseofitsblockchain-enabledprotocol(Arianee,2020).OneofitsbiggestmembersistheRichemontgroup,aleadingownerofmanyluxurybrands.Theconsortiumalsoincludeswell-knownbrandsinwatchmakingandhorology.MOBI:AutomotiveIndustryTheMobilityOpenBlockchainInitiative(MOBI)isanautomotiveindustryconsortiumthatfocusesonimprovingthesustainability,efficiency,andaffordabilityofmobilityservicesusingblockchaintechnology(MOBI,2020).MOBIworkswithbothoriginalequipmentmanufacturers(OEMs)(forexample,Ford,BMW,GM),andnon-profitorganizationsonthedevelopmentofblockchainstandardstoaccelerateitsadoptioninthesector.MOBImembersbelieveinthepotentialbenefitsofblockchainintermsofimprovingefficiencyandreducingcosts.Theyalsoagreeonthenecessityforcollaborationtorealizethesebenefits.OneofitsworkinggroupsassessesthevaluepropositionofblockchainforautomotiveOEMs,N-tiersuppliers,andfurtherbusinesspartnersforarangeofautomotivesupplychainmanagementapplications(MOBI,2021).MROBlockchainAlliance:AerospaceIndustryEmergingfromtheGlobalSITAalliancethatfocusesonITandcommunicationinairtrans-port,theMRO(Maintenance,RepairandOverhaul)alliancewaslaunchedbykeyaerospaceindustrypartnersinFebruary2020toinvestigateandexperimentwithblockchaintechnologyinthetraceabilityofaircraftparts(SITA,2020).Thereissignificantpotentialfortheuseofblockchainintheaerospaceindustryforapplicationsrelatedtothetraceabilityofpartslocationandavailability,theauthenticityofparts,leaseandreturntoserviceprocesses,speed-ingupcontractsexecutionandpayments,andforcertificationofqualityandmaintenance(AerospaceIndustriesAssociation,2019).MembersoftheMROalliancecurrentlyincludesCathayPacific,BolloréLogistics,HAECOGroup,FLYdocs,andRamcoSystems.TheITproviderSITAisresponsibleforconsortiumgovernance,ensuringblockchaincompliancewiththeSPEC2000andSPEC42aviationindustrystandards,andforvalidatingalignmentwithstandardsorganizationsandregulators(SITA,2020).Theconsortiumisstillintheplan-ningphase,toidentifybestusecasesanddevelopproofsofconcept.ANALYSISOFEXISTINGBLOCKCHAINCONSORTIATheconsortiumnameisindicativeofthefocus:Pharmaledger(Mediledger)forpharmaceuti-cal(medicines)blockchainapplications;TradeLensforprovidingvisibility(lens)toshippingprocesses;theMROallianceforblockchainapplicationsformaintenance,repairandoverhauloperations;MOBIforblockchainapplicationsinmobilityservicesintheautomotivesector.Weanalyzethenatureandtypeofpartnership,thescopeoftheactivitiesundertaken,theconsortium’sobjectives,andthebusinessmodelunderwhichtheyoperate(seeFigure23.1):●Typeofpartnership.Someblockchainconsortiaarebasedonpublic‒privatepartnershipswheregovernments,academia,technologydevelopers,andenterprisesworktogethertoachievestatedcommongoals,whileothersarebasedonprivatepartnershipsbetweenWafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

391378Handbookondigitalbusinessecosystemsselectedorganizations.Someconsortiaaremembership-based,whereorganizationsneedtoapplytoacquiremembership.●Scope.Thescopeofaconsortium’sworkcanbeacrossindustries/sectors,withinaspecificindustry/sector,orforaspecificapplicationoraspecificusecase.●Objectives.Blockchainconsortiacanhavevariousobjectives.Somemayfocusontech-nologydevelopment,standardsdevelopment,and/orusecaseidentification,development,andimplementation.Someorganizationsmaythereforebepartofseveralconsortia,basedontheirneedsandtheobjectivesofeachconsortium(WEF,2020).●Businessmodel.Aconsortium’sbusinessmodelcanbeclassifiedaseitherfor-profitornon-profit(WEF,2020).Figure23.1DimensionsforblockchainconsortiaanalysisWepresentthedetailedanalysisoftheconsortiainvestigatedinTable23.1.Notableobservationsincludethefollowing.Acommonblockchain-enabledsupplychainapplicationisthefocusofseveralconsortia.Specifically,thisisonthetrackingandtracingofproductsacrossthesupplychain(forexample,MROBlockchainAlliance),and/orhowtoensureproductquality,authenticityandsustainability(forexample,Arianee).BesidesthePharmaledgerconsortium,whichisfundedbytheInnovativeMedicineInitiative(IMI)oftheEuropeanUnion,theremainingpartnershipsareeithermembership-basedorprivate.Thismakessenseforenterpriseapplicationswhereorganizationswillhaveprivacyrequirementsandwillneedtocontrolaccesstotheirdata,restrictinformationsharingtocertainparties,andprotectintellectualpropertythatmaybesensitiveand/orcommerciallyexploitable.Thebusinessmodelsadoptedbyconsortiaprovideinsightsintotherangeofopportunitiesthatareavailable.Thefor-profitbusinessmodelindicatesthepotentialmarketopportunitiesforindustrypioneerstoexperimentwiththetechnologyanddevelopindustry-widesolu-WafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

392Blockchaintechnologyinthesupplychain379ReferenceEnterpriseEthereumAlliance(2020)Pharmaledger(2020)Mediledger(2020)TradeLens(2020)Arianee(2020)MOBI(2020)SITA(2020)ExamplesofblockchainapplicationareasTelecommunication,realestate,andcross-chainusecasesDrugtraceabilityacrossthesupplychain.Developmentofe-leafletPatientshealthdatamanagementDrugtraceabilityacrossthesupplychainShipmentdocumentationmanagementDigitalidentificationandcertificationofluxurygoodsMobilityservicesapplicationsAircraftpartstrackingacrossthesupplychainAircraftassetdatamanagementKeysupplychainchallengestackledImmaturityofblockchainforenterpriseapplicationsFightingcounterfeitproductsEnsuringpatientsafetythroughdrugstraceabilityFightingcounterfeitdrugsEnablingdrugtraceabilityReducelogisticsandsupplychaininefficienciesandcostsEnabletraceabilityofcargoandshippingdocumentsFightingcounterfeitluxuryproductsEnsuringauthenticityandbrandprotectionAssessingvalueofadoptioninsupplychainapplicationsProvidingbettercustomerserviceReduceinefficiencyandenabletraceabilityBusinessmodelFor-profitNon-profitFor-profitFor-profitFor-profitNon-profitFor-profitObjectivesStandardsdevelopmentUsecasedevelopmentTechnologydevelopmentStandardsdevelopmentUsecasesandsolutiondevelopmentUsecasedevelopmentUsecaseandsolutiondevelopmentStandardsdevelopmentUsecasedevelopmentStandardsdevelopmentUsecasedevelopmentUsecasedevelopmentScopeCross-industryapplicationsIndustry-wideapplicationsIndustry-specificapplicationIndustry-specificapplicationIndustry-specificapplicationIndustry-specificapplicationIndustry-specificapplicationTypeofpartnershipMembership-basedpartnershipPublic‒privatepartnershipPrivatepartnershipMembership-basedpartnershipPrivatepartnershipMembership-basedpartnershipPrivatepartnershipAnalysisofprominentblockchainconsortiaTable23.1BlockchainconsortiumEnterpriseEthereumAlliance(EEA)PharmaledgerMediledgerTradeLensArianeeMobilityOpenBlockchainInitiative(MOBI)MROBlockchainAllianceWafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

393380Handbookondigitalbusinessecosystemstionsthatcanbeacquiredbyotherorganizations.ThisisthecasewithbothTradeLensandMediledger.Ontheotherhand,thenon-profitmodelsreflectaholisticindustrycollabora-tion,whichcanpotentiallyenrichorrevolutionizeawholeindustryorsector’secosystem.Solutionsaredevelopedbyallmembersforthebenefitofallmembers.ThisisthecasewithPharmaledgerandMOBI.Blockchainconsortiadonotnecessarilyoperateinisolation.Collaborationbetweenblock-chainconsortiamayfurtherspeedthedevelopmentofthetechnologyanditsusecases(forexample,theAlastriaconsortiumisamemberoftheEnterpriseEthereumAlliance).DISCUSSIONBlockchaintechnologyisa“teamsport”(WEF,2020).Itisapeer-to-peernetworkthatrequiresmultiplepartiestointeractinadecentralizedmanner.Networkparticipantsneedtobewillingtousethetechnologyandparticipateinthenetworkbypostingand/orvalidatingtransactions.Collaborationisthereforeakeyprerequisitefortheadoptionofblockchaintechnology.Manyparticipantsaretypicallyinvolvedinthedevelopment,supply,production,transportation,anddeliveryofproductsorservicestoendcustomers.Manyofthesesupplychainactorsarenecessarypartnersinablockchainconsortiumthataddressessupplychainorrelatedenterpriseapplicationssuchasprocurementorlogistics.Establishingcollaborativeagreementsbetweenpartiesisafirstandcriticalstepfortheadoptionofthistechnology.Networkparticipantshavetoagreeontheuseofthetechnology,acquirethenecessarytechnicalresources,participateactivelyinthenetwork,andsharetherequiredinformation.Organizationsthereforeneedtoseethepotentialbenefitsfrompartic-ipationandcollaboration,andmayneedincentivestobepartofthenetwork.Establishinganagreementisnoteasyandmaysignificantlydelaytheadoptionofthetechnology.Clancy(2017)notesthatittooktheEverledgerfounder18monthstodiscussanddecidetherelation-shipsneededtomakeitsblockchain-enabledtraceabilitysolutionpossible.Theincreasingcomplexityandglobalizationofsupplynetworks(MacCarthyetal.,2016;Demireletal.,2019)magnifiestheeffortsrequiredtoestablishsuchagreementswithsupplychainpartnersoperatingacrosscountrieswithdifferentcultures,regulations,laws,andinsti-tutions(Kshetri,2018).Hence,torealizethefullbenefitsofblockchaintechnology,thereneedtobeindustry-wideand/orglobalcollaborativeeffortsbetweentechnologydevelopers,governments,non-governmentalorganizations,andenterprisestocontributetothedevelop-mentofthetechnology,itsstandardsandregulations,andtheidentificationofusecasesthatbestdemonstrateitspotential.Thesecomplexitieshelptoexplaintheemergenceofthetypeofblockchainconsortiadescribedandanalyzedinthischapter.Below,wesummarizethelearningevidentfromthisstudyasasetofpropositionsforblockchainconsortiafocusedonsupplychainandrelatedenterpriseapplications.Blockchainconsortiaareatypeofdigitalbusinessecosystem(DBE)withafocusontheuseanddevelopmentofblockchaintechnologiesfordifferentapplications.Giventhatpower,incentivesandgovernancearenotexclusivetotheplatformprovider,butratheraresharedamongtheconsortiummemberswhoagreetoengageinthedevelopmentanduseoftheblockchainsolution,wedonotconsiderblockchainconsortiaasdigitalplatformecosystems(DPEs).Wearguethatblockchainconsortiacanevolveintodigitalplatformecosystemsoncethereisanestablishedblockchainplatforminplace.TradeLens,asashippingindustryWafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

394Blockchaintechnologyinthesupplychain381blockchainplatform(TradeLens,2020),isthebestexampleofpotentialblockchainconsortiaevolvingintoaDPE.Proposition1:Blockchainconsortiaareembryonicdigitalbusinessecosystems(DBEs)thatcandevelopintodigitalplatformecosystems(DPEs).Manyblockchainconsortiahavebeenstartedbyasingleorganizationtakingtheleadinexperimentingwiththetechnologyandrealizingtheneedforindustry-widecollaborationstoreapthebenefitsofthetechnology.Thesize,position,power,andinfluenceoftheleadingorganizationwithintheirnetworkhavesupportedandfacilitatedtheformationoftheblock-chainconsortiumandhaveencouragednetworkpartnerstojoin.ExamplesincludetheroleofthegiantshippingoceancarrierMaerskinthedevelopmentofTradeLens(TradeLens,2020),andthetopluxurybrandLVMHinthedevelopmentofAURA(ConsenSys,2020).Theinclu-sionofregulators,legalentities,andstandardsorganizationsintheblockchainconsortiumalsohastheeffectofincreasingthecredibilityoftheconsortiumanditspotentialtocreatesustainablesolutions(forexample,therangeofparticipantscollaboratinginPharmaledger).Forblockchain-enabledsupplychainapplications,thedigitalization,security,andtranspar-encyofblockchainsystemshasthepotentialtodisruptcurrentsupplychainbusinessmodelsbyleveragingandstreamliningthecapabilitiesandknowledgeofgloballydispersedsupplychainpartnersofdifferentsizesanddifferentvalue-addingactivities.Thisisevidencedbytheirinclusionandparticipationinthesolutionsbeingdevelopedbyblockchainconsortia(forexample,theMROBlockchainAlliance).Proposition2:Thesuccessfuldevelopmentanddeploymentofblockchaintechnologyforsupplychainapplicationsrequiresthecollaborationofbothdirectandindirectvaluechainparticipantsinablockchainconsortium.Blockchaintechnologyshowsgreatpromiseintransformingexistingbusinessmodelsandecosystemsbecauseoftheinherentsecurity,immutability,andtransparencyachievableinblockchainplatforms.Theimpactofblockchainmayalsoinfluencebusinessecosystemrelationships.Theuseofblockchainleveragestrustinthebusinessecosystem(ConwayandGarimella,2020).Theimmutabilityofblockchainprovidesallparticipants,whomightnotnecessarilyknoweachother,withasinglesourceoftruth,usingthedigitalrecordasevi-dencefortheownershipofeachtransactionandtransactionhistory(TheEconomist,2015).Traditionally,ecosystempartnershavereliedonintermediariestogeneratethetrustnecessaryforeffectivecollaboration.Blockchainhasemergedasatrust-evokingtechnologythatcansupportengagementinuntrustedenvironments(SeebacherandSchüritz,2017).Ittransferstrustdependencefrompeopletothetechnology(ConwayandGarimella,2020).Ablockchainconsortiumhelpstounitedifferentorganizationswhoserelationshipsintraditionalsettingsmayhavetrustandcompetitionissues,and/orhaveconflictsofinterest(forexample,com-petitors,regulators,auditors).Theemergenceofblockchainconsortiaishelpingtochangethenormfromcompetitiontocoopetition.Thevarietyanddiversityofblockchainconsortia,andthecumulativeeffortsbeingmadetosupportblockchaindevelopmentandovercomeitslimitations,showstheincreasingaware-nessofthepotentialofblockchainfordisruptivetransformationacrossmultipleindustryecosystemsandsupplychains(Schneideretal.,2020).Blockchainadoptiongoesbeyondthetechnicalaspectsofhowinformationisshared,secured,andaccessed.Ithasmajorsocialandeconomicimpacts,includingchangingtherelationshipsbetweenpartiesbyinstillingtrustandWafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

395382Handbookondigitalbusinessecosystemsdisseminatingpower.Itcanleveragethecapabilitiesofminorityplayersinsupplychainsbyacknowledgingtheirroleandprovidingthemwithdigitaltoolsandknowledgetoparticipateandcollaborate.Proposition3:Blockchainconsortiaarehelpingtochangerelationshipswithinbusinessandindustryecosystems,leveragingtrustandsupportinginclusion.Thedriversfortheformationofblockchainconsortiavaryacrossdifferentsectors.Someblockchainconsortiahaverespondedtospecificindustryregulations,suchastheformationofMediledgerinresponsetotheUSDrugSupplyChainSecurityAct(DSCSA).Othersweredrivenbycustomers’demandforguaranteesofproductauthenticity,suchastheArianeeconsortium’sfocusonthesecurityofluxuryhigh-valuegoods;and/orbytheintenttodelivercustomerservices,suchastheMOBIconsortium’sfocusonthedevelopmentofmobilitysolu-tions.Internalecosystemdriverssuchasimprovingbusinessoperationsandefficiencyhavealsobeendriversforblockchainconsortiaformation,asisevidentfrombothTradeLensandtheMROAlliance.Suchsolutionsarehighlyimpactedbythenetworkeffect.Collaborationacrosstheecosystemisnecessarytogeneratebenefitsfromblockchaintechnologyadoption.Proposition4:Driversfortheformationofablockchainconsortiumcanbeexternaltothebusinessecosystem(forexample,regulatoryorcustomer/consumerpressures)and/orinternaltothebusinessecosystem(forexample,improvingefficienciesanddevelopingservices).Industry-specificcharacteristicsplayanimportantroleintheformation,success,andsustaina-bilityofblockchainconsortia.Highlyregulatedindustriessuchaspharmaceuticalsexperiencehighlevelsofscrutinyateverystageoftheirsupplychain.Thishasimposedahighlevelofstructureandorganizationintheoveralldrugsupplychain,whereeverysupplychainactorisrequiredtoadheretointernationalandlocalregulationsrelatedtoproductsafetyandsensitivemanufacturingprocesses.Thesecharacteristicsandthehighlevelsofscrutinyandrigorousregulationshavecontributedtoblockchainconsortiumformation,bringingtogetherallthedrugsupplychainstakeholdersincludingregulators,pharmaceuticalmanufacturers,andsup-plierstodevelopindustry-widesolutions.PharmaledgerinEuropeandMediledgerintheUSpharmasectorareprominentexamplesofsuchcollaborations.Otherindustrieswithrelativelylessstringentregulationsmayhavetoputmoreeffortintoincentivizingcollaborations,forinstancebyfocusingonspecificusecasesforhigh-valueproductsorforproductswithhighsocialandenvironmentalimpacts.Inthefashionandluxurygoodsindustry,theArianeeconsortiumfocusesonsolutionsforthetraceabilityofhigh-endluxuryproductstoensuretheirauthenticityandprovenance,andtocombatthethreatsofcounterfeitgoods(Arianee,2020).Forhigh-technologysectors,participationinconsortiamayacceleratetechnologydevelopments.OEMsinthesesectorshaveanincentivetojoinandreapbenefitsfromthenetworkeffectsinsuchconsortia,andinfluencetechnologicaldevelop-mentsandthedefinitionofstandardsinrapidlydevelopingtechnologicalenvironments.ThisisevidentintheMOBIconsortiumthatseekstoexperimentwithblockchaintechnologyinmobilityservices,includingthetrendsinautonomousvehicles(MOBI,2020).SeveralmajorOEMs,includingBMW,Ford,andHyundai,aremembersofthisconsortium.Proposition5:Industrycharacteristics,includingthelevelofregulationand/orthetechnologylevel,influencethenatureandcharacteristicsofblockchainconsortia.WafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

396Blockchaintechnologyinthesupplychain383CONCLUSIONSANDFUTURERESEARCHThechapterhasdiscussedthepotentialcapabilitiesofblockchaintechnologyforsupplychainapplicationsandthemajorchallengesaffectingitsadoption.Specifically,ithasexaminedthemostcommonapproachfortacklingthesechallenges:theformationofindustry-ledconsortiatoadvanceblockchaintechnologyadoption.Sevenblockchainconsortiahavebeenanalyzedwithrespecttothenatureandtypeofpartnership,thescopeofactivitiesundertaken,theirdeclaredgoals,andthebusinessmodelunderwhichtheyoperate.Theanalysisprovidesinsightsonthedominantconsiderationsthatarecentraltoaconsortium’sformation,includingindustrycharacteristics,governance,andtheconsortium’stechnicalfocus.Fivepropositionsderivedfromthecharacteristicsoftheblockchainconsortiastudiedhavebeenpresented.Theserelatetothetypeofecosystemablockchainconsortiumrepresents,theneedforinclusionofdirectandindirectvaluechainparticipantsinaconsortium,theexternalandinternalpressuresandtheindustrycharacteristicsinfluencingthenatureofblockchainconsortia,andthepoten-tialforsuchconsortiatochangeconventionalrelationshipswithinbusinessecosystems.Thediscussion,insights,andpropositionsprovideabasisforfuturestudiesofblockchainadoptionandtheroleplayedbyconsortiaindevelopingrobustblockchain-enabledecosystemsforsupplychainandenterpriseapplications.Theinsightspresentedarenecessarilylimitedbythespecificconsortiaanalyzed,andthefast-movingdevelopmentsinthetechnology.Futureresearchshouldexaminetheperformanceandachievementsofblockchainconsortiaasthetechnologymaturesandmovestowardswideradoption.REFERENCESAerospaceIndustriesAssociation(2019).BlockchaininAerospaceandDefense.Availableat:https://www.aia-aerospace.org/report/blockchain-in-aerospace/(accessedOctober21,2019).Ahmed,W.A.andMacCarthy,B.L.(2021).Blockchain-EnabledSupplyChainTraceabilityintheTextileandApparelSupplyChain:ACaseStudyoftheFiberProducer,Lenzing.Sustainability,13(19),p.10496.Anjum,A.,Sporny,M.andSill,A.(2017).Blockchainstandardsforcomplianceandtrust.IEEECloudComputing,4(4),pp.84‒90.Aras,S.T.andKulkarni,V.(2017).Blockchainanditsapplications—adetailedsurvey.InternationalJournalofComputerApplications,180(3),pp.29‒35.Arianee(2020).Digitalidentitystandardforallvaluables.Availableat:https://www.arianee.org/(accessedOctober8,2020).Barley,M.(2019).EYdevelopsblockchainsalmontraceabilitysolution.LedgerInsights—EnterpriseBlockchain.Availableat:https://www.ledgerinsights.com/blockchain-food-traceability-ey-salmon-fish/(accessedOctober14,2020).Buterin,V.(2015).Onpublicandprivateblockchains.Blog.ethereum.org.Availableat:https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/(accessedNovember14,2019).Christidis,K.andDevetsikiotis,M.(2016).Blockchainsandsmartcontractsfortheinternetofthings.IEEEAccess,4,pp.2292‒2303.Clancy,H.(2017).Theblockchain’semergingroleinsustainability.GreenBiz.Availableat:https://www.greenbiz.com/article/blockchains-emerging-role-sustainability(accessedDecember3,2019).ConsenSys(2020).LVMH,Consensys,andMicrosoftannounceconsortiumforluxuryindustry.Availableat:https://consensys.net/blog/press-release/lvmh-microsoft-consensys-announce-aura-to-power-luxury-industry/(accessedOctober8,2020).Conway,D.andGarimella,K.(2020).Enhancingtrustinbusinessecosystemswithblockchaintechnol-ogy.IEEEEngineeringManagementReview,48(1),pp.24‒30.WafaaA.H.AhmedandBartL.MacCarthy-9781839107191DownloadedfromPubFactoryat05/28/202210:25:08AMviaColumbiaUniversityLibrary

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40024.Blockchain-basedsupplychainarchitectureadaptedtodigitalbusinessecosystemsYuCuiandPrakashJ.SinghINTRODUCTIONTherapiddevelopmentofanewgenerationofinformationandcommunicationtechnologies(ICTs),suchastheInternetofThings(IoT),bigdata,artificialintelligence(AI),andcloudcomputing,hasreshapedthebusinessenvironment(Bharadwajetal.,2013).Digitaltransfor-mationhasbecomeinevitablefornearlyalltraditionalindustriestosurviveandcertainlytodevelopandgrowinthisnewbusinessenvironment.However,itisclearthatsuccessfuldigitaltransformationisnotjustlimitedtowhatisimplementedwithintheboundariesofasingleenterprise,anditisnownecessarytoviewdigitaltransformationacrosstheentireecosystemthatabusinessoperatesin(Subramaniametal.,2019).Therefore,howtobuildandformahealthydigitalbusinessecosystem(DBE)hasbecomeakeyissueinthedigitaltransforma-tionoftraditionalindustriesandthesectorstheyoperatein.Thisisalsothekeyfocusofthischapter.ADBEcanbeconsideredanextensionofMoore’s(1993)businessecosystem,oneinwhichdigitaltechnologyplaysadominantrole(Senyoetal.,2019).ThereareseveraldefinitionsofaDBEintheliterature.Nachiraetal.(2007,p.9)defineaDBEasthe“socio-economicdevelopmentcatalyzedbyICT.”BoleyandChang(2007,p.399)defineadigital(business)ecosystemasan“open,looselycoupled,domainclustered,demand-driven,self-organizingagentenvironment,whereeachagentofeachspeciesisproactiveandresponsiveregardingitsownbenefit/profitbutisalsoresponsibletoitssystem.”Senyoetal.(2019,p.53)defineaDBEas“asocio-technicalenvironmentofindividuals,organizationsanddigitaltechnolo-gieswithcollaborativeandcompetitiverelationshipstoco-createvaluethroughshareddigitalplatforms.”Synthesizingthesedefinitions,itcanbeconcludedthatasuccessfulDBEwouldbeonethathasdigitaltechnologyasitscoredrivingforceandamoderninformationnetworkasthemainpathway.Thisset-upenablesthepropagationandtransmissionofdigitalknowledgeandinformation.Inthischapter,acomparisonandsystematicanalysisoftraditionalandmodern(digital)supplychainsisperformed.Thisshowsthatmanyorganizationsinsupplychainsactivelyimplementtheirowndigitaltransformation,whichmaynotalignwithothersinthesupplychain,leadingtoclassicsupplychainmanagementissuesofalackofinformationsharingbetweenmembersandalackoftrust,whicharetwoofthebiggestpotentialissuesthatcanhindertheefficientworkingofasupplychain.Thefundamentalcausesoftheseproblemscanbesummarizedasthelackofaneffectivetrustmechanism,andthedisadvantagesofthecentralizedframeworkitselfwithintraditionalsupplychains.Inordertoaddresstheseissues,specificallyonthebasisofexistingsupplychainsandDBEs,theconceptofblockchaintechnologyhasbeenintroducedandtrialled,withtheviewthatthekeycharacteristicsofthis387YuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

401388Handbookondigitalbusinessecosystemstechnologyoffulldecentralizationandaprovenhardtrustmechanismcanempowerresilientoperationsandthesustainablemanagementofsupplychains.Thechapterstartswithacomparisonofthekeyfeaturesoftraditionalanddigitalsupplychains.Thisisfollowedbyareviewofblockchaintechnologyanditskeycharacteristics.Next,anewarchitectureforasupplychainincorporatingblockchainisproposed.Twoexam-plesfromJapaneseindustryareusedtoshowhowblockchaintechnologyiscurrentlybeingimplementedinpractice.Thekeyissuesarereviewedinthe“Discussion”section.Thechapterconcludeswiththekeyfindings,aswellaslistingsomeshortcomingsinthisarea,andsomeassociatedissuesworthcoveringinfutureresearch.TRADITIONALVERSUSDIGITALSUPPLYCHAINSTraditionalSupplyChainsThetraditionalviewofasupplychainisalinearmodelfortheproductionandsalesofcommercialgoods,whereentities,suchasmaterialsorgoods,flowfromsuppliers,toman-ufacturers,distributors,andfinallytoconsumers.Thesetraditionalsupplychainsarelimitedbytheconstraintsoftraditionalbusinessthinking,cognition,andknowledgestructure.Theseconstraintscreateaseriesofinterconnectedobstacles(BüyüközkanandGöçer,2018),asdescribedbelow.Thefirstobstacleinvolvescooperation.Cooperationcanbeinhibitedbypoorcommuni-cation,blockedchannels,andinformationasymmetry.Traditionalsupplychaincooperativerelationsareusuallyunstableandparticipantsareeasilydivided(Heiligetal.,2017).Inthiscircumstance,ifcertainexternalunexpectedfactorsorinternalinconsistenciesareencoun-tered,theycancausedisruptionsinthesupplychain,whichcaninterferewiththenormalorderofproductionandoperation;andthecostofrechaining,ifnecessary,canbehigh(Aldrighettietal.,2021).Thesecondobstaclerelatestotheextenttowhichmembersembedthemselvesinthesupplychains.Thetraditionalsupplychainismostlybasedontheextenttowhicheachmemberwishestoengageandcontributetothechain.Enterpriseswillconsiderthebenefitsandriskfactorsofengagingwiththesupplychainandmaybereluctanttoseemajorchangesimple-mented,whichcanpreventthein-depthadvancementofcertainchanges(Ivanovetal.,2019).Thethirdobstaclerelatestotrust.Eachmemberofthesupplychainisanentityindifferentvaluelinksofthesupplychain.Upstreamanddownstreambusinessrelationshipsnaturallygeneratebenefitsandcorrespondingbenefitdistributionconflicts(ChengandSheu,2012).Inaddition,variancesincorporatevalues,corporatecultures,organizationalstructures,goalvisions,andmentalmodelsalsodistortthecollaborativebehaviorandcollaborativerules,resultinginadecreaseintrustinthesupplychain(KwonandSuh,2006).Thefourthobstacleinvolvesliquiditystagnation.Thereareanumberofdifferentformsofimportantliquidityinsupplychains.Theseareaspectsthatflowbetweensupplychainpart-ners,andincludevalueflow,capitalflow,commodityflow,informationflow,andmaterialflow.Theseflowsshouldnormallytakeplaceinanorderlymanner(AlbrechtandSteinrücke,2020).However,inthecaseofsupplychainfragmentation,informationasymmetry,orevenchaindisconnection,theorderedstructureofliquiditycanbebroken,inevitablyleadingtoYuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

402Blockchain-basedsupplychainarchitectureadaptedtodigitalbusinessecosystems389animbalanceintheoverallefficiencyandalowerdemandresponsecapabilityofthesupplychain,thusultimatelyincreasingthecostsinthesupplychain.DigitallyDrivenSupplyChainsAdigitallydrivenorganizationusuallydoesnothavesimpleandlinearprocessesinplacetomanageflows.Instead,theytendtohavecomplexandsystematicprocesses,withthebestinclassgovernedbyrigorouslogicsystems,togetherwithanorderlyevolutionofthesepro-cesses.TheessentialcharacteristicofthedigitalbusinessmodelcomparedtotheconventionaltraditionalmodelisthatitintegratesinnovationofthesupplychainthroughICT,suchastheincreasinguseofAI,theIoT,bigdata,cloudcomputing,andmobileinternet.Throughthesetechnologies,theresilienceandcoordinationofthemodernDBEsareconstantlyenhanced.Thereareanumberofalternativeorcomplementarywaysthroughwhichintegratedinno-vationtakesplace.Thefirstisdigitalcognition.Here,toformnewideasandnewconcepts,especiallyinthefaceofdigitaltransformation,itisnecessarytohaveaninnovativespiritandtoavoidfallingintotechnology-orientedthinkingalone(Kampkeretal.,2019).Digitizationofthesupplychainisfirstlythoughtofandintuitivelymanifestedasaseriesoftechnologicaliterations,throughwhichtechnologicalupgradingisrealized,formingadigitalpathinthegeneralsense.However,thetechnologyismerelythedigitaltoolsandframeworksusedratherthantheultimategoal.Thesecondistechnologicalchange.Althoughdigitaltransformationisconstrainedandinfluencedbyvariousfactors,suchastechnology,system,supply,demand,andmarketstruc-ture,technologicalchangeisundoubtedlythemostsubstantiveandfundamentalfactor.Duringprevioustechnologicalrevolutions,newtechnologiesinevitablyreplacedoldones,resultinginasubstantialimprovementinthetechnologicalfoundationoftheentireeconomy(Liotine,2020).Accordingly,aseriesofeconomicandqualitativechangesweretriggered.Forexample,manualandanimallaborwasreplacedbythesteamengine,whichinturnwasreplacedbyelectricity-drivenpowerdrives,witheachsystemandchangerepresentingastepimprovementinproductivity.Alatter-dayexampleistheemergenceofhightechnology,suchastheIoTandAI,whichareincreasinglyreplacingtheinsularbusinessprocessingsystemsofthepast.Thirdisknowledgeconstruction.Digitizationofthesupplychainisessentiallyaboutknowl-edgecondensation;henceknowledgeplaysakeyroleinit.Inaddition,experience,skills,strategy,culture,psychology,andsocialcapitalalsoplayimportantroles(Vendrell-Herreroetal.,2017).Theseinfluencingfactorspresentacomplexpatternintermsoftheeffect,mode,direction,andrealizationmechanism.Inessence,thedigitaltransformationofthesupplychainrequirescompaniestoestablishaneffectivematchingmechanismintermsoftheirtechnology,knowledge,andcapabilities.Fourthisthebusinessecosystem.Intheeraofdigitalbusiness,theecosystemhasbecomeanimportantarchitectureofindustrialorganization(Lenkenhoffetal.,2018).Adigitalinfra-structure(ecosystem)isdefinedasa“social-technicalsystem”thatincludestechnicalelementsofsoftwareandhardwareaswellastherelatedorganizationalprocessesandstandards(Tilsonetal.,2010,p.748).WiththerapidriseofDBEs,suchascommunity-based(forexample,socialmediaecosystems),innovative(forexample,mobileoperatingsystemecosystems)andtransactional(forexample,e-commerceecosystems),theconceptoftheDBEhasgraduallybecomeclearer(Barykinetal.,2020).Itincludesnotonlythosewhoaredirectlyinvolvedinthedevelopmentandapplicationofinformationtechnology(suchasecosystemdevelopers,YuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

403390Handbookondigitalbusinessecosystemsservicedesigners),butalsothosewhocontributetothedevelopmentofDBEs,suchascom-mercialenterprises,non-profitorganizations,publicinstitutions,andotherintermediaries,aswellaselementssuchasbusinessmodelsandstandards(DoughertyandDunne,2011).Throughtheconstructionofanindustrialcloudplatformwithonline–offlineandphysical–virtualinteractions,upstreamanddownstreamenterprises,differentlinks,producersandconsumersinthesupplychainarelinkedintheformationofanindustrialinternet1andfullyexertthefunctionsoftheattraction,agglomeration,andconfigurationoftheresourcesoftheecosystem.Throughthecomplexinteractionofmultipleelements,theDBEcanalsoproducesomeunexpectedinnovationresults.Thesuperimposed,explosive,anddisruptivecharacteris-ticsofsuchtechnologicalinnovationconstituteoneofthekeycompetitiveadvantagesoftheDBE(Jacobidesetal.,2018).Supplychainsthatincorporatestate-of-the-artdigitalbusinesscomponentshavesomekeyfeaturesthatdistinguishthemfromtraditionalsupplychains.Thesetakeanumberofdifferentformsandaredescribedbelow.First,thesesupplychainsincorporatetheIoT.TheIoTallowseachproducttohaveauniqueInternetProtocol(IP)address.Inparticular,thematurityandthedeclineinthecostofradiofrequencyidentificationdevice(RFID)technology,akeyIoTelement,nowallowstheinternetandproductstobefullyandautomaticallyconnected(Nawazetal.,2019).However,issueswiththecurrentnetworktransmissionspeedinmanycasesmeanthatmanytheoreticallyfea-sibletechnologiesoftheIoTandrelatedsolutionscannotyetbeappliedinpracticalscenarios.Second,thereistheapplicationof“bigdata”inthesesupplychains.Thiscanenabletheconductingofin-depthanalysisofthemassiveamountofdatainsupplychains,therebyallow-ingaccuratepredictionsofthemarketdemandofeachlinkinthesupplychain,andonthisbasisensuringthecompletionofordersaheadofschedule,therebygreatlyimprovingthesatis-factionrateandshorteningtheproductsupplychaincycle(Addo-TenkorangandHelo,2016).Third,thesesupplychainsinvolvetheapplicationofcloudcomputing.Thiscangreatlyreducethecostoftheinformatization2ofenterprises;inparticular,theproblemofmanagingthevastamountofinformationgeneratedinthesupplychaincannowbesolvedforsmallandmedium-sizedenterprises(Mishraetal.,2020).Fourth,thereisanapplicationofAIinthesesupplychains.Thecontinuousbreakthroughinthefieldsofmachinelearning,speechrecognition,andimagerecognitioninAItechnologynowenablecomputerstoceaselesslyandindependentlylearnonthebasisofgivendataandscenariostothepointwheretheycanseeminglypossessautonomousconsciousnessincertainlinks(HartleyandSawaya,2019).Fifth,thereisanapplicationofmobileinternetinthesesupplychains.Thedevelopmentofmobileinternettechnologyhaspredominantlyshiftedfromcomputerterminalstomobileter-minals,suchasmobilephones.Thecontinuousupgradingofmobileinternettechnologyandmobileterminalfunctionsnowenabletheconnectionofalmosteverything(Qinetal.,2020).ResilienceIssuesinDigitalSupplyChainsTheintelligenceandisomerizationofequipmentbringaboutobviousresilienceissues.NumerousIoTdevicesaredirectlyexposedtotheinternet,withmanylackinganeffectivesecurityprotectionmechanism,raisingtheriskofuserprivacyleakageandsystemsecurityissues.Forexample,onOctober21,2016,DYN,adomainnameserviceproviderintheUnitedStates,sufferedadistributeddenial-of-service(DDoS)attackfromabotnetdrivingrequestsYuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

404Blockchain-basedsupplychainarchitectureadaptedtodigitalbusinessecosystems391fromhundredsofthousandsofwebcamsanddigitalvideorecordersandcreatingatrafficvolumeofupto620Gigabyteofflow,resultinginalarge-scalenetworkdisconnectionontheeastcoastoftheUnitedStates(Doshietal.,2018).Similarly,theoutbreakoftheCOVID-19pandemicin2020notmerelyaffectedthelivesofpeopleallovertheworld,butalsoglobalproduction,distribution,andconsumptionpatternswereforcedtoundergotremendouschangesasdigitalsupplychainsbecameakeyforceinthefightagainstthepandemic(Sarkisetal.,2020).Despitethesetremendouschanges,lookingatthecurrentdigitalsupplychainsintermsoftheirtimelinessofresourceallocation,andtheefficiencyandqualityofreorganizingthesupplychain,theyhavenotyetreachedthelevelandeffectthatneedtobemettocopewithsuchacrisis.Goingforward,theindustrialinternetisanimportantpartofthedigitaltransformationofsupplychainenterprises.Throughtheindustrialinternet,substantialindustrialequipmentandsystemdatacanbeeffectivelyintegrated,andbusinessandresourcescanthenbeintelligentlymanaged(Al-Talibetal.,2020).Nevertheless,therearemanyresilienceissueswiththeconstructionoftheindustrialinternet.Inparticular,whenaterminaldeviceismaliciouslydamagedorattacked,datasecuritymaynotbeguaranteed.Similarly,intheindustrialinternetplatform,themostimportantconsiderationisdatasecurity,namelythattheintegrityofthedataontheplatformmustbeguaranteedandtamper-proof,anddataleakagemustbeprevented.Givenalltheseconcerns,thereisanurgentneedtoenhancesupplychainresilience3withsecurityatthecorefromtheperspectiveofsystemdesignandconfiguration.SuchaconceptofresiliencewasraisedbyHolling(1973),whointroducedittoecologywithafocusonthepersistenceofsystemsandtheirabilitytoabsorbshocks.Subsequently,resiliencethinkinginsocial-ecologicalsystemshasfocusedonthreeaspects—persistence,adaptability,andtrans-formability—andthesehavegraduallybecomematureandmorepopularlyapplied(Folkeetal.,2010).Resiliencefromasocial-ecologicalsystemsperspectiveconsidersthatinsteadofrecoveringtotheoriginalnormalstatus,resilienceistheabilitytochangeandadapttoevenmajortransformationwhenacomplexsocialecosystemhastocopewithstress(Carpenteretal.,2005).Thenatureofresilienceiseffectivelyanevolutionability,withtheevolutionofecologicalsystems’resiliencebeingcomplicated,non-linear,andfullofuncertainty(Duitetal.,2010).Theevolutionaryoutcomeisthereforenotsimpletopredict.Also,itisdifficulttoobtaintheendoutcomewithlinearcausalitybysimplychangingasingleelement.Resiliencemaynotonlybetheresultofexternalshock;itmayalsobegeneratedthroughinternalpressureandfromcomplexeffectswithintheecosystem(Davoudietal.,2012).Ecosystems,therefore,canshowevolutionalresilienceevenwithoutexternalshocks.Atthesametime,someresearchersproposethatasystemwillshowdifferentresiliencecapabilitieswhenrespondingtodifferentphasesofimpact,thatis,preparedness,prevention,recovery,andresponse(Pitrėnaitė-Žilėnienėetal.,2014).Theadvantagesofadigitalecosys-temwiththesecapabilitiesmainlyrelyonitsdiversity,decentralization,andself-evolution.However,ifthereisnoproperguideorcontrolunderspecificcircumstances,itcanresultinpoorefficiency,andevenanegativeimpact.Breakthroughsmustbemaderegardingimpor-tantsecurityissues,suchasaccessauthenticationandthemanagementofkeyequipment,real-timesystemmaintenance,andanti-attacksecurityprotectionofprivatedata,aswellasonserver-sidedataverificationandcombatingtamperingrisks.Thehealthydevelopmentofthesupplychainrequirestheestablishmentofatrustmecha-nisminthesupplychainnetwork.Therefore,itisofgreatsignificancetosolvethetrusttrans-missionmechanismintheupstreamanddownstreamendsofthesupplychain.BlockchainYuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

405392Handbookondigitalbusinessecosystemstechnologyprovidessolutionsforimplementingatrustmechanisminthesupplychain.Inthenextsection,somecharacteristicsofblockchainanditspossibleadvantagesinthereshapingofsupplychainsystemsandDBEsarediscussed.BLOCKCHAINTECHNOLOGYANDITSADVANTAGESBlockchainisdefinedasanaccountingtechnologythatisjointlymaintainedbymultiplepartiesandthatadoptscryptographytoensuretransmissionandaccesssecuritysoastoachieveconsistentdatastorage,tamper-proofing,anddenial-proofingoperation(BehnkeandJanssen,2020).Blockchainisalsosometimescalleddistributedledgertechnology(DLT).Blockchain’stechnicalfeatures,suchasitsdecentralization,opennessandtransparency,tamper-proofingandtraceability,haveraiseditspotentialtoreshapethetrustmechanismforvariousindustriesandtoremovethedeficienciesofitsexistingapplications.Intermsofdigitalidentitymanagement,theasymmetricencryptionanddistributedstorageofblockchaincanprovideeffectiveprotectionforusers’privacyanddatasecurity.CharacteristicsofBlockchainTechnologyThecoreofblockchaintechnologycanbefoundatthetechnicallevel,andinvolvesfourcrucialaspects,asfollows.DistributedledgerInatypicaltraditionalmanufacturingsupplychain,thetransactioninformationofthepartici-pantsisscatteredandonlyconcentratedamongasmallnumberofparticipants.Thisincreasesinformationdisputesandreducesaccountability,andalsomakesitdifficulttocoordinatetheoperationoftheentiresupplychain(Roecketal.,2020).Thedistributedledgeroftheblockchain-basedsystemcankeepanopenandcompleteaccountofallthetransactioninfor-mationinthesupplychain,ensuringthatalltheparticipantscanparticipateincheckingthelegalityofthetransactions(SchmidtandWagner,2019).ConsensusmechanismThisisthepivotalpartofblockchaintechnology.Allthenodesinthemanufacturingsupplychainreachacognitiveconsensusthroughacertaincontracttoformaconsensusmechanism,suchasproof-of-work(PoW),andthenthroughthespecifiedhashcalculationtoensurethatthenewblockisaddedtotheblockchaininformationnetwork,therebystrengtheningthedefensivecapabilitiesoftheinter-chaininformationtamper-proofsystem(Duttaetal.,2020;Mingetal.,2021).SmartcontractThesmartcontractalgorithminblockchaincannotonlyensurethesynchronizationofinformationovertheentirenetwork,butalsoimplementtheautomatedexecutionofbusinessprocesses(Dolguietal.,2020).Therefore,applyingblockchaintotheallocationofresourceswouldallowtheautomaticmatchingofsupplyanddemand,andtheautomaticexecutionoftransactions,whichwouldlikelyreducesupplychaindisruptions(DeGiovanni,2020).TheYuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

406Blockchain-basedsupplychainarchitectureadaptedtodigitalbusinessecosystems393advantageofblockchaininthisregardliesinthereductionofhumaninterventionandtheassuranceofthetimelinessandeffectivenessofresourceallocation.AsymmetricencryptionCross-subjecttransactionsinthetraditionalsupplychainarepronetoincurringhighinfor-mationexchangecosts.Asymmetricencryptionadoptspublicandprivatekeystoreducecommunicationcosts(Dasetal.,2021).Thesecanonlybeaccessedwiththepermissionoftheownerofnon-publicdata,ensuringtheprivacyandsecurityofinformationinthechain(Duttaetal.,2020).AdvantagesofUsingBlockchaininReshapingSupplyChainsandDBEsTechnologyadoption,suchastheinternet,bigdata,AI,cloudcomputing,andtheIoT,hasdra-maticallyimprovedwiththebuildingofDBEs.Whiledifferenttechnologieshavetheirownfocus,theycancollaborativelyworkwitheachother.However,notalldigitalassetsthatexistaspartoftheinternetcannecessarilybeverifiedandusedonalargescale.Here,blockchaintechnologycangenerateauthenticatedrightstomakethesedigitalassetsbecomesafe-identityassets(Wolfond,2017).FromaDBEgovernanceperspective,everyentitycanobtainitsownuniquedigitalidentitythatallowsittobedistinguishedfromothers.Anindividualentity’sidentityanditsassetinformationcanthenbedistinguishedacrossmediaandregions,makingitpossibletoprocessworkwithhighefficiencyandtoincorporateavastnumberofentities.Theintegrationofdigitalidentityanddigitalassetscannotbeachievedwithouttheintegrationandanalysisofdata(Angiullietal.,2018).Thisneedforthecooperationofvariousnewtech-nologieshaspromotedthedevelopmentoftheDBE.Forinstance,theIoTmakesitpossibletocollectrealdata.Bigdatatechnologyhasimprovedthepossibilityofmassivedataprocessingandanalysis.AImakesitpossibleforDBEtopossessintelligence;whilecloudcomputingallowsachievingpowerfuldatastorageandprocessingcapabilities.Complementingthesetechnologies,blockchaintechnologyfacilitatesthekeystepfromtherealworldtothedigitalworld,facilitatingauthenticatedrightsandthemanagementofdata(Becketal.,2017).Blockchaintechnologythusguaranteestheprivacyofdigitalassets,whilealsoachievingsafetyindatasharing(Zhuetal.,2018).Itallowstheconnectionbetweenscattereddataandenablesdatabeutilizedtotheirmaximumvalue.Blockchainitselfrepresentsahighlytrustedvaluenetwork(Truongetal.,2018),andcanaddressthetrustissueinsupplychainsystems.ItsupportsbuildingadigitalidentityanddigitalassetsinDBEsbasedontrust.Reflectingthefactthattheinternettidehasswepttheglobeandeveryareaoflifeandbusiness,theamountofinformationheldintheinternethasgrownexplo-sively.Everyuserandvisitorleavesinformationinthenetwork.Thislargeamountofinforma-tionhasbeenmappedontodigitalworlds.Thesedigitalworldswithmassivedatacorrespondtotherealworld.Therapidexpansionofthisdatabasehasbroughtplentifuldataassets,butalsoincreasedthedifficultyofdistinguishingandguaranteeingthedataauthenticity.Theownershipofdatahasalsobecomeanissue.Here,blockchaintechnologycanmaptherealidentitytothedigitalidentity(Augotetal.,2017).Accordingly,itcansynchronouslymaprealassetstodigitalassetsaswell.Duringthegreatmigrationofreal-worlddatatotheinternet,blockchainverifiestherightsforeachdigitalidentityanddigitalasset.Inthedigitaleconomyera,notonlydoesthedigitalworldhavethedatathataremappedfromtherealworld,butalsosomedigitalassetsexistinthedigitalworldonly(forexample,bitcoin).BlockchaincanYuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

407394Handbookondigitalbusinessecosystemsprocesstheauthenticrightstothesecontentsaswell.Inotherwords,blockchaincanprovidetrustfordigitalidentitiesanddigitalassets(TakemiyaandVanieiev,2018).BlockchainisbecominganewmotivationpromotingtheestablishmentandgrowthofDBEs(Peck,2017).Itallowsforreducingthecostsandimprovingtheefficiencytoboostthehigh-qualitydevelopmentofDBEs.Basedontheinstallationofdigitalidentitiesanddigitalassets,manyinfrastructureconstructionsintherealworldaretransferringsafelyfromofflinetoonline.Abroadscaleofcross-regionalcooperationhasbecomepossible.Theadvantagethatblockchainbringsisreflectedinallareas,includinggovernance,traceability,andresil-ience.Withregardtotechnologyapplication,regardlessofwhetheritisasupplychainoranecosystem,therearestrongdemandsforimprovingcurrentbusinessprocessesbyusingblockchaintechnology,andfordifferentfieldstobuildtheirownblockchain.Formanybusinesses,digitaltransformationhasnowbecomeanimminentconsiderationwithrapidchangesintheirsector,andinthisregardblockchaintechnologyhasprovenbroadcapabilityinthefieldsoflogisticsandfinance.Further,manygoodsandbillshavebeenfactuallymappedasdigitalassetsinthedigitalworld.Informationhasbecomeopenandtrans-parent,andownershiphasbecomeclearer.Inthetraceabilityofsupplychains,thecirculationinformationongoodsorbillshasbecomewellfounded(Changetal.,2020).Theproductqualityandbills’authenticityhavesignificantlyimproved.Inthefuture,enterprisesneedtokeepexploringtheunderlyingtechnologyofblockchaintorealizeitsfullpotential.Theyalsoneedtoexploreblockchain’sapplicationundervariousscenarios,withresolvingthecurrentlackoftrustasthestartingpoint,andthenmakeeffortstoachievethebusiness’sdigitizingtransformationanddigitizingmanagement(Hossain,2017).Inthenextsection,anewconceptualframeworkisproposedforhowtoapplyblockchaintothereconstructionofadigitalsupplychaintomakethesupplychainmoreefficientandintelligentintermsofresilienceandsecurity.Also,specificrecommendationsfortheimple-mentationofthisframeworkaremade.ANEWSUPPLYCHAINARCHITECTUREWITHBLOCKCHAINTECHNOLOGYHowBlockchainFitsintheDigitalSupplyChainBasedonthediscussiononblockchainandthedigitalsupplychain,thewayinwhichblock-chaintechnologycouldfitthedigitalsupplychaincouldbesummarizedasfollows.First,thiscouldbedonebyestablishingadistributeddatabasebasedonthesupplychain,wherebythethresholdofdatausageforboundary-spanningenterprisescouldbeloweredandtheflowofsupplychaininformationimproved.Inthisway,thecomprehensivecoordinationofallthesupplychaininformationcouldberealized.Second,byintroducingsmartcontracttechnology,manualoperationscouldbeseparatedouttothegreatestextentandtheinterferenceofhumanfactorsreduced.Byimprovingtheefficiencyofinformationtransmission,thetransmissionofinformationinthesupplychainwouldspeedup,reducingtheprobabilityoferrors,savingonoperatingcosts,andloweringtheconsumptionofhumanandmaterialresourcesinthesupplychain,andhenceeffectivelyachievinganintelligentmanagementmode.YuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

408Blockchain-basedsupplychainarchitectureadaptedtodigitalbusinessecosystems395Third,byadoptingblockchaintechnology,informationriskscouldbesignificantlyreduced.Thiswouldimprovethestandardizationofinformationtransmissionandstrengthentheopen-nessandtransparencyofinformation,soastofacilitatethecollaborativesharingofinforma-tioninthesupplychain.Additionally,theHyperledgerissuitableforcircumstanceswheretherearemultiplepartic-ipantsbuttheydonothavecomputingpowerthatisstrongenough,butstillhaveallthechar-acteristicsofablockchain.Amongthesetypesofblockchain,thealliancechainismostinlinewiththedesignandmanagementoftheoperationandbusinessprocessofthedigitalsupplychainsupportedbydigitalnetworksystems,suchastheIoT,intheHyperledgerarchitecture(Putrietal.,2019;LongandWang,2019).Blockchain-BasedSupplyChainBlendingwithDBETheblockchain-basedsupplychainhastwomainfunctions:atransactionfunctionandaninformationsharingfunction.Supplychainenterprisesconducttransactionsandinformationsharingthroughtheblockchainmechanismandthesmartcontractsdeployedonit.Withthehelpofthisblockchainmechanismoftransactionfunction,thesupplychaincanachievethegoalofbuildinganewkindofsupplychaintrustrelationship.Supplychaincompaniesconducttransactionsthroughsmartcontracts.Thelegitimacyofthetransactionisverifiedbysmartcontracts.Atthesametime,smartcontractsrecordthetransactioncontentandtheinformationoftransactioncompletionintotheblockchain,toensurethesafetyandreliabilityofthetransactionprocess,andthetransparencyandtraceabil-ityoftransactioninformation.Theblockchainmechanismforthesupplychainadoptsthealliancechainmode,inwhichdifferentnodesaregivendifferentpermissions.Inthissystem,therearesmartcontractsforverifyingtransactioninformation,managingtransactionfunds,recordingandmanagingtrans-actioninformation,andforjudgingtransactionresults.Inaddition,banksandotherfinancialinstitutionscanalsobeaddedtothesystem,combinedwithsmartcontracts,toprovideloans,financing,andotherservicestosmalltomedium-sizedenterprises.Inthesupplychain,usersconducttransactionsbyinvokingsmartcontracts.TheworkflowofatypicaltransactionsmartcontractisshowninFigure24.1.Indetail,ausersendsthetransactioncontent,contract,andfundstothesmartcontractaccount,whichisthenverified.Oncetheverificationisapproved,thetransactioninformationissenttothecorrespondingpar-ticipant,andoncethecontentofthecontractischeckedbytheparticipantandthetransactionisaccepted,deliverycanbeperformedaccordingtothetransactioncontent,ortheproductcanbedirectlyshippedtotherelatedcustomer.Meanwhile,thelogisticsinformationoftheproductissenttothesmartcontract,whichforwardstheinformationtotheuser.Afterreceivingtheproduct,theusersendsaconfirmationmessagetothesmartcontract,whichwillpaythetrans-actionfundstotheproduceraftertheinformationisverified.Alltheinteractiveinformationinthetransactionprocessistemporarilystoredbythesmartcontract.Afterthetransactioniscompleted,thesmartcontractformsablockandaddsittotheblockchain.Theblockchain-basedsupplychainsystem(B-SCS)isbasedonanencryptionalgorithmandthedistributedledger.ItcanrapidlyintegratetheresourcesofDBEsandmobilizetherelationshipsamongsupplyparticipants.Withthis,supplychainenterpriseswillbeabletoidentifyanyproblemsfasterandmorecomprehensivelythroughaquicksearchfunctionwithlowercost.Also,fromtheperspectiveofoperatingtheblockchain,theB-SCSisbasedonYuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

409396HandbookondigitalbusinessecosystemsFigure24.1NewsupplychainarchitecturewiththeblockchainmechanisminaDBEaconsensusmechanismandtheuseofsmartcontractstoblurtheboundariesoftheentitiesthroughreshapingtheinteractivemodesamongtherelatedparticipants.Itbroadensthescopeofnetworkvirtualconfiguration,andalsooptimizesthecross-functionalcooperationmecha-nisminDBEs.ItadvancesthefunctionaloptimizationoftheecosystemwhileimprovingtheYuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

410Blockchain-basedsupplychainarchitectureadaptedtodigitalbusinessecosystems397efficiencyofcross-industrylabordivisionandcollaboration.Inaddition,fromtheperspectiveoftrust,theB-SCS,underthejointactionofconsensusanddecentralization,canachieveinfor-mationverificationanddisputearbitrationaspartofnetworkautomatization.Itthereforefreesthegeneraldigitalsupplychainfromitsrelianceonthird-partymechanisms,whileallowinggreaterfairnessandefficiency.Lastly,intermsofresilienceimprovement,B-SCSsarebasedonconsensusandasymmetricencryption.Theyimprovetherapidcorrespondenceandrecov-eryofrelatedbusinessesthroughthepeer-to-peernetworkconnections,withspecialfeatures,suchasfalsificationimpossibilityandtraceability,addingtotheirbenefits.Theyalsohelptheecosystemtoimproveitsownoperatingmechanismautonomouslythroughtheprocessofcrisistreatment,whileallowingtheupgradingandevolutionofthewholeecosystem.Inthenextsection,twoexamplesfromJapanareusedtodemonstratetheapplicationofablockchainmechanismincorporatedindigitalsupplychains,andhowthisextendstotheirrespectiveDBEs.BLOCKCHAIN-BASEDSUPPLYCHAINSANDDBEEXAMPLESFROMJAPANExample1:TCompany’sBlockchain-BasedDBEEstablishmentThefirstexampleisablockchain-basedautomobilesupplychainforaJapanesecompany:“TCompany.”Sincethenumberofenterprisesintheautomobilesupplychainweretoonumerousandcomplicated,bullwhipeffects,doublemarginalizationeffects,brandeffects,andotherissuesinthetraditionalautomobilesupplychaincouldbeexperienced.Itwasthusvitalfortherelevantcompaniesinthesupplychaintoaddresstheseissues.Underthepremiseofensuringservicequality,thesecompaniesknewthattheyneededtorealizemaximizationinformationsharing,strengthentheconnectionsbetweenupstreamsuppliersanddownstreamretailers,improvetheoperationalefficiencybetweenenterprises,andbuildanefficientandresilientautomotivesupplychain.InApril2019,TCompany,whichisaleadingJapaneseautomotivemanufacturer,launchedtheblockchainresearchanddevelopmentorganization“BlockchainLab.”InadditiontoTCompanyitself,someassociatedcompaniesandTCompany’sR&DLabsparticipatedinthisblockchainlab.Bytheendof2019,ithadalreadyformedallianceswithabout100blockchain-relatedcompanies.InMarch2020,itannouncedthatitwasproceedingwithfourtypesofdemonstrationexperimentsthatutilizeblockchaintechnology.Themainpurposewastorecordtheusagehistoryofcarsontheblockchain,linkitwiththedataofothercompanies,searchfornewservices,andtoaimforgreaterresilienceandefficiencyintheoperationoftheentiresupplychain.TCompanyalsosawblockchainasusefulfor“democratization,”wheredataaresharedandmanagedbyeveryparticipant,andasaconfigurationpatternthatwasfundamentallydiffer-entfromtheinformationmanagementofotherDBEs.Inotherwords,althoughinformationsharingmethodsbasedonthecurrentDBEarchitecturewereeffective,itwasexpectedthattherewouldbenewbeneficialpossibilitiesforthenewlyconstructedDBEbyintroducingtheblockchainmechanism.Thecompanyrepresentativeinvolvedintheblockchainlabsaid,“ThemethodofsharingdataviaApplicationProgrammingInterface(API)usingourowndatacentrecanbesimilartousingblockchain.However,whenyouaresharingonblockchain,theYuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

411398Handbookondigitalbusinessecosystemsmomentyoudothat,yougettheimpressionthatyoucandomorethingsatonce”(Shimizu,2020).Figure24.2illustratesTCompany’sblockchain-basedDBE.Figure24.2Blockchain-basedDBEofTCompanyFurthermore,inJanuary2020,TCompanyannouncedtheconstructionofasmartcityinitshometown,andconsideredtheneedforcitymanagementwithafocusondataincollaborationwithalargetelecomcompany.TCompanysawblockchainasthecoretechnologyunderpin-ningthese“datacities.”Inaddition,TCompanyanalyzedthatitwouldbeeasiertolinkwithdatawheretheassetvalueishighandprivacyisimportant,suchasmedicalcareandrealestate,aswellasautomobiles.TCompanyaimedtobuildasafe,fair,andresilientDBEbymaximizingthesharingofinformationassociatedwithcarsandbyendorsingitwithablock-chainmechanism,centeredonitsowndigitalsupplychain.Example2:SCompany’sBlockchain-BasedDBE“SCompany,”amajorJapaneserealestateandconstructioncompany,builtamechanismtoshareinformationonthetenantsofrentalhousinginthesupplychaininwhichitisinvolved,usingblockchaintechnology.Thecompanyannouncedthatitwouldstartaone-stopservicewithinFY2020thatsimplifiespropertyviewing,moving,andcontractsforgas,water,andelectricity.ThecreditworthinessofacustomerwouldbejudgedbytheirhistoryrecordedonYuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

412Blockchain-basedsupplychainarchitectureadaptedtodigitalbusinessecosystems399theblockchain.Businessesalsonolongerneededtomanageinformationfromtheirpersonalhistory,thusallowingreducedcosts.AsummaryofthesystemthatisinplaceisprovidedinFigure24.3.Figure24.3Blockchain-basedDBEofNCConsortiumThenewserviceusesthetechnologyofthe“NCConsortium,”establishedinApril2019withKDDI,Hitachi,andothers.Nineteencompaniesparticipated,includingsomeJapaneseleadingenergycompanies,andmajorsecurityandtransportenterprises.Inadditiontopropertypreviewsandmoving,itisalsoresearchingthemanagementandfeesettlementofsuburbansatelliteofficesontheblockchain.NCConsortiumaimstohave500companiesparticipatinginitby2025.DISCUSSIONSimilartothetwoexamplesabove,therearemanyDBEsbeinglaunchedinvariousindustries,suchasagriculture,arts,andmedia.Untilrecently,blockchaintechnology,whichwasfirstthoughttobeusefulonlyforFinTechandvirtualcurrencies,isnowgrowinginpopularityinvariousotherindustriesandevenforactivitiesbetweenindustries.YuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

413400HandbookondigitalbusinessecosystemsAtechnologicalecosystemmeansatechnologynetworkplatformcomposedofanecosys-temwiththecomplementofdifferentecotypesthroughassemblingmanyindependentactors(Warehametal.,2013).Thetechnologicalecosystem,beingthenetworkplatformthatusestheblockchain’sdecentralizedgovernancemechanism,canensureDBEs’resiliencewhileimprovingequalcooperationandinnovationamongsupplychainparticipants.Inthepast,therewasgreatriskwithautonomousecosystems.Therewereconcernsthatanout-of-controlcreativeoutputcouldrisktheentireecosystemitself,suchthatitcouldseriouslydamagetheeconomicsustainabilityofthenetworkplatform(Boudreau,2011).However,importingblockchain’sdecentralizedgovernancemechanismmakesitreasonabletoallowevolvabilitywithinsensiblelimitsatthetechnologyecosystemlevel,whileappropriatelyconstrainingthebehaviourofsupplychainparticipants.TheB-SCScanplayaroleintheconstructionandoperationofDBEsinanumberofways.First,smartmatchingisanintegratedfunctionoftheB-SCSadaptedtoDBEs’establishmentphase.SmartmatchingintheB-SCSmeansvariousresourcescanbedispersedintheDBE.Thisdistributedstructurethatcanbeachievedthroughtheblockchainnetworksearchallowsrapiddataflow,proceedingtosmartmatchingwiththeneedsorideasofdifferentparticipants,thenallowingthemtobuildacomprehensiveDBEtogether.Smartmatchingsimplifiestheconnectingandfittingprocessofresourcesuppliersandreceiversbyusingblockchaintech-nologyinDBEs.ThiscanallowrelatedorganizationstoacknowledgeDBEs’overallestab-lishment,andalsotocapturethenatureandcoreelementswithinashorttimeatsmallcost.Second,collaborativeoperationisanacceleratedfunctionwhentheB-SCSisadaptedtoaDBE’soperationalprocesses.Collaborativeoperationisbasedonusingaconsensusmechanismandsmartmatchingfunction,throughtheauthenticationmechanismofcollectiveendorsementbytheDBE’sparties.Italsoenablestheinterchangeoftransaction,integration,andreviewprocessdatatoenhancetheparticipationofrelatedparties,thusmaximizingtheabilityofeachpartyintheDBE.Thisallowsforcreatingsolutionswithmorecreativityandpertinence.Then,throughfurther-upcross-organizationcollaborationandblurryphysicalboundariesamongdifferentorganizations,theyareabletocollaborativelycompletethebusi-nessprocessaccuratelyandefficiently.Third,automatedexecutionisaconsolidatedfunctionwhentheB-SCSisadaptedtoaDBE’strustmechanism.Automatedexecutionisunderthecombinedeffectofsmartcontractsanddigitalsignatures,throughpredeterminingtradingconditionsandtheorderlyarrangementofinformationtoachieveanautomaticmodeofoperationandtheorderlyexe-cutionofsolutions.ThisenablestheparticipantsofDBEstoreviewtheentirecourseonlinethroughoutthetransaction.Itcanalsoreducetheimpactfromthirdpartiesinthetraditionaloperationactivities.Thiscanachievethedirectconnectionofalltherelatedparties,andalsohelptosimplifytheprocessoftransactionimplementation,lowertransactioncosts,andreducedisputesandtherisksinthetransactionprocess.Finally,repairingandupgradingthroughtheB-SCScanhelpDBEstoenhancetheirresilienceandensuretherecoveryandevolutionfunctionsofrisktreatmentandautonomousupdates.ThiswillensurethattheDBEhaseffectivesolutionstoachieverapidsystemrepair-ingandupgrading.Repairingandupgradingarebasedonthecomprehensiveapplicationofthethreefunctionsabove.Thatis,whenariskisdetected,thesystemcanstillcompletesmartmatchingrapidlyandsafely,operatecollaboratively,andexecuteautomatically.ThiscanensurethatDBEsareabletoberecoveredtothenormaloperationstatusrapidlywhenapartoftheDBEisattackedorthreatened.Furthermore,whenDBEsareintheprocessofself-repair,YuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

414Blockchain-basedsupplychainarchitectureadaptedtodigitalbusinessecosystems401throughtheevolutionoftheirfeaturesofreorganizingfunctions,asymmetricencryptionoftheblockchain,andpeer-to-peernetworkmechanism,DBEscanconstantlyextendandexpandtonewcriticalpoints.DBEscanthussuccessfullyachieverepairandupgradingatminimumcostthroughthistypeofevolution.CONCLUDINGREMARKSOverthepastdecade,basedontheextensiveapplicationoftheIoT,cloudcomputing,AI,andbigdatainglobalsupplychains,theorganizationofsupplychainshaschangedpartlyfromchain-orientedtonetwork(orevenecosystem)-oriented,andgraduallysomeDBE-orientedandsupplychainenterprises,suchasApple,Zara,andSamsung,haveemerged.However,whennaturaldisastersoccur,suchasthespreadoflocustsandCOVID-19,aswellassuddencrisescausedbywarsandtradefrictions,thesecurityandstabilityofsupplychainscanbegreatlythreatenedandchallenged.Inthischapter,firstofall,theframeworkandstructureofthetraditionalsupplychainwerebrieflyreviewed.Fromtheperspectiveofstrengtheningsupplychainresilience,theadvan-tagesanddisadvantagesoftheexistingfullycentralizedandpeople-orientedarchitecturemodelwereanalyzed.Basedonthisanalysis,anewarchitectureofasupplychainincorporat-ingblockchainmechanismswasproposed.Thiswouldallowsupplychainstostrengthentheirownsupplychainresiliencewithoutweakeningitsexistingefficiency,soastofullyutilizetoday’sdigitaltechnology,andachieverapidinnovationandstrongintegrationwhenfacedwithcrisesandchallengesinnewsituations.Finally,twoJapaneseexampleswereusedtodemonstratehowthesupplychainarchitecturewithblockchainmechanismcanminimizethelossescausedbythestagnationofthesupplychainintheeventofemergencies,andcanhelptomaintainthehighefficiencyandresilienceofsupplychainsundernormalconditions.ThetwoexamplesprovideinsightsintohowblockchainmechanismscanbeusedtobuildDBEs.Theuseofsuchblockchaintechnologycannotonlyhelptoresolvethemajorissuesfacedinthetraditionalsupplychain,butalsoenabletheentireDBEtoreorganizerapidly,flexiblyadjusttheallocationofresources,andimprovetheresilienceandintelligenceoftheecosystemasawholeintheeventofacrisis.However,theapplicationofblockchainindigitalsupplychainsystemsandDBEsisstillinitsinfancy.Thecompatibilitybetweenblockchaintechnologiesandotherdigitaltechnologies,aswellastheimpactandproblemswiththeoverallsupplychainarchitecture,isinneedoffurtherinvestigationandresearch.Furthermore,withthecontinuousimprovementofblockchaintechnologies,suchasdecentralizedledgertechnology(DLT)andsmartcontracts,variousindustriesintheprocessofbuildingtheirownDBEshouldactivelyattempttoengagewiththeopportunitiesandchallengetheissuescreatedbynewsystemarchitectureelements,suchastheconsensusmechanismandasymmetricencryption.NOTES1.Theindustrialinternetcanbedefinedasthefusionofindustrialsystemsandinformationtechnolo-giesontheinternet(Lietal.,2019).Itisanetworkbasedontheinternet,thetraditionaltelecommu-nicationnetwork,andotherinformationcarriers,whichenablesordinaryphysicalobjectsthatcanbeindependentlyaddressedtorealizeinterconnection(Zhangetal.,2021).YuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

415402Handbookondigitalbusinessecosystems2.Informatizationis“aprocessofchangethatfeatures(a)theuseofIT(InformationTechnologies)tosuchanextentthattheybecomethedominantforcesincommandingeconomic,political,socialandculturaldevelopment;and(b)unprecedentedgrowthinthespeed,quantityandpopularityofinformationproductionanddistribution”(Wang,1994,p.5;Kluver,2000,p.2).3.Supplychainresiliencedefinedasthecapacityofasupplychaintopersist,adapt,ortransforminthefaceofchange(WielandandDurach,2021).REFERENCESAddo-Tenkorang,R.andHelo,P.T.(2016).BigDataApplicationsinOperations/Supply-ChainManagement:ALiteratureReview.ComputersandIndustrialEngineering,101,pp.528–543.Albrecht,W.andSteinrücke,M.(2020).AssessingSiteIntegrationintoSemi-ContinuousProduction,DistributionandLiquidityPlanningofSupplyChainNetworks.EUROJournalonTransportationandLogistics,9(1),pp.1–13.Aldrighetti,R.,Battini,D.andZennaro,I.(2021).CostsofResilienceandDisruptionsinSupplyChainNetworkDesignModels:AReviewandFutureResearchDirections.InternationalJournalofProductionEconomics,235,pp.1–21.Al-Talib,M.,Melhem,W.Y.,Anosike,A.I.,Reyes,J.A.G.,Nadeem,S.P.andKumar,A.(2020).AchievingResilienceintheSupplyChainbyApplyingIoTTechnology.ProcediaCIRP,91,pp.752–757.Angiulli,F.,Fassetti,F.,Furfaro,A.,Piccolo,A.andSaccà,D.(2018).AchievingServiceAccountabilityThroughBlockchainandDigitalIdentity.In:Mendling,J.andMouratidis,H.(eds),InformationSystemsintheBigDataEra,CAiSE2018.LectureNotesinBusinessInformationProcessing,Vol.317,Cham:Springer,pp.16–23.Augot,D.,Chabanne,H.,Clémot,O.andGeorge,W.(2017).TransformingFace-to-FaceIdentityProofingintoAnonymousDigitalIdentityUsingtheBitcoinBlockchain.15thAnnualConferenceonPrivacy,SecurityandTrust,Calgary,Canada,pp.2500–2509.Barykin,S.Y.,Kapustina,I.V.,Kirillova,T.V.,Yadykin,V.K.andKonnikov,Y.A.(2020).EconomicsofDigitalEcosystems.JournalofOpenInnovation:Technology,Market,andComplexity,6(4),pp.2–16.Beck,R.,Avital,M.,Rossi,M.andThatcher,J.B.(2017).BlockchainTechnologyinBusinessandInformationSystemsResearch.BusinessandInformationSystemsEngineering,59(6),pp.381–384.Behnke,K.andJanssen,M.F.W.H.A.(2020).BoundaryConditionsforTraceabilityinFoodSupplyChainsusingBlockchainTechnology.InternationalJournalofInformationManagement,52,pp.1–10.Bharadwaj,A.,ElSawy,O.A.,Pavlou,P.A.andVenkatraman,N.(2013).DigitalBusinessStrategy:TowardaNextGenerationofInsights.MISQuarterly,37(2),pp.471–482.Boley,H.andChang,E.(2007).DigitalEcosystems:PrinciplesandSemantics,ProceedingsofDigitalEcoSystemsandTechnologiesConference,Cairns,Australia,pp.398–403.Boudreau,Kevin.(2011).LetaThousandFlowersBloom?AnEarlyLookatLargeNumbersofSoftwareAppDevelopersandPatternsofInnovation.OrganizationScience,23(5),pp.1409–1427.Büyüközkan,G.andGöçer,F.(2018).DigitalSupplyChain:LiteratureReviewandaProposedFrameworkforFutureResearch.ComputersinIndustry,97,pp.157–177.Carpenter,S.R.,Westley,F.andTurner,M.G.(2005).SurrogatesforResilienceofSocial–EcologicalSystems.Ecosystems,8,pp.941–944.Chang,Y.,Iakovou,E.ShiandShi,W.(2020).BlockchaininGlobalSupplyChainsandCrossBorderTrade:ACriticalSynthesisoftheState-of-the-Art,ChallengesandOpportunities.InternationalJournalofProductionResearch,58(7),pp.2082–2099.Cheng,J.H.andSheu,J.B.(2012).Inter-organizationalRelationshipsandStrategyQualityinGreenSupplyChains—ModeratedbyOpportunisticBehaviorandDysfunctionalConflict.IndustrialMarketingManagement,41,pp.563–572.Das,M.,Tao,X.andCheng.J.C.P.(2021).BIMSecurity:ACriticalReviewandRecommendationsUsingEncryptionStrategyandBlockchain.AutomationinConstruction,126,pp.1–22.YuCuiandPrakashJ.Singh-9781839107191DownloadedfromPubFactoryat05/28/202210:25:12AMviaColumbiaUniversityLibrary

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41825.Blockchainecosystemsinthecreativeindustries:bigdreamsformicro-paymentsIvanaKostovskaINTRODUCTIONThepastfewyearshaveseenblockchaingainingtractionbeyondthecryptocurrencyscene,withthelistofusecasesbeingexpandedintonewindustriesandsectors.Theeconomicsofcrypto-tokenshashypedupthecreativeindustries,asseenbythesurgeofblockchainventuresinmediaandentertainmentandarts.Blockchainisattractingattentionfromdigitalartists,filmmakers,andgamedevelopers.Thishasbeenreflectedinsomerecentworksproducedinlinewithblockchain’stechno-economicpossibilities.ThedocumentaryClaudeLanzmann:SpectresoftheShoahisthefirstAcademyAward-nominatedfilmthathasbeenreleasedasanon-fungibletoken(NFT)(Ravindran,2021),whilethereleaseofdigitalartcollectiblesintheformofNFTsforthemovieGodzillavs.Kong,isthefirstofitskindinvolvingamajorHollywoodstudio(Bosselman,2021).Theheightenedinterestincrypto-art,frombothcol-lectorsandartists,hasledtoatwentyfoldincreaseinsalesofNFTsbetween2018and2020(Statista,2021).Blockchainhasalsosparkedinterestamongacademics,resultinginacornucopiaofscholarlyliterature.Researchershavefocusedondistinctaspectsofblockchain,suchastheunderlying,blockchain-enablingtechnologies(peer-to-peernetworking,cryptography,anddistributeddatastores),itsvariousindustrialuses,andtheethical,environmental,andlegalrepercussionsofblockchainapplication.Nonetheless,theuseofblockchainintheempiri-calcontextofcreativeindustrieshasreceivedverylittlescholarlyattention.Giventhegapbetweenexistingacademicliteratureandthegrowingadoptionofblockchaininthecreativeindustries,acomprehensiveaccountofanemergingcrypto-creativesectorandacompendiousassessmentofitsvaluecreationmechanismsaremorethannecessarytoadvanceresearchandinformpractice.Tothispurpose,theresearchpresentedinthischapteradoptsaninnovationecosystemlens(Bogersetal.,2019;Adner,2017)tostudyblockchainecosystemsinthecreativeindustries.Itaimstoanswertworesearchquestions(RQs):RQ1:Howdoblockchainstartupsincreativeindustriesdefinetheblockchainecosystemvaluepropositionandvaluecaptureinordertoattractmultipleactors?RQ2:Whataretherisksthatcancreatebottlenecksinvaluecreationincreativeindustries’blockchainecosystems?Amultimethodresearchdesignwasadoptedtoofferamorenuancedaccountofthedistinctaspectsofblockchainecosystemsinthecreativeindustries.Theconceptualizationofthe“inno-vationecosystem”inthestrategicmanagementliterature(AdnerandKapoor,2010;Talmaret405IvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

419406Handbookondigitalbusinessecosystemsal.,2018;Jacobidesetal.,2018)andentrepreneurialresearchonblockchainbusinessventures(O’DairandOwen,2019;AttaranandGunasekaran,2019)wereusedasatheoreticalbasis.Thechaptersubsequentlyreviewstheliteratureonblockchainandinnovationecosystemsthatprovidethestudy’sconceptualfoundation,followedbyadiscussiononthemethodology.Thelasttwosectionsfocusontheresearchresultsanddiscussionandconcludingremarks.LITERATUREREVIEWRiseofBlockchainEntrepreneurshipBlockchainisanencrypted,continuouslygrowingdistributedledgerthatrecordstransactionsinachain(Saberietal.,2019),andassuch,itisanappend-onlydatarepository.Underpinnedbypeer-to-peercommunication,distributeddatabases,transparencywithpseudonymity,andirreversibilityofrecords,blockchainenablesuserstohaveunlimitedaccesstoashareddata-basewhilepreventingthemfrommanipulatingorcontrollingthedata(seeDeFilippi,2017;Pilkington,2016).Blockchaintraversedthemarginsofpublicattentionwiththewideradoptionofcryp-tocurrencies,highlightingitsdistinctiveandpotentiallyparadigm-changingfeatures(seealsoTapscottandEuchner,2019).Theriseofmainstreaminteresthasprovidedanimpetusforbusinessesandentrepreneurstoexplorethepotentialmeritsofblockchain,whichhasextendedtheuseofblockchainbeyondthefinancialsector.Itsincreasingadoptioninsupplychainmanagement,copyrightprotection,healthcare,andsmartenergypointstoanemergingcrypto-economy,driveninpartbyblockchainentrepreneurshipthathasgrowninresponsetothegrowinginterestofventurecapitalinthetechnology.Blockchainstartupshavealsochallengedthetraditionalfundingvehiclesbyusinginitialcoinofferings(ICOs)asaformoffunding(SchückesandGutmann,2020).Entrepreneursattempttolegitimizethestartup’svaluepropositionbypublishingwhitepapersonthetechnol-ogy’sintendeduse,whichalsoshowcasetheusevalueoftheproductorserviceonoffer.Thepublicationofawhitepaperisusuallytheinitialstepundertakenbyearly-stageblockchainbusinessventuresseekingfundingthroughanICO(Albrechtetal.,2019).Aninitialcoinofferingisafundingmechanismthroughwhichabusinessventureissuesdigitaltokensthatinvestorspayforwithfiatmoneyandreceivecryptocurrencyinexchange.Todistinguishtokensfromcoinsisessential,astheformeraremostoftenusedasapaymentmethodinsideecosystems,andgrantholderstherighttobecomepartofthenetwork(Boreikoetal.,2019).Tokensareusedtocreatenetworkingeffectsandbinddifferentstakeholderswithintheblock-chainecosystemandallowtransparencyoverwhoownsthem(Laplume,2018).Againstthisbackground,blockchaintechnologyhasbeenresearchedinthecontextofvariousfieldsandanalyticalperspectives(Frizzo-Barkeretal.,2020;Casinoetal.,2019).Studiesonblockchain-enabledentrepreneurshiptrytocontributetodigitalentrepreneurshiptheoreticalunderpinnings(Chalmersetal.,2019),signalingtheory(Fisch,2019),moralhazardinsignalinginentrepreneurialfinancecontext(Momtaz,2020),andnascentliterature(Howelletal.,2019).Overall,mostofthestudiesonblockchainbusinessventuresinentrepreneurshipliteratureareexploratoryandexaminedifferentfeaturesofblockchainbusinesses.IvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

420Blockchainecosystemsinthecreativeindustries:bigdreamsformicro-payments407Blockchain’sAdvantagesandDisadvantagesWhereasblockchain’sapplicabilityisindustry-specific,itsgenericfunctionalitiesbringadvantagesthatcutacrossdifferentindustries.Inparticular,asapeer-to-peernetworkunder-pinnedbydistributedconsensus,blockchainhasthepotentialtoremoveintermediaries.Thetrustisdistributedacrossthenetwork,asthesystemallowsanimmutablerecordoftransac-tions(Coleetal.,2019).Transactionsbetweenpartiesthroughdistributeddatamanagementinablockchainmakecentralintermediariessuchaslawyers,brokers,andbankersredundant(Zhengetal.,2017;Lacity,2018).Trustinanintermediaryissubstitutedbytrustintechnol-ogy(Bonsetal.,2020).Certainpotentialbenefitsarelinkedtosmartcontracts,transactionverification,andtheimmutabilityofrecordsascoreblockchainfunctionalities(Bashir,2017).Firstly,thesmartcontractfunctionalityoperatesasanimmutabledecentralizedprogramintendedtoautomati-callydocumentorexecutethecontractterms(Ante,2020).Thismeansthatsmartcontracts,whichgoverntransaction’stermsandconditions,bringautomationtosomebusinessprocesses(Hughesetal.,2019).Secondly,thetransactionverificationfunctionalitymeansthatbeforeatransactionisaddedtotheblockchain,ithastobeauthenticatedbasedonaprearrangedsetofrules.Thirdly,recordsaddedontotheblockchainareimmutable.Thus,blockchainallowsnon-repudiation,thatis,thetransactionhistory’sintegritydoesnotletparticipantsdenyordisputetheiradditionstotheblockchain(Hughesetal.,2019),whichisassociatedwithadvan-tagessuchastrust,transparency,andnetworkintegrity(Bashir,2017).Theuseofblockchaintostreamlinetransactionsandsettlementprocessescanreducecostsrelatedtomanualopera-tions,asisevident,forexample,inhealthcare(Xuetal.,2019).Theliteratureonblockchainalsoidentifiestechnology’slimitations(Hughesetal.,2019;GuoandLiang,2016).Hughesetal.(2019)differentiatebetweentechnicallimitationssuchaslackofprivacy,highcosts,andfsecuritychallenges,andnon-technicallimitationssuchaslackofacceptancefromlegalandregulatoryauthorities,andend-useradoption.Security-relatedissuesinvolverisksofaccounttakeover,digitalidentityfrauds,andhacking(Xuetal.,2019).Blockchaintechnology’sconsensusmechanismcanbesubjecttoattackbecauseofitsdecen-tralizedandpublicqualities(Chicarinoetal.,2020).Anotherchallengeisthatdataisstoredpermanently,resultinginacollisionwithsomelegislativerequirements,suchastherighttobeforgottenstipulatedintheEuropeanUnion’sGeneralDataProtectionRegulation(Tataretal.,2020).Frizzo-Barkeretal.’s(2020)studynotesadoptionbarriersindifferentareas,includingwasteofresourceslinkedtolatency,costs,andinefficientenergyuse.BlockchainintheCreativeIndustriesAdepartingpointfortheresearchpresentedinthischapteristhedefinitionofitsscope;thatis,anexplanationofwhichcreativeindustries’sectorsareincluded.Thedevelopmentofthecreativeindustriesdiscoursebroughtdifferentcontext-specificconceptualizationsaboutthesectorsthatmakeupthe“creativeindustries”(GallowayandDunlop,2007;Flew,2011),oftenreflectingthelong-lastingdivisionbetweenculturalstudiesandeconomics(Flew,2011;Moore,2014).Thischapterfocusesonmediaandentertainment(broadcasting,film,publishing,recordingmusic,videogames,andadvertising)andarts.Thismeansthat,fromthebroaderspectrumofcreativeindustries,sectorssuchasfashion,architecture,crafts,anddesignareoutsideofthisstudy’sscope.IvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

421408HandbookondigitalbusinessecosystemsTable25.1PotentialadvantagesofblockchaintechnologylistedinliteratureSectorPotentialadvantagesSourcesBroadcasting●Newpricingoptionsforpaidcontent(throughmicrotransactions)DeloitteBlockchainInstitute●Bypassingaggregators(2017),●DistributionofroyaltypaymentsBadeletal.(2019),●SecureandtransparentC2CsalesQayyumetal.●Improverightsmanagement(2019)●Enhancetrackingofdistribution●Simplifyandfacilitatemediavaluechainsandprocesses●VerifyintegrityofnewsFilm●AuthenticatingandprotectingintellectualpropertyDeloitteBlockchainInstitute●Developingdigitalrightsmanagementtools(2017),Badeletal.(2019),●EnablingmorecollaborativeworkenvironmentsBissonetal.(2019)●Complementfilmfinancing●Buildsystemthatcollectsandsharesrevenues●Simplifyandfacilitatemediavaluechainsandprocesses●CrowdfundingPublishing●ProtectingauthorroyaltyNizamuddinetal.(2019),Ryan●Authorshipverificationandco-creationetal.(2020)●Rightsmanagement●AudienceengagementMusic●Overcomingfundinggapsthroughreal-timepaymentformusicstreamingorO’DairandOwen(2019),O’Dairtokensalesetal.(2016)●Improvedtransparencythroughthevaluechain●Fast,frictionlessroyaltypayments●AccesstoalternativesourcesofcapitalVideogames●EnablingdigitalscarcitySeradaetal.(2020),Minetal.●Assetreusability(2019),EY(2020)●TransparencyofrulesAdvertising●AutomatethedistributionofearningsorenabledataaccessShresthaetal.(2020),●Enableconsensus,collaboration,andtrustbetweenbuyersandsellersIAB(2018,2019)●Buyer‒seller“peers”nolongerneedtobehuman●GreaterefficiencyintheadsupplychainArt●VisibilityofdigitalartanditsownershipMcConaghyetal.(2017),●SetstandardsonhowartshouldbetradedandregulatedMacDonald-Korthetal.(2018)Whilesomelackofinterestfromresearchandacademiaregardingblockchainapplicationinthecreativeindustries(morepronouncedinbroadcasting,film,publishing,andadvertising)canbeobserved(seeTable25.1),blockchainhascreatedahypeamongpractitionersinthecreativeindustries,withmixedfeelingsofenthusiasmandvigilance.Blockchainapplica-bilityhasbeendiscussedatfilmfestivals,industryevents,andhackathons,oftenriddledwithutopianvisionsaboutthetechnology’stransformativepotential(Baymetal.,2019).Thepotentialofblockchainhasalsobeenassessedbypublicbodiesthattestitsapplicabilitythrough“sandbox”approaches(e.g.,Badeletal.,2019).AreportoftheAustraliaCouncilfortheArts,ScreenAustralia,andtheAustralianFilm,TelevisionandRadioSchool,proposescreatinganAustralianCreativeBlockchainthatwouldassistinbridgingproblemswithroyaltypayments,artforgery,andadministrativeoverheadcosts(Rennieetal.,2019).TheUnitedKingdom(UK)innovationagencyInnovateUKsupportedtheblockchainecosystemIvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

422Blockchainecosystemsinthecreativeindustries:bigdreamsformicro-payments409FilmChain,developedonEthereum,wherefilmmakerscancollect,allocate,andanalyzerev-enuesforfilm,TV,anddigitalintransparentandefficientways.Asidefrom“sandbox”approaches,theuseofblockchaintechnologyinthecreativeindus-triesisstillatanearlystageofdevelopment(seealsoBissonetal.,2019;ErkkiläandYle,2019),especiallyinmediaandentertainment.Largerincumbentsonlyexperimentwiththetechnology,whereasviableprojectsarebroughttomarketbyenthusiasticstartups,oftenmadeupofindustry-experiencedcreatives(producers,filmmakers,musicians)whofinancetheirlaunchthroughanICOwhilepositioningthemselvesastrailblazersandclaimingdisruptivepower.Blockchainstartupsthatemergeareeitherpublicandaccessibletoeveryone(forexample,musicorartmarketplaces),orprivate,whereonlyaselectionofverifiedparticipantscanparticipate.AnexampleofthelatterisFilmChain,whereblockchainparticipantsmusthaveafulfillmentaccountwhereupstreammoneyispaid.AlthoughFilmChain’secosystemisbuiltonEthereum,itcanrunwithoutrelyingoncryptocurrency,usingfiatmoneyinstead(Bissonetal.,2019).Blockchaintechnology’sadvantagesinspecificcreativeindustriessectors,outlinedinacademicliteratureandindustryreports,areoftengeneralizedandprophesied.InnovationEcosystemasConceptualFoundationThischapter’sconceptualfoundationisembeddedintheinnovationecosystemresearchstreamthathasgainedprominenceinbusinessandinnovationmanagement(Bogersetal.,2019;Adner,2017).Innovationecosystemsallowmultipleactorstocreatevaluejointly,makingecosystemanalysissuitableforresearchingblockchainventures.Asanewmodeoforganizingbusinessactivity,theecosystemmetaphorisperceivedasamoreaccuratesubsti-tuteforindustrywhenusedasaneconomicanalysisframework(Moore,2006).Thismeansthatecosystemscanco-evolvewithinmultiplemarkets,spandifferentindustries,andacrossgeographicalboundaries.Adner(2017,p.42)outlinedthatecosystemshave“asetofrelationshipsthatarenotdecomposabletoanaggregationofbilateralinteractions.”Centraltotheecosystemisafocalorananchorfirmthatorchestratescreationofajointvaluepropositionbyecosystemactors.Intheblockchainecosystem,atechstartupactsasafocalfirm.AccordingtoAdner’secosystem-as-structureapproach,thefocalfirmbeginsfromthequestion“Whatistheeco-systemvalueproposition?”beforedeterminingwhatkindofactorsneedtobeconnected.Thismeansthatajointvalueproposition,asasystem-levelgoal,iscriticalforaligningeco-systemactors.Asaunitofanalysis,theecosystemhasadvantagesinthemediaindustry(seeKostovskaetal.,2020),givinganempiricalopportunitytostudyblockchainstartupsinthecreativeindustries.METHODOLOGYThischapterisbasedonaqualitativeresearchdesignsuitableforinquiringintonascent,dynamic,andunderexploredphenomenabroughtaboutbydigitizationandglobalization(Su,2017;VanMaanen,1979).Aqualitativeapproachispertinenttoanswer“how”and“what”questions(MilesandHuberman,1994)andenablesresearcherstoventureintoless-researchedareas.Inaddition,qualitativeresearchdesignoffersanin-depthandholisticdepictionofrealitiesandcanbeadaptedtounanticipatedevents(Gephart,2004).AsthephenomenonIvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

423410Handbookondigitalbusinessecosystemsbeingstudieddictatesthemethods,amultimethodresearchdesignwasnecessarytoelucidatethecomplexitiesencompassingblockchainecosystemsinthecreativeindustries,combiningthematiccontentanalysisandinterviews(Oliver,2018;HunterandBrewer,2015).Thematiccontentanalysiswascarriedoutonadatasettoidentifyblockchainstartupsandcollectrelevantinformationforthethematiccontentanalysis.Firstly,therawdatawasextractedfromtheCrunchbasedatabase(crunchbase.com)whichcontainscompany,investor,andfundingdataforbusinessesworldwide.Inordertodelimitarelevantsample,acompre-hensivelistofkeywordswasmade,basedonthedefiningtermsofthecreativeindustries(“media,”“streaming,”“film,”“music,”“art,”“publishing,”“games,”“advertising”)incombinationwiththekeyword“blockchain.”TofindblockchainsnotincludedinCrunchbase,industrypresssourceswereused.Inthenextstep,secondarydataobtainedfromblockchaincompanies’websites,whitepapers,reports,mediaarticles,andotheravailabledocumentswereusedtocollectinformationregardingtheirvisionandmissionstatements,blockchainecosystemstrategicgoals,andobjectives.Afteraninitialsetofsampleunitswascreated,itwasreviewedtoverifyitsvalidityandascertainitsfitnesstoaddresstheresearchobjectives.Uponreview,alldataentriesthatwereconsideredtobeoutsideofthescopeofthisstudy,typicallynewsmediaventuresfocusingonblockchainnewsorinactiveblockchainstartups,wereexcludedfromthesample.Intotal,dataon110blockchainstartupswasgathered.ThecomputersoftwarepackageNVivowasusedtostudyandanalyzethedatasample.Duringtheanalysis,severalcodingthemeswereidentifiedthroughopencoding,fromwhichthematicgroupingsemerged.Opencodingwasusedtoassignacodetorepresentaconceptshowninthedata(CorbinandStrauss,2014).Codingdecisionswereinformedbyrelevantliteratureonblockchain,businessecosystems,andcreativeindustries.Inthefollowingstep,emergentpatterns,thatis,higher-levelconceptsorthemesthathighlightinterconnectionsofcodingdecisions,wereestablishedasanessentialstepininterpretingandreducingthedata(Roberts,2020).Overall,codingandestablishingpatternswerefocusedonidentifyingthematicgroupingsthatwouldelucidatetheblockchainecosystem-levelgoal;thatis,theecosystemvalueproposition.Basedonthecontentanalysis,fourdimensionsofblockchainecosystemvaluepropositionweredeveloped.Thesedimensionsservedasabasisforthedevelopmentofthetaxonomyofblockchainecosystems.Asasecondaryqualitativemethodology,in-depthsemi-structuredinterviewswithchiefexecutiveofficers(CEOs),founders,andotherrepresentativesfromblockchainstartupswereconducted.Tocollectempiricaldata,atotalofteninterviewswereconducted.Theinterviewslastedbetween20and60minutes,dependingontheavailabilityofinterviewees.Theinter-viewdatawasusedtoanswerbothresearchquestionsbyfocusingon:(1)identifyingtherisksoftheblockchainecosystem;(2)explainingtheinterdependenciesbetweenparticipantsthatmightcreatebottleneckstovaluecreationintheecosystem;and(3)definingthemaingoalthatbringstogethertheblockchainparticipants(theecosystemvalueproposition).Theinterviewswereaudio-recordedandlatertranscribed.Sixintervieweeshaveaprofessionalbackgroundincreativeindustries,whiletheremaininghaveexpertiseinblockchaintechnology.TwooftheintervieweesareCEOsofdistributorledgerecosystems.TheintervieweeswereanalyzedinNVivo,aswasthedocumentanalysis.IvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

424Blockchainecosystemsinthecreativeindustries:bigdreamsformicro-payments411RESULTSCulturalNarrativeDirectedTowardsNichePlayersTheresultsfromthethematiccontentanalysisindicatethatmostoftheblockchain-enabledapplicationsinthecreativeindustriestargetnichecreatorssuchasindiefilmmakers,musicproducers,andartists.Themajorityoftheearly-stageblockchainbusinessesanalyzedarelaunchedbyentrepreneursfromthecreativeindustrieswhoarenotblockchain-savvy.Furthermore,resultssuggestthatthediscourserevolvingaroundblockchainstartupsoftengoesbeyondtheeconomiclogicofcreativeindustriesandconsidersthepolitical-economycontext(seeLee,2017).Aspiringtoelevatetheideaofcreativityandculturebeyondeconomicconstraints,someblockchainstartupsusea“culturalvalues”narrativetoexplainthattheir“goalsarenotdefinedbyprofit”andthattheyprovide“fairrevenueshare”and“democratiza-tion”oftheaudiovisualproductionprocess,screenwritingandpitching,mediastorytelling,ordigitalmusicdistribution.Someblockchainstartupsexplicitlymentionthattheytryto“disrupttheHollywoodstudiomodel”byreducingrisks,producingcontentatalowercost,andpro-vidingaccesstodistributionchannels.Theentertainmentindustrybusinessmodelisdepictedas“tired,slowanditdisplacesownership.”Theresultsshowthatblockchainstartupsputforwardideassuchasco-creation,coexistence,balance,sharingresources,adaptingtogether,andinterdependence,whicharelinkedwiththenotionoftheecosysteminbusinessliterature(e.g.,Kapoor,2018).TypologyofBlockchainEcosystemsinCreativeIndustriesBasedontheecosystemvaluepropositionasameta-criterion(Nickersonetal.,2013),fourtypesofblockchainecosystemsinthecreativeindustrieswereidentifiedasaresultofthethematiccontentanalysis:1.Community-drivenecosystems.2.Transactionecosystems.3.Copyrightsprotectionecosystems.4.Crowdfundingecosystems.Thesecategoriesaremutuallynon-exclusive,whichmeansthatablockchainecosystemcouldhavecopyrightprotectionasavaluepropositionbutstilloffersomecommunityengagementfunctionalities.Theidentificationoftheecosystemvaluepropositionwasconductedbyansweringthequestion:Whatisthekeyecosystem-levelgoal?(Adner,2017).Thefollowingsectionsprovidefurtherdetailaboutthetypesofblockchainecosystemsincreativeindustriesoutlinedabove,whereeachoftheseisdiscussedinturn.Community-drivenblockchainecosystemsInco-creativeenvironments,customersandusersbecomeincreasinglyactiveparticipantsthataddvalue(RomeroandMolina,2011).Theanalysisofblockchainecosystems’strategicstate-mentsshowedthatsomestartupsaimtodevelopandcommercializevaluepropositionsthatrestuponvalueco-creationwithend-userparticipationatitscore.Forinstance,audienceshavetheopportunitytoco-produceshowsandfilmswiththeirfavoriteproducersanddirectors,decidehowtheirsubscriptionfeeisutilized,orbenefitfromthecontenttheypublish.IvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

425412HandbookondigitalbusinessecosystemsCommunity-drivenblockchainecosystemgoalsrevolvearoundaddressingsomeperti-nentindustrychallengesassociatedwithfinancingandunderstandingaudiences.UnliketheHollywoodstudios’logicofconvincingaudiencestocommittheirtimeandmoneytounforeseeablefilmexperiences(Hadidaetal.,2021),blockchainecosystemsinthiscategoryintegrateaudienceparticipationintheproductionprocessfromtheoutset.Usersareinvolvedfromthedevelopmentphaseofthevaluechains,havingthepossibilitytodecidewhatkindofgamesaredevelopedorwhatkindofmusicisrecordedanddistributed.Theecosystems’goalsarefocusedonincentivizingusersandaudiences’participation.Users’time,dataandattentionisrewardedwithintellectualproperty(IP)rightsoraccesstocontent.Incontrast,traditionalrevenuemodelsinthecreativeindustriesdonotincentivizeaudienceparticipation.Yet,thelevelofdecentralizationofpowerinblockchainecosystemsbringscertainchallenges.Audius,afullydecentralizedmusicstreamingprotocolbuiltwithpublicblockchaininfrastructure,bringstogetherartists,fans,andnodeoperators.Accordingtoitswhitepaper,Audiusletsartistsdistributetoandgetpaiddirectlyfromtheirfanswhiledemocratizingaccesstoanyonewhofollowsprotocolrules.Thepublicblockchaininfrastruc-turehasprovedtobechallengingforcopyrightprotection(Deahl,2019a).TransactionecosystemsTransactionecosystemsfacilitatetheexchangeofgoodsandservices,thatis,transactionsbetweendifferentsides.Theplatformusuallyactsasadistributorinasupplychain,enablinginteractionsbetweenbuyersandsellers.Viberate,forinstance,isablockchain-basedlivemusicmarketplacethatusesbothtokensandsmartcontractstomatchmakemusiciansandeventorganizers.Ittargetsthebusiness-to-customer(B2C)segmentthroughticketingbusi-ness.AccordingtoViberate’swhitepaper,theblockchaincompanyreplicatestheexistinglivemusicindustry’srevenuemodelandchargesfees,butonalowerpricerange.Theblockchainecosystemsthatfallintothiscategoryaremorefocusedonprovidingacombinationofpricingtacticsthatmightalsoincludereturningdividendstotokenholders.Blockchainstartupsthatofferdigitalartworksaretypicalforthiscategory.Anotherexampleiscryptogamesthatoffercollectiblesownership(forexample,CryptoKitties,collectibledigitalcats).Allocatingresourcestowardstransactionblockchainecosystemisastrategicresponsebycreativeindustryentrepreneurstoconcernsthatemergeinthedigitalplatformenvironment.Theriseofintermediaries,suchassocialmediaandvideo-on-demandplatforms,haspro-foundlychangedcreativeindustries’landscapes.Facedwithchallengesbroughtbygatekeep-ers’power,firmsinthecreativeindustriestrytodiversifytheirdistributionstrategiesandinnovatebusinessmodels(MeeseandHurcombe,2020).RightsmanagementecosystemsTheblockchainecosystemsinthiscategoryareorientedtowardsvaluepropositionsforpro-vidingsecurityandproofofintellectualassetsownership,inbothbuesiness-to-business(B2B)andB2Csegments.Blockchainecosystemswithrightsmanagementattheircorehelpcreatorstoconnectwiththeirdigitalcontent(Casinoetal.,2019).Theoverarchingecosystemvaluepropositionsarebasedonthemessuchasverificationandrightsownership,trust,transpar-ency,safety,andfraudprevention.Forexample,BeatdapptargetsB2Bsegmentsbyenablingmusiclabelsandartiststotrackplaycountsfortheirsongsandcollectroyalties.IvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

426Blockchainecosystemsinthecreativeindustries:bigdreamsformicro-payments413Dominanttopicsthatemergedasaresultofthethematiccontentanalysisincluderightsmanagement,protectionagainstpiracy,anddataprotection.Inparticular,someofthestrategicdocumentsanalyzedemphasize“trust”asacriticalfeature,withphrasingssuchas“increasingroyaltyrevenueforrightsholders,”“transparentroyaltydistributions,”and“furtheringtrustandcredibilityinthethrivingartsecosystem.”Copyrightprotectionblockchainecosystemsofferfunctionalitiesthatallowdigitalsignaturestobeinsertedintodigitalworksandthenbepermanentlyrecordedandverifiedthroughtheblockchain.Insomecases,thisinvolvesregis-teringartworkfordigitalsignaturebytrustedartinstitutions.Rightsmanagementecosystemsprovideanalternativeforthenumeroushurdlesfacedbycreativebusinessesandtalentineverydaypractice,whichresultfromtheinterplayofdigitization,changingindustrypowerstructures,andthe(re)configurationofcomplexvaluechains.Forinstance,thefilmandTVsupplyandvaluechainsarehighlycomplexduetothenatureoftradingcopyrightedcontent(multiplewindowingagreementswithdifferentendbroadcastersordistributorsacrossvariousgeographicalareas)andpaymentschemes(profitshares,minimumguarantees,andsoon).Infilmproduction,intellectualpropertyrightsareacentralfeaturethatunderpinsthebusinessmodelandallowsmonetizationthroughlicensing(McDonaldandWasko,2008).Audiovisualproduction,especiallythatoffeaturefilmsandTVseries,isassociatedwithhighproductioncosts,recoupedthroughdistributionandsalesbytakingadvantageofeconomiesofscale(Doyle,2013).Illegalconsumptionofcontent—thatis,piracy—exacerbatedbypeer-to-peer(P2P)file-sharingtechnologiesandtheInternet,underminesthisestablishedmodel.Similarchallengesariseinartswithpoorprovenance(McConaghyetal.,2017)andonlinecopyrightinfringementincontentindustries(Muir,2013).Inthemusicindustry,eachyearaboutUS$2.5billionworthofroyaltiesremainunallo-catedbecausetheycannotbematchedtotheircorrectcontributor(Deahl,2019b).FundraisingecosystemsAsubsetofblockchains,thefindingssuggest,aredefinedbytheiraimstofacilitatefundrais-ingandeliminateintermediaries.Illustrativeexampleshereareblockchainstartupsthatraisefinancingforfilmandmusicproduction.Asoutlinedintheliteraturereview,disintermediationinblockchainbusinessventuresmightincreaseefficiencyandreducetransactioncosts(Zhengetal.,2017).Thedominantthemesidentifiedbasedonthethematiccontentanalysisoftheblockchainsinthiscategoryshowtheimportanceof“removingthemiddlemanandearningrevenueswithoutsharingwithintermediaries.”Insomecases,blockchainstartupstrytoattractecosystemactorsbypromisingtoremovethegatekeeperswho“owntheirintellectualproperty,”“creatingacommunityofalignedincentives,”and“bypassthemiddlemenwhotakeover80%ofartists’revenues.”Aparticularchallengewhenblockchainsaimtocutthemiddlemanistheriskthatintermediationinsomeformmightpersist(seeO’DairandOwen,2019).Thecreativeindustriesentrepreneurswhowanttofundraisebyusingblockchaintechnologytrytoreconfiguretheiractivitiesduetochangesbroughtbydigitization.Digitaldisruptorsaffectindependentfilmmakers’businessmodelsbyleveragingtheirpowertohammeroutlicensingcontractsthatbenefitthemexclusiverightsforglobaldistributionaffectingthelongtail(Tryon,2013).Thisisparticularlychallengingforindependentfilmmakersasrapidlychangingmarketsaddfurtheruncertaintytoanalreadyprecarioussector.Similartendenciescanbepinpointedinthemusicindustry,wherethedigitizationofmusic(Moreau,2013),theunbundlingofthealbum(Elberse,2010),andtheinnovationofnewbusinessanddigitalIvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

427414Handbookondigitalbusinessecosystemsdistributionmodelspavedthewayforstreamingplatforms.Thesehavegrowntooccupygatekeepingandintermediarypositionsdictatingnewindustrydynamicscharacterizedbyinadequatepayouts,lackoftransparency,andheightenedtensionbetweencreativityandprofitmaximization.Spotify,oneofthemostprominentmusicstreamingplatforms,epitomizesthistensiontothefullestbyincentivizingartiststoproduceplaylist-tailoredmusicasawaytomaximizestreams(Morgan,2020;Preyetal.,2020;BoniniandGandini,2019;AguiarandWaldfogel,2018;NieborgandPoell,2018).EcosystemInterdependenceRisksLinkingecosysteminterdependencetograsptherisksinblockchainecosystemsfollowsthelineofreasoninginthestrategicmanagementliterature(Adner,2017;Bogersetal.,2019)thatecosystemsuccessisdeterminedbyidentifyinginterdependence.Theinterdependentvaluecreationinblockchainecosystemswasexplainedwithabiologicalmetaphorbyoneoftheinterviewees:“ifonerisesorfalls,itcanaffecttherestoftheecosystem.Ifonedies,anotheronewillsuffertoo.”Asseenfromtheresultsfrominterviews,thecontrastbetweenupstreamanddownstreaminterdependencerisks(Adner,2017)canbeidentifiedinblockchainecosystemsincreativeindustries.Firstly,allintervieweesexplicitlyexpressedthechallengesconcerningtechnolog-icalinterdependence.AsAdnerandKapoor(2010)articulated,ecosysteminterdependenceriskscanhavedifferentlocationsrelativetothefocalfirm:upstreamcomponentsbundledbythefocalfirm,anddownstreamcomplementsbundledbycustomers.Accordingtotheempir-icaldatacollectedfrominterviewees,thereisahighriskrelatedtodownstreaminterdepend-enceinblockchainecosystems.Eventhemostinnovativeblockchaintechnologyapplicationwouldendasafailureifotherdownstreamecosystemactorsencountercomplementchal-lenges(suchasdistrustintheblockchaintechnology)thatrestrainthevaluecreationprocess.Somefocalfirmstrytoovercomevaluecreation’sdownstreamchallengesbyeducatingtheirpartnersabouttheirvalueproposition.Oneoftheintervieweesfromablockchainventurethatenablesmediacompaniestoverifytheauthenticityofcorporatecontentbyusingblockchainexplained:“Wehavetothinknotjustaboutimprovingtechnology,butalsoaboutadoption.Whatifyoudon’thavethepeopleontheothersidetouseit.Wespendtimetoeducateusersofourtechnology,tomakeitworkintermsofknowledge”(Interviewee,founderofablockchainstartupforfightingdisinformation).Generally,theinterviewsshowedadrivetowardsdiscussiononwhattypeofactorsmightbeattractedtoblockchain.ThesefindingsareinlinewithBissonetal.(2019),whoarguethattheabsenceofunderstandingaboutblockchain’sadvantagesmakesmanyfilmandTVproductionsrejectthetechnology:Filmmakerswhoareyoungerandtech-savvyaremoreinterestedinexploringtheadvantagesofblockchainanduploadingtheirprojects.(Interviewee,representativeoffilmblockchain)IspentalotoftimetryingtogetonboardregularartistsuntilIrealizedthatthiswasnotworking.Abetterstrategyistotalktopeoplewhoalreadyhaveacuriosityforcrypto,digitalartists.Evennow,ifsomeonedoesnotusecryptocurrencies,itischallengingtoconvincethem.Thentheythinkwewanttoinvitetheminapyramidscheme.(Interviewee,founderofcryptoartblockchaincompany)Fromtheinterviews,weunderstoodthatdownstreamcomplementchallengescandifferdependingontheecosystemactorsthathavetomaterializethevalueproposition.OntheIvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

428Blockchainecosystemsinthecreativeindustries:bigdreamsformicro-payments415otherhand,upstreaminterdependenceposeschallengesbylimitingthefocalfirm’sabilitytoprovidethekeyproductorservice(AdnerandKapoor,2010).Accordingtothedatacollectedthroughinterviews,thisisrelatedtochallengessuchasblockchaintechnologyhurdles.Whendefiningthemainecosystem-levelgoalandgettingtogripswithadoptionrisks,itisimportanttoshowthateveryonehasbenefits,becausethebalanceanddynamicsofecosystemareinfluencedbyecosystemactors’behavior(RitalaandAlmpanopoulou,2017).Oneoftheintervieweesexplainedthis:Throughthepilotstudy,wewantedtoshowthattherearebenefitsforeveryoneinthesupplychain.Therealityisthatsomecompanieswillbenefitmorethanothers,andintheadvertisingindustry,themoneyflowsfromadvertiserstopublishers.Whatwearetryingtodoiscreatebalanceandmakesurethateveryoneisincentivizedtoparticipate.Wetriedtoseetherequiredlevelofeffortandvaluefordifferentparticipantsbycreatingavaluedesign.Onceyouhavethat,youhavethebasisforthebusinessmodel.Basedonthisanalysis,weconsiderifsomeparticipantdoesnothavetopaytoparticipateorevenhavetobepaidtoparticipate.Wewanttomakesurethereisconsensus.Unlessyoutakepeoplealongwithyou,youwillnothaveadoption.(Interviewee,CEOofdistributedledgerecosystemfordigitaladvertising)Thethematicgroupofadoptionriskidentifiedininterviewswaslinkedwithseveralcodingthemes:valuecapturerisks(uncertaintyaboutthepotentialbenefitsfrombecomingpartoftheblockchainecosystem),lackofknowledgeandtrainingofemployees,andsecurityrisks.Theseadoptionrisksareconnectedwithblockchainparticipants’preparednesstoengageinactivitiesandpossibleincentivesthatmightpromptengagement(Adner,2017).Anotherthematicgroupisrelatedtoblockchainorchestratorrisksfromthefollowingcodingthemes:financialrisks,architecturerisks(relatedtoblockchainconsensusmechanisms),andregulatoryrisks.Blockchainecosystemswillhavetoadapttotheevolvingregulatoryenvironments.“Currently,weallowcross-bordertransactions,whichmightbecomeaproblembecauseexist-ingregulatoryframeworksarequicklychanged”(Interviewee,representativefromamusicblockchainecosystem).AccordingtoPrewettetal.(2020),theregulatorychallengesshouldbeperceivedasobstaclestoblockchainapplications;thus,newregulatoryframeworksarenecessary.NewUnitsofValueBlockchainhasintroducednewunitsofvalueinthecreativeindustries,attachedtofungibleandnon-fungibletokens(NFTs).Theformerareinterchangeable,whilethelatterrepresentindividualownershipofuniqueassetsinthedigitalorphysicalform.Ethereum-basedNFTs,astheempiricalresultssuggest,areusedtocreateandreinforcefandominfilmandvideogameecosystems.InthefilmecosystemDreamFrames,unitsofvaluearecollectiblefilmframes(intheformoftradingcards)withhologramsofcharactersorvirtualreality(VR)scenes.Filmproducerscanpre-sellNFTfilmframesassharestofansandinvestorswho,inreturn,getaroyaltystakeinthefilm.FansandinvestorscanlockupNFTsinasmartcontractandearndailyinterestinmoviecoinsthatcanbetradedinliquiditypools.BuyingNFTsintheformof“royalty”filmframesgivesinvestorsaproratastakeinafilm.Asimilarunitofvalue,usedinCinemadrom’sfilmecosystem,isanNFTequaltoonesecondofscreentimeor24frames,convertedintoamovieprojectbudget.Tokenholderscanearnfromthesaleofrightsoffilms.TheBBCStudiosreleasedNFTcollectibleswithdigitaltradingIvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

429416HandbookondigitalbusinessecosystemscardsbasedonthehistoryoftheirTVshowDoctorWho,whichcanbetradedandplayedinadigitaltradinggame.Invideogameecosystems,NFTsarebestsuitedformicropaymentsandpurchasein-gameassets.InPolyientGames’ecosystem,userscanearnandbuyrewardbadgesasNFTsthatcanberesold,whereasfungibletokensmaybeusedasa“liquidvehicle”tobridgeNFTecono-mies.SandboxprovidesanexampleofavideogameecosystemthatallowsthecreationandtradingofNFTin-gameassets.TheempiricalresultsindicatethatNFTscanalsobeappliedasgovernancetokens,asobservedintheSixDragonsecosystem.Namely,playerscanearnapercentageofallin-gamemechanicsandvoteonfuturegamedevelopmentdecisions.Incryptoart,NFTsaretiedtodigitalart,tokenizedwithasmartcontract,asamonetizingandroyaltycollectionmethodforartists.Forinstance,unitsofvalueinthePixeos’ecosystemareArt-NFTsthatproveauthorshipfordigitalartworkscreatedjointlyonablockchainandsoldonauctions.Inmusicecosystems,suchasUjo,fanscanuseNFTstobuydigitalcollectiblesandsupportartists.Fungibletokens,unlikeNFTs,aremorecommonlyusedinmarketplaceecosystems,andinsomecases,combinedwithNFTsinasingle,smartcontract.Asinterchangeableassets,fungibletokensaresuitableforfacilitatingtransactions.Inthebookpublishingblockchainsanalyzed,tokensusesmartcontractsfordirectpaymentsbetweenreadersandauthors,orasaccesskeysforbookfunding.Similarapplicabilityoffungibletokenswasnotedinvideogameandcryptoartecosystems.Intheformer,exceptforgeneratingrevenuestreamsandpayingsubscriptionfees,tokensareusedforrevenuesharingandmarketing.Inthelatter,tokensareappliedtomaximizeearningsfordigitalartistswhocanarrangevalueexchangeontheblockchain,andinsomecasesmayusesmartcontractstoarrangeoff-chainpayment.IntheMogulfilmecosystem,fungibletokensandNFTsareusedtogethertorewardfanswithvotingrights,sotheycanparticipateinthedecision-makingregardingwhichfilmsreceivefinance,getsetmemorabiliaandredcarpettickets.Insomevideocontentecosystemsanalyzed,itwasobservedthataudiencesmightreceivetokensasengagementrewardsbasedonsharingtheirdata,time,andattention.Forinstance,Current,ablockchain-enabledstreamingecosystem,createdan“attractivenesscoefficient”ofusersdependingontheamountofdatalinkedtotheiraccount.Basedonthis,usersarerewardedwithtokensthatcanbedonatedorspentonpremiumservicesintheecosystem,suchasofflinemusiclistening,ad-freestreaming,orexclusivecontent.Theanalysishasshownthatinfilmblockchainecosystems,thevalueforinvestorswhopurchasetokenscanbegrantedintheformofboxofficerevenue,distributionrights,accesstoinformationaboutthefilmprojects,andvotingrightsintermsofimportantfinancialdeci-sions.Icebreaker,ahigh-budgetdocumentaryproductionblockchain,offersdifferenttypesofrevenuestreamsforinvestors,dependingontheinvestmentlevel(fromticketstoearnings).Thefindingsindicatethatinsomeadvertisingecosystems,suchasBrave,usersareincentiv-izedbyatokenthatallowsthemtocontrolhowmuchdatatheyprovidetopublishersandlimitadvertfrequency.Insomeblockchainecosystems,tokenholdershavearighttoadividendproportionatetothenumberoftokens.Forinstance,tokenownersinGramaryecanvoteonhowdividendswillbedistributedinbonustokensorcash.PolyientGamesGovernanceTokengivesitsownerstherighttovoteonproposalsbythePolyientGamesteam.IvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

430Blockchainecosystemsinthecreativeindustries:bigdreamsformicro-payments417Takentogether,theanalysisshowsthattheriseofblockchainecosystemsinthecreativeindustriesbringsnewwaysofvaluecreationthatencouragealignmentofusersinthefollow-ingforms:1.Non-fungiblevaluecapture:unitsofvaluetiedtoNFTsascollectibles,suchasfilmframes,asecondofscreentime,rewardvideo-gamesbadges,TVshowtradingcards,tradablein-gameassets,on-chaingovernance,art,andmusiccollectibles.TheassetsorgoodsrepresentedbyNFTsmaybringearningstothecreatorsthroughmicro-paymentsandroyaltiesandbuildfancommunities.InvestorsanduserscanalsobenefitfromNFTsasunitsofvaluethroughroyaltystakes,collectibles,interestfees,votingrightsonfilmfinancing,andtherighttobeincludedinecosystemgovernance.2.Fungiblevaluecapture:unitsofvaluearefungibletokensthatareexchangeableandtiedtodifferentrevenuestreamsforusersandinvestors,includingtherighttodividendpropor-tionatetothenumberoftokens.DISCUSSIONTheuseofblockchaintechnologyinthecreativeindustriesisgivingrisetoinnovationblockchainecosystems.Thevaluecreationprocessofcreativeindustryblockchainsinthischapterwasanalyzedthroughaninnovationecosystemlensandtheoreticalunderpinningsfromstrategicmanagement(Adner,2017;AdnerandFeiler,2019;AdnerandKapoor,2010).Fromatheoreticalviewpoint,theresultssuggestthatecosystem-basedanalysisisapplicabletoanalyzeblockchainstartupsinthecreativeindustries,asitallowsthemandtheirenvironmenttobestudiedholistically(Kostovskaetal.,2020).Theecosystem-levelgoalsidentifiedcreativeblockchainventuresarisefromblockchaintechnologyadvantages,suchasautomatedtransactionswithsmartcontracts,verificationwithoutthirdparties,andimmutablerecordoftransactions.Creativeindustryblockchainecosystemsaredistinctivecomparedtothoseinotherindustries,astheyalsofocusonnon-economicobjectives.Namely,creativeblockchainecosystemsrelyona“culturalvalues”narrativethatstemsfromtheaspirationtodefineecosystem-levelgoalsthatgobeyondtheeconomicframingofcreativeindustries.IcebreakerStudios’whitepaper,forexample,high-lightsthatblockchaincould“radicallytransformthefinancingoffilm...freecreatorsfromconstraintsandpurelycapitalisticlogic...[and]involveaudiencesinthegenesisofprojects.”Thesegoalsrelatetosomechallengespertinenttothecreativeindustries,linkedtolackofsupportfornicheplayersandgenres,fairrevenueshare,democratizedparticipationinthefundingandproductionofcontent,andfairdistribution.Withthatinmind,blockchainentrepreneursmainlytrytoattractapoolofinvestorsandtransformthelong-standinghurdleswithfinancinginthecreativeindustries(seeHamilton,2020).Theirinnovativebusinessmodelsaredirectedtowardsnichecreatorssuchasarthousefilmmakers,musicproducers,andartists,whichalsosuggeststhatblockchainapplicationsshouldbeperceivedascomplementaryratherthandisruptivetoincumbentsincreativeindus-tries.Someestablishedcompanies,suchasBBCStudios,alsostartedexperimentingwithNFTcollectibles,indicatingthattheremaybeafutureforbroaderuseofblockchaintobuildfandom.IvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

431418HandbookondigitalbusinessecosystemsInmanyways,theentrepreneursinthecreativeindustriesaredistinctivebecausetheylev-erageopportunitiesaffordedbyblockchaintocreatenewforaforuserengagement,improveinsightintousers’opinionsandpreferences,andmakeiteasierforuserstoconnectwiththeirownbrandstatus.Forinstance,Mogulusesacollectivedecision-makingmechanism,basedonquadraticvoting(seeButerinetal.,2019),toplacedecision-makinginfilmfinancingintothehandsofusersandavoidthetyrannyofthemajority.AnillustrativeexampleofblockchainbasedonidentificationandbrandingistheblockchainplatformbytheOscar-winningdocu-mentaryfilmmakerLucJacquetandtheproducerSophoklesTasioulis,thattargetsinvestorswillingtosupporttheirenvironmentallymindedcreations.Theempiricaldatafromtheinterviewsindicatesthatblockchainecosystemsincreativeindustriesareparticularlyvulnerabletodownstreaminterdependencerisks.Withoutbeingabletostimulatemusicartists,filmmakers,mediacompanies,advertisers,artists,andgamedeveloperstounderstandandtrustproposedvaluepropositionsofblockchainecosystems,eventhemostinnovativeblockchainstartupscouldfail.ThisfindingisinlinewiththoseofAdnerandKapoor(2010).Concerningotherinterdependencerisks,theresultsshowthatupstreaminterdependenceismainlyrelatedtoblockchaintechnologyhurdles.Basedontheinterviews,twogroupsofriskwereidentified:adoptionrisksandblockchainorchestratorsrisks.Thefindingshavealsorevealednovelvaluecreationdynamics,suggestingthatblockchaintechnologyholdsthepotentialtofacilitateinnovationincreativeindustries(seealsoChenandBellavitis,2020),especiallythroughNFTs.AspointedoutbyJacobidesetal.(2018),ecosysteminteractionsarestrategicallyuniqueasecosystemassets,andinvestmentsarenotcompletelyfungible.Thefindingsindicatethatbusinessventures,withinthescopeoftheresearch,embellishblockchainfunctionalitiesandaddnewlayersofvaluepertinentforthecreativeindustry.CONCLUDINGREMARKSTheemergingblockchainlandscapeinthecreativeindustriesispopulatedbybusinessven-turesthatclaimdisruptivepotentialwiththeirpromiseofcorrectingmarketimperfectionsandcircumventingbarriersbypowerfulintermediaries.Thisempiricalresearchshowsthatvaluepropositionsofcreativeindustriesblockchainsareaimedatnicheplayersandmostlyrestuponsolvinglong-standinghurdlesintheindustries.Thenewunitsofvalue,especiallythosetiedtoNFTs,couldpotentiallyhelpcreativeindustries’blockchainentrepreneurstoatleastpartiallysolvecertainsystemicindustryissuesbysettingfootinthemicrofinancespace.Notwithstandingtheutopianovertoneoftheenthusiasmsurroundingblockchainanditsdisruptivepotential,theapplicationofthetechnologyinthecreativeindustriesisnascentandriddledwithcomplexities,suchasdownstreaminterdependencerisks.Atthesametime,thepotentialuseofblockchainintheseindustriesismetwithcertaindoubtsoveritsaptitudetoreinvigorateverticalwealthconcentrationandtheconsolidationofcontroloverdecentralizedsystems(Zeilinger,2018).Despitethenon-centralizedarchitectureofblockchaintechnology,businessventuressettherulesofengagementandstructuretherevenuemodelsguidedbyeconomiclogic.Blockchainbusinesseshaveplatformcharacteristicssuchasmulti-sidednessanddigitalinterfaces(seeGawer,2020),sothequestionsaboutredistributionofpowerandintermediationremainoverarchingconcerns.BlockchainecosystemsinthecreativeindustriesIvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

432Blockchainecosystemsinthecreativeindustries:bigdreamsformicro-payments419definevaluepropositionsusingaculturalnarrative.However,inpractice,blockchainentrepre-neursarestillmarket-orientedandcenteredondevisingnoveltypesoftradabledigitalassets(O’Dwyer,2018).Thischapterprovidesatheoreticalcontributionbyintegratinginnovationecosystemtheo-reticalunderpinnings,entrepreneurshipliteratureonblockchains,andculturaleconomicsliter-ature,tostudyblockchainsincreativeindustriesasanunderexploredtopic.Itaddstoalimitedknowledgebaseonhowblockchaintechnologyisusedincreativeindustries,bydevelopingatypologyofcreativeindustryblockchainecosystemsandidentifyingthenewunitsofvalueusedbyblockchainbusinesses.Departingfromthepremisethatvaluepropositionisadefiningcharacteristicofblockchainecosystems(seeAdner,2017),thischapterenrichesacademicdis-cussionsonecosystemvaluecreationprocesses.Italsocontributestoabroaderdebateamongscholarsandindustrypractitionersonblockchainapplicability.Nonetheless,theresearchpresentedherehaslimitationsthatfuturestudiesshouldconsider,mainlyarisingfromthequalitativeresearchdesignchallenges(Casselletal.,2017).Althoughadiversifiedsampleofcompanieswasanalyzed,statisticalprocedurescanbeappliedtolargersamplesizestoincreasegeneralizabilityofresults.Promisingareasforfurtherresearchmightbeanalyzingthecollaborationandcoordinationbehaviorsinblockchainecosystems(Jacobidesetal.,2018),andbrandengagementincreativeindustriesblockchainecosystems(Kohlietal.,2021).ACKNOWLEDGMENTSTheauthorwouldliketothanktheintervieweesfortheirvaluablecontributions,andtheeditorandreviewersfortheirconstructivefeedback.REFERENCESAdner,R.(2017).Ecosystemasstructure:anactionableconstructforstrategy.JournalofManagement,43(1),pp.39–58.Adner,R.andFeiler,D.(2019).Interdependence,perception,andinvestmentchoices:anexperimentalapproachtodecisionmakingininnovationecosystems.OrganizationScience,30(1),pp.109–125.Adner,R.andKapoor,R.(2010).Valuecreationininnovationecosystems:howthestructureoftechnologicalinterdependenceaffectsfirmperformanceinnewtechnologygenerations.StrategicManagementJournal,31(3),pp.306–333.Aguiar,L.andWaldfogel,J.,2018.Asstreamingreachesfloodstage,doesitstimulateordepressmusicsales?InternationalJournalofIndustrialOrganization,57,pp.278–307.Albrecht,S.,Lutz,B.andNeumann,D.(2019).ThebehaviorofblockchainventuresonTwitterasadeterminantforfundingsuccess.ElectronicMarkets,30(2),pp.241–257.Ante,L.(2020).Smartcontractsontheblockchain—abibliometricanalysisandreview.TelematicsandInformatics,57,p.101519.https://doi.org/10.1016/j.tele.2020.101519.Attaran,M.andGunasekaran,A.(2019).Blockchainprinciples,qualities,andbusinessapplications.In:M.AttaranandA.Gunasekaran(eds),ApplicationsofBlockchainTechnologyinBusiness.Cham:Springer,pp.13–20.Badel,M.,Doucet,B.,andSamano,M.(2019).BlockchaintechnologyandtheCanadianmediaindustry.TelefilmCanadaandtheCanadaMediaFund.Availableat:https://telefilm.ca/wp-content/uploads/blockchain-2019-en.pdf(accessed:1March2021).Bashir,I.(2017).MasteringBlockchain.Birmingham:PacktPublishing.IvanaKostovska-9781839107191DownloadedfromPubFactoryat05/28/202210:25:15AMviaColumbiaUniversityLibrary

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43726.Artificialintelligencemeetsonto-epistemologies:distinctivesociomaterialperspectivesfororganizationalresearchattheintersectionofdigitalbusinessecosystemsandroboticsW.G.WillZhaoandYiminYangINTRODUCTIONOneoftheearliestappearancesoftheterm“businessecosystem”wasinanarticleintheHarvardBusinessReviewin1993(Moore,1993),whicharguedthatcompaniesshouldbeunderstoodnotonlyaspartofindustries,butalsopartofbusinessecosystemsthatspanneddifferentindustriesandknowledgesectors.Ecosystemsconsistofasetofactorscontributingtofocalvaluepropositions(Kapoor,2018),andtheirdigitalincarnation,thedigitalbusinessecosystem(DBE),isunderstoodasasociotechnicalnetworkofindividuals,organizations,andtechnologiesthatco-createvalue(Senyoetal.,2019).TheDBEhasbeenbringingaboutprofoundindustrialchanges,aspredicted,thankstothemuch-improvedtransportandcommunications(Porter,1998).AttheheartofDBEsareoftenplatformbusinessesthatcreateandexploitlarge,scalablenetworksofusersandresourcestocreatevaluebyfacilitatingcommunicationbetweentwoormoreinterdependentgroups,usuallyconsumersandproducers.CompaniessuchasFacebook,Uber,andAlibabadonotcontrolinventorydirectlythroughtheirsupplychains,asdotraditionalcompanies.Instead,theygenerateprofitsbyreducingtransactioncostsorfacilitatingexternalizedinnovation.DBEshavebeenadisruptiveforcenotonlytoexistingbusinessesthatsellproductsandser-vicestoconsumers,butalsotothosethathavebeenrunningtraditionalmatchmakerplatformsthatconnectdifferentgroupsofcustomers(EvansandSchmalensee,2016).Underlyingthesedisruptionshasbeenartificialintelligence(AI),championedasakeytech-nologyofthefourthindustrialrevolution,especiallytheemergingmachinelearningmodelsandalgorithmsthatarecontinuouslyincreasingtheirsocialimpact(Stahletal.,2010).Thesepre-trainedmodelsandalgorithms,usefulforavarietyofpurposes,areexpectedtobringanewlevelofintegrationtotheentirevaluesystem,changingthestructureoftheindustriallandscape,andmakingtheimpactofecosystemsandplatformsmorepowerful(Larsson,2021).Forexample,majorplatformprovidersareofferingAIsolutionsasstandardproducts,industrialcontrolsystemsnowhavebuilt-inmachinelearningcapabilities,andtraditionalindustrieshavebeguntosharetheconceptoftheInternetofThingsandtoexplorethebenefitsofAI-poweredroboticprocessautomation.Indeed,AIandroboticsarehelpingtheDBEtoexpanditsreachacrossthevarioussectors.Poweredbycloudandcognitivecomputing,theseintelligentrobotsarecapableofperform-ingaseriesofcomplexactions(Singer,2009),andcompaniesandconsumersareactively424W.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

438Artificialintelligencemeetsonto-epistemologies425deployingthemtoperformrepetitive,time-consuming,dangerous,andboringtasks.Withtheirgrowingcapabilities,scale,andintelligence,theserobotsareincreasinglyrenderingtheotherwiseintangibleAIelementsofDBEs(suchasthealgorithmsusedbyplatforms)moretangible(forexample,asrobot-basedservices).Twocommonexamplesaresweepingrobots(forexample,iRobot’sRoomba)usedinhouseholds,anddeicingrobotsemployedinpublicservices,whichsurveythethicknessoftheiceandremoveexcessiveiceonpowertransmis-sionlinesininclementweather.TheseAI-poweredrobotscanmakeautonomousdecisionsbasedondatareceivedfromavarietyofsensorsandothersources,andadapttosituations,andinmanycasescanlearnfrompreviousevents(Wirtzetal.,2018).Today’sservicerobotshavewide-rangingpotentialcommercialapplicationsandarebeingaggressivelyintroducedintodifferentmarkets.Gartnerestimatesthat90percentoflargeorganizationswilldeployroboticprocessautomationby2022,andmorethan60percentofcompanieswithmorethan$1billioninrevenuewereexpectedtodosobytheendof2021(Gartner,2020).ItcanbesaidthatroboticsislikelytodrasticallyenhancethescopeanddepthofDBE.However,instarkcontrastwiththeflourishingreal-worldroboticapplicationsandthegrowingscholarlyinterestsinDBEs,organizationalresearchintoservicerobotshasonlyrecentlystarted(Wirtzetal.,2018).Thereisapaucityoftheoreticaleffortsdevotedtounder-standingAI-poweredrobots,whichareakeyelementofcontemporaryandfutureDBEs,andtheirrelationswiththehumanactors.Thisisregrettable.Theerathatweliveinnowischarac-terizedbythefactthatpeople,things,andcomputingaremorecomplexandinterwoventhaneverbefore;computingpowerisalmosteverywhere,accessibletohumanbeingsandartifactsthroughtheInternetofThings(Larsson,2021).IfthekeytoDBEsistotakeintoaccountthedifferenttypesofactorsthatcontributetofocalvaluecreation(Kapoor,2018),thentrivializingtheroboticelementofDBEswilldepriveusoftheopportunitytoappreciatehowautonomousagents(forexample,AI-poweredrobots)contributetoDBEs’valuecreation“ontheground.”However,understandingAI-poweredrobotsisnoeasytask.Unliketraditionallyunderstoodtechnology,whichisrarelyautonomous(Orlikowski,2009,1992),therobotsinquestionrequireadegreeofautonomy,or“theabilitytoperformplannedtasksbasedoncurrentstateanddetectionwithouthumanintervention”aspertheISO8373standard.RecentresearchhasmadeusefulsuggestionsforthedifferentlevelsofpossibleautonomiesofAI-poweredrobots(Yangetal.,2017).ItcanbearguedthattherobotsinvolvedinDBEsmayexhibitautonomyatoneofthefollowinglevels:●Level0:noautonomy.Therobotsrespondtoandfollowusercommands.●Level1:controlledtaskautonomy.Therobotsprovidecertainassistanceduringthetaskexecution,whilethehumancontinuouslycontrolsthesystem.●Level2:taskautonomy.Therobotscanperformspecifictasksinitiatedbyhumans.UnlikeLevel1,humans’controlofthesystemisdiscrete,notcontinuous.●Level3:conditionalautonomy.Theroboticsystemgeneratesataskstrategy,butitdependsonthehumantochoosefromdifferentstrategiesortoapproveaself-selectedstrategy.●Level4:highautonomy.Therobotscanmakedecisionswithlimitedsupervision.●Level5:completeautonomy.Nohumaninterventionisrequired.Therobotsdiscussedinthischapter—thatis,thosethatwillbedeployedinDBEsinthecurrentandforeseeablefuture—areconsideredtohaveautonomiesofLevels2‒3(current)andLevel4(future).W.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

439426HandbookondigitalbusinessecosystemsTherehasbeenaprominentdebatearoundsociomaterialityinorganizationalresearchinthelastdecade;thatis,overwhetherthesocialandthematerialarediscreteentitiesorareconsti-tutivelyentangledtogether(KautzandJensen,2013;OrlikowskiandScott,2014).Ithasbeenarguedthatthematerialisinvolvedinvariousaspectsoforganizationalprocesses,fromthemostvisible,forexample,computers,totheleastvisible,forexample,databases(Orlikowski,2007).However,whenconsideringthesehigherlevelsofautonomyoftheAI-poweredrobots,itisclearthattheaboveprominentdebateneedstobere-examinedinasignificantlydifferentlight,giventhat,inthecontextofDBEs,itisnolongereasytoarguethatthematerialislessagenticthanthehuman.Tohelpfosterawell-roundedunderstandingofthisdebateandinformtheemergingorganizationalresearchattheintersectionofDBEsandrobotics,intheremain-derofthischapter,weperusethreeprominentsociomaterialitystreams—thatis,affordances,constitutiveentanglement,andimbrications—andconnecttheseworksofliteraturetothecontextofrobotsasanessentialandtangibleelementoftheDBE,thusde-trivializinghowAI-poweredrobotsmaycontributetoDBEs’valuecreation“ontheground.”Notably,weintroduceanonto-epistemologicalcharacterizationofthesestreamsasameansofdemonstratingthefundamentaldifferencesandconnectionsamongthem.Thischaracteriza-tionisthenextrapolatedtoadiscussionofservicerobotswiththeexampleofdeicingrobots.Insteadofemphasizingthesestreams’irreconcilability,inthischapterwejuxtaposethethreeonto-epistemologicalperspectivesandseektooutlinehowtheycanbeusedtoanalyzeandinterprettheserobotsandtheirservicesindifferentyetcomplementarylights.THEMATERIALAND/ORTHESOCIAL:MORETHANAQUESTIONOFONTOLOGYAsabroadertermbeyond“technology,”theterm“material”coversawidespectrumofentitiesinourlives,organicorinorganic,technicalornaturalforms(Fenwick,2014).Theearliestevidenceoftherelationshipbetweenthesocialandthematerialinthemanagementliteraturecanbetracedbacktothe1960s’viewthattechnologyispartoftheorganizationalprocess(Perrow,1960).Inthedecadesthatfollow,technologyorthematerialwaslargelyunderstoodinseparationfromthesocial,untiltheendofthelastcentury,whenrenewedinteresthasbeengrantedtotechnologyandthematerial.TheriseofsociomaterialityinorganizationalresearchshouldbelargelycreditedtoOrlikowski,whosestructurationmodeloftechnology,inspiredbyGiddens,allowedadepar-turefromthethen-dominantpositivismapproachandtowardsaninterpretiveperspective.The“dualityoftechnology”view,whichdepictstechnologyhavingtworoles—thatis,astheresultandmediumofhumanaction(Orlikowski,1992)—waslaterfurtherelaboratedintoaviewonthesocialandmaterialexistencesasinterwoven(OrlikowskiandScott,2008).Organizationalscholarsthensetoffonaquestfor“anunderstandingofhowtechnologyinteractswithorganizations”(Orlikowski,1992,p.398)andforhighlightingtheartifactswhichhaddisappearedinthesociologicalrecordsofservicesineverydaylife(Latour,1992).Thisquesthascontributedtoadeeperunderstandingoftechnologyintheorganizationalcontext,andanappreciationofmaterialandhumaninteraction.Overtheyears,thisnewemphasisonoureverydaysociallife’smaterialexistencehasbecomemarkedinresearchvariouslylabeled,forexample,materiality,socialmateriality,andsociomateriality,orsocio-W.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

440Artificialintelligencemeetsonto-epistemologies427Table26.1Sociomaterialframeworksofdifferentonto-epistemologiesFrameworksOntologyEpistemologyAffordancesSeparableSeparableConstitutiveentanglementInseparableInseparableImbricationInseparableSeparabletechnicalsystems(Leonardi,2012),drawingonseveralprominentperspectives,forexample,actor-networktheory(ANT),affordances,imbrication,constitutiveentanglement.Thisdevelopmentfurtherstimulatedmuchdebatearoundtheirreconcilabilitybetweenthesemanyperspectives(KautzandJensen,2013),broadlysummarizedasthreestreams(OrlikowskiandScott,2008).ResearchstreamIconsidersthematerialandthesocialasinter-actingentities,withtechnologybeingseenasimportantwhenasituationoccurs.Forexample,whenanorganizationadoptsnewtechnology,theartifactembodyingthetechnologybecomesthefocusofaspecificgroupofpeopledealingwiththenewtechnology.Ontheotherhand,streamIIplacestheinteractionofthesocialandthematerialonthecentralstage.Asaresultofthesetwostreams,thethirdstreamemerged,focusingontheagencyoftheintertwinedhuman‒materialentity.Wearguethatmuchoftheso-calledirreconcilabilitystemsfromafocusonthedifferencebetweenontologies(beliefsaboutthenatureoftheworld)andthetrivializationofepistemol-ogy(beliefsabouthowtocreateeffectiveworldknowledge).Althoughtheattemptstobridgeorappreciatetheontologicalgaparebeneficial,bringingintheepistemologicalpiecewillbeequallyimportant,ifnotmore,fororganizationstudiesontopicssuchasservicerobotsthatarefeaturedbyempiricalrichness.Despitethedivergentunderlyingassumptionsamongthesedifferentperspectives,theirmobilizationinorganizationalinquiriesofservicerobotscouldoffercomplementaryinsightsonsomemajoryetotherwiseunnoticeablephenomena.Below,weexaminethreedistinctonto-epistemologicalpositionsonsociomateriality(Table26.1)andfocusonsomeofthemostinfluentialtheoriespereachposition.Affordances,theOnto-EpistemologicallySeparableFromthefirstperspective,thesocialandthematerialareseenandunderstoodastwoseparaterealities.Inthisstream,themostprominentapproachisarguablythetheoryof“affordances”developedbyGibson(1986),whooriginallyenvisionedaffordancesasalenstoexaminetherelationshipbetweenhumanbeingsandtheirphysicalworld.Gibson(1986,p.119)definesaffordancesasalatentsetofactionpossibilitiesthatenvi-ronmentsenable:“Theaffordancesoftheenvironmentarewhatitofferstheanimal,whatitprovidesorfurnishes,eitherforgoodorill…thenounaffordance…referstoboththeenvi-ronmentandtheanimalinawaythatnoexistingtermdoes.Itimpliesthecomplementarilyoftheanimalandtheenvironment.”Latermanagementscholarsrefertoaffordancesas“functionalandrelationalaspectswhichframe,whilenotdetermining,thepossibilitiesforagenticactioninrelationtoanobject”(Hutchby,2001,p.444).Centraltothistheoryistheideathattheseactionsarerelationallylinkedtoanactor’sabilitytointeractwiththeenvironmentorthematerialworld.Forinstance,whenfacedwitharockintheenvironment,amancouldthrowtherockanduseitasatool.Meanwhile,hemightwellhurthistoeswhenkickingatit.However,facedwiththesamerock,arathasadifferentsetofactionpossibilities,includinghidingbehinditfromitsenemiesorW.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

441428Handbookondigitalbusinessecosystemsclimbingonit.Similarly,acatwouldtakestilldifferentactionsabouttherock,suchashidingitsprey.Thoughresearchfromthisperspectivetypicallyemphasizestheartifacts,affordancesdenotefirstandforemostarelationship,ratherthanthematerialpropertiesofanartifact.Inotherwords,theattributesofartifactstakeeffectdifferentlyaccordingtothehumanwhointeractswiththeartifacts.Forexample,anelevatorcansupportacertainnumberofpeople,butnotmorethanthat,thoughtheelevator’sphysicalpropertiesdonotchangeineithercase.Conversely,whilenoteveryonecandevelopanAI-poweredrobot,mostcanuseacomputer.ConstitutiveEntanglement,theOnto-EpistemologicallyInseparableThesecondonto-epistemologicalstanceregardshumansandtechnologyascombinedentitieswithoutpre-existingboundariesandisreifiedthroughrelationships.OrlikowskiandScottdiscussedthisstanceunderthelabel“constitutiveentanglement.”Underlyingthisviewistheontologyofinseparabilityorcommonlycalledrelationalontology.Researcherswiththisontologydenytheexistenceofaparticularentitywithaclearboundary,themostbasicontologicalunitbeingthephenomenon.Inthisview,theworldismadeupofphenomenaintheprocessofsociomaterialbecoming(Barad,2007),whereagencies(socialandmaterial)aresaturatedwitheachother(OrlikowskiandScott,2008).ContrarytoOrlikowski’searlierassertionofduality(Orlikowski,1992),thereisnosepara-tionbetweenthetwo,evenfromanepistemologicalviewpointintheentanglementofmeaningandmatter.Thepropertiesofentitiesareformedwhentheyareinterrelated.Sociomaterialityisnotfixed,butflexibleanddynamic(CoorenandMartine,2016).Therefore,researcherswouldde-focusontherelationshipbetweenmaterialityandsociality,andemphasizetheconstitutiveeffectofanagencyinthesocialandmaterialnetworkinstead(Pelsetal.,2002).Equallyinspiredbythemovementofrelationalontology,oneextremeperspectiveistheactor-networktheory(ANT)developedbyCallonandLatour,whoseworkshowsthathumansandtechnologyinteractandaresymmetricallyrelated(Callon,1986,2008;Latour,1992).Fromthispointofview,discreteentitieshavenoinherentcharacteristics,andtheirattributescanonlybeacquiredthroughtherelationshipwithotherentitiesinpractice.Humansandtech-nologyareindivisible;actionsaregeneratedthroughrelationships,anddonotexistoutsidetheactor-network.Bothhumanandnon-humanareconsideredactors(oractants);ahumanbeing,anaturalphenomenon,atechnology,andsocialstructuresareviewedasequalparticipantsinsocialrestructuring.Scholars(e.g.,Bruni,2005;Law,1992)havearguedthatANToffersnomethodologicalguidancebeyondbeingwhatLatourcalls“averycrudemethodtolearnfromtheactorswithoutimposingonthemanaprioridefinitionoftheirworld-buildingcapacities”(Latour,1999,p.20),andANTresearchtendstoexplorehowtheassemblageworksandhowactorsemerge,ratherthanwhytheydo.Thischapter,therefore,choosestheconstitutiveentangle-mentasrepresentativeofthesecondstance.Imbrication,InseparableOntologywithSeparableEpistemologyWhilethesociomaterialitystancethatconstitutiveentanglementrepresentshasbeenacclaimedforovercomingthesubject‒objectandstructure‒agencydemarcations(ZhaoandForgues,2017)thatplaguedtheresearchattheintersectionoftechnologyandorganizations(LeonardiW.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

442Artificialintelligencemeetsonto-epistemologies429andBarley,2008),researchoftenfindsitempiricallychallengingnottoanalyticallyaccountforthematerialandthehumanasdistinctiveconcepts.Inthisregard,Leonardi’simbricationconceptualization(Leonardi,2011),thoughalsorootedintheontologyofinseparability,allowsmoreanalyticalflexibility.AccordingtoLeonardi(2011,pp.150‒151):Toimbricatemeanstoarrangedistinctelementsinoverlappingpatternssothattheyfunctioninterde-pendently.TheverbimbricateisderivedfromnamesofrooftilesusedinancientRomanandGreekarchitecture.Thetegulaandimbrexwereinterlockingtilesusedtowaterproofaroof.Thetegulawasaplainflattilelaidontheroofandtheimbrexwasasemi-cylindricaltilelaidoverthejointsbetweenthetegulae.Theinterlockingpatternoftegulaeandimbricesdividedtheroofintoanequalnumberofchannels.Theimageryoftilingsuggeststhatdifferenttypesoftilesarearrangedinaninterlockingsequencethatproducesavisiblepattern.Aroofcouldnotbecomposedsolelyoftegulaenorofimbrices:thedifferencesbetweenthetilesintermsofshape,weight,andpositionproveessentialforprovidingtheconditionsforinterdependencethatformasolidstructure.Aroofismadeupofdifferentimbrexandtegula(seeFigure26.1)intermsofshape,weight,andposition;theirinterdependenceisessentialtoformastablestructure.Rainwaterflowsfromthetile’sridgetothetegula’ssurface,whereitrunstotheground.Thisindicatesthatsocialandmaterialagenciesdifferintheirabilitytoact,andlikeimbrexandtegula,theyformastableorganizationalstructure.Figure26.1ImbrexandtegulaLeonardi(2013)showsthatmaterialityandsocialitybelongtodifferentlayersoforganization.Overtime,whenthematerialandthesocialoverlap,sociomaterialityemergesandispresentedintheformofindivisibleandfunctionalintegrity.Theinteractionofthesocialandthemate-rialisputcenterstage.Inthissense,theso-calledmaterialagencyreferstothepotentialofnon-humanentitiestoactwithouthumanintervention.Forexample,intheabsenceofhumanintervention,theweather,suchasrainandwind,isagentic.Ontheotherhand,socialagencyreferstothepotentialtoformandachievepersonalgoals.Humansusuallyformulatetheirhumanagencyinresponsetomaterialagencies.Inthisview,anepistemologicaldistinctionisnoticeablebetweenthesocialandmaterialworlds.WhileontologicallythematerialisnotW.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

443430Handbookondigitalbusinessecosystemsseparatedfromthesocial,itisseparatedfromthesocialbyunderstanding,whichimpliestheinteractionofthetwo(Leonardi,2011).SOCIOMATERIALITYINTHESERVICEOFAI-POWEREDROBOTS:DEICINGROBOTSASANEXAMPLEThesurveyaboverevolvesaroundacentralquestionofwhetherthematerial/technologicalshouldbeconsideredsubjecttohumanintent,orwhetherthehumansmaybedethronedfromtheirprivilegedpositionintheworld.TofurtherintegratethissociomaterialdebateintotheagendaoforganizationalresearchattheintersectionofDBEandrobotics,wenowextrapolatetheabovetheorizationtothecontextofintelligentrobots,which,asdiscussedabove,exhibitdifferentlevelsofautonomy,rangingfrompartialautonomy,thatis,requiringhuman‒robotinteraction,toastateofcompleteautonomy,thatis,withouttheactivehumanintervention.Theglobalmarkethasshowngreatenthusiasmforrobots,withservicerobotsbecominga$12.88billionindustryin2019(FortuneBusinessInsights,2020).Beyondindividualcustom-ersandbusiness,policy-makersalsohavehighexpectationsforthepublicservicepotentialrepresentedbyservicerobots(Nielsenetal.,2016),astheyareoftenunderenormouspressuretoimproveserviceaccessibility,efficiency,andcoststructurewhilestrivingtomaintain,orevenimprove,thequalityofservices.Forinstance,incoldercountriesandespeciallyinremoteareas,servicerobotswouldbeparticularlyuseful(Thrun,2004)tomaintainpowertransmis-sionlines.Sincetheenvironmentoftenfeaturesstrongwinds,lightning,andice,itisdifficultanddangeroustorelysolelyonhumanbeingsformaintenancework(seeFigure26.2).Figure26.2ElectriciansconductingdeicingworkToensurethatthetransmissiongridoperatesinasafe,predictable,andreliablemanner,deicingrobotsareoftendeployed.Inrecentyears,neuralnetwork-basedmachinelearningtechniqueshavebeenappliedtorobotcontrol(Yangetal.,2013).Theadditionofaneuralnetworkintelligentcontrollerequipsdeicingrobotswiththeself-learningability,allowingthemtobemoreautonomous;thatis,suchrobotscansolvemultiplenon-linearity,thevaria-tionofobjectparameters,andexternaldisturbancewithlittleneedofhumanintervention.SeeFigure26.3foratypeofdeicingrobot.W.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

444Artificialintelligencemeetsonto-epistemologies431Figure26.3DeicingrobotBeforewefurtherdiscussthesociomaterialityoftheseAI-poweredrobots,itisnecessarytoclarifyourdiscussion’sscope.Inthischapter,weviewtheservicesinvolvingrobotsasasoci-omaterialphenomenonthatinvolvesmultipleactorsinspaceandtime.Theseservicerobotsaretypicallyconnectedthroughthecloudtoalargersystemfordatahandling,inadditiontohavinglocalinputchannels(suchascameras,microphones,andsensors).Inexaminingtheexampleofdeicingrobots,wewillconsiderthesenon-humanelementsthatformthetechnicalinfrastructurefordeicingservices.Notably,whendiscussingourexample,wewilladoptarathersubjectiveapproach,ratherthanattemptingtoprovideclear-cut,reproducibleempiricalresearchfindings,asourunderstandingoftheserobotsisinformedbyourfieldobservationsofdeicingrobotsinservice,andthesecondauthor’sexperienceindevelopingalgorithmsfordeicingrobots.ThreeTheoreticalOrientationsforUnderstandingAI-PoweredRobotsFollowingthethreeonto-epistemologicalstancesofsociomaterialitysurveyedintheprevioussection,deicingrobotservicescanbeapproachedwiththreetheoreticalorientations:(1)affor-dances,orthebeneficialanddefyingaspectsofdeicingrobots;(2)constitutiveentanglement,orthedifferententanglementsunderlyingthedeicingrobot’sservices;and(3)imbrications,ortheprocessualdevelopmentofdeicingrobotservices.W.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

445432HandbookondigitalbusinessecosystemsDeicingservicesasaffordedbydeicingrobotsTheaffordancesperspectiveseesthematerialandsocialasinteractingentities.Thisviewcouldhelpustorevealseveraloftenunreachable(Appadurai,2013)aspectsofdeicingrobot’sservices,including:(1)technologicalandphysicalfeaturesofdeicingrobots;(2)robots’potentialbenefits;(3)capabilitiesofhumanactors;(4)thehuman‒robotrelationship;(5)humanalignmentwork;aswellas(6)potentialmaterialdefiance.First,artifactsarehighlightedinanyinteractionintheworldofaffordances.Whenasitua-tionoccurs,technologyandotherartifactsareseenasimportant.Thisartifactualemphasisisalsoparticularlyinterestingforthestudiesofdeicingrobots’services,whichismediatedbyanarrayofartifacts,forexample,theminiaturecomputers.Second,whatisequallyimportantisthattheseAI-poweredrobots’attributesarealsorelativetothosewhousethem.Forexample,whendeicingrobotsarebeingdeployed,mate-rialitymayhavedifferentimplicationsforparticulargroupsofhumanactors,suchasdeicingworkers,supervisors,andengineersdealingwithdeicingrobots.Researcherscouldinvestigatethedeicingrobotsbefore,during,andaftertheyareusedintheenvironment,andseewhatbehavioralpossibilitiescanbegiventowhichhumanactorgroups,andhowtheirperceptionsoftheirmaterialenvironmentdivergefromeachother.Third,onthehumanfront,theaffordancesperspectiveallowsustoanalyzewitheasehowhumansactivelyworktoaligntheiractionswithcategorizedanduncategorizedcomponentsofadeicingrobot.Whileonthematerialfrontwecanreadilyobservehowartifactscanafford(thatis,enableandconstrain)deicingactivities,equallyimportantquestionsarehowhumanactorsdealwiththerobotsthattheywillinglyorunwillinglyuse.Fourth,severalinterestingissuescanberaisedconcerningtheextenttowhichtechnologicaldevicesimpedehumanaction.Wynne(1988)pointsoutthatmoderntechnologyhasbecomeincreasinglyunrulyandevadingideasoforderlyfunctioning.Indeicingservices,thisappliestoboththeunforeseenandunintendedsideeffectsofcertainartifacts,andtheinterferenceoftheartifactsthemselveswithestablishedservice.Asfieldobservationsshowus,bothengi-neersandclientsofthedeicingrobothaveseriousconcernsabouttherobots’physicallimi-tationsandthelimitedflexibilityovertherobots’use.Forexample,throughtheinterventionoftechnologies,adirectsensoryconnection—forexample,throughtouchandtap—nolongerexistswhenadeicingrobotisbeingused.Thischallengeshumanagency;asthepossibilityofsensoryfeedbackdiminishes,newuncertaintiesmayarise.Anotherinterestingquestiontoaskwouldbehowsometaskssuccessfullychangethepowerrelationsamonghumanpartiesinthecontextofdeicingrobots.Professionsarecharacterizedbytheknowledgethatnon-professionalsdonotpossess.Yet,theknowledgeindeicingwhendeicingrobotsarepresentisnolongerintheexclusiverealmofelectriciansandmaintenanceworkers.Forexample,non-technicalpersonnelmayhavemoreauthorityindeicingservicesthanintraditionaltechnology-drivenservices,asaresultofthedifferentlevelsofautonomyofrobots.EntangledservicesinvolvingdeicingrobotsFromthisperspective,technologyisunderstoodashavingnoinherentattributes,boundaries,ormeanings,butcomesfromaspecificdiscursivematerialphenomenon(OrlikowskiandScott,2015).Therefore,researchers’focuscanbeprimarilyplacedondeicingservicesperseratherthanemphasizinghowthetechnologicalaspectsofthedeicingrobot—forexample,remotevisionorovernightexecution—couldchangethedeicingservices.W.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

446Artificialintelligencemeetsonto-epistemologies433ConsiderthescenariooftransmissionlinedeicingrobotsbeingdeployedinanisolatedareaofCanada.Whenthescreenlightsup,theelectricianbeginstowork,andthenonlyinteractswiththetransmissionlineminimally.Whiletheabundanceoftechnologiesfeaturestheentirework,researchers’observationdoesnotcenterontheappearanceanddisappearanceofhumanormaterialagencies,neitherisitfixatedontheinteractionbetweentheelectriciansandAI-poweredrobotsasdiscreteentities.TheelectricianmaydecidetohavesomeactivitiesperformedbyanAI-poweredrobot,othersbythemself,andstillothersbyotherhumans.Therelationshipbetweenelectricianandrobotislesssalientthanthatbetweentheelectricianandthetransmissionlinesthatneeddeicing.Researchers,therefore,couldgobeyondtheotherwiseasymmetricaccountsofthematerialandthehuman,andexamine:(1)howtemporalentanglementsexistparticularlyforelectricians,AI-poweredrobots,andeventhetransmissionline;(2)howtheycontrast;(3)howthepropertiesoftheentitieschangedynamicallyinrelationtoeachother;and(4)whatconstitutestheagencyinthesociomaterialentity.DeicingservicesasimbricatedfromthehumanandtheAI-poweredrobotThisperspectiveproposesthattheservicesareproducedthroughtheimbricationofhuman(inourcaseelectricians)andmaterial(deicingrobots)agencies.Leonardi(2011)considersthesocialandthematerialasaninseparablephenomenonwithanalyticallyseparableagencies,andthathumanandmaterialagencies“buildanintegratedstructurethroughintegration”(Leonardi,2011,p.151).Inotherwords,whilewewillinevitablyobservethatallservicesareconstitutedbyhumanandmaterialagencies,whatmattersmoreinthiscontextishowsuchagenciesarewoventogetherasconstitutivepartsofservices.TounderstandtheemergentnatureofAI-poweredrobots’serviceduetoimbrication,considerthisscenario.Whileelectricians’knowledgeiscrucialtothedeicingservices,thisknowledgeiseffectivethanksonlytotheimbricationsbetweenthehumanagencies(aspartofthedeicingservices)andtheAI-poweredrobotsandtheirnetwork.Inthissense,materialityisnotunderstoodinitsessentialtechnicalproperties,butintermsofthedynamicrelationshipsofthematerialwiththehuman.Whenhumans’agencyisenactedforciblyvis-à-visnewrobotsortheircomponents,tensionsarelikelytoarise.Suchtensionsmaybringabreakdownoftheser-vices,orgiverisetonewimbricationopportunitiesthatwouldeventuallyformnewservices.Aninterestingquestionwouldthenbewhethertensionsexistbetweennewandoldroutinesforelectriciansengagingindeicingrobotservices,andhowelectricians“live”suchtensions.Materialagenciesarenotalwaysepistemologicallydifficulttoaccess.Forinstance,thedeicingrobotinthecontextoftransmissionlinedeicingserviceisadiscreteagentjustasthehumanagent,thatis,theelectrician.However,becauseofphysicallimitations,itisimpossibleforhumanstoinspectthetransmissionlineasthoroughlyasthebuilt-invideocameraintherobotswouldallow.Inaddition,imagesareautomaticallyanalyzed,andtheresultsarepre-sentedonthescreen.Inthiscase,thesesensorsandcomputersextendhumanperceptionandinterpretation:theycandetectthingsthathumanscannot,andpresentthingsinamuchmoreaccessiblewayforhumanstoanalyze.W.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

447434HandbookondigitalbusinessecosystemsCONCLUSIONDBEsaredrivenbycustomerswhoneedsmarter,real-timesolutionsacrosstheeconomy,andnotablyinareassuchasfinancialservices,manufacturing,transportation,healthcare,andthepublicsector(Barykinetal.,2020).Microsoftpredictedthat,by2025,AI-enableddigitalplatformswouldcreate72millionfull-timejobsworldwide(Shaw,2019).Inadditiontotech-nologygiantssuchasAlphabet,Amazon,Apple,andMicrosoft,otherindustryleaderssuchasGEandMerck&Co.arerapidlypouringresourcesintoDBEsthatfeatureplatformsandAI.Coupledwiththesetrendsarethematuringofrobotics,roboticprocessautomation,andAIsolutionsasthemainpillarsofthetechnologicalunderpinningsoftheDBE.Asroboticsbecomesmorewidelymobilized,DBEsareevolvingintomoreflexible,scalable,andintelli-gentecosystems.However,whileourfieldhasbeguntogeneratedeeperinsightsintotheDBE,whichisemergingasthepreferredbusinessmodelforthedigitaleconomy,researchintotherobot-icsdimensionofDBEsisstillexceedinglyrare,andevenmoresoforthesociomaterialityofAI-poweredrobotsinvolvedinDBEs.Thischapter,therefore,hasattemptedtofillthisimportantgapinourknowledgebyilluminatingthesociomaterialityaroundtherobotsthatcontributetoDBEs’valuecreation“ontheground.”Specifically,weexploredtheimpli-cationsofthreetheoreticalstancesinstudyingtherelationshipbetweenthesocialandthematerial—thatis,affordances,constructiveentanglement,andimbrications—andcontrastedtheonto-epistemologicalassumptionsandtenetsunderlyingthesethreestreamsofthought.Webelievethat,asanemergingtopicinorganizationalresearch,robotsinDBEsrepresentvastunchartedterritories,duetoitsnoveltyand,perhapsmoreimportantly,itsinterdiscipli-narycomplexity,whichatthesametimechallengescurrentresearchparadigmsandbegsinputsfromavarietyoffieldsacrossscience,engineering,andsocialsciences.Whiletherela-tionshipbetweentechnology,individuals,andorganizationshasbeenoneofthemostcentralissuesinorganizationalresearch(OrlikowskiandBaroudi,1991),theoreticaldebatesonsociomaterialityneedurgentupdatingandrenewal,asthedevelopmentofAIandroboticsinthedigitalecosystemhascreatedthepossibilityofvaluecreationbyrobotswithlittleorevennohumanintervention.Tothisend,oursurveyofthedifferentstreamsofthoughtonsocio-materialitycontributestothegenerationofnewknowledgeonsociomaterialityinthecontextofAI-poweredrobotsinDBEs.Meanwhile,ourcharacterizationofthethreeprominentsocio-materialstancesalsoaddsfine-grainedinsightstothedebatesaroundthedistinctionbetweenresearchstreamsontechnologyandorganizationingeneral(e.g.,OrlikowskiandScott,2008).LimitationsandFutureDirectionsDBEsareexpectedtohaveanever-increasingimpactonourorganizationallife,asbusinessesandorganizationsstrivetoprovidevaluethroughincreasinglyintelligentandinterconnectedproductsandservices.AsatheoreticaleffortonthesociomaterialityofrobotsinvolvedinDBEs,itisbeyondthescopeofthischaptertoconsiderthecooperativesituationsofmultipleDBEstakeholdersandpartners.However,futureresearchcoulddiscusshowhuman‒robotinteractionsorassemblagescanfunctionaspartofaflexibleandreconfigurableecosystem,soastoadapttothechangingmarketdemands.OnepotentialforAI-poweredDBEliesinitsautonomousdecision-makingapproachtobusinessactivities,incontrasttothetraditionalcentralizedmodel.FutureresearchcouldthereforeexaminethedistributedagenciesofrobotsW.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

448Artificialintelligencemeetsonto-epistemologies435inDBEs,explainhowtheDBEmaybecomebetteroroptimizedwhenthedriveforoptimiza-tionorself-organizationcomesfromroboticagents,andexplorethepotentialnegativeeffectsassociatedwithsuchscenarios.Recently,managementresearchhasbeguntoattempttocategorizerobots(Wirtzetal.,2018):forexample,tangiblerobotsthatcantakeactionstotouch,handlepeople(haircuts,providingpassengertransportationormassage)orpossessions(cleaningcars,orrepairingsuitcases);andintangiblerobotssuchasvirtualrobotsthatcanprovideinvisibleactionsbasedontext,voice,video,andthree-dimensional(3-D)virtualrobots.Thesociomaterialityoftheintangiblerobotisworthyofstudyinfutureresearch,givenits“immaterial”materiality.Forexample,ininsurancecompanies,robotscanalreadyupdatecustomerfiles,reportcomplianceissues,handleinsuranceclaims,orperformothertaskswithminimalhumanintervention.Telecomcompaniesprovidevirtualassistantsforautomatedcommunications,suchasschedulingappointmentsandsometechnicalsupportfunctionsthathumansusuallyperform.Likewise,healthcareprovidersoffervirtualrobotsthatcantextorvoicechatwithpatientsinrealtime,answerquestions,andevenofferservicerecommendations.Futureresearchcouldstudythe“immaterial”robotssuchasconversationalagents(morecommonlyknownaschat-bots),drawingontheratherextensiveinformationsystemliterature(Adametal.,2020;Hilletal.,2015;MouandXu,2017),orutilizingalternativetheoreticallensessuchassocialresponsetheoryandsociotechnicalsystemtheory,inadditiontoexploringtheaffordances,imbrication,andconstitutiveentanglementfortheserobots.Relatedtothis,whilemanyotherlenseswouldshedlightondeicingrobotservices,suchasANT,thischapterhasfocusedonthethreemostprominentstances,asthey,withtheirrespectiveunderliningassumptions,offerradicallydifferentyetcompatiblealternativestoexaminingAI-poweredrobots.Futureorganizationalresearchcouldstudytheemergenceofcertaintypesofintelligentrobots,andfurtherdeterminewhethersuchemergencecouldchallengethebasicassumptionsandapplicabilityofanyoftheextanttheoreticallensesofsociomateriality.TheorganizationalresearchattheintersectionofDBEandroboticsisstillinitsinfancy,andthischapterrepresentsourefforttoprovideabasisandimpetusforfurtherresearchthatcontributestotherapidlydevelopingfieldofDBEs.REFERENCESAdam,M.,Wessel,M.,andBenlian,A.(2020).AI-basedchatbotsincustomerserviceandtheireffectsonusercompliance.ElectronicMarkets.https://doi.org/10.1007/s12525-020-00414-7.Appadurai,A.(2013).TheSocialLifeofThings:CommoditiesinCulturalPerspective.https://doi.org/10.2307/2070604.Barad,K.M.(2007).MeetingtheUniverseHalfway:QuantumPhysicsandtheEntanglementofMatterandMeaning(2ndedn).Durham,NC:DukeUniversityPressBooks.Barykin,S.Y.,Kapustina,I.V.,Kirillova,T.V.,Yadykin,V.K.,andKonnikov,Y.A.(2020).Economicsofdigitalecosystems.JournalofOpenInnovation:Technology,Market,andComplexity,6(4),124.https://doi.org/10.3390/joitmc6040124.Bruni,A.(2005).ShadowingSoftwareandclinicalrecords:ontheethnographyofnon-humansandheterogeneouscontexts.Organization,12(3),357–378.https://doi.org/10.1177/1350508405051272.Callon,M.(1986).TheSociologyofanactor-network:thecaseoftheelectricvehicle.InMappingtheDynamicsofScienceandTechnology(pp.19–34).https://doi.org/10.1007/978-1-349-07408-2_2.Callon,M.(2008).Economicmarketsandtheriseofinteractiveagencements.InM.CallonJ.Law,andA.Rip(eds),LivinginaMaterialWorld(pp.29–56).London:PalgraveMacmillanUK.W.G.WillZhaoandYiminYang-9781839107191DownloadedfromPubFactoryat05/28/202210:25:20AMviaColumbiaUniversityLibrary

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45127.Havingaplatformtostandon:examiningmodernchallengesfacedbyworkersinplatform-facilitatedmulti-sidedmarketsTraciM.BrickaandAmberN.SchroederTheplatformeconomyisanonlineenvironmentinwhichorganizationsuseadigitalinterme-diarynotonlytoidentifybutalsotomanageindividualsfromadecentralizedlaborforcewhocancompletevariousworktasks,buttoalsomanageemploymentrelationships(Lehdonvirtaetal.,2019).Theplatformeconomyisamodern-dayfacilitatorofvariousmulti-sidedmarketsinwhichanonlineplatformenablesseveralparties(forexample,employers;freelancers;consumers)thatwouldnoteasilybeabletoconnectintheabsenceofsuchaplatform(EvansandGawer,2016)tomeettheirbusinessobjectives(RochetandTirole,2006).Platformshavebeendescribedasthemechanismsthatcoordinateandprovideaccesstomarkets(Drugău-Constantin,2018).Notably,platform-facilitatedmulti-sidedmarketshavebeeniden-tifiedasacentralaspectofdigitalbusinessecosystems(DBEs),asanumberofstakeholdersaredirectlyaffiliatedwithandinvestedintheplatform,andplatformsenablebusinessestocollaboratewithrelevantparties(Ting,2018).Platformsareanintegralcomponentoftheinfrastructureofpresent-dayDBEs,asdemon-stratedbyKenneyandZsyman’s(2016)assertionthattheroleofplatformsintoday’schanginglabormarketsisequivalenttothecentralityoffactoriestotheindustrialrevolution.Similarly,Schwab(2016)referredtothesynthesizingoftechnologiesthatcombinethedigitalandphys-icalworkenvironmentsviatechnology-enabledplatformsastheFourthIndustrialRevolution,andothershavenotedtheeconomicrevolutiontriggeredbytheriseoftheplatformeconomy(Chanetal.,2018).Assuch,itisevidentthatplatform-facilitatedmulti-sidedmarketshavebecomeanintegralcomponentofmodern-daybusinessoperations,thuswarrantingspecificinvestigationintothepresentstateofsuchmarketsandconsiderationoftheworkexperiencesofthoseinvolved.PLATFORMWORK:PASTANDPRESENTAlthoughthedigitalcomponentofplatformshasemergedalongsidetheprogressionoftech-nology,otheraspectsofplatform-facilitatedworkhavebeenregularlyimplementedthroughoutthehistoryofwork,suchason-demandshort-termwork,pieceworkpaystructures,require-mentsforworkerstoprovidetheirownworksupplies,andthepresenceofworkintermediaries(Stanford,2017;StewartandStanford,2017).Theseworkcharacteristicshavebeenutilizedinavarietyofindustriesthroughouthistory,includingwithinserviceandtransportationoccu-pations(Stanford,2017).Platformsequippedwithdigitalcapabilitieswerefirstintroducedinthe1990s,followedbyrapidexpansionofsuchplatformsinthe21stcentury(WEF,2020a).Bothhistoricallyandcurrently,workofthisnaturehasavoidedthedefinitivecategorizationof439TraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

452440Handbookondigitalbusinessecosystemsitsworkersasemployeesorindependentcontractors(forexample,freelancers;daylaborers),whichwasacommonplacepracticeformanybusinessmodelsinpreviouscenturies(Stanford,2017).Insum,platform-facilitatedmulti-sidedmarketscloselyemulatetheworkpracticesofcenturiespastandhaveusedemergenttechnologytostreamlinethesepractices,ratherthanrepresentingentirelynovelorinnovativebusinessstrategies(Stanford,2017).Notably,platformsarestillevolvingandwillcontinuetodosoalongsidetheconstantimprovementoftechnologyandtheprogressionofbusinesspracticesandmarkets(WEF,2020b).Today,platformsarepowerfuldigitalstructuresthathaveconsiderableinfluenceinsocietyandlabormarkets,suchthatthepotentialconsequencesofdecisionsmadebyplatformpro-viders(thatis,themediumsthatcollectacommissionfromconnectingprovidersoftasksorserviceswithclientele;deRuyteretal.,2019)arewide-reaching(KenneyandZsyman,2016).Infact,thepopularityoftheplatform-facilitatedbusinessmodelhasrenderedestimatesthatplatformworkwillinevitablyfullyreplacetraditionalfull-timeemployment(Stanford,2017)or,attheleast,becomemuchmoreprevalent(Liao,2020).Twocommonexamplesofthemanybusinessesoperatingwithinplatform-facilitatedmulti-sidedmarketsareridesharingservicessuchasUberandLyft,andeLancingcompanies,suchasUpworkandAmazonMechanicalTurk(MTurk)(Schmidt,2017).However,newplatform-basedbusinessesareconstantlyemerging(Healyetal.,2020;Wuetal.,2019),coveringawidearrayoftasksandservices,includinglaundry,massages,parking,andcraftsmanshipprojects,amongmanyothers(DeutscheWelle,2003;Schwab,2016).Notably,digitalplatformscanfacilitateworkthatiscompletedin-person(forexample,ridesharedriving)orvirtually(forexample,eLanc-ing;DeGroenetal.,2016),bothofwhichareincludedinthescopeofthischapter.Identifyingthequantityofworkerswithintheplatformeconomyischallengingduetothenumberofinactiveworkerprofilesonplatformsandworkeruseofmultipleplatformssimul-taneously(Aloisi,2016).Nonetheless,estimateshavesuggestedthatthelargestcrowdwork-ing,homeservices,transportation,anddeliveryplatformsemployapproximately21millionworkersworldwide(SmithandLeberstein,2015).Althoughotherestimatessuggestthatplatformworkcompriseslessthan1percentoftheUnitedStates(US)labormarket(KatzandKrueger,2016;StewartandStanford,2017),andlessthan5percentofresidentsofAustralia,theUnitedKingdom,andGermanyconsistentlycompleteplatformwork(HuwsandJoyce,2016a,2016b;Minifie,2016),scholarsagreethatthissectorofthemarketisincreasingrapidly(HarrisandKrueger,2015;Thomas,2018;WEF,2020a).Somehaveevenestimatedthatby2025,digitalplatformswillserveasintermediariesforasmuchasone-thirdofworktransac-tions(Standing,2016).Regardlessofthevariabilityinestimates,aconsiderablenumberofindividualsaremembersoftheplatformeconomy,andthisnumberislikelytoincrease.Theplatformeconomyhascreatedanumberofopportunitiesforbothbusinessesandindi-viduals,asbusinessescanquicklyaccessabroadlaborpool,andworkerscanexperienceatasteofentrepreneurialismandschedulingautonomy(BrickaandSchroeder,2019).Additionally,platformshavegreatlybenefittedindividualsnegativelyimpactedbytheCOVID-19pandemicbyprovidingasourceofsupplementaryincome.Yet,suchmarketsalsoproduceuniquechallenges.Morespecifically,threemodernchallengesintheplatformeconomyare:(1)howplatformworkersshouldbelegallyclassifiedinregardtotheiremploymentstatus(thatis,employeeversusindependentcontractor);(2)thelackofopportunities(orresources)forplat-formworkerstodevelopnewknowledgeandskills;and(3)theeconomicprecarityofplatformworkduetothehighlevelsofsusceptibilitytomarkettrends,suchasdecreasedridesharingdemandduringtherecentCOVID-19pandemic(Bhuiyan,2020).Takentogether,inlightofTraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

453Modernchallengesfacedbyworkersinplatform-facilitatedmulti-sidedmarkets441recenttrendsanddevelopmentsrelevanttothemulti-sidedplatformmarket,thepurposeofthischapteristocomprehensivelyreviewthesemodernchallengeswithintheplatformeconomyandthepotentialimplicationsoftheseissuesforbothbusinessesandindividuals.PLATFORMWORKEREMPLOYMENTSTATUSPlatformworkhasfrequentlybeenidentifiedasanambiguoustypeofemployment,asitisanon-traditionalworkarrangementthatoperateswithintraditionalemploymentregulations(Steinberger,2018).Thisdynamichasraisedquestionsastowhetherplatformsshouldbegovernedbythesameregulationsasmoretypicalformsofemployment(Chanetal.,2018).Namely,acommonlydeliberatedissueishowplatformworkersshouldbeclassifiedintermsoftheiremploymentstatus,asplatformworkersarenotclearlylabeledasemployeesorasindependentcontractors(Aloisi,2016;Johnstoneetal.,2012;Stanford,2017).Manyhavenotedthedifficultyinassigningthissubgroupofworkerstoeithertheemployeeortheindependentcontractorcategory(CherryandAloisi,2017;Cunningham-Parmeter;2016;HagiuandWright,2019;HarrisandKrueger,2015;SmithandLeberstein,2015;StewartandStanford,2017;Thomas,2018),withsomesuggestingthatitispreferabletocategorizeplatformworkersasemployees(SmithandLeberstein,2015),whereasothersadvocateforthecreationofathirdcategorythatismoreaptlytailoredtothisformofwork(CherryandAloisi,2017;HarrisandKrueger,2015;StewartandStanford,2017;Thomas,2018).Thisdistinctionhasimportantimplications,asindividualsclassifiedasemployeesarerequiredtobeprovidedbenefitsandatleastminimumwagepay.Injustifyingtheclassificationofworkersasindependentcontractorsratherthanemploy-ees,platformprovidersoftencontendthattheyarenotinaformalemploymentrelationshipwithplatformworkers,astheymerelyserveasanintermediarythroughwhichworkersareconnectedwiththoseseekingtheirservices(Atmore,2017;SmithandLeberstein,2015;Steinberger,2018).Inaddition,platformworkersdeterminetheirownworkhours,tasks,workmethods,andemployers,whichsimulatesanindependentcontractingworkarrangement(HagiuandWright,2019).However,thisstancehasbeencriticized,asplatformprovidersessentiallyserveasabrokerageserviceregardinglabor,inthattheyarrangetransactionsanddeployworkerstofulfillthedeterminedarrangements(SmithandLeberstein,2015).Further,workersoftenlackthepowerneededtonegotiatewiththeplatformprovidersorvoiceconcernsordiscontent(GrahamandWoodcock,2018).Forinstance,workerssometimeslackcontrolovereventheirincome,assomeplatformsregulatepriceschargedtoclientele(WEF,2020a),suchasUber’sdeterminationofriderfaresinsteadofthedriverssettingrates(HagiuandWright,2019).Platformprovidershavebeenaccusedofattemptingtomaneuverthelegalsystembyavoidingthecostsassociatedwithhavingformalemployees(HagiuandWright,2019;Healyetal.,2020)whilemaintainingconsiderablecontrolovertheirworkforce(Cunningham-Parmeter,2016;HagiuandWright,2019).Nevertheless,platformsaregenerallyfirmlyopposedtolegalreclassificationoftheiremployees(Healyetal.,2020).Consequently,therearesignificantethicalimplicationssurroundingtheclassificationofplatformworkersasindependentcontractorsasopposedtoemployees.Namely,classifyingworkersasindependentcontractorstranslatesintoalackoforganizationalresponsibilityorlia-bilityfortheirworkers(Bapujietal.,2020;Steinberger,2018),astheburdenofriskisplaceduponworkersratherthanorganizations(Aloisi,2016).Forinstance,platformworkersareTraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

454442Handbookondigitalbusinessecosystemstypicallyfinanciallyresponsiblefortheprovisionandupkeepoftheirrequiredworkmaterials,suchasvehiclemaintenance(Bapujietal.,2020).Inaddition,platformworkersaregenerallynotprovidedwithhealthorautomobileinsurance,whichisparticularlyconcerningfortrans-portationworkersduetotheprevalenceofroadcollisions(DrahokoupilandJepsen,2017).Further,therearenumerousreportsofplatformworkersreceivinglowpaythatfallsbelowminimumwage(DrahokoupilandJepsen,2017;Risak,2017).Statedsimply,inherentwithinthisformofworkisinequality(VanDoorn,2017)andtheassumptionthatworkersshouldnotbeaffordedthebasicprotections(forexample,insurance;minimumwage)providedtotraditionalemployees(deRuyteretal.,2019;Stanford,2017).Forthesereasons,platformshavebeenaccusedofexploitingindividualscompletinglow-wagework,andgenderandracialminorities(VanDoorn,2017).Onespecificsectorofplatformworkinwhichthisdebateisparticularlyprevalentistheridesharingindustry,asthereisanongoinglegalbattleregardingdriveremploymentstatus.Morespecifically,controversiallegislation(thatis,AB5;referredtoasCalifornia’s“gigworkerbill”whichcontestedthecategorizationofridesharedriversasindependentcontrac-tors;para.1)wasrecentlypassedinCaliforniawhichlegallyclassifiesdriversasemployeesratherthanindependentcontractors,andmandatestheprovisionofminimumwagecom-pensationandbenefits(Lake,2020).IthasbeenpredictedthatotherUSstatesarelikelytofollowsuit(TaxNotes,2020).However,ridesharingcompaniesareinstrongoppositiontoAB5(Rapier,2019)andhavefiledlegalappealsthatsuggestthatthelawisdiscriminatoryandviolatesindividualrights(Savitz,2019).Inaddition,CaliforniaresidentsrecentlyvotedinfavorofProposition22,whichstemmedfromapetitionagainstAB5,classifyingdriversasindependentcontractors(CaliforniaSecretaryofState,2020).ThepassingofProposition22nolongerrequirescompaniestoadheretoAB5’smandatetoclassifydriversasemployees(Stocker,2020).RidesharingcompaniesarguethatenactingAB5willprovidedriverswithlesscontrolovertheirworkschedules(Campbell,2020);however,Wuetal.(2019)foundthatworkerswhogeneratedtheirincomesolelyfromUberexperiencedaseverelackofautonomyandflexibilityduetothehighlevelofeffortandtimeneededtogarneralivingwage,con-cludingthatthecompany’sclaimsofofferingflexibilityhad“becomeatbestastrategyforobscuringtheemploymentrelationship”(p.592).Driversaredividedontheiropinionsaboutthelaw,withsomeconsideringitabeneficialchange,andothersfearinglossofflexibilityinschedulingandrestrictionsonweeklyhours(Campbell,2020).Thislackofconsensusisrepresentativeofthelackofclearinformationbeingprovidedtoemployeesaboutachangethatmaysignificantlyimpacttheirlivelihoods,yieldingthepotentialforadangerousspreadofmisinformation.Notably,71percentofridesharedriversreportedadesiretoremainanindependentcontractor,whichisareductionfromthepre-COVID-19valueof81percent(Campbell,2020).Takentogether,evidencesuggeststhatridesharedriversprefertoremainindependentcontractorsratherthanemployees,whichisinterestingduetotheethicalissuesraisedbytheircurrenttreatment.Althoughmoreattentiontothedebateregardingplatformworkerlegalemploymentclas-sificationhasbeengiventotheridesharecontextthanotherformsofplatformwork,thisissueisrelevanttoallavenuesofplatformwork.Forinstance,theUSDepartmentofLaborclassifiesworkerswithinvirtualmarketplaces(thatis,eLancers)asindependentcontractors(Lieber,2019),whichhasresultedincriticismthatthis“allow[s]…companiestounderpayandoverworkworkers”(NationalEmploymentLawProject,2019).AseLancingplatformssuchasMTurkareessentiallyunregulated,workersmaybeofferedmerecentsforcompletingTraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

455Modernchallengesfacedbyworkersinplatform-facilitatedmulti-sidedmarkets443substantialpiecesofwork(Semuels,2018),whichintroducessignificantconcernsurroundingtheethicaltreatmentofeLancers(IraniandSilberman,2016).Takentogether,thefutureofplatformworkeremploymentstatusisuncertain(Healyetal.,2020),butthisdilemmahassevereimplicationsforbothplatformworkersandtheorganizationsthatemploythem.PLATFORMWORKERSKILLDEVELOPMENTAnothermodernchallengewithintheplatformeconomyisthepresenceofbarrierstotraininganddevelopmentopportunities.Asseveralscholarshavenoted,therearesubstantialdiffer-encesintheskilllevelsrequiredtocompletevarioustypesofplatformwork(Burke,2019;DeGroenetal.,2016;Schroederetal.,2019).Forinstance,crowdsourcersonplatformssuchasMTurkoftencompletebrief,simpletasksthatrequiremoreattentionaleffortthanspecializedskill,whereasworkersonplatformssuchasUpworkmaycompletemorecomplexprojectsrequiringworkerexpertise(forexample,creatingtailoredonlinebots;GrahamandWoodcock,2018),andhigherskilldemandsoftencoincidewithlonger-termprojectsthatcantakeweeksormonthstocomplete(Burke,2019).Inaddition,theplatform-facilitatedroleofridesharedriving,oritstraditionalnon-platformfacilitatedcounterpart(thatis,taxidriving),arecollo-quiallyconsideredtoberolesthatrequirelittleadditionalspecializedskilltocomplete,andthereforecanbecompletedbymanywhoneedflexibleorimmediatework.Thediversityinskillrequirementsacrossvarioussubtypesofplatformworkisimportanttoconsider,astaskswithgreaterskilldemandsnecessitatehigherlevelsofworkertraininginorderforindividualstoeffectivelycompleteworkassignments.Thisscenariocreatesabitofaparadoxforplatformworkers,asemployeeswithinplatformworkrolesmayhaveenteredthissectoroftheworkforcetoescapetraditionalorganizationalstructuresthatlimitworkerautonomy(ILO,2016),yetremovalfromastandardworkarrange-mentoftenalsocoincideswithreducedaccesstotraininganddevelopmentopportunitiesthatareimportantforemployeereskillingandupskilling(MeijerinkandKeegan,2019).Notably,platformworkertraininganddevelopmenthasbeendescribedas“invisiblework”thatisunpaidbutmayberequiredforeffectiveperformance(Martinetal.,2014).Extantplatformworkstructuresdonoteasilyrewardupskillingefforts(KokkodisandIpeirotis,2016)andmayevendisincentivizeworkersfromengaginginskilldevelopmentactivities,asjobsareoftenearnedbasedonworkerreputation,whichdoesnotconsidernewlyacquiredknowledgeorskills(Martinetal.,2014).Further,suchsystemsalsodiscourageindividualsfrombranchingoutintonewareas,asdoingsomayresultinpoorratingsduringthelearningperiod,whichcouldhaveanadverseimpactonfuturejobopportunities(Guptaetal.,2014).Interestingly,comparisonshavebeendrawnbetweenplatformworkandthescientificman-agementerainwhichpieceworkpaywascommonplace.Forinstance,Alkhatibetal.(2017)arguedthat,likepieceworktasks,workassignmentswithintheplatformeconomyarelikelytobecomeincreasinglynarrowlyfocused,therebyrequiringspecializedskills.Relatedly,othershaveexpressedconcernthatspecializationwithinplatformworkrolescancreateaworkerdeskillingeffect,inthattechnologycanbeusedasasubstituteforworkerexpertise(forexample,driverrelianceonGlobalPositioningSystem(GPS)systemsratherthangeographi-calknowledge(Spoke,2020)),whichreducestherequisitetrainingneededandcompensationprovidedtoworkers.Takentogether,workerreskillingandupskillingopportunitiesmaybeTraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

456444Handbookondigitalbusinessecosystemslimitedwithintheplatformeconomy,andtheremaybestructuralmechanismsthatdiscourageplatformworkersfromdevelopingnewexpertise.Coupledwithchallengesthatplatformworkersmayfacerelatedtounderpaymentandperiodsofworkinactivity(SchiekandGideon,2018),failuretoengageintraininganddevel-opmentactivitiesmayintroducebarrierstofuturecareergrowth.Namely,astheplatformeconomyjobmarketisoftenhighlycompetitive(Chanetal.,2018),individualswhodonotactivelyworktogrowandrefinetheirskillsarelikelytobelessmarketableandmayhavedifficultyinsecuringhigh-qualityworkassignments.Likewise,limitedinvolvementinskilldevelopmentactivitiesmayalsopreventplatformworkersfrombeingabletotransitionintostandardworkroles,asemployeeswithintraditionalworkarrangementsareunlikelytofacethesamebarrierstoparticipatingintrainingopportunities.Employeetraininganddevelopmentplaysanimportantroleinthecareerdevelopmentprocess(Kim,2019),notonlybecauseskilldevelopmenthasbeenpositivelylinkedtojobper-formance(Colquittetal.,2000),butalsobecausetheskillsrequiredinthemodernworkforceareconstantlyevolving(PewResearchCenter,2016).Further,evenperceptionsoftrainingopportunitieshavebeenlinkedtoemployeemotivationandperformancebenefits(DysvikandKuvaas,2008).Thus,barrierstotrainingopportunitieswithinthemodernplatformeconomyareacauseforconcern,asitcreatesasituationinwhichtheresponsibility(intermsofbothinitiativeandfinancialobligations)foremployeedevelopmentshiftstoworkers,suchthatplatformworkerswhodonotcontinuallyhonetheirknowledgeandskillsmayputthemselvesatadisadvantageinanalreadycompetitivemarket.ECONOMICPRECARITYINPLATFORMWORKAlthoughrecentyearshavewitnessedexponentialgrowthindigitalplatform-facilitatedmarkets(KPMG,2018),athirdchallengewithinthemodernplatformeconomyisthatplatformworkersmayexperienceemploymentprecarityamidstweakeconomies.Unfavorablelabormarketconditionsandhighunemploymentrateshavebeenlinkedtogrowthinnon-traditionalworkroles(KatzandKrueger,2017),includingplatform-facilitatedwork(Huangetal.,2020).Yet,thedirectionalityofthiseffectisunclear.Forinstance,Friedman(2014)suggestedthatweakeconomiesmayforcesomeemployeeswithinmoretraditionalformsofemploymentintogigworkroles,whereasKatzandKrueger(2017)arguedthatalthoughgigworkgrowthmayhavecoincidedwithaweakeconomyinrecentyears,increasedinterestinnon-standardworkrolesislikelymoreattributabletotechnologicaladvancesthatmakegigworkeasierorhaveincreasedworkerinterestinflexiblework,ratherthanduetopooreconomicconditions.Theplatformeconomyisanenvironmentrifewithcompetitionduetotheeaseofenteringthemarketplace(Chanetal.,2018),aswellasthefactthatforsomeroles(forexample,onlinefreelancing),thelabormarketspansbeyondthelocalareatoencompassworkersfromaroundtheglobe(GrahamandWoodcock,2018).Thus,evenoutsideofchallengingeconomictimes,competitionforjobsmaypromoteworkunderpaymentorleadtoperiodsofworkinactivity(SchiekandGideon,2018).Further,theavailabilityofplatformworkhasbeendemonstratedtobedependentuponevenshort-termeventsaffectingthemarket,suchaspublicholidays(KässiandLehdonvirta,2018).Therefore,onemightquestionwhethertheamountofavailableplatformworkwithinaweakeconomywouldbeabletokeepupwiththesupplyofplatformworkers,whichislikelytosurgewithinsuchenvironments.TraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

457Modernchallengesfacedbyworkersinplatform-facilitatedmulti-sidedmarkets445Namely,duringtheCOVID-19pandemic,datahavesuggestedthatadownscalingeffectmayhaveoccurred,suchthatorganizationsreliedlessonplatform-basedonlinelaborinordertocutcosts(Stephanyetal.,2020).Inaddition,manygigworkplatformsreportedasurgeingigworkersupply,whichinsomecasesproducedahighdegreeofcompetitionforjobsamongworkers(Semuels,2020),andwhichsometimescoincidedwithsteepdeclinesinconsumerdemand(Reuters,2020).Perhapsnotsurprisingly,giventheincreasedtechnologydemandswithinorganizationalsettingsduetosocialdistancingprotocolsduringthepandemic,someoccupationswithintheplatform-facilitatedmarket(forexample,technologyandsoftwaredevelopment)seemtohaverecoveredmorequicklyfromtheCOVID-19downscalingeffect,whereasnegativeeffectsonothersectorsoftheworkforce(forexample,creativeandmultime-dia;salesandmarketing)weremorelong-lasting(Stephanyetal.,2020).Notably,theCOVID-19-relatedeconomicdownshiftnotonlyimpactedthesupplyofanddemandforplatform-basedworkers,butitalsohadeffectsonworkerfinancialoutcomes.Namely,withinsomeplatforms,thesaturatedmarketnegativelyimpactedemployeewagesduetoincreasedcompetitionforjobs(Semuels,2020;Stephanyetal.,2020),withsomeplat-formworkersreportingasmuchasa47percentdecreaseinweeklyincome(Dunnetal.,2020).Thisisparticularlynotable,asevenoutsideofweakeconomicconditions,platformworkerunderpaymentissueshavebeenhighlighted(Friedman,2014;Gaskell,2019;Peticca-Harrisetal.,2020;Woodetal.,2019),leadingsometodescribeplatformworkcontextsasconditionsof“apploitation”(Callaway,2016).Further,despiteincreasedriskofvirusexposureinsomeformsofplatformwork(forexample,grocerydelivery),platformworkerswereoftennotprovidedwithbasicsafetyequipmentorpayintheeventofexposure(Bapujietal.,2020).Inaddition,asplatformworkerstypicallydonothaveaccesstounemploymentbenefitsorotherfinancialassistanceprograms,SpurkandStraub(2020)describedtheconditionsproducedforgigworkersduringCOVID-19as“acrisisontopofacrisis”(para.1).Anotherrelevantconsiderationtotheimpactofeconomicprecarityonplatformworkersisthedegreetowhichworkersarefinanciallydependentupontheirwork.Avarietyofindividualmotivationsforperformingplatformworkhavebeenidentified(Peticca-Harrisetal.,2020),yetestimatesvaryoftheproportionofworkersforwhichplatformworkistheirprimarysourceofincome.Forinstance,Woodetal.(2019)reportedthatplatformworkearningsserveastheprimarysourceofincomefor61percentofonlinegigworkersacrosstwomajorplatforms;whereasBrawleyandPury’s(2016)findingssuggestedthat39percentofplatformworkersonMTurkviewtheirplatformworkastheirprimaryjob.Researchhasalsosuggestedthattheplatformeconomyislargelycomprisedofyoungadultswithbelow-averageincome(Difallahetal.,2018;FlorrisonandMandl,2018)whoareoftenmembersofaminoritygroup(Steinmetz,2016),whichcouldsuggestthatcertainsubgroupsofthepopulationmaybepar-ticularlydisadvantagedbyeconomicprecaritywithintheplatformeconomy.AlthoughresearchhassuggestedthatfinancialprecarityhasbecomemoresalienttoplatformworkersduringtheCOVID-19pandemic(Dunnetal.,2020),inconsistencyinworkavailability(Gaskell,2019)andsalaryuncertainty(ILO,2016)havebeendescribedasdefiningfeaturesofplatformworkregardlessofeconomicconditions(Cassadyetal.,2018).Aswagesandperceivedjobinsecurityhavebeeninverselylinked(MuñozdeBustilloanddePedraza,2010),itisperhapsnotsurprisingthatplatformworkhasbeengenerallydescribedasaprecariousformofemployment(DrahokoupilandFabo,2016).Notably,perceptionsofjobinsecuritycanhaveseriousconsequences,includingpsychologicaldistress(Probst,2000),depression(Burgardetal.,2009),jobdissatisfaction(NarisadaandSchieman,2016),workTraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

458446Handbookondigitalbusinessecosystemsinjuriesandaccidents(ProbstandBrubaker,2001),decreasedphysicalhealth(Burgardetal.,2009),andreducedorganizationalcommitment(Probst,2000).Takentogether,theprecariousnatureofplatformworkcoupledwithaweakeconomymaybeparticularlyconcerninginregardtoitsimpactonemployeeoutcomes.DISCUSSIONThischapterhasexaminedplatform-facilitatedmulti-sidedmarketsinaDBE,startingwithareviewofthepastandpresentstateofsuchplatforms,thenhighlightinganddiscussingthreemodernchallengesrelevanttopresent-dayplatformworkers:howplatformworkersshouldbelegallyclassifiedinregardtotheiremploymentstatus,barrierstotheskilldevelopmentactiv-itiesforplatformworkers,andtheimpactofeconomicconditionsonemploymentprecaritywithintheplatformeconomy.Theimplicationsofeachofthesechallengesforbothplatformworkersandorganizationsthatemployplatformworkersareconsideredbelow.Notably,digitalworkplatformsoffertremendousadvantagesfororganizations,workers,andconsumersalike.Forinstance,platformworkhasthepotentialtoaddresssignificanthurdlesinregardtothefutureofwork,suchasincreasingtheaccessibilityofworkandthelabormarkettoindividualsinremotelocations(Oxera,2015;WEF,2020a)andprovidingnewavenuesofworkforindividualswhosejobshavebecomeautomated(WEF,2020a).Additionally,asplatformsstrictlyfacilitateinteractionbetweensuppliersofservicesandconsumersratherthanprovidingtheservicesthemselves,theyhavethepotentialforrapidandessentiallyunlimitedexpansion(Decker,2019).Platformsalsoofferuserstheabilitytohaveanextensivemarketreachwithouthavingtointentionallyengageinmarketingoradvertisingtactics(Spencer,2017),whichadditionallyservesasacost-savingmeasure(Oxera,2015).Inregardtohowtheplatformeconomycreatesopportunitiesfororganizations,onesignif-icantbenefitistheabilitytorecruitlaborfromoutsideoftheorganization,enablinggreateraccessibilityoftalentwithouthiringadditionalfull-timeworkers(Pratap,2018).Workersbenefitfromtheopportunitytoengageinawidervarietyoftasks,andcompletethosewhicharepreferred(Pratap,2018),withlimitedorganizationaloversight(HagiuandWright,2019).Inaddition,workerscanachieveschedulingflexibilityandwork‒lifebalance(BroeckeandCazes,2020;Spencer,2017),experienceeaseinenteringthemarketplace,andhavethepoten-tialtoearnsupplementalincomeorfullysupportthemselvesviaavirtualmedium(BroeckeandCazes,2020).Platformsalsobenefitconsumers,astheyhavecreatedaproliferationofmarketplacesforconsumerstoaccessservices,therebyincreasingconvenience(Oxera,2015),savingtime(BroeckeandCazes,2020),andincreasingtheavailabilityofhigh-quality,appro-priatelypricedservices(BroeckeandCazes,2020;Oxera,2015).Despitetheseadvantages,thereareanumberofchallengesintroducedbyplatformwork.Forinstance,theendlessaccessibilityofworkcaninfluenceworkerstoincreasethenumberofhoursworked(BroeckeandCazes,2020;Wuetal.,2019),aswellasencouragethemtomakethemselvesavailableduringnon-traditionalhoursinordertomakeadditionalincome(BroeckeandCazes,2020).Inaddition,ininstancesinwhichorganizationshireplatformworkerstocompleteshort-termtasks,workersmayfeeldisadvantagedbyorganizationalpoliciesthatdemonstratepreferentialtreatmenttowardstraditionalemployeesoverplatformworkers(Pratap,2018),suchasprovidingfull-timeemployeeswithbonusesorbenefitswhilewithholdingsuchperksfromworkersthatareexternaltothecompany.TraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

459Modernchallengesfacedbyworkersinplatform-facilitatedmulti-sidedmarkets447Further,duetohighcompetitionamongworkers(Chanetal.,2018),lowwages(DrahokoupilandJepsen,2017;Risak,2017),andalackofopportunitiestoengageintraditionalcareermanagementactivities(forexample,performancereviewwithamanager;trainingoppor-tunities),workersmayexperiencediscouragementanddifficultyinfindingplatformwork(Pratap,2018).Completingplatformworkcanalsocomplicateworkerpersonaltaxes,particularlywhenreceivingincomefromanumberofdifferentemployers,asindependentcontractorsdonothaveautomaticpaycheckwithholding(Spencer,2017).Assuch,untilthechallengesfacingplatformworkareconsideredandaddressed,thepotentialadvantagesofthisplatform-facilitatedmulti-sidedmarketmaybehindered(WEF,2020a).Itisimportanttoconsidertheroleoforganizationsinaddressingthesechallenges,asorgan-izationshavebeenshowntoengageindifferentialtreatmentofplatformworkersduringtimesofeconomicnecessity.Forinstance,thegrowthofthegigeconomycanbeattributed,atleastinpart,toorganizationalstrategyrelatedtohandlingeconomicshifts.Namely,easeinmakingadjustmentstostaffingarrangementsandworkassignmentshasbeentoutedasoneofthekeyadvantagesoforganizationaluseofnon-standardworkers,assuchanapproachprovidesastra-tegicmeansofprotectingtraditional,full-timeemployeesduringmarketshifts(Kalleberg,2003).However,ithasbeenarguedthatsuchanemploymentmodelmayunfairlytransfertheperilsofaneconomicdownturnfromorganizationstogigworkers,aslimitedworkavailabilitywilllikelydisproportionatelyaffectcontingentemployees(Friedman,2014).Likewise,Fleming(2017)describedthisprocessas“radicalresponsibilization”inwhichgigworkersare“responsiblefortheirowneconomicfate”(p.702).Morespecifically,hearguedthatlowwages,burdensomemanagementstructures,andlimitedtrainingopportunitieswithinthegigeconomyarelikelytoproducefinancialinsecurityandhighdebt.Stateddiffer-ently,“whatemployersconsidercheaplabourisactuallyveryexpensiveforeverybodyelsetomaintain”(Fleming,2017,p.699).Assuch,inaweakeconomy,“survivalofthefittest”maymanifestas“survivalofthefixtures,”therebydisadvantagingplatformworkersandraisingquestionsaboutthestabilityofplatform-basedemployment.However,asnotedbyStanford(2017),thelackofstabilityinplatformworkshouldnotbesolelyattributedtotechnologicalinfluences.Instead,thereislikelyageneralreductioninemploymentstabilitywithinthepresentlabormarket,assuchtrendstowardworkprecarityalsooccurredinearliercenturiesthatutilizedasimilarplatformworkstructure(Stanford,2017).Althoughplatformworkersoftenlacktheauthorityneededtonegotiatewithplatformsorsettheirownwages(GrahamandWoodcock,2018;HagiuandWright,2019),scholarshavearguedthatthisgroupofworkersshouldbeentitledtojoinforcestoraisetheirconcernswithlaborplatformsviacollectivebargaining(BroeckeandCazes,2020;SchiekandGideon,2018;WEF,2020a).However,self-employedindividualsarelargelylegallybarredfromcollectivebargaininginmanycountriesduetotheirclassificationasbusinesses(BroeckeandCazes,2020;SchiekandGordon,2018),furtherhighlightingthecomplicationsthatarisefromthecurrentlegalclassificationascribedtoplatformworkers.Assuch,thisgroupofworkersisfacingthecontradictoryrealityofexperiencingtheautonomyinvolvedinperformingfree-lanceworkwhilealsobeingboundbythehumanresourcemanagementpracticesofplatformintermediaries(MeijerinkandKeegan,2019).TraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

460448HandbookondigitalbusinessecosystemsACADEMICCONTRIBUTIONSANDFUTURERESEARCHDIRECTIONSAsevidencedbyfindingsfromSenyoetal.’s(2019)reviewoftheDBEliterature,thenovelnatureofresearchonDBEshasresultedinstudiesthatoftenlackstrongtheoreticalunder-pinnings,andexistingtheoreticaleffortshavelargelyreferencedtheoriesfromavarietyofnon-DBErelatedfields.Assuch,thereisaclearinterdisciplinarytrendintheDBEliterature.Thus,thiseffortcontributestointerdisciplinaryDBEtheorybyspecificallyhighlightingthefieldsinwhichworkrelatedtoeachchallengediscussedinthischapterisbeingconducted.Morespecifically,muchresearchontheemploymentstatusofplatformworkershasbeenconductedfromeitheraneconomicsperspective(see,e.g.,DrahokoupilandFabo,2016;HagiuandWright,2019;Stanford,2017;StewartandStanford,2017)oralegalperspective(see,e.g.,CherryandAloisi,2017;Cunningham-Parmeter,2016;Steinberger,2018;Thomas,2018).Further,discussionsofskilldevelopmentneedsforplatformworkershaveprimarilytakenplaceinthehumanresourcemanagementfield(see,e.g.,MeijerinkandKeegan,2019)andthecomputersciencefield(see,e.g.,Alkhatibetal.,2017;Guptaetal.,2014;Martinetal.,2014).Lastly,considerationofplatformworkersininstancesofmarketprecarityhavelargelybeenmadeinthedisciplineofeconomics(see,e.g.,Friedman,2014;KatzandKrueger,2017;Stephanyetal.,2020).Inaddition,muchworkpertainingtothechallengesfacedbyplatformworkersisbeingconductedoutsideofacademicdisciplines,suchasinresearchcompaniesexaminingmarkettrends,ornewsoutlets(see,e.g.,Chanetal.,2018;Kim,2019;PewResearchCenter,2016;Semuels,2020).ThischapterbuildsuponSenyoetal.’s(2019)findingsbyprovidingexamplesofspecificchallengesrelatedtoDBEsinwhichsupportfromotherfieldsisneededtofullyunderstandsuchphenomena.Althoughthisinterdisciplinaryperspectiveisbeneficialindevelopingacomprehensiveunderstandingofthesemodernchallengesfacedbyplatformworkers,Senyoetal.(2019)emphasizetheneedforfutureeffortstodeveloptheoriesspecifictoDBEs.InadditiontocontributingtothediscussionsurroundinginterdisciplinaryeffortsinDBEtheory,inthenextsectionthischapterprovidespracticalrecommendationsforallplatformstakehold-erstoaddresseachoftheaforementionedchallenges.Thereareanumberofresearchopportunitiesforscholarsinterestedintheplatformeconomy.Forinstance,howdolow-versushigh-skillplatformworkrolesdifferintermsofeconomicprecarity,aswellasworkercharacteristics(forexample,financialdependence)?Thislineofresearchcouldbeparticularlyadvantageousinsheddinglightonwhetherbroadpoliciesandrecommendationsareequallyvalidacrossplatformworkwithvaryinglevelsofcomplexity.Inaddition,asridesharedrivershaveindicatedapreferencetowardlegalclassi-ficationasindependentcontractorsoveremployees(Campbell,2020),workexaminingthefactorsthatcontributetothispreferenceiswarranted.Forinstance,isthischoiceduetoworkerconcernoverhowtheemploymentstatuschangewouldimpacttheindustry(forexample,ridesharingplatformshavearguedthatincreasedworkerwagesmaynotbeeconomicallyfeasiblewhileremainingcompetitive),alackofunderstandingofhowtheemploymentstatuschangewouldimpactworkers,orsomeotherfactor?Further,aninvestigationintonovelmethods(forexample,grievanceorappealsystems)forimprovingfairnessperceptionsamongplatformworkersisnecessary.TraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

461Modernchallengesfacedbyworkersinplatform-facilitatedmulti-sidedmarkets449PRACTICALRECOMMENDATIONSAddressingtheaforementionedchallengesofplatformworkisnotanundertakingthatcanbecompletedsingle-handedly,butratherwillrequirecollectiveeffortsfromanumberofstake-holders,includinggovernmententities,platformproviders,organizationsthathireplatformworkers,platformworkers,andconsumers.Allpartiesinvolvedintheplatform-facilitatedmarketplaceareresponsibleforthewelfareofplatformworkers(WEF,2020c)andshouldaimtofollowtheInternationalLabourOrganization’s(2016)recommendationtosupportplatformworkersbyofferinglegalandsocialprotections.Morespecifically,governmentscanaidplatformworkersbycreatingpoliciesthatprotectworkers,suchasclassifyingworkersasemployeesorotherwiseensuringtheprovisionofminimumwageandbenefits.Governmentscanalsoenactpoliciestoensurethatworkingconditionsforplatformworkersaresafeandconscionable,andcooperatewithplatformstoprovideworkerswithadequatesocialprotec-tions,andtrainingprogramsthataidineducationandskilldevelopmenttofacilitateworkerprofessionalefforts(WEF,2020c).Additionally,providingplatformworkerswithunemploy-mentbenefitsintheeventofaprolongedperiodwithoutworkmaybebeneficial,particularlyduringperiodsofeconomicprecarity.Thepartiesthatarguablyhavethemostpowertoaddressthestatedissuesareplatformprovidersthemselves.Anumberoftacticsforplatformstoimprovetreatmentoftheirworkershavebeensuggestedintheliterature.Namely,Guptaetal.(2014)recommendedthatplatformsprovideworkerswithpurposefulworkinexchangeforarespectablewageandintroducetrain-ingopportunitiesforworkers,particularlythoseresidinginemergentnations.Additionally,platformshavebeenurgedtoimplementpoliciesthatsupportdiversityandinclusionefforts,prioritizeworkersafetyandwell-being,ensurethefairtreatmentofworkers,compensateworkersadequately,andencourageworkerexpressionofopinionsandinvolvementindecision-making(Grahametal.,2020;WEF,2020c).NotableexamplesofethicalplatformproviderpracticesincludeGrab’s(aridesharingcompanyinSingapore)effortstomakeitsplatformmoreinclusiveandaccessibletodeafandhearing-impaireddrivers,Postmates’sinitiativestoprovidedeliveryworkerswithoccupationalinsuranceintheeventofanaccident,andDeliveroo’sestablishmentofforumsfordriverstoprovideinputoncompanyendeavors(WEF,2020a).Althoughactionssuchasthesemeaningfullycontributetothecreationofamoreequitableworkenvironmentforplatformworkers,theseeffortsaregenerallytheexceptionratherthanthenorm,assuchpracticeshaveyettobeenactedbyplatformprovidersonalarge-scalebasis.Consideringhoworganizationsthatutilizeworkersfromthissectorofthelabormarketcanhelptoaddressthesechallenges,perhapsthemostimpactfulpracticewouldbetoensurefairpayandtreatmentfortheplatformworkers.Onewaytoachievethisisthroughorgan-izationalselectionofintermediariesthatalignwiththeorganization’scorevaluesandthatengageinethicaltreatmentofworkers.Forinstance,Prolific(asurveyrecruitmentplatform)advertisesitsbeliefinethicalpaymentofplatformworkersandimplementsaminimumwagethatrequestorsmustpayworkerswhilerecommendingevenhigherpayrates(Moodie,2018).Additionaltacticsthatcanbeimplementedbyorganizationswouldbetomonitorthetalentpoolofplatformworkersaffiliatedwiththeircompanyandnotifythemofupcomingassignmentsorfull-timepositionsthatmayberelevant,inordertoprovideworkerswithmoreincomeopportunities.TraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

462450HandbookondigitalbusinessecosystemsFurther,whenpossible,organizationscanaimtorelyonthesamesubsetofplatformworkersconsistentlyinanefforttoprovidethoseworkerswithasenseofstability.Andiforganizationsmustrejectworkcompletedbyplatformworkers,theyshouldensurethatsuchactionsarewarrantedandproceduresareestablishedforworkerstocontestpaymentdecisions(Grahametal.,2020;WEF,2020c).Instandardworkplaces,organizationalimplementationofaformalgrievanceprocesshasbeenshowntoimproveemployeejusticeperceptions(Greenberg,1987),asitallowsworkerstobeactivelyinvolvedwiththesituationandperceiveasenseofcontroloveroutcomes(Aquino,1995).Assuch,institutingsuchprocessesamongplatformworkersislikelytorenderpositiveoutcomesandensuremoreequitabletreatmentofworkers.Asworkershavecompleteautonomyoverthechoicetocompleteplatformworkandwhichplatformstofrequent,somehavearguedthattheyarekeystakeholdersinthegovernanceofplatforms(Kretschmeretal.,2021).Assuch,onetacticthatplatformworkerscantaketoimprovetheirworkexperiencesiscommunicatingtheiropinionstoplatformprovidersregard-ingpolicies(Grahametal.,2020;WEF,2020c).Althoughcollectivebargainingmaynotbepossibleinthecurrentclimate,workersshouldstillutilizeavailableavenuestosharetheirviewswithplatformproviders.Inaddition,platformworkerscanshareinformationabouttheirworkexperienceswithfriends,family,andconsumers,notinghowtheyweretreatedonspe-cificlaborplatformsandencouragingindividualstosupportcompaniesthatupholdhonorableworkpractices.Lastly,workerscanpartakeinacademicresearchexaminingplatformworkerexperiences,orengageinpoliticalactioninordertoensurethattheirvoicesareaccountedforandcommunicatetheirneedstoinfluentialpartiesexternaltothelaborplatformmarket.Finally,consumerscanaidinsupportingplatformworkersbyresearchingthelaborpoliciesofchosenplatformsandintentionallyselectingthosethattheydeemethical,asrecommendedbyHealyetal.(2020).Further,platformusersmaydisseminatetheinformationgatheredaboutplatformethicalpracticesonpublicforumsinordertocreatebroadersocialawarenessandencourageprincipledconsumerpractices.Forinstance,effortshavebeenmadetorecognizethemostethicalcompaniesworldwide(Ethisphere,2020)andtoidentifycompaniesthatprovidethehighestwagesforgigworkers(Liu,2019).Notably,asconsumerperceptionsofanorganization’sethicalityhavebeenpositivelylinkedtotrustandattitudestowardthebrand(Singhetal.,2012),moretailoredeffortsgearedtowardestablishingapublicdatabaseofthemostethicalplatformproviderswouldbeworthwhile.Takentogether,platform-facilitatedmulti-sidedmarketshavegreatpotentialbothtocon-tributetoDBEs,aswellastointroducechallengeswithinthemodernworkplace.Assuch,weencouragebothscholarsandpractitionerstodevotemoreattentiontothissectorofthebusinessenvironmentinordertoshedmorelightonwaystoimprovetheexperiencesoforganizations,workers,andconsumerswithintheplatformeconomy.REFERENCESAlkhatib,A.,Bernstein,M.S.,andLevi,M.(2017,May).ExaminingCrowdWorkandGigWorkThroughtheHistoricalLensofPiecework.In:Proceedingsofthe2017CHIConferenceonHumanFactorsinComputingSystems.Denver:ACM,pp.4599–4616.Aloisi,A.(2016).CommoditizedWorkers:CaseStudyResearchonLaborLawIssuesArisingFromaSetof“On-Demand/GigEconomy”Platforms.ComparativeLaborLawandPolicyJournal,37(3),pp.620–653.Availableat:https://doi.org/10.2139/ssrn.2637485(accessedOctober15,2020).TraciM.BrickaandAmberN.Schroeder-9781839107191DownloadedfromPubFactoryat05/28/202210:25:50AMviaColumbiaUniversityLibrary

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46928.Betterdata,betterbusiness,betterlives:towardsasymbioticreportingframeworkforsustainabledigitalbusinessecosystemsPatrickPeterandWillRitzrauINTRODUCTIONThischapterexploreshowdigitizationandtechnologyinnovations(BrynjolfssonandMcAfee,2014)canhelptoconvergeandacceleratetwoemergingbusinesstrends:(1)growingstake-holderexpectations(EcclesandKlimenko,2019;Barkeretal.,2020)towardsprivatecompa-niestounderstandtheirsocialresponsibilityandsustainableimpactalongvaluechains;and(2)thebusinessimperativetocontrolthefutureriskoffiniteresourceavailabilitybyestablish-ingcirculareconomies(BraungartandMcDonough,2009;McDonoughandBraungart,2013).Weofferinsightsonhowcircularitycanbeadoptedbydigitalbusinessecosystemsbymeansofsystemicinformationexchangeonasymbioticreportingplatform.Thechapterisstructuredasfollows.First,weintroducetheinnovativeaccountingcon-ceptsofeconomicsofmutuality(Rocheetal.,2017)andvaluebalancing(ValueBalancingAlliance,2021).Further,wepresentchallengesofcircularityanddigitizationwhenappliedtovaluecreationanddistributionwithinexistingsupplychains.Wethenpresenttheneedednetwork-leveltransformationstoadoptsustainablebusinessmodelsindigitalbusinessecosys-tems.Next,weconceptualizeasymbioticreportingframeworktoovercometheobstacleofinformationasymmetrybetweendependentbusinesspartnersanddemonstratethebenefitofmutualinformationsharingasenablerforcircularvalueco-creationanddistribution.Thisisfollowedbyacasestudyinvestigatinghowsymbioticreportingsupportstheoperationalizationofcircularvalueco-creationanddistributionwithinexistingdigitalbusinessecosystems.Weconcludethechapterbydiscussingourfindingsandsuggestingavenuesforfurtherresearch.FOUNDATIONALCONCEPTSSustainabilityReportingStandardsInvestorsincreasinglyrealizethatneglectingenvironmentalissuesoftheirassetsnotonlyposesareputationalriskontheirfinancialproducts,butalsounsustainableoperationsjeopard-izethemid-andlong-termfinancialreturnontheirinvestment.Inanattempttomeetstake-holderexpectationstowardsholisticcompanyperformance,variousdisclosureframeworkssuchastheGlobalReportingInitiative(GRI),theSustainabilityAccountingStandardBoard(SASB),theInternationalIntegratedReportingCouncil(IIRC)wereestablishedoverthepastdecades.Unfortunately,theseestablishedmethodsofcorporatedisclosurestilldonotmeettheemergingexpectationstowardsagreatersocietalbusinessresponsibilityormoreresponsible457PatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

470458Handbookondigitalbusinessecosystemsmanagementpractices(Barbyetal.,2021;EcclesandKrzus,2014).Sofar,managementaccountingisbasedonalegalconceptofafirmasanentitythatownspropertyandcontractswithotherparties.Organizationalsteeringisbasedoncosts,incomes,assets,andliabilitiesassociatedwithoperations.Provisionsfortheirphysicalassetmaintenanceandservicingliabilitiesareintegralcomponentsoftheirbalancesheet.Theexternaldisclosurecombinestheactualcostsofusedorconsumedresourcesandtheassociatedearnings,distinguishingcurrentcostsfromcapitalexpenditures.Companiesarehighlydependentonexternalassets,suchasnaturalorsocietalresources(externalities).Thecostofconsumptionandmaintenanceforthoseexternalitiesarecurrentlynotconsideredinthefinancialormanagementaccounting,eventhoughtheyarepositively(social)ornegatively(environmental)impactedbycompanyoperations(SerafeimandTrinh,2020).Theseestablishedaccountingprinciplesposethedilemmabetweenapurefocusonpropertyrightsandownerbenefitsversusassumingawidersocietalresponsibilityandpurposefulmanagement(CannadineandMayer,2019).Especiallycompaniesintheindustrialsectorhaverealizedthattheirmarketvaluationandlong-termeco-nomicviabilityareincreasinglylinkedtosocietalandenvironmentalstabilityinmarketstheyoperatein.Greatersocialresponsibilityandtransparentlydisclosingthepositiveornegativeimpactoftheiroperationshavebecomedifferentiatorstowardsinvestors,employees,andcustomers.Thistransformationalshifttowardstransparencyislinkedtoanewunderstandingofvalueversusprofit,expandingthesolefocusonfinancewithenvironmental,human,andsocialdimensions.EconomicsofmutualityTheeconomicsofmutuality(EoM)extendsthemodelofthetraditionalprofitandloss(P&L)towardsa“mutualP&L”measuringasustainable,mutualprofit.ThemutualP&Lexpandsandadjuststhetraditionalunderstandingofmaterialandfinancialcapitalperformance,byconsideringcostsofconsumptionandmaintenanceofnatural,human,andsocialexternalities.Compilingthesemeasurementsfromtimely,viable,andreliableinformationrequiresnewmethodologiesandtrustfulengagementofthefirmwithitseconomicandsocietalenviron-ment.Thistrustfulcollaborationofallinvolvedbusinesspartnersalongthevalueco-creationmayrequiredifferentandnewbusinessmodelsandmanagementpractices,placinggreateremphasisonbusinessimpactonhuman,social,andnaturalcapitalperformance(IoannouandSerafeim,2019).Integratingthesenewimpactmeasuresintomanagementaccountingsystemsmakessocial,environmental,andfinancialperformancecomparable.Thismultidimensionalanalysiswillallowbetterdailyoperationaldecisionsandlong-termstrategicsimulations(suchascapitalallocationandcompensationpractices).Therefore,thefundamentalbenefitisnottoaccuratelycapturetheenvironmentalandsocietalimpactofthecompany,buttoevolvetheorganizationanditsbusinessecosystemtowardsthemindsetofmutuality.Moredetailedinte-gratedsocial,environmentalandfinancialdatawillenablethebusinessecosystemtoassumegreatersocietalresponsibilityinastrategicandforward-lookingway.ValuebalancingOverthepastdecade,asignificantdisconnectbetweenmarketcapitalizationandvaluecre-ationbymanufacturingphysicalproductsmanifesteditself.In2019,theValueBalancingAlliancewasfoundedbytenglobalsustainabilityleadersfromvariousindustriestomakevaluecreation,societalimpact,andcorporatesocialresponsibilitycomparableandtangibleforallrelevantstakeholders(ValueBalancingAlliance,2021).By2021,thisnon-profitPatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

471Betterdata,betterbusiness,betterlives459organizationaimedtocompiletangibleandpracticallyapplicablerecommendationstoexpandthecurrentacceptedfinancialaccountingframeworkswithmonetizedpre-financialaspectsatthecorporate,project,andproductlevels.SimilartotheEoM,thisintegratedaccountingapproachallowsholisticshort-termoperationalandlong-termstrategicdecision-making.Thestandardizedmethodologyisbasedonharmonizedconversionandvaluationfactors.Itcanbeconsistentlyappliedintheentireimpactcreation,integratingupstream,ownoperations,anddownstreamactivities.Toincreasetheacceptanceandscaleofthemethodology,thecal-culationmodelswillbesimple,andtheapplicabilitytestedbythemembercompanies.Closecooperationwithstandard-settersandthird-partyauditorswillensurethattheresultswillmeetthehighestcompliancerequirements,providingreliableandtrustfulinformationtoallinternalandsocietalstakeholders.Again,themethodologyishighlydependentontheavailabilityofrelevant,reliable,andtimelydataaboutmaterial,social,andenvironmentalissues.Theexpo-nentialavailabilityandapplicationofdigitaltechnologycanprovidethisdataasthebasisforfact-basedandseamlesstransparency.However,withalldata-driventransparencyavailableorevendisclosed,onlyamindsetofmutualtrustinbusinesspartnerswillgraduallyimprovethequalityandimpactofthevaluebalancingorEoMapproachesacrossindustries.Otherwise,insteadoftangibledisclosureofcorporateresponsibilityandfuture-safebusinessviability,bothapproacheswillfacethecriticismofhighlyelaboratedgreenwashing.CircularEconomyinDigitalBusinessEcosystemsDespitetheinnovativeapproachesoftheeconomyofmutualityandvaluebalancingthereisstillasignificantgapbetweenannualorquarterlyexternaldisclosureofintegratedcompanyperformanceandthedailyoperationalsteeringbasedonintegratedprinciples.Digitizationhelpstocollect,consolidate,andanalyzethefinancial,social,andenvironmentaldatafromdispersedinformationsources.Integratingthefinancialimpactofexternalitiesintoaccountingallowsresponsibleoperationalsteering,whiletransparentdisclosureenablesinternalandexternalstakeholderstoassessfuturebusinessrisksandassociatedmitigationstrategies.Bydecouplingeconomicgrowthfromresourceconsumption,acirculareconomyrepresentsonemitigationstrategytoaddressthefutureriskofresourcescarcity.Forcenturies,efficientandprofitablelinearsupplychainswerebasedontheprincipleof“take,make,use,waste,”withoutconsideringthecostsofnaturalresourceexploitationandsignificantenvironmentalpollution(Lyle,1994).Duetothefundamentallossofmaterialintowaste,theincreasingdepletionandhighpricevolatilityoffiniterawmaterials,andassociateddependenceonpoliticallyunstablegovernments,thistraditionallinearsupplychainwillnolongerbeeconomicallyviable,letalonesustainable(Ritzrau,2020).Incontrast,anindustrialcirculareconomyisrestorativeorregenerativebypurposeanddesign(EllenMacArthurFoundation,2016).Withinacirculareconomyallareasofaproductlifecycle,fromresourceextraction,toproduction,transporta-tion,use,andrecycling,areorchestrated(Wilts,2016).Thecirculardesignprincipleassuresthatinvolvedmaterialsarereadyforrestoration,remanufacturing,andrecycling(EEA,2017).Thisdecouplingofbusinessgrowthandresourcesconsumption(Sanyé-Mengualetal.,2019)cansatisfystakeholderexpectationsofsustainableeconomicperformancewithminimalenvironmentaldegradation.Sofar,informationdeficitshavepreventedthedevelopmentofawidercirculareconomy(OECD,2005,2007).Missingtransparencyonmaterialsupplyandquality,alongwithlackofexpertiseonsuitability,hinderscircularresourceadoption,usage,orsubstitutionandcreatesasourcingbiasforvirginproducts.Today,digitaltechnologiescanPatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

472460Handbookondigitalbusinessecosystemsprovidesufficientdatatoovercomeinformationgapsorasymmetriesandcreateharmonizedresourcetransparencyforasuccessfulcirculareconomy(LacyandRutqvist,2015).Digitalnetworks,whichweunderstandasnetworkedbusinessandexchangesystems,willplayaspecialrole(McAfeeandBrnjolfsson,2016)inestablishingsustainablebusinessmodels.Leveragingdigitalconvergenceinbusinessecosystemswillgeneratepredictableproductquality,minimizeplanningrisks,andallowfornewbusinessmodels(NeliganandSchmitz,2017).However,therearenodigitalplatformsthatorchestrateestablishedcircularmarketsorentiresupplychains.Currentsuccessfultradingplatformsmanagemany-to-many(n:m)tradingrelationshipsefficiently,butdonotorchestratethesequenceofinter-companyprocessstepsoftheproductvaluecreationrequiredinaneffectivecirculareconomy.Inthecontextofacirculareconomy,adigitalbusinessnetworkorchestratestheentirelifecycleofproducts,recycledmaterials,orrecyclablecomponents,andthesequenceofvaluecreationbetweennetworkparticipantsindependentlyfromtheirvaluecontributionandpositioninthecirculareconomy.Thedigitalplatformmustprovidedetailedinformationonpurityofthematerials,thequalityoftheofferedgoods,specificationsofadditivesorhazardousingredients,tomatchsupplyanddemandwithrespectforlocationandtime(GawerandCusumano,2013).Mutualsharingofthisinformationontheplatformdrivesefficientexchangeofmaterialsandgoodsforremanufacturing,repurposing,redistribution,orrecycling,creatingsecondaryfeedstockasinputforinitialproductionprocesses.Varioustypesofdigitalbusinessnetworkswillemerge.Thesemaybeindustry-focused,suchaselectronicconsumables.Othersaremulti-sided,connectingactorsfromdiversesectorsleveragingcertainrecyclatesormaterialsindifferentapplications(forexample,metals).Digitalnetworksystemsalreadyintegrateplanning,distri-butionandoperationsinlinearsupplychains.McAfeeandBrynjolfsson(2017)demonstratehowweb-basedsystemsenablenewbusinessmodelsbasedonnewdigitalcapabilities,byreducinginformationasymmetries.Internalinformation-sharingplatformsoptimizeresourceproductivityandaccelerateinnovationacrossdepartmentorregionalboundaries(GawerandCusumano,2013).Applyingmutualoptimizationalgorithmsonthesedataexchangesmitigatesmarketfailure.Expandingtransparencythroughouttheusephaseseamlesslylinksproductandresourceavailabilityintothe(re)productionprocess(BrynjolfssonandMcAfee,2014).DigitizationasEnablerforCircularBusinessEcosystemsTheliteraturedefinesdigitalecosystemsasopeninfrastructureframeworkswherecloselyconnectedexternalactorsorusersgenerateorreceivevalue(Yooetal.,2012;GawerandCusumano,2013;Tiwana,2014;Henfridssonetal.,2018).Manyauthorshighlighttheimpor-tanceofnetworkandecosystemresearch(Schreiecketal.,2016;Constantinidesetal.,2018;deReuveretal.,2018).Yooetal.(2012)emphasizetheroleofnetworksforcoordinatinghet-erogeneousgroupsofactors,digitalassets(suchasdata),andmutualcapabilities,topromoteinnovation.Constantinidesetal.(2018)stresstheimportanceofemergingdigitalinfrastruc-turesasfundamentalenablersofmodernplatform-basedcompanies.Technologicaldevelop-mentanddigitalizationaredifferentiatingenablersforglobalandlocalbusinessinnovationandtransformations.Digitizationcansupportcircularresourcemanagementatthreelevels:1.Riskcontrolandcompliancewithlegalregulationsatthelowestpossiblecostensuresthesocial“license-to-operate”(BhimaniandWillcocks,2014).PatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

473Betterdata,betterbusiness,betterlives4612.Automationandoptimizationincreaseresourceproductivityandensureexpectedeco-nomicreturns(Okorieetal.,2018).3.Inter-companyconnectivityhelpstoorchestratecircularprocessesenablingtransformative“user-centric”andcross-industrybusinessmodels(Brenner,2018).Newventuresandestablishedmarketplayersincreasinglyleveragedigitalplatformecosys-temstofindnewwaystoinnovateacrossmultipleindustries(Yooetal.,2012;Tiwana,2014;Nambisan,2016;Parkeretal.,2016).Withthesimplicityandreachofdigitalconnectivity,thebusinessopportunityofdigitalplatformswillgrowbeyondthescopeofanysingleorganiza-tionalortechnicalentity(WestandWood,2013;Sandbergetal.,2020).Translatingphysicalproductsintodigitalassetsoffersnewactorsamultitudeofpossibilitiesofformingneweco-systems.Sincedigitalenvironmentsrelyonservicesthataremanagedacrossvariousplayersandcontexts(Kallinikosetal.,2013),ungovernedorchestrationisinherentlyrisky(Dattéeetal.,2018).Asaresult,theunprecedenteddegreeofcomplexityinecosysteminnovationrequiresabetterunderstandingofhowecosystemsareorchestrated,especiallyinsightsintosuccessfulemergingdigitalplatformecosystems(David,1994).Theseemergingecosystems,whereonlyafewactorsshareacommonvisionofacirculareconomy,mayneedadifferentgovernance,operations,andorchestrationframework,comparedtofullyestablishedplatformecosystemswitha“winnertakesall”attitude(Jacobidesetal.,2018).Alongwithleveragingdigitalplatforms,establishingacircularbusinessmodelrequiresacommonunderstandingofthefullvalueco-creationprocessalongtheentirelifecycleofaproduct,withspecialfocusonthebenefitsforeachecosystempartner.Thiscommonunderstandingandwillingnesstocooperatereliesoncomprehensiveandmutualtransparencyonmaterialandfinancialflowinformation.Oncethistrustfulcollaborationisinitiated,co-innovationandintegratedprocessimprovementswillstrengthenthecompetitivenessofaproduct,whilereducingtheriskofresourceshortagesandassociatedpricevolatility.Availabledigitizationtechnologies,suchastheInternetofThings,bigdataanalytics,anddeeplearningalgorithms,providetherele-vantinsightstoorchestratemutuallybeneficialbusinessdecisionswithinacirculareconomy(EllenMacArthurFoundation,2016).Thisnextlevelofsystem-widedataconsolidationofferstheopportunitytoconnectfinancial(returnoninvestment,revenue,profit,andsoon)andpre-financial(societal,health,environment)metricstomeasureimpactforresponsiblegrowthbeyondfinancialmetrics(Ritzrau,2017;Leukert,2018).Expandingthelimitedcostfocusandorganizationalaccountabilityofinternalcompanyprocessesintoadata-driven,transparentnetworkcollaborationofacirculareconomyoffersatransformationframeworkforvalueco-creationwhilecreatingpositivesocietalimpact(CannadineandMayer,2019;EllenMacArthurFoundation,2016).THEORETICALBACKGROUND:NETWORK-LEVELTRANSFORMATIONFORSUSTAINABILITYValueCo-CreationRealizingthefullbenefitsofdigitizationandacirculareconomyrequiresanorchestratedbusinesstransformationofallconstituentsatthenetworklevel.Onefundamentalsuccessfactortoensurevalueco-creationbetweencollaboratorshingesonoptimizinganddistributingPatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

474462Handbookondigitalbusinessecosystemssustainabilitybenefits.Tomeetmarginexpectations,businessesconstantlyanalyzetheircurrentperformanceandadjustcollaborationroleswithpartnercompaniestoimproveprocessefficiencyandmaximizeresourceproductivity(RönnbergSjödinetal.,2016).Traditionalcustomerandvendorrelationships,inmanycasescharacterizedbyinformationasym-metries,arechallengedincircularcollaborationactivitiesintendinginnovativeresource-andcustomer-centricvalueco-creationenabledbydigitization.Thedesignofthesedigitalsolu-tionstoseamlesslyorchestrateresourceflowsrequiresdeepunderstandingoftheindividualvaluecontributionofeachconnectednetworkpartner(LuschandVargo,2015).Previouslylooselylinkedpartnersstartinteractingtrustfullyandtransparentlyinasharedvaluesphere,allcommittedtomutualvalueco-creation.Notonlythebenefit,butalsoresponsibilityfortheoutcomeandimpactissharedamongecosystempartnersastheymutuallydesign,execute,andtracktheirnewconnectedbusinessmodel(Bradyetal.,2005).Incontrast,themissingviewonholisticvalueco-creationintheverynarrowperspectiveoffinancialaccountabilitystillresultsininsufficientunderstandingoftheinefficienciesinestablished,buthighlyfragmentedlinearsupplychains.Eventhoughthenegativeeconomicimpactofthe“bullwhipeffect”islong-known,withtheircost-basedversusvalue-basedincentivization,companiesstrugglewithintegratedmulti-tiersupplychainplanning,eventhoughintegrateddigitalsolutionsarereadilyavailable(HeinrichandBetts,2003).Especially,valueextractionbythecustomerduringtheusephaseandaftertheend-of-lifeofaproductisthecurrentblindspotofallsupplychains.Theemergenceofsharedorperformanceeconomiesrequiresintegrationofproductsandservicesintoacomplementarysolutionoffering.Thebuyer‒sellerrelationshipevolvesfrompurelytransaction-basedinteractionstorelationship-basedcollaboration,andrequiressubstantialinvestmentinrelationship-buildingpractices(Tulietal.,2007).Thisco-creationfollowsvariousdistinctphases(e.g.,Aarikka-StenroosandJaakkola,2012;Daviesetal.,2007;LuschandVargo,2015;Storbacka,2011;Tulietal.,2007),fromevaluatingacustomerchallenge,toidentifyingthecustomer’sobjectives,mappingcustomerbehaviors,andrecog-nizingservicesandproductsnecessarytocreateanddeliveracompellingvaluepropositiontothecustomer(LuschandVargo,2015).Therefore,executingco-creationwithinanecosystemisacomplexundertaking,requiringmutualtransparencytomitigatethehighriskofoverallsystemfailure.Weinvestigatehowvalueisco-createdandmaintainedtoensuresustainabilitybenefits.Efficientandeffectiveecosystemorchestrationisthekeysuccessfactortofacilitatethebusinesstransformation.EcosystemOrchestrationThemajorityofproductsandservicesarecreatedinhighlyefficientglobalized,buthighlyfragmentedandlinear,supplyecosystemsfromrawmaterialextractiontoproductdisposal.Globallyconnecteddigitaltechnologiesofferthetoolstoorchestratetheseecosystemsdigi-tallyinacircular,resource-centric,andvalue-centricway.Theprevailinglinearframeworkforhowbusinessescreate,deliver,andcapturevaluenolongermeetschangingcustomerexpectations(Reimetal.,2015).Forexample,thelackofcustomerinsightsduringtheuseanddisposalphaseoftheproductlifecyclehindersahigherdegreeofsuccessfulcustomer-centricproductinnovation.Withoutthisend-to-endtransparency,theneedforinnovativeproductcapabilitiesorevennewbusinessmodelstodeliverdifferentiatingvaluepropositionsbasedonanecosystemvaluestaysvague(Lockettetal.,2011;Mont,2002).Therefore,withoutaholis-ticdata-supportedviewonecosystemvalueco-creation,theestablishedlinearprice-basedPatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

475Betterdata,betterbusiness,betterlives463productmarketstrategiespreventthetransitiontowardsfunctionalvalue-basedserviceoffer-ings(GrönroosandVoima,2013).Establishingacirculareconomyrequiressynchronizedoperationswithinanindustryframe-workatamicro(singleobject),meso(symbiosisassociation),andmacro(city,region,orstate)level(Suetal.,2013).ExpandingonMoore’s(1993)description,wedefineabusinessecosys-temasacommunityoflooselycoupledindividualactors.Inthisgroupofversatileactors,thehighest-valueco-creationisbestorchestratedbyanecosystemleaderthroughaclearlydefinedsetoffocusedengagementactivities(DhanarajandParkhe,2006).Theypromotebusinesspracticestoestablishacommonviewofthesystemvaluesthatcanbecreated(NambisanandSawhney,2011).Orchestratorsprovidetheunderlyingstructuralcontinuity,commoncollabo-rationrules,andvaluesforbusinessecosystems(ThomasandAutio,2021).Theyalsoensurethatallactorsfollowthecommonlyacceptedrules.Theserulesincludefosteringaccounta-bilityamongallactorstomonitorandcontrolreputationalandethicalrisks,theimpositionofpenalties,oreventheremovalofactorsthatdonotfollowtherules(WilliamsonandDeMeyer,2012).Orchestrationalsoincludesadoptingtheholisticecosystemperspectivetoclarifytheroleofdigitalizationtoimplementacirculareconomyandservitizationinasystematicway.Coordinationofestablisheddigitalplatformsiswellunderstood,butlittleisknownabouttheinitiationphaseofinnovativeortransformativebusinessecosystems,suchasacirculareconomy.Howdotheyevolveoncestarted,whatwerekeysuccessfactors,whattimelinesdotheyacton,orwhydidtheyfail?Themechanicsofone-to-onebusinessrelationshipswithinanecosystemaredescribedingreatdetail,whileneglectingthebiggerpictureofsystemvalueco-creation.Especially,howexistingsmaller-scaleecosystemshavetoadjusttomatchmodernmacro-leveltransformations,suchasacirculareconomy,isunknown.Despitealltheacceptedbenefitsofscalabilityandreachthroughdigitalplatforms,theystillthriveoninformationasymmetriesbetweensellersandbuyers,orplatformprovidersandusers.Therefore,agreaterunderstandingisneededofhowecosystemleadersinitiatesuchevolution,andwhichmechanismstheyimplementtomakethevaluesofthecirculareconomytangible.Howdoindividualcorporationsleadecosystemtransformationbyadoptingcircularbusinesspractices?Innovativeprocessorthebusinessmodelchangesimplementedbytheecosystemleadermustbemetbyallassociatedecosystempartnersbyadjustingtheirownbusinessprocessesaccordingly(FrishammarandParida,2018).Thismayincludeupgradingthenextlevelofdigitizationanddigitalconnectivityamongecosystempartners.Thus,thedigitalandbusinessarchitectures,theaccessibility,andtheseamlesslyintegratedprocessflowsofinter-organizationalnetworksareessentialtocreatingtheintendedcompetitiveadvantagesforallinvolvedecosystempartners,includingthetargetcustomer.Thesuccessfulorchestrationofanevolvingecosystemhastoovercomeunfamiliaraspectsbetweenhighlysophisticatedandspecializedexpertsinfragmentedlinearsupplychainmodels,andseeminglyradicalideasofinexperiencedbusinessentrepreneurstestedinanexperimentalnetworkofnewpartnerships.Unlessitisaclosedproprietaryecosystem,thismeanstoconstantlydealwithflexiblemembershipmodelsofanunlimitednumberofpartnersorpotentialcompetitorswithmostlikelyconflictinginterests.Initially,theindividualinfluence,powerstructures,andtheextendedresponsibilityforthenetworkappearunclearandlimitinteresttojoinfornewentrants(WilliamsonandDeMeyer,2012).Thesedynamicsaremultipliedbystickingtothedogmaofinformationasymmetryinrejectingtheideaofopendatasharingamongecosystempartners,withoutaccessandcontroloverrelevantandavailabledata.Asaresult,governanceandoperationaredividedamongseveralplayers,executingontheirindividualtargets,ampli-PatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

476464Handbookondigitalbusinessecosystemsfyingconflictinginterests,whilelosingsightofthebiggerpictureofsuperiorvalueco-creationforcustomersandallinvolvedecosystempartners(BrynjolfssonandMcAfee,2014).SYMBIOTICREPORTINGASKEYENABLERFORNETWORKCOLLABORATIONATSCALENote:Thefigurepresentsthethreelayersofsymbioticreporting,namely:(1)agencyplatforms;(2)commoncloud-basedplatform;and(3)companyplatforms.Abbreviations:NCP:naturalcapitalprotocol;SCP:socialcapitalprotocol;GhG:greenhousegasprotocol;WRI:WorldResourceInstitute;OECD:OrganisationforEconomicCo-operationandDevelopment.Figure28.1SchematicpresentationofasymbioticreportingbusinessarchitectureThepositiveornegativeimpactofpre-financialsocialandenvironmentalactivitiesontheeconomicperformanceofindividualorganizationshasbeenextensivelystudied(EcclesandKrzus,2014;SerafeinandTrinh,2020;Ritzrau,2020;Barbyetal.,2021).However,eventhoughElkingtonin2004hadalreadypublishedaframeworkwithsevendisruptivedriverstowardsmoresustainablebusinessenvironments,verylittlebusinesstransformationhashap-penedsincethen(Elkington,2004).Weproposedigitalsymbioticreporting(inthesenseofdecisionsupportversusexternaldisclosure)platformstoevolvesustainabledigitalbusinessecosystemsasthebasisforthenextlevelofcorporateresponsibilityandvalueco-creation.Thisconsumer-andresource-centricapproachcombinescurrentbusinessmodels,materialflows,manufacturingprocesses,andimprovementstoexistingproducts,newdigitaltechnol-ogies,services,andsystemsthateffectivelycontributetoestablishingacirculareconomy.Wedefinesymbioticreportingasthemutualexchangeofmaterialdatawithinabusinessnetworktomaximizeanddistributevalueacrossallinvolvedconstituents,similartothesymbioticbenefitsofrelationshipsinbiologicalecosystemssuchascoralreefs.Thissymbioticapproachtoreportingexpandsthetraditionalviewonmaterialandfinancialstocksandflowswiththewidersocio-economicimpactsofkeystakeholdersacrosstheentirebusinessnetwork.CircularPatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

477Betterdata,betterbusiness,betterlives465businessmodels,asonetangiblebusinessmodeltransformation,deliverthissuperiorandsustainablesymbioticvalue,withinclosedloopsofinvolvedmaterials,byenablingproductstobedurable,re-manufacturable,andrecyclable.Thiswillincludeashiftawayfromthesupplyofproductstowardsproduct-servicesystems(PSSs)thatmeetconsumerneedswhileradicallyreducingthesystem’senvironmentalimpactacrossitswholelifecycle.Theimplementationofthiscollaborativeapproachcombinesfivebuildingblocksofdataandgovernancepro-cessescomingfromindividualcorporationswithinthenetwork,complementedwithexternalsocio-economicdatafromagencies(Figure28.1).Thisdataandtheassociatedprocessingactivitiesaredistributedandmanagedacrossthreeconnectedandintegratedplatformlayersatcorporates,governmentalagencies,andscientificinstitutions,andthecentralsymbioticcommoncloud-basedplatform.Thedatatransferismanagedbyopenapplicationinterfaces(APIs).Thelicensingandownershipforproceduresandcalculationalgorithmsshouldfollowtheideaofcreativecommons.Theownershipofthegovernmentalagencyandscientificdatamaydependonthebusinessmodelofthesecontributors.Corporatedataareviewedasproprietary.Thecoreofasymbioticreportingbusinessarchitectureisacloud-basedplatform,whichservesasahubtocollect,transform,aggregate,calculate,exchange,anddisplaycommonlyagreedandessentialbusinessdatainaso-called“datalake.”Thedatalakeisconstantlyupdatedwithsocial,economic,andenvironmentaldatainputfromcorporates,acceptedgov-ernmentagencies,andscientificinstitutions.Alongwithamutuallyagreedminimumsetofinformationrequiredbyallcontributors,otherkeysuccessfactorsareaccepted,harmonized,andstandardizeddatadefinitionsandcalculationmethods.Withinthecommoncloud-basedplatform,incomingdataisqualitychecked,consolidated,andnormalized.Thecloud-basedsymbioticreportingplatformisconnectedtocompanyplatforms,receivingupdatesofrel-evantproprietarydataandreturningessentialbusinessinformationtocontributetovalueco-creation.Thisallowsbothacompany-internalimpactmeasurementandamulti-sidedbenchmarkingamongnetworkpartners.Thecommonlyagreedsetofsymbioticdataalsohelpsgovernmentalagenciesandscientificinstitutionsimprovethequalityandtimelinessoftheirsocio-economicbaselinedatatosupportmacroeconomicguidanceorinnovativescientificresearch,forexample,globalandindividualassessmentoftheindustrycontributiontoachiev-ingtheUnitedNations(UN)SustainableDevelopmentGoals.Threekeychallengesariseintheadoptionofasymbioticreportingapproach.1.Governance.Trustandreliabilityofthesymbioticreportingishighlydependentontheestablishedandacceptedgovernancestructure.Inthebestcasescenario,anindependentorganizationensuresorevenauditscompliancetodatasecurityandprivacyregulations,assurescorrectnessandtimelinessofthecollectionprocessandthepublisheddataitself.Itorganizesregularupdates,grantsaccesstothedata,andpreventsmisuseofthedataasacommongood.2.Ownership.Toadvancethecauseofasustainableandequal-opportunityeconomywithintheplanetaryboundariesthroughsymbioticreporting,therelevantdatashouldbetreatedasacommongoodwithoutanyfinancialinterestorbenefitofdataownership.Thecopy-rightmodelofthecreativecommonscouldbeaviableapproachtomakethematerialinfor-mationaccessibletoeveryorganizationthatcanconstitutepublicinterest.ContributingtoachievingtheUNSustainableDevelopmentGoalswouldconstitutesuchpublicinterest.PatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

478466Handbookondigitalbusinessecosystems3.Operations.Despitehighinterestandinvestmentsintopilotprojects,manynetworkorplatformapproachesfailduetolackingagreementongovernanceandcostofongoinginfrastructureoperations.Therefore,incombinationwithgovernanceanddataownership,theoperationsofsymbioticreportingcouldberunbyanindependentglobalagencyandbefundedthroughgovernmentalcontributionscomplementedbypay-per-usefeesfromcom-panies.Corporatesbenefitfromavailabledatatosecureeconomicviabilitybyreducingrisk,meetingcompliancerequirements,optimizingresourceproductivity,ordifferentiat-ingtheirproductstowardsconsumers.THECASEOFCIRCUNOMICS:ACIRCULARBUSINESSECOSYSTEMINTHEE-MOBILITYSECTORTheincreasingpopularityofelectricandhybridelectricvehicles(E&HEVs)requiresestab-lishingacirculareconomyapproachtoguaranteefuturesustainabilityintheautomotiveindustry(Petersetal.,2017;Richaetal.,2017;RomareandDahllöf,2017).ToacceleratetheadoptionofacirculareconomyapproachwithintheE&HEVsindustry,theeconomicandenvironmentalbenefitofferedbyre-use,remanufacturing,andrecyclingofhigh-valuecomponentsofpost-useE&HEVscanbeenabledbymutualperformancetransparency.Thefundamentalprincipleofacirculareconomyisthateveryresourcerepresentsaninherentorintrinsicvaluebeyondthecurrentwayofuse(RomareandDahllöf,2017).Thisvaluecanonlybecreated,maintained,andfinallyretrievedbyfosteringcollaborationwithinbusinessecosystems(RomareandDahllöf,2017).Automotivesupplychains,however,arehighlyfragmented(Cicconietal.,2012).Integrateddigitalsupplychainsoffersomeinformationonsustainablesourcingorecologicalfootprintsofrawmaterialsandcomponentsintheupstreamsupplychain.Incontrast,verylittledataiscollectedduringtheusephaseofaproducttosteeritslifecycle(Ahmadietal.,2015).Crucialinformationonavailability,quantity,andqualityofpost-usecomponentstoextendresourcevalueintheformofreusable,remanufactured,andrecycledpartsisonlypartiallyavailabletoselectedsupplychainplayers(Ellingsenetal.,2013).Controllingthereputationalorcomplianceriskduetoincreasingdemandsforessentialandscarceconflictminerals,suchascobaltorgraphiteinvehiclebatteries,requiresseamlesstransparencyonsustainablesourcingpractices,toavoidtheriskofchildlabor,ensureenvi-ronmentallycompliantmining,andsafeguardlivingconditionsoflocalcommunities(Faberetal.,2017;Golroudbaryetal.,2019;Kimetal.,2016;O’Driscoll,2017).Currently,high-valuecomponentsarenotselectivelyrecovered,butentertheundifferentiatedflowofautomotivewastethatisrecycledaftertheremovalofhazardouscomponentsthroughshreddingandchemicalprocesses(CiezandWhitacre,2019;Daietal.,2017;Dunnetal.,2014;Richaetal.,2017).ThebatteryrepresentsthecomponentwiththehighestrelevanceforcircularvaluecreationwithinE&HEVs,asitmakesup40percentofthetotalcostsofthecar(Engeletal.,2019).UsedE&HEVbatteriesstillprovidesignificantintrinsicvalueforusecaseswithlowercapacityorperformancerequirements,suchasdecentralizedsmartgridsstorageoffluctuatingrenewableenergygeneration,ruraloff-gridapplications,smallstoragesystemsforhouseholdapplications,andenergyback-upsystems(Ahmadietal.,2015;Casalsetal.,2015;Cicconietal.,2012;Richaetal.,2017;RomareandDahllöf,2017).Oncebatteriesreachtheirendofper-formancerequirementsevenatlow-performanceapplications,controlledrecyclingcanextracttheintrinsicvalueofrawmaterials.Therawmaterialvalueinan89kWhnickelmanganesePatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

479Betterdata,betterbusiness,betterlives467cobaltoxide(NMC)batteryisstillworthupto€4000(Yinetal.,2019).Onceabatteryendsitsfirstlifeuse,thefollowingstrategiestoguaranteecircularprinciplesandmaintaintheintrinsicvalueoftheEVbatteryshouldbeenabledbymutualtransparency(RomareandDahllöf,2017;Ahmadietal.,2015;Casalsetal.,2015;Cicconietal.,2012):1.BatteryreusedasawholeinE&HEVs,wherethebatteryisingoodcondition,salvagedfromvehiclesinvolvedinanaccident.2.BatteryreusedtoproducecomponentsforbatterypacksforE&HEVs,wheresomeintegercomponentscanbereused.3.Batteryremanufacturedtoproduceabatteryforaseconduseinotherapplications,suchasasmartgridforwindorsolarenergyinthebusiness-to-business(B2B)sector,ormicrohouseholdstorageandenergybackupsystemsinthebusiness-to-customer(B2C)sector.4.Batteryselectivelyrecycledtorecovervaluablematerialsthroughoptimizedshreddingandchemicaltechnologies.Circunomics,acloud-basedInternetofThings(IoT)circularityplatform,allowstheexecutionofstrategiestopreserveadvancedandhigh-valueE&HEVbatterycomponentsandmate-rials,whoseresidualvalueattheendoflife(EOL)isstillsignificant(Chohan,2018).ViaCircunomics,€13900per89kWhNMClithium-ionbatteryofmutualvalueisgeneratedanddistributedthroughoutthebusinessecosystem(Daietal.,2017).Thetotalenvironmentalandsocietalfootprintofthebatteriescanbemeasured,mitigated,andcompensatedaccordingtoindustrystandards(Daietal.,2017;Dunnetal.,2014).Byextendinganelectricvehicle(EV)battery’slifeintoasecondlifeapplication,thetotalcarbonlifecyclefootprintcanbereducedbyupto50percent(Kimetal.,2016).Circunomicsintegratesrelevantkeyperformanceindi-cators(KPI)andprocessesofeveryactorofthesupplychain,enablingmutualvaluecreation,maintenance,anddistributionwithinthedigitalbusinessecosystem.ThegathereddataisprocessedbymutualalgorithmsandreportstowardsasharedKPIframework.Collecteddataandderivedinsightsareusedtooptimizeinter-networkprocesses.Inputandoutputfactorsaretrackedthroughouttheassetlifecycle.Assetretirementstrategiesandprocessescanbesteered.Thebusinessprocessescanbeadaptedtosupporttheassetmanagementofanyphys-icalproduct(Figure28.2).Thedigitalplatformimplementedmutualdecision-makingoveranentireE&EHVbatterylifecycle(Circunomics,2020).Thedrivingforcefortheimplementationofthisnewwayofnetworkcollaborationwastheoriginalequipmentmanufacturer(OEM),whichatthetimewasanticipatingstricterglobalbatteryregulation.Alongwiththisindividualecosystem,industrypeergroupssuchastheGlobalBatteryAlliancearenowseekingtostandardizetransparencypracticeswithintheirindustrynetwork(RitzrauandSchmid,2018).Bycombiningdataofconnectedbatteriesandcontextualdata,Circunomicsenablesanentirebatteryecosystemtooperateuponcirculareconomyprinciples.Actorswithinthebusinessecosystemarecollab-orativelysharingrelevantassetandprocessdatathroughouttheentireassetlifecycle.Everyactorbenefitsfromadoptingamutualreportingapproach.Bodiesoflegislationareenabledtomonitortheenvironmentalandsocialimpactsofvaluesystems.Suppliersgainbetterproductdatathroughoutthetotallifecycle.OEMsreceiveperformancedataontheirproductswhiletheyareinuse,enablingreal-timeandfact-basedoptimization.Moreover,productswithrelia-bleperformancecreatehigherrevenueinsecondarymarkets.Insuranceandlogisticsproviderscreateattractivedata-basedofferings.Recyclersandwastemanagersplanandoptimizetheirplantutilizationbasedonpredictivedataofrawmaterialfeedstockextractedfromend-of-lifePatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

480468Handbookondigitalbusinessecosystemsproducts;remanufacturersandrefurbishersmatchfuturedemandbypredictingthequantityandqualityofproductsavailabletosecond-lifemarketsbasedondatafromincomingfeed-stock.Theriskofcompliantandfairupstreamsupplychainsfromextraction,smelterintothebatteryproductioniscontrolled.Demandandsupplyofbatteriesduringtheirvariousfirstorsecondlifeusephasesisfullymatched.Thefinancialvalueofinvolvedrawmaterialsalongtheentirelifecycleistransparenttoallparticipatingactors.Note:Informationismutuallycollectedviabothphysicalanddigitalinterfacesandtransmittedtoasharedcloudplatform.Figure28.2SymbioticreportingplatformsupportingbusinessprocesseswithinamutualautomotivebusinessecosystemDISCUSSIONInorderfordigitalbusinessecosystemstobegintoefficientlyexecutecircularsolutions,basedonouranalysis,severalpreconditionsmustbeinplace.First,unlockingprofitablebusinesscasesbynetworkeffects.Afundamentalsuccessfactorforanacceptedplatformwillbetan-giblebusinesscasesforallactors(FrishammarandParida,2018).Theseprofitablebusinesscasesrequireallinvolvedbusinesspartnerstobeintegratedintoanetworkofvalueco-creationtomutuallysharerelevantdataresolvingtheindividualcontributiontrade-offs.Platformsalsorequireacriticalmassofactorsandtransactionvolumetobeeconomicallyattractiveandbecomebusiness-relevant.Actorswillonlyparticipate—andthereforegeneratenetworkeffects—iftheexpectedbusinessbenefitsarepredictableandprofitable.Oncenewaccountingframeworksmandateinternalizationofexternalities,thesemutualbusinesscasesofcircularitywillevenbestrengthened.Second,breakingupinformationasymmetries.Materialandfinancialflowsmustbeeasilyidentifiable,traceable,andpredictable.Extensivedataonthematerialspecificationwillovercomeobstructiveinformationasymmetriesandreducetransactionandsearchcostsincircularmarkets.Ideally,thiswillbenefiteconomicreturns,reducetheenvironmentalfoot-print,andimproveresourcequality(Berkhoutetal.,2000;Binswanger,2001).InstandardizedPatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

481Betterdata,betterbusiness,betterlives469cyber-physicalsystems,productscancontinuouslytransferperformancethroughouttheirlifecycleintocloud-enabledsupplychainsoftware(Ritzrau,2017).Third,ensuringinformationreliabilitybystandardizedalgorithms,infrastructure,anddatainterfaces.Onlywithreliabledataqualitydobusinesstransactionsbecomerobustandeffi-cient.Agreedstandardsandproceduresmakeinformationcomparableandtransferable,andensurethatallnecessaryinformationiscreatedandprocessedatalllifecyclestages.Potentialconstraintsofvalueco-creation,suchasavailablerecyclingcapacity,mustbeholisticallyassessedandmitigatedtoensureseamlesscircularityexecution.Finally,becausealgorithmsarealwayssubjecttoerrors,particularlyinearlyanalyticalphases,themutualplatformrequireslearningflexibilityanderrortolerance.Tolimitbusinessriskduringtheramp-upphaseofthenetwork,possiblesourcesoferrorswillbeidentifiedandeliminated,reducingtheasymmetryofknowledgeandcontinuouslypromotingfurthernetworklearning(Ross,2016).Fourth,establishingdatasecurityandpreventingviolationorlossofintellectualproperty.Thefearofdatapiracy,infringementorlossofpropertyrights,andexternalthreatssuchashacking,areamongthemajorbarrierstotheuptakeofmutualdigitalplatforms.Uncontrolledaccesstospecificationsofsecondarymaterialsandcomponentsposestheessentialriskofintellectualpropertyinfringements.Themutualtrustfulcollaborationdependsonacommonunderstandingandagreementonrelevantinformationtovalueco-creation,andwhichinfor-mationwillstayproprietaryorsecret(McAfeeandBrynjolfsson,2017).Theplatformmustenabletheexchangeofrequiredprivilegedinformationbetweensomeecosystemparticipants,whilethisinformationstaysinaccessibletootherswhoarenotdirectlyinvolvedinthesespe-cificprocesssteps.Ensuringanonymityandtheuseofcryptographicmethodsforthispurposecanbeaparticularstrategicbenefitofdigitaltechnologiesfortherealizationofcirculareconomymarkets.Distributedledgertechnologyforcontractdocumentationandcompliance,aswellasinformationencryption,aredesignedtoprovidesolutionsthatarebestsuitedtothiscircularmarketoperations.Fifth,executingcompliantandsecuretrading.Designingandimplementingapplicableandexistinglegalandregulatoryframeworksminimizestransactioncostsandsimplifiestheexecutionofcontractsandagreementswithinadigitalbusinessecosystem(WilliamsonandDeMeyer,2012).Thus,theplatformmustrecordandmonitoralltransactionstoassessanddocumentthereliabilityoftheparticipants.Inthisway,alltransactionswillinherentlymeetpropercontractualandlegalcomplianceandsecuretheinterestsoftheinvolvedparties.Thecombinationofadigitalrecordandtheassociatedchangelogsimplifiesintendedaudits.CONCLUSIONThischapterhasexploredhowthetwocurrentbusinesstrendsofincreasedstakeholderexpectationstowardsgreatercorporatesocialresponsibility,andthebusinesstransformationtowardscircularvalueco-creationtominimizetheriskofresourceavailabilityandpricevolatility,canbeimplementedbyusingdigitalinnovations(BrynjolfssonandMcAfee,2014).Expandingonthecorporate-specificviewofthetriplebottomline(Elkington,2004)wepostulatethatsymbioticreportingcreatestheneededtransparencyofholisticperformancetobettersteerinternaloperations(throughmutualprofitcalculations)anddisclosecorporateimpactandvalueco-creationexternally(throughbalancedvaluecalculations).Thisnewlevelofdisclosedtransparencywillmeettherisingexpectationsofinvestorstowardsthesustain-PatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

482470Handbookondigitalbusinessecosystemsablebusinessperformanceoftheirassets(EcclesandKlimenko,2019).Also,themutualtransparencymakesthefinancialandmaterialflowswithinaresource-andconsumer-centricvalueco-creationcycletangibleandpredictableforallecosystemactors.Thiscommonandsharedviewisonefundamentalprerequisitetoimplementacircularbusinesstransformation(RitzrauandSchmid,2018).Weoutlinedtwounderlyingcoreconceptsforimplementingsustainablebusinesspracticeswithindigitalbusinessecosystems:economicsofmutualityandvaluebalancing.Combiningtheseconceptswithnewcapabilitiesofdigitization,weintroducedasymbioticreportingframeworkfordigitalbusinessecosystems.Applyingthisframeworktoaspecificusecaseofacirculareconomy,weexplainedtheinteractionofneces-sarybusinessprocesstransformationandsimplerdecision-makingthroughthesymbioticuseofdataanddigitization.Analyzingthelifecycleofelectricvehiclebatteries,wedemonstratedhowdigitizationhelpstoimplementholisticandfuture-orientedcollaborationasthebasisfortheadoptionofcircularvalueco-creationindigitallyconnectedbusinessecosystems.Weidentifiedgovernance,ownership,andoperationsasthekeychallengesfortheadoptionofsymbioticreportingpractices.Symbioticreportingplatformscreatetherequiredtransparencyoftangiblemutualandindividualeconomicbenefitstoincentivizeparticipationinadigitallyenabledtrust-basedbusinessecosystem.Itservesasanexampleofanewmarketplaceofcer-tifiedreusable,remanufacturedcomponentsandrecycledrawmaterials,notonlyforpreciousE&EHVcomponents,butalsoforothersupplychainsofhigh-valueassets.Transparencyofavailability,quantity,andqualityofsecondaryfeedstockmaterialswillreducepotentialsupplyshortagesoffinitenaturalresourcesandthushelptocontroltheriskofrawmaterialpricevolatility.Thiswillsubsequentlyimpactthepricepoliciesforhigh-valueitems,andinourspecificexampleallowsthereductionoftheEVbatterycostovertime.Itreducesuncer-taintyaboutthecapacityandperformanceofpost-usedparts,sincetheirusephasewillbewelldocumented.Itfurtherreducesmarketrisk,sincethereusevaluechainwillbetriggeredandwillplanactivitiesaccordingtotheeffectivemarketdemandforspecificparts.Finally,symbi-oticreportingenablesatransformationfromthenon-sustainableestablished“take,make,use,waste”paradigmtowardstransparentreuseandpost-usematerialflow,byprovidingreliablequantitiesandqualitiesofsecondaryfeedstockasacost-efficientsupplyalternativetofiniterawmaterials.Thischapterhassomelimitations.Althoughwehavebuiltourmodelonexistingtheoreticalfoundationsandlong-termknowledgeofindividualcasestudies,boththetheoreticalfounda-tionsandtheempiricalfindingsareinanearlyphase.Weencourageresearcherstoexpandsystematicliteraturereviewsandempiricalstudiestoexploretheadoptionofmutualreportingpracticesasthebasisforresponsiblebusinessmodeltransformations.Wehopetoinspirebothscholarsandpractitionerstoexplore,assess,andadoptthepotentialofsymbioticreportingasameanstoextendintra-firmreportingtowardsaninter-firmvalueco-creationtool.Webelievethatthiswayofvalueco-creationanddistributionappliestoabroadspectrumofcross-industryinteractionsforproductsandservices(forexample,energy,mobility,textiles,andothers)involvingmultipleresearchdisciplines(forexample,informationtechnology,behavioraleconomics,managementscienceincludingaccounting,supplychainmanagement,andgovernance).Thisinterdisciplinaryapproachwilluncovernewopportunitiestooptimizestocksandflowsofresourcesandfinanceincircularbusinessecosystems,toovercomethemythsagainstcircularbusinessmodels,andacceleratetheemergenceofcollaborationplat-formsforopeninnovationleveraginginnovativetechnicalcapabilities.PatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

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485Betterdata,betterbusiness,betterlives473Lyle,J.,1994.RegenerativeDesignForSustainableDevelopment.NewYork:Wiley.McAfee,A.andBrynjolfsson,E.,2016.Humanworkintheroboticfuture:policyfortheageofautoma-tion.ForeignAffairs,July/August.McAfee,A.,andBrynjolfsson,E.,2017.Machine,Platform,Crowd:HarnessingourDigitalFuture.NewYork:WWNorton&Company.McDonough,W.,andBraungart,M.,2013.TheUpcycle:BeyondSustainability—DesigningforAbundance.NewYork:NorthPointPress.Mont,O.,2002.Clarifyingtheconceptofproduct–servicesystem.JournalofCleanerProduction,10(3),pp.237–245.Moore,J.F.,1993.Predatorsandprey:anewecologyofcompetition.HarvardBusinessReview,71(3),pp.75–86.Nambisan,S.,2016.Digitalentrepreneurship:towardadigitaltechnologyperspectiveofentrepreneur-ship.EntrepreneurshipTheoryandPractice,41(6),pp.1029–1055.Nambisan,S.andSawhney,M.,2011.Orchestrationprocessesinnetwork-centricinnovation:evidencefromthefield.AcademyofManagementPerspectives,25(3),pp.40–57.Neligan,A.andSchmitz,E.,2017.DigitaleStrategienfürmehrMaterialeffizienzinderIndustrie:ErgebnisseausdemIW-Zukunftspanel(No.3/2017).IW-Report.O’Driscoll,D.,2017.Overviewofchildlabourintheartisanalandsmall-scaleminingsectorinAsiaandAfrica.K4DHelpdeskReport.Brighton:InstituteofDevelopmentStudies.OECD,2005.Improvingrecyclingmarkets.WorkingGrouponWastePreventionandRecycling.OECD,2007.Improvingrecyclingmarkets.PolicyBrief,OECDObserver,January.Okorie,O.,Salonitis,K.,Charnley,F.,Moreno,M.,Turner,C.andTiwari,A.,2018.Digitisationandthecirculareconomy:areviewofcurrentresearchandfuturetrends.Energies,11(11),p.3009.Parker,G.,VanAlstyne,M.andChoudary,S.,2016.PlatformRevolution.NewYork:W.W.Norton&Company.Peters,J.,Baumann,M.,Zimmermann,B.,Braun,J.andWeil,M.,2017.TheenvironmentalimpactofLi-Ionbatteriesandtheroleofkeyparameters—areview.RenewableandSustainableEnergyReviews,67,pp.491–506.Reim,W.,Parida,V.andÖrtqvist,D.,2015.Product–servicesystems(PSS)businessmodelsandtactics—asystematicliteraturereview.JournalofCleanerProduction,97,pp.61–75.Richa,K.,Babbitt,C.andGaustad,G.,2017.Eco‐efficiencyanalysisofalithium‐ionbatterywastehierarchyinspiredbycirculareconomy.JournalofIndustrialEcology,21(3),pp.715–730.Ritzrau,W.,2017.EinenachhaltigeStrategiebeiSAP.In:ThomasWunder(ed.),CSRundStrategischesManagement.Management-ReiheCorporateSocialResponsibility.BerlinandHeidelberg:SpringerGabler.https://doi.org/10.1007/978-3-662-49457-8_11.Ritzrau,W.,2020.NachhaltigkeitdurchDigitalisierungamBeispielvonSAP.InH.Kminek,F.BankandL.Fuchs(eds),KontroversesMiteinander,InterdisziplinäreundkontroversePositionenzurBildungfüreinenachhaltigeEntwicklung.Frankfurt:Goethe-Universität,pp.33‒55.Availableat:https://www.researchgate.net/profile/Helge-Kminek/publication/343281382_Kontroverses_Miteinander_-_Interdisziplinare_und_kontroverse_Positionen_zur_Bildung_fur_eine_nachhaltige_Entwicklung/links/5f213a1b45851515ef52d938/Kontroverses-Miteinander-Interdisziplinaere-und-kontroverse-Positionen-zur-Bildung-fuer-eine-nachhaltige-Entwicklung.pdf(accessedNovember17,2021).Ritzrau,W.andSchmid,D.,2018.Whythecirculareconomymustlinkupthewholesupplychain.WorldEconomicForum.AccessedJune29,2021at:https://www.weforum.org/agenda/2018/09/why-the-circular-economy-needs-to-link-up-the-whole-supply-chain/.Roche,B.,Jakub,J.,Mayer,C.,andRadvan,M.,2017.CompletingCapitalism:HealBusinesstoHealtheWorld.Oakland,CA:Berrett-KoehlerPublishers.Romare,M.andDahllöf,L.,2017.Thelifecycleenergyconsumptionandgreenhousegasemissionsfromlithium-ionbatteries.IVLSvenskaMiljöinstitutet.RönnbergSjödin,D.,Parida,V.andWincent,J.,2016.Valueco-creationprocessofintegratedproduct-services:effectofroleambiguitiesandrelationalcopingstrategies.IndustrialMarketingManagement,56,pp.108–119.Ross,A.,2016.TheIndustriesoftheFuture.NewYork:Simon&Schuster.PatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

486474HandbookondigitalbusinessecosystemsSandberg,J.,Holmstrom,J.andLyytinen,K.,2020.Digitizationandphasetransitionsinplatformorganizinglogics:evidencefromtheprocessautomationindustry.MISQuarterly,44(1),pp.129–153.Sanyé-Mengual,E.,Secchi,M.,Corrado,S.,Beylot,A.,andSala,S.,2019.AssessingthedecouplingofeconomicgrowthfromenvironmentalimpactsintheEuropeanUnion:aconsumption-basedapproach.JournalofCleanerProduction,236,117535.Schreieck,M.,Wiesche,M.andKrcmar,H.,2016.Designandgovernanceofplatformecosystems—keyconceptsandissuesforfutureresearch.In:Twenty-FourthEuropeanConferenceonInformationSystems(ECIS).Istanbul.Serafeim,G.,andTrinh,K.,2020.Aframeworkforproductimpact-weightedaccounts.Impact-WeightedAccountsResearchReport.HarvardBusinessSchoolAccountingandManagementUnitWorkingPaper(20-076).Storbacka,K.,2011.Asolutionbusinessmodel:capabilitiesandmanagementpracticesforintegratedsolutions.IndustrialMarketingManagement,40(5),pp.699–711.Su,B.,Heshmati,A.,Geng,Y.andYu,X.,2013.AreviewofthecirculareconomyinChina:movingfromrhetorictoimplementation.JournalofCleanerProduction,42,pp.215–227.Thomas,L.andAutio,E.,2021.Emergentequifinality:anempiricalanalysisofecosystemcreationprocesses.In:35thDRUIDCelebrationConference.Barcelona.Tiwana,A.,2014.PlatformEcosystems:AligningArchitecture,Governance,andStrategy.Waltham,MA:MorganKaufmann.https://doi.org/10.1016/C2012-0-06625-2.Tuli,K.,Kohli,A.andBharadwaj,S.,2007.Rethinkingcustomersolutions:fromproductbundlestorelationalprocesses.JournalofMarketing,71(3),pp.1–17.ValueBalancingAlliance.2021.Howvaluebalancinghasanimpactoncreatingabetterfuture.AccessedJune29,2021at:https://www.value-balancing.com/general/interview-with-christian-heller/.West,J.andWood,D.,2013.EvolvinganOpenEcosystem:TheRiseandFalloftheSymbianPlatform.Bingley:Emerald.Williamson,P.andDeMeyer,A.,2012.Ecosystemadvantage:howtosuccessfullyharnessthepowerofpartners.CaliforniaManagementReview,55(1),pp.24–46.Wilts,H.,2016.GermanyontheRoadtoaCircularEconomy?Berlin:Friedrich-Ebert-Stiftung,DivisionforEconomicandSocialPolicy.Yin,R.,Hu,S.andYang,Y.,2019.Lifecycleinventoriesofthecommonlyusedmaterialsforlithium-ionbatteriesinChina.JournalofCleanerProduction,227,pp.960–971.Yoo,Y.,Boland,R.,Lyytinen,K.andMajchrzak,A.,2012.Organizingforinnovationinthedigitizedworld.OrganizationScience,23(5),pp.1398–1408.PatrickPeterandWillRitzrau-9781839107191DownloadedfromPubFactoryat05/28/202210:25:54AMviaColumbiaUniversityLibrary

48729.Conceptualizingsmart-circularproduct-serviceecosystemsforthephotovoltaicpowerindustryVerenaLuisaAufderheide,LauraMontag,andMarionStevenINTRODUCTIONInordertolimittheglobalaveragetemperaturerisetonomorethan1.5°Cabovepre-industriallevelsuntil2050,majorchangesinallsectorsareneeded.Withnearlytwo-thirdsofglobalgreenhousegasemissionsresultingfromenergyproductionanduse,theenergysystemrequiresarapidtransitiontorenewableenergy(IRENA,2018).Althoughtheshareofrenew-ablepowerintheenergygenerationhasdoubledwithinthelastdecade(Statista,2021b),thegrowthofrenewablesmustneverthelessconsiderablyacceleratetomakeupashareofuptotwo-thirdsofenergyproductionby2050(IRENA,2018).Solarpowercanplayavitalroleinthisenergytransition.Thephotovoltaic(PV)markethasseenasignificantgrowthwithinthelastyears:in2019,nearly100GWgenerationcapacitywasnewlyinstalledglobally,morethanallotherrenewablesourcescombined(IRENA,2020;Statista,2021a).Despiteitspotentialtopushthetransitionoftheenergysystemtowardalow-carbonone,PVfacesmajorsustainabilitychallenges:withthegrowingvolumeofinstalledPVpanels,thevolumeofdiscardedend-of-life(EOL)moduleswillincreaseaswell(StrupeitandBocken,2019).Withanaveragemodulelifespanof30years,EOLmanagementmaynotseemtobeamajorproblemrightnow,butitisprojectedthatthecumulativePVpanelwastestreamwillreachupto8milliontonsby2030andthenincreasealmosttenfoldby2050upto78milliontons(IRENAandIEA-PVPS,2016).Consequently,aninnovativebusinessmodelisneededthatcanhelptoincreasethetotalPVmarketdemandandacceleratethegrowthofthesolarpowershareofenergyproduction,whileatthesametimeaddressingandsolvingtheemergingenvironmentalchallengesoftheEOLmanagementofPVpanels.Service-basedbusinessmodels,orso-calledproduct-servicesystems(PSSs),canactaskeyenablerforthewidespreadinstallationofPVpanelsbyofferingaccesstosolarpowerasaserviceratherthanasaproduct(Overholm,2015b).Thisinnovativebusinessmodelopensupanewmassmarketbyremovingthemajor,customer-sitedbarriers:highupfrontinvest-mentcosts,effortsinselectingandinstallingtherighttechnology,andtheresponsibilityforlong-termoperationandmaintenance(HorváthandSzabó,2018;Overholm,2015a).Apartfromthis,PSSbusinessmodelshavethepotentialtoenableefficientEOLmanagementandtocatalyzethetransitionfromlineartocircularbusinessactivities(Bockenetal.,2016;Tukker,2015).SincethePSSproviderremainstheownerofthePVpanel,higherreturnrates,collec-tion,recycling,andothercircularprocessesareenabled(Salimetal.,2019).WithinthePVpowerindustry,boththetransitiontowardcircularityandPSSsrequireradicalandfundamentalchangesinthebusinessmodelandbusinessactivities(Bockenetal.,2016;Tukker,2015).Inordertoimplementthesenewwaysofdoingbusiness,awiderperspectivethanjustaproductorsinglebusinessmodelperspectiveisneeded(Konietzko475VerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

488476Handbookondigitalbusinessecosystemsetal.,2020).Theecosystemperspectivegoesbeyondthatnarrowperspectiveandpresentsanew,integrativeviewofvalueco-creationfrommultiple,collaboratingactors(Adner,2017;Jacobidesetal.,2018).Inrecentyears,thedigitalbusinessecosystem(DBE)hasemergedasanewandinterestingresearchfield,promptingworkinexploringtechnologicaladvancementsinvalueco-creation(Rezac,2020).AlthoughboththebusinessecosystemperspectiveandPSSbusinessmodelshavebeenstudiedindividually(Humbecketal.,2019),sufficientcombinedresearchisstilllackingintheacademicliterature(Yinetal.,2020).Inresponsetothisresearchgap,theobjectiveofthischapteristoinvestigatetheinnovativebusinessmodelofsmart-circularproduct-serviceecosystems(SCPSEs)inthePVpowerindustry,basedontheworkofAlcayagaetal.(2019).Figure29.1illustratestheunderlyingresearchframeworkaslyingattheintersectionbetweentheresearchstreamsofPSSbusinessmodels,DBE,andthePVpowerindustry.Thisinvesti-gationisguidedbythefollowingresearchquestions:HowshouldtheDBEbecharacterizedinordertosuccessfullyimplementsmart-circularproduct-servicesforPVpanels?Whatarethemainvaluecontributionsofthekeyactorswithintheecosystem?Whatstrategiesandtasksdotheyperform?Figure29.1ResearchframeworkVerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

489Conceptualizingsmart-circularproduct-serviceecosystems477Thischapterisstructuredasfollows.Thefollowingsectionsprovidethetheoreticalback-groundontheDBEconceptaswellasonthedevelopmentsofthePSSbusinessmodel.ThechapterthenconcentratesonSCPSEs,andfirstexplainshowtheDBEneedstobespecified,beforeanalyzingthekeyactorsindetail.Finally,themainresultsaresummarizedandabriefoutlookonfutureresearchopportunitiesisgiven.DIGITALBUSINESSECOSYSTEMSAlthoughtheecosystemconcepthasbeenconsideredinthebusinessandmanagementliteratureforsometimenow(Moore,1993;Jacobidesetal.,2018),therehasbeenarecentsignificantincreaseinpublications(Rezac,2020;Kapoor,2018):since2016,thenumberofpeer-reviewedarticlesdealingwiththeecosystem,thebusinessecosystem,aswellastheDBEconcepthasmorethandoubled.Despitethisboom,theresearchfieldischaracterizedbyaratherambiguousunderstandingandthereforesuffersfromalackofconceptualconsensus(Rezac,2020;Kapoor,2018).Thischapteraimstoshedlightonthedifferentresearchstreamsaswellastocontributetothebodyofknowledgeinthisfield.Theterm“ecosystem”originallystemsfromthenaturalsciencesandreferstothevariousnaturalecosystemsinwhichorganismswithvaryingcomplementaritiesinteractwithoneanotherincomplexways.TheearliestandmostprominentconceptualizationofthisterminamanagerialcontextwascoinedbyJamesF.Moorein1993,whostatedthatina“businessecosystem,companiesco-evolvecapabilitiesaroundanewinnovation”(Moore,1993,p.76).Withinthisbusinessecosystem,looselycoupledorganizationsworktogethernotonlycoop-erativelybutalsocompetitivelyinaneconomiccommunitytoproducegoodsandfulfillcus-tomers’needs(Moore,1993).InMoore’sunderstanding,acompanycanneverbeamemberofonlyasingleindustry,butisratherapartofanecosystemstretchingoverarangeofindustries.Adecadelater,IansitiandLevienprovidedanotherconceptualizationthatemphasizesthedependencieswithinabusinessecosystem,statingthatastheinteractionbetweencompaniesinanecosystemishighlycomplex,thehealthandperformanceofthewholesystemdependsonthehealthandperformanceofeachindividualcompany,andviceversa(IansitiandLevien,2004).Thisdefinitionstressesthecomplexitybusinessecosystemsface.TwomorerecentconceptualizationshavebeenproposedbythedefinitionsandresearchperspectivesofAdner(2017)andJacobidesetal.(2018).Thefirstdifferentiatesbetweentheecosystemasanaffiliation–whichreferstotheunderstandingofMooreandofIansitiandLevien–andtheecosystemasastructure,whichplacesthevaluepropositionatthecoreoftheecosystem(Adner,2017).AccordingtoAdner,theecosystem’sconfigurationisbasedonfourbasicelements:itsactivities,actors,positions,andlinks.Basically,dependingontheapproach,thefocusisoneithertheecosystem’sactorsortheecosystem’sactivities.Jacobidesetal.(2018)focusontheemergenceanddynamicsofecosystemsandproposethreedistinctivecharacteristics,namely:multilateral,non-genericcomplementarities–whicharebasedonasetofrolesthatlinkactorswithintheecosystem–andtheabsenceofunilateralhierarchicalcontrol(Jacobidesetal.,2018).Intheirview,thevaluecreationwithinanecosystemisgreaterthanwhatanindividualentitycouldcreate(Jacobidesetal.,2018;Rezac,2020).Drivenbytherapidpaceoftechnologicalprogressineveryaspectofbusiness,theresearchfocushasshiftedtothenewlyemergedfieldofdigital(business)ecosystems,whichaddsadigitalcomponenttothe(business)ecosystemconcept(Rezac,2020).Senyoetal.(2019)VerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

490478HandbookondigitalbusinessecosystemsTable29.1KeydefinitionsontheecosystemconceptConceptDefinitionAuthor(s)Ecosystem“TheecosystemisdefinedbythealignmentstructureofthemultilateralsetofpartnersAdner(2017)thatneedtointeractinorderforafocalvaluepropositiontomaterialize.”[p.42]“Anecosystemisasetofactorswithvaryingdegreesofmultilateral,nongenericJacobidesetal.(2018)complementaritiesthatarenotfullyhierarchicallycontrolled.”[p.2264]Business“Inabusinessecosystem,companiesco-evolvecapabilitiesaroundanewinnovation:Moore(1993)Ecosystemtheyworkcooperativelyandcompetitivelytosupportnewproducts,satisfycustomerneeds,andeventuallyincorporatethenextroundofinnovation.”[p.76]“These[businessecosystems]loosenetworks–ofsuppliers,distributors,outsourcingIansitiandLevienfirms,makersofrelatedproductsorservices,technologyproviders,andahostofother(2004)organization–affect,andareaffectedby,thecreationanddeliveryofacompany’sownofferings…Ifthe[business]ecosystemishealthy,individualparticipantswillthrive,iftheecosystemisunhealthy,individualparticipantswillsuffer.”[p.1/5]Digital“AdigitalecosystemcanbeunderstoodasanetworkofcompaniesandotherinstitutionsKocheandEcosystemthatisinter-linkedbyacommoninteresttocreateandsustainvaluearoundadigitalWindsperger(2017)platform.”[p.2]“Focusingmorenarrowlyondigitalecosystems–whichconsistofinteractingJacobides(2019)organizationsthataredigitallyconnectedandenabledbymodularity,andarenotmanagedbyhierarchicalauthority(likeinasupplychain).”[p.14]DigitalBusiness“[W]edefineDBEasasocio-technicalenvironmentofindividuals,organisationsandSenyoetal.(2019)Ecosystemdigitaltechnologieswithcollaborativeandcompetitiverelationshipstoco-createvaluethroughshareddigitalplatforms.”[p.53]“Thedigitalbusinessecosystem,isa‘digitalenvironment’populatedby‘digitalspecies’Nachira(2002)whichcouldbesoftwarecomponents,applications,services,knowledge,businessmodels,trainingmodules,contractualframeworks,laws.”[p.12]Table29.2KeycharacteristicsoftheDBEconceptKeyCharacteristicDescriptionSourceValueCo-CreationTheco-createdvaluepropositionconstitutesthegeneralgoalofthewholeAdner(2017),KapoorecosystemandisthereforeplacedattheverycoreoftheDBE.Inorder(2018),BetzandJungtomaterializethefocaloffertotheconsumer(intheformofaproduct,(2021)service,oracombination),multipleactorscollaborateinthevaluecreation.DefinedRoleTheDBEencompassesadefinedsetofactivitiesthatareundertakenIansitiandLevien(2004),Archetypesbyadefinedsetofactors.EachactorhasadifferentroleaccordingtoAdner(2017),Betzetal.itscapabilities:consumer,provider,contributor,ororchestrator.The(2019),BetzandJungorchestratorperformsthecoordinationtoenabletheDBEtofunction.(2021)Cooperation&AlltheactorscollaborateinacooperativeyetcompetitivewaytosupportMoore(1993),JacobidesetCompetitionthevalueproposition,namely,tosatisfytheconsumerneedsandeventuallyal.(2018)togenerateinnovation.Withineverystageofanecosystem,cooperativeaswellascompetitivechallengesarise.Complementarities&Despitethelackofhierarchicalorganization,theecosystem’sautonomousIansitiandLevien(2004),InterdependenciesactorsareboundtogetherthroughcomplementaritiesonaneconomiclevelJacobidesetal.(2018),andinterdependenciesonastructurallevel.Kapoor(2018),BetzandJung(2021)DigitalTechnologyDigitaltechnologyenablestheecosystembyprovidingthenecessarySenyoetal.(2019),RezacInfrastructureinfrastructure(especiallyplatforms)inordertoorchestratethecollaborative(2020)valueproposition.VerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

491Conceptualizingsmart-circularproduct-serviceecosystems479provideanextensiveliteraturereviewontheDBEresearchstream.TheysuggestthataDBEisanextensionofMoore’sbusinessecosysteminwhichdigitaltechnologyandinfrastructure,suchassoftwareapplicationsandplatformuse,playacentralrole.Table29.1summarizesimportantdefinitionsontheaforementionedconcepts,namely,ecosystem,businessecosystem,digitalecosystem,andDBE.Table29.2summarizesthekeyDBEcharacteristics,whichweredeductivelyderivedfromtheliteraturereview.ThesecharacteristicsshouldallowamoredifferentiatedunderstandingofDBEs,aswellashighlightingthedistinctionswithotherexistingconcepts.EVOLUTIONOFPRODUCT-SERVICEECOSYSTEMSDevelopmentsindigitalizationaswellasemergingandincreasingsustainabilityeffortsarechangingthewaybusinessisdone.ThesedevelopmentsalsoaffectthePSSbusinessmodel,leadingtoavarietyofdifferentadvancementsinthisfield.ThefollowingsectionfirstdescribesthetraditionalPSSbusinessmodelandthenfocusesontwomorerecentdevelopments.Product-ServiceEcosystemsAPSSisaninterrelatedcombinationofatangibleproductandanintangibleservicethattogetherincreasethecustomer’sbenefits(Goedkoopetal.,1999).TheemergenceofPSSsismotivatednotonlybyeconomicsuccessbutalsobythedesiretoobtainsustainableresourcemanagement(Reimetal.,2015).PSSscanbeclassifiedintothreedifferenttypes,namely,product-,use-,andresult-orientedsystems(TukkerandTischner,2006):●Thevalueofaproduct-orientedPSSstillliesintheproductitself.Astheownershipshiftstowardtheuser,theprovideronlyoffersadditional,product-orientedservices(forexample,maintenancecontractsorusingadvice).●Withintheuse-orientedPSS,theproductismadeavailabletotheuser,buttheownershipoftenstayswiththeprovider.Accesstotheproductisofferedthroughuse-orientedser-vices,suchasleasing,renting,orsharing(Bressanellietal.,2017).●Inaresult-orientedPSS,nopredeterminedproductisinvolved,butitisagreeduponinachievingaspecificresult.Hencethefocusisputontheservice(D’Agostinetal.,2020).UsuallyaPSSischaracterizedbyacomplexsolutioncombiningproductsandservices.Therefore,inordertocreateahighervalueforthecustomer,acooperationofdifferentactorsisrequired.Theseactorsworkcloselytogetherintheso-calledcentralproduct-serviceecosys-tem(PSE),fulfillingdifferenttasks:●Product-serviceproviders(PSPs)offeracombinationoftheproductandadditionalser-vicesofvariousPSStypes.●Customersgainvaluefromeithertheproduct,theuse,ortheresultofthePSS.●Suppliersdelivertherequiredresourcestotheproducer.●Producersmanufacturetheproduct.●DisposersareresponsiblefortheEOLactivities.VerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

492480HandbookondigitalbusinessecosystemsSmartProduct-ServiceEcosystemsAsweliveinamoreandmoredigitalera,traditionalproductsandservicesnolongerappealtocustomersasinnovativesolutions.Hence,byintegratingsmartcomponents,suchasInternetofThings(IoT)technologiesandsoftware,intoconventionalPSSs,theybecomemoreattrac-tivetocustomers.ThisbusinessmodeldevelopmentisrecognizedasasmartPSS(SPSS)(Chowdhuryetal.,2018).SPSSsoffervariousopportunitiesintermsofvaluecreation(Valenciaetal.,2015):●enhancingcommunicationbetweencustomersandproviders,butalsobetweencustomersthemselvesviaappsandplatforms;●extendingoffersofphysicalgoodsbyaddingdigitalcomponentsanddigitalservices;●empoweringcustomersbyprovidingdataaboutuse,location,andcondition;●theabilitytoindividualizeservicesthatcanbebookedviaplatforms;●introducingnewfunctionalities,services,andtoolstofacilitategrowth.Thus,digitalizationplaysacriticalroleinuse-orientedandresult-orientedSPSSs,becausethedigitalinfrastructurefacilitatestheshiftfromowningtousingor,rather,sharinggoods(Altetal.,2019).AsnewtasksariseforthePSP,itseemsreasonabletooutsourcetheservicestoaserviceprovider(SP),whoseinputexpandsthecentralPSEtoasmartPSE.AfterthePSPprovidestheSPSS,theSPisthemaincontactpersonforthecustomer.Duringtheusephase,theSP’saimistoextendthelifecycleoftheSPSSbyapplyingsmartservices,suchassmartmaintenance.Aftertheusephase,theSPdecideswhethertheSPSScanbereused,orifitshouldberepairedordisposedof.CircularProduct-ServiceEcosystemsAcirculareconomy(CE)isrestorativeandregenerativebyintention,andaimstoreplacethelinearthroughputofvirginmaterialsbyapplyingawastehierarchy,thereforeclosingtheproduction‒consumptionsystem,andpromotinghigh-valuematerialcyclingandcascadingflowsofmaterial(Bressanellietal.,2018;Korhonenetal.,2018).Itsimplementationrequiresaparadigmchangeinholisticecosystemthinkinginbothproductionandconsumption.Theintegrationofcircularthinking,activities,andstrategiesintothePSSbusinessmodelresultedinthedevelopmentofthecircularPSS(CPSS)(Michelinietal.,2017).ACPSSprovidesatangiblecircularproductwithvalue-addingandcircularserviceelements(RomeroandRossi,2017).WithinaCPSS,perhapsmorethaneverbefore,holisticecosystemthinkingisneededtosuccessfullyperformthevariouscircularbusinessstrategies(forexample,reverseflowsofrepairing,remanufacturing,andrecycling)(AlcayagaandHansen,2017;Tukker,2015).Therefore,thecentralPSEcanbeexpandedtoacircularPSEbyintegratingtwonewactors:theremanufacturerandtherecycler.Smart-CircularProduct-ServiceEcosystemsAPSSbusinessmodelthatenhancestheutilizationofsmartproductsaswellasintensifiescircularactivitiesandthereforecombinesthepreviouslypresenteddevelopmentscanbeseenVerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

493Conceptualizingsmart-circularproduct-serviceecosystems481intheframeworkofasmart-circularPSS(SCPSS)(Alcayagaetal.,2019).Duetothemul-titudeoftasksandactorsinvolvedintheprovisionofaSCPSS,theunderlyingsmartPSEisevolvingtowardthesmart-circularPSE.Throughsuccessfulsymbiosisandsynergieswithinthatsmart-circularPSE,customerscanexperiencevalueproposition,valuecreation,andvaluecaptureofatangiblesmart-circularproductalongsideanintangiblesmart-circularbundleofservices.Inthisecosystem,thealready-mentionedactorsperformdifferentsmart-circularstrategies:●Customers:smartuse,smartreuse,smartshare;●SPs:smartrepair,smartmaintenance;●remanufacturers:smartremanufacturing;●recyclers:smartrecycling.ThePSPactsastheorchestratorandcoordinatestheimplementationandrealizationofthesmart-circularPSE.However,theconvergenceofmanyactorsleadstoseveralchallengesintermsofcross-organizationalcommunicationaswellasininformationanddatasharing(Roy,2000).Forthispurpose,anewlinkingentity–aplatformoperator–providesthedigitalinfra-structureandthussupportsthePSP.Figure29.2Smart-circularproduct-serviceecosystemFigure29.2illustratesthedifferentPSEsdescribedinthissection,startingwiththecentralPSEfortraditionalPSSs,movingtothesmartPSEforSPSSs,andendingwiththeSCPSEforSCPSSs.VerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

494482HandbookondigitalbusinessecosystemsTheaforementionedDBEcharacteristicsunderlinetherelevanceofthesmart-circularPSEtotheSCPSS:●Valueco-creation:multipleactorscancollaborateinofferingacombinationofsmart-circularproductsandadditionalsmart-circularservices,whichextendtheproductlifecycleandcreateahighervalueforthecustomer.●Definedrolearchetypes:intheSCPSE,everyactorhastofulfillitsindividualtasksinlinewiththesmart-circularstrategytoprovidetheSCPSS.●Cooperationandcompetition:alltheactorspursueacommongoal(asuccessfulSCPSE),buttheyarealsoincompetitionwitheachother(forexample,recyclerversusremanufac-turerforEOLactivities).●Complementaritiesandinterdependencies:withintheSCPSE,alltheactorsareautono-mousentitiesatthesameeconomiclevel;onastructurallevel,thereexistsahierarchicalorganization(PSPastheorchestrator).●Digitaltechnologyinfrastructure:theplatformoperatorprovidesthedigitaltechnologyinfrastructuretosupportcommunication,information,anddatasharingfortheentireSCPSE.SMART-CIRCULARPRODUCT-SERVICEECOSYSTEMSFORPVPANELSToillustratethevariousinteractionsrequiredtosuccessfullyformaSCPSE,thissectionfirstexplainsthePVpanelexample,beforediscussingthreekeyDBEactorsandtheirroles,tasks,andresponsibilities.BusinessModelRegardingdifferentenergysources,PVpowersystemshavegreatpotentialformoresustaina-bility(ShihandChou,2011).Nevertheless,manycustomersdonotyetusethisformofenergyduetovariouschallengeswithinthetraditionalPVpanelbusinessmodel(Överholm,2017):●Beginning-of-life(BOL):highupfrontinvestmentcostsforthecustomer,effortsinselect-ingandprocuringtechnology.●Middle-of-life(MOL):fullresponsibilityforthelong-termoperation,maintenance,andrepair.●End-of-life(EOL):disposalactivities(reuse,remanufacture,recycle,ordiscard).AnSCPSEfacesthesechallengesbyofferingaresult-orientedSCPSStocustomers.Withinthisbusinessmodel,thePSPsellsthefunctionalityandtheresult–renewableenergy–byprovidingaleaseofPVpanelswithadditionalservicesforBOL,MOL,andEOL(Overholm,2015a):●BOL:reductionofinitialinvestmentcostsforthecustomerbypurchasingservicesinsteadofproducts.●MOL:PSPandSPtakefullresponsibilityforlong-termoperationandperformancesecu-rity,thusincreasingthecustomer’scomfort.VerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

495Conceptualizingsmart-circularproduct-serviceecosystems483●EOL:PSPensuressustainabledisposalactivities(highreuse,remanufacturing,andrecy-clingrates).Summarizing,theSCPSEoffersmanyadvantages.ThecustomerbenefitsthroughreceivingrenewableenergyatapredictablepricecomparedtothetraditionalPVbusinessmodel.ThePSPbenefitsbyhavingalong-termrelationshipwiththecustomer.Accordingly,theSCPSEhasgreatpotentialforthePVpowerindustry(Overholm,2015b).ByimplementingaPVpowersystemasanSCPSE,thePSP,theSP,andtheplatformopera-torfacenewchallenges.Therefore,thefollowingsectionsanalyzeindetailtheirdifferentrolesintheSCPSE,theirvalueproposition,andtheirappliedsmart-circularstrategy.Product-ServiceProvidersWithinthePSSbusinessmodel,theroleofthePSPisalwaysanessentialone.IntheSCPSEforPVpanels,thebusinessorientationshiftsfromapuresalesperspectivetoaserviceperspectivethroughofferinganintegratedproductandservicesolution(Mont,2002).Thisshiftideallyadds,delivers,andcapturesvalueforthecustomer,butalsocreatesahighercomplexityintheimplementationandoperationoftheSCPSE(Reimetal.,2015;ZuchellaandPrevitali,2019).Workingtogetherinanetworkofpartnershipscanreducesomeofthiscomplexityandhelpinunitingtherequiredcompetences(Humbecketal.,2019),butthePSPisthenconfrontedwithother,ecosystem-specifictasksandchallenges,whichwillbethesubjectofthissection.ThePSPactsastheorchestratoroftheSCPSEanditsroleiscrucialtotheprocessesofimplementationandengagementinrealizingthisbusinessmodel(ZuchellaandPrevitali,2019).InordertodeliveraPVpowersystemasaconvenientservicetothecustomer,thePSPhastofulfillavarietyofstrategicaswellasoperationaltaskswithintheecosystem.ThemaintasksaretheSCPSEimplementation,itscoordination,aswellasitsoptimalfunctioning(Överholm,2017).TheimplementationprocessoftheSCPSEishighlycomplexandcriticalforitslong-termsuccess(Humbecketal.,2019).Asvalueco-creationandcollaborationarekeycharacteristicsofanecosystem,theorchestratorneedstofindactorswhocanbringnumerouscompetencesandresourcesbutwhoalsowillfitintotheecosystemanditsvision(Humbecketal.,2019;ZuchellaandPrevitali,2019).Konietzkoetal.(2020)definethreeprinciplesforsuccessfulcollaborationwithinanecosystem:first,definitionofapartnerselectionprocess(thatis,howmanyandwhichkindofpartnersneedtobeinvolved);second,theinvolvementofnewactors(thatis,tostimulateinnovation);andthird,acleardefinitionoftheactors’rolesandtheirresponsibilities(thatis,toavoidconflicts).FortheorchestratorofanSCPSE,thismeansfindingappropriatepartnersovertheentirePSSlifecycle:●BOL:●suppliersthatcandeliverhigh-quality,durable,andreliablePVcomponentsthatcanbereturnedandusedagainastechnicalnutrients;●producersthatcandesignforcircularity,namelyeasy-to-repair,standardizedPVpanelsthatcanbedisassembledandreassembled(Bockenetal.,2016).●MOL:●SPsthatcanintensifytheuseandextendtheproductlifethroughmaintenance,repair,andupgrades;●SPsthatcanenablethetakebackofobsoleteproducts,components,andmaterialsforVerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

496484Handbookondigitalbusinessecosystemsfurtherprocessing(vanderZeeuwLaanandAurisicchio,2020).●EOL:●remanufacturersthatcanreplacedegradedorfailedPVcomponentsattheEOLandenablesecond-lifePVpowersystemstobeutilizedafterrecertification;●recyclersthatcanexecutePVrecyclingprocessestoisolateandenablethereuseofallPVcomponentmaterials(Tsanakasetal.,2020).●Aplatformoperatorthatcanprovideanassetdatabaseandthetechnologicalarchitecturetoenableinter-organizationaldataflowsaswellascommunicationandconnectivitythrough-outtheecosystem(Konietzkoetal.,2020).ThenumberofactorsinvolvedinanSCPSEdemonstratestheimportanceofcoordination.InordertodeliveraPVpowersystemasaneasyservicetocustomers,thePSPastheintermedi-arypartyintheecosystemhastocoordinatetheefficientandeffectivecooperationamongthedifferentactors(Sicaetal.,2018;Överholm,2017).AsthePSPretainstheownershipofthePVpanels,hetakesfullresponsibilityforthelong-termoperationoftheinstallation,theprovisionoftheleaseandpowerpurchaseagree-ments,andalladditionalservicesandtechnicalissues(HorváthandSzabó,2018).ThePSPhasastronginterestinmeetingtherequirementsofthebusinessmodelinthelongtermandinmaintainingthefunctioningoftheecosystemasawhole(Överholm,2017).Aconditionforthiswell-functioningisthedefinitionofcommongoals,jointstrategies,andcleartargets,aswellasclarificationoftheexpectationswithintheDBE(Humbecketal.,2019).Inaddition,thePSPmustsucceedinbuildingasharedvisionandtrustamongalltheecosystemactors,includingthecustomer(ZuchellaandPrevitali,2019).ServiceProvidersTheprovisionofPVpowersystemsbasedonanSCPSEpresentsseveralbenefitstothecustomer(Överholm,2017).Inordertoactuallydeliverthesebenefits,theSPasakeyactorintheSCPSEisneeded.TheSPfulfills–comparedtothePSP–moreofanoperationalrolewithintheDBEandactsasalinkingentitybetweenthecustomerandthePSP.ThemaintaskoftheSPliesincarryingouttheactivedecision-makingfortheoptimallifecycleofeachPVpanel(Tsanakasetal.,2020).ThisincludesMOLactivities,suchasperformancemonitoring,maintenance,andrepairservices,aswellasEOLactivities,suchastakebacksystems,deci-sionsonfurtherprocessing,andtheenablingofsecond-lifePVpanels(Tsanakasetal.,2020;vanderZeeuwLaanandAurisicchio,2020).Accordingly,theSPissignificantlyinvolvedinco-creatingvalueforthecustomer.DuringthePV’sMOL,theSPhastoensureitscost-efficientoperationallife,performance,andfunctionality.Withinthislifecyclephase,twostrategiesshouldbeappliedbytheSP:smart(andthuspredictive)maintenance,andsmartrepair.Whilethefirststrategyispreven-tiveinnatureandthesecondfocusesmoreonreactiveactivities,bothareaimedatextendingtheproductlifeofthePVpowersystem(CIRCUSOL,2021).Additionally,aspowergener-ationfromPVpanelsisvariablebutgridstabilityhastobemaintained,smartandpredictivemaintenanceareessentialinlocalizinganddefiningfaultsandfailuresinaPVpowersystem(Adhyaetal.,2016).Therefore,theSPhastoaccessandproperlyevaluatediagnosticandstatisticaldatathatareobtainedduringtheoperationallifeandstoredontheecosystem’sdataplatform(Tsanakasetal.,2020).ImportantdataincludefailureoccurrenceandseverityVerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

497Conceptualizingsmart-circularproduct-serviceecosystems485data,andperformancevariationsordegradationrates.AsphysicaldefectsandfailuresoftenoccurinonlyasinglePVcomponentwhiletherestofthePVpanelremainsintact,theSPmightperformsmallrepairson-siteandextendthePVpanel’sproductlifebyreplacingsinglecomponentsandmaterials(Tsanakasetal.,2020;vanderZeeuwLaanandAurisicchio,2020).OncetheEOLofaPVpowersystemhasbeendeterminedbytheSP(forexample,aftermajorphysicaldegradationthroughlong-timefieldexposure,orwhenitshowsastronglydecreasedperformance),remanufactureandrecyclingproceduresneedtobeestablished.TheSP’stasksinthislifecyclephaseincludethedeterminationofthetargetvolume(actualquantityoffailedPVcomponents),theproportionofwornbutrepairable/recyclablePVcomponents,andtheproportionofyoungerbutretiredPVpanelsthatweredecommissionedforeconomic/technicalreasons(whichcouldbecomesecond-lifePVpanels),andofcoursetheestimatedcosts(Tsanakasetal.,2020).Basedonthesedata,theSPdecidesonthefurtherpathandprocessingoftheEOLPVpanels.Duringthisphase,theSPprimarilycommunicateswiththePSP,theremanufacturer,andtherecycler,andactsasthelinkingentityinclosingtheresourceloop.Accordingly,theSPhasadecisiveroletoplayinenablingthetransitiontowardacircularandmoresustainablePVpowerindustry.Duetoguaranteedtakebacks,efficientandsafeEOLactivities,aswellastheenablingofsecond-lifeproducts,theenvironmentalchallengesarerecognizedasvaluableopportunities.PlatformOperatorsBydigitalizingtheSCPSE,severalnewtasksfortheactorsarise;forexample,thePSPfacesnewchallengesintermsofinformationandcommunication(Roy,2000).InordertosupportthePSP,itseemsreasonabletooutsourcethetasksofmanagingcross-organizationalcommu-nicationbetweenDBEactorstoanewkeyactor:theplatformoperator.Thisrolecanbefulfilledbyanexternalprovidercompanyoranexistingactorthatperformsasaplatformoperatorinadditiontoitsotherrole,forexample,supplier,producer,PSP,orSP.Inthefollowing,thefocusisontheplatformoperatorasanadditionalcontributortotheDBE.Theirmaintaskistheprovisionofdigitalinfrastructure,thusenablingcross-organizationalcommunicationaswellasdatacollection,monitoring,andsharingthroughouttheSCPSE.AsmanyactorsneedtoworkcloselytogethertoprovideaPVpowersystem,theplatformoperatorplaysacrucialroleinenablingsmartformsofcommunication(Lockettetal.,2011).PlatformsgenerateagreatpotentialforbetterandfastercommunicationandthusstrengthenthehorizontalintegrationintheSCPSE(Kuhlenkötteretal.,2017).Theplatformnotonlycon-nectsthecustomerwiththePSP,butalsoconnectsthevariousotheractorsintheSCPSE.So,themainvaluecontributionoftheplatformoperatorisguaranteeingcross-organizationalcom-munication,especiallyintheMOLandEOLstagesofthePVpowersystem(Humbecketal.,2019).Successfulcommunicationisbasedonhigh-qualitydatathatarecollected,monitored,andsharedviatheplatform.DuringtheMOLstage,integratedsmarttechnologiesinthePVpanels,suchassensors,continuouslygeneratedatathatareautomaticallycollected,analyzed,andusedtoallowbetterdecision-making(Konietzkoetal.,2020).Withthisdata,theplatformcanprovideanover-viewoftheperformanceinformation,whichcanbeusedtostrengthenthesmartuseofthePVpowersystem.Assolarpowergenerationisintermittentinnature,thestabilityofthesystemmustbemonitoredatalltimes:ifpowergenerationisinsufficient,additionalenergymustVerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

498486Handbookondigitalbusinessecosystemsbepurchasedfromotherpowersystems,justasexcessenergycanbesoldtoothersystems(ManziniandVezzoli,2003).Real-timegenerateddatainformtheSPaboutthequalityofthePVpanelsandtheneedforsmartmaintenanceandsmartrepair.TheSPcanscheduleanappointmentwiththecustomerviatheplatformifnecessary.AttheEOLstage,dataaboutthedisturbance,thelocalization,andthedefinitionsofrelatedfaultsandfailuresinthePVpowersystemareprovidedviatheplatformfortheSP,whocandecidewhethertheremanufacturerortherecyclerneedtobeinformedtoprocessthebrokenPVpowersystemtofacilitatesecond-lifeusageandEOLmanagement.Inordertoachievethesepotentials,theplatformneedsdifferentcharacteristics:●Highservercapacity:theplatformoperatormustovercomethechallengesofhighvolumesofdata,theneedforalargeserverprovision,andensuringpermanentavailability(daCruzetal.,2012).●Privacypolicy:theplatformoperatormustsecuretheserverinawaythatunauthorizedpersonnelcannotaccesssensitivedata.AsalargenumberofactorswithintheSCPSEusetheplatform,thischallengeisofhighrelevance.Nevertheless,cautioushandlingbyallactorscouldoffsetthischallenge.DISCUSSIONANDFUTUREWORKThischapterproposesandexploresaninnovativebusinessmodelthatovercomesthemainbarriersofthePVpowerindustry:highupfrontinvestmentcosts,missingwidespreadandeasyinstallationoptionsforindividuals,challengingmanagementtasksduringuse,andenvironmentalchallengesintheEOLmanagement.Withinthesmart-circularproduct-serviceecosystem(SCPSE),tworesearchfieldsarethuscombined:thebusinessecosystemperspec-tiveandPSSbusinessmodels.TheSCPSEandespeciallyitscharacterizationintermsoftheactors,theirroles,andtheirvaluecontributionwerethefocusofthischapter’sanalysis.Whiletheprevioussectionsaboutthedigitalbusinessecosystemandtheevolutionofproduct-serviceecosystemsprovidedthetheoreticalbackgroundsonDBEandPSSbusinessmodels,themaincontributionliesintheexplorationandin-depthanalysisoftheSCPSEanditskeyactorsastheproduct-serviceproviders,serviceproviders,andplatformoperators.Table29.3summarizesthemainfindingsontheecosystemconceptualizationforPVpanelsasanSCPSS,comple-mentedbyadditionalinformationontheotheractors.VerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

499Conceptualizingsmart-circularproduct-serviceecosystems487Table29.3SummaryTheanalysisshowedthat,despiteitsmanychallenges,theSCPSEforPVpanelspresentsseveralvalue-creationopportunities:●Forthecustomers:●reductionoftheinitialinvestmentcostandeffortsintechnologyselection;●performanceandlong-termoperationsecurity;●predictablecostofrenewableelectricityprovision.●ForthePSPs:●reducedcomplexityinproduct-serviceprovisionthroughtheserviceproviderandVerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

500488Handbookondigitalbusinessecosystemsplatformoperator;●long-termrelationshipwithcustomersandotherDBEactors;●ecosystemorchestrationbasedonacommonvision.●Fortheentireecosystem:●long-termcooperationandvalueco-creation;●reduceddependencyonvirginresources;●integrationofcomplementarycompetences;●stimulationofinnovation.●Fortheenvironment:●extensionofPVproductlifethroughMOLactivities(forexample,maintenanceandservice);●closed-loopresourceflowsandefficienttakebacksofEOLproducts;●marketadoptionofsecond-lifePVafterEOLactivities(forexample,repair,remanu-facturing,orrecycling).Themainlimitationofthisworkliesintherestrictedselectionoftheconsideredecosystemactors.Withinthischapter,thefocuswasonthekeyactorsforsmart-circularproduct-servicesinanecosystemcontext.Thecustomerside,aswellastheactorsthatrecycleandremanu-facture,werenotanalyzedingreatdetail.Fromacircularperspective,therecyclerandtheremanufacturerplayimportantrolesintheecosystemandareworthfocusingoninthefuture,asbothactorscanenablethetransformationtowardcircularity.Basedonthispreliminarywork,futureworkmightalsoconcentrateontheactualimple-mentationoftheSCPSEandinvestigatetowhatextentthisbusinessmodelisrealizableinthePVpowerindustry,whatchallengesmightariseinthisrealization,andhowthetheoreticalconceptualizationandpracticalapplicationmaydiffer.Moreover,thespecificimplementationofsmart-circularstrategiesisonlyconsideredatanaggregatelevelandthusneedstobefurtheranalyzed.Inparticular,theirimpactontheefficiencyoftheSCPSEintermsoftheenviron-mentalimpactsneedstobestudiedindetail.REFERENCESAdhya,S.,Saha,D.,Das,A.,Jana,J.andSaha,H.(2016).AnIoTbasedsmartsolarphotovoltaicremotemonitoringandcontrolunit.In:2ndInternationalConferenceonControl,Instrumentation,EnergyandCommunication.Kolkata,India:CIEC,pp.432–436.Availableat:https://ieeexplore.ieee.org/document/7513793(accessedJanuary10,2021).Adner,R.(2017).Ecosystemasstructure:anactionableconstructforstrategy.JournalofManagement,43(1),pp.39–58.Alcayaga,A.andHansen,E.(2017).Smart-circularsystems:aservicebusinessmodelperspective.In:Bakker,C.andMugge,R.(eds),PLATEProductLifetimesandtheEnvironment.Amsterdam:IOSPress,pp.10–13.Alcayaga,A.,Wiener,M.andHansen,E.(2019).Towardsaframeworkofsmart-circularsystems:anintegrativeliteraturereview.JournalofCleanerProduction,221,pp.622–634.Alt,R.,Demirkan,H.,Ehmke,J.,Moen,A.andWinter,A.(2019).Smartservices:themovetocustomerorientation.ElectronicMarkets,29(1),pp.1–6.Betz,C.,Burkhalter,M.andJung,R.(2019).Prerequisitesforvalueco-creationinbusinessecosystems.In:25thAmericasConferenceonInformationSystemsCancun.Cancun:AMCIS,pp.1‒6.Availableat:https://aisel.aisnet.org/amcis2019/adv_info_systems_research/adv_info_systems_research/20/(accessedMarch15,2021).VerenaLuisaAufderheide,LauraMontag,andMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:05AMviaColumbiaUniversityLibrary

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50430.Thedigitalbusinessecosystemsustainabilitycube:aninstrumentenablingsystematiccollaborationdecisionsTimoKlünderandMarionStevenINTRODUCTIONNatureservesasasourceofinspirationforcompaniestosolvetechnicalproblemsinproductdevelopment.Forinstance,althoughtheJapanesetrainseriesShinkansenisconsideredamilestoneintraintechnology,amajorproblemoccurredatspeedsabove300km/h.Duetothesuddenchangeinairpressurealoudblastcouldbeheardevenatgreatdistances,whenthetrainwasleavingatunnel.Coincidentally,thetrain’schiefengineerwasadedicatedbirdwatcherandgothisinspirationforthesolutionoftheproblemfromtheshapeofthekingfisher’sbeak.Thisledtoanimprovementinaerodynamics,asignificantdecreaseofnoisepollution,areductioninpowerconsumptionby15percent,anda10percentfastermaximumspeed.Thegenerationofasolutiontohuman,economic,technical,orsocialchallengesbyobservingandemulatingthedesigns,structures,andstrategiesofnatureiscalledbiomimicry(Hood,2006).Aslivingorganismsevolvedwell-adoptedstrategiesandstructures,theyarealsoarichsourceofinspirationforaddressingnotjusttechnicalbutalsoeconomic,environ-mental,andsocialissues.Digitalbusinessecosystems,arefinementofbusinessecosystemsdevelopedbyMoore(1999)groundedonthisconceptofbiomimicry,integratethestrategiesofnatureandthetechnologiesofdigitizationtocopewithsocietalchallenges.Ionityisaprominentexampleofadigitalbusinessecosystem.With400loadingareas,IonityisEurope’sleadinghigh-powerchargingnetworkofcollaboratingcarmanufacturers,whichaimstoensureamanufacturer-independentpowersupplyforelectricvehicles(Lenkenhoffetal.,2018).Ontheonehand,thecarmanufacturersarecollaborating,butontheotherhandtheyareindirectcompetitionforthesaleoftheirelectricvehicles.So,thedigitalbusinessecosystemrepresentsacomplexnetworkofrelationships.Thischapterstrivestounbundlethecomplexnetworkinordertocarryoutastudyofdigitalbusinessecosystems’contributiononthesocietalchallengesofsustainabledevelopment,bydevelopinganinstrumentfortheevaluationoftheanticipatedsustainabilityperformanceofanactorwithinthedigitalbusinessecosystem.Althoughdigitalbusinessecosystemsarethesubjectofnumerousresearchactivities,thescientificobjectremainsafuzzybundleofcharacteristics,challenges,andobjectives.Acom-prehensivebibliometricliteratureanalysisrevealsthe12elementarycharacteristicsofdigitalbusinessecosystems.Theseparateelaborationofthedigitalbusinessecosystem’sproperties,challenges,andobjectivesindicatesareciprocaleffect,whosedescriptiondeterminesthischapter’sfocus.Thechapterhighlightssustainabilityasthemostconflictingobjectiveofdigitalbusinessecosystems.Astheagentsofadigitalbusinessecosystemareattributedto492TimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

505Thedigitalbusinessecosystemsustainabilitycube493influencetheobjectiveofsustainabledevelopment,asustainabilityperformanceevaluationofpotentialnetworkpartnersisnecessarybeforetheiracceptanceinadigitalbusinessecosystem.Forthispurpose,benchmarkingisasuitableclassofmethodsthatisintroducednext.Theestablishedprocessforthedevelopmentandapplicationofabenchmarkinginstrumentisthencovered,stepbystep.Aconclusionandanoutlookconcludethischapter.SUSTAINABILITYINDIGITALBUSINESSECOSYSTEMSAdigitalbusinessecosystemismultifaceted,asitcanbeseenasaconcept,technology,project,orparadigm(DarkingandWhitley,2007;BriscoeandSadedin,2009).Withintheseapproaches,numerousproperties,challenges,andobjectivesareattributedtothedigitalbusinessecosystem,resultingininconsistentdefinitionsthatobscureacoherentviewoftheapproachforastructuredanalysis.Afterisolatingtheelementsforstructureddefinition,theessentialrelationshipsbetweentheseelementsareelaborated.DigitalBusinessEcosystemsDigitalbusinessecosystemsarewidelyregardedasaneworganizationalformofcollaborativevaluecreationthatevolvedfromthealready-knownbusinessecosystems(Senyoetal.,2019).WhiletheanaloguetransferofnaturalecosystemsintothebusinessenvironmentwasalreadyundertakenbyMoore(1999),businessecosystemsarecurrentlyattractingincreasedattentionduetotheirconnectiontoubiquitousdigitization(Adner,2017).Theintegrationofthethreeconcepts—naturalecosystems,business,anddigitization—leadstodigitalbusinessecosys-tems,whichtriggerchangeinvaluecreation:●Digitalbusinessdescribesbusinessmodelssupportedbydigitaltechnologiessellingdigitalproductsandservices.●Theterm“digitalecosystem”isoftenusedsynonymouslywith“digitalbusinessecosys-tem.”As“business”isnotpartofthisterm,itjustdescribesthetechnicalinfrastructure.●Abusinessecosystemisacollaborationofcompanies,whichisdirectedbyanorchestratortowardsjointvaluecreation.Theperformanceoftheentireecosystemfromthecustomers’pointofviewexceedsthesumoftheindividualcontributionsofallparticipants(Senyoetal.,2019).Consequently,theorganizationalformoriginatingfromthiscombinationiscalledadigitalbusinessecosystem.Theevolutionofthistermleadstonumerousresearchactivities.Thesecanbeillus-tratedwithabibliometricanalysis.Ananalysisoftheliteratureindexedwiththekeywords“DigitalBusinessEcosystem”and“DigitalBusinessEcosystems”inthelargestdatabaseofpeer-reviewedjournalarticles,Scopus,allowsthesystematizationofrecentresearchpriorities.Inabibliometricanalysis,ananalysiswasmadeofthe1252journalarticlespublishedbetween2011and2020thatcontainedthekeywordsinthetitle,intheabstract,orasoneoftheirkey-words.Thetimehorizonisselectedtoincludebothcurrentliteratureandearlier,highlycitedstudies.Inaddition,thefourthindustrialrevolutionemergedin2011,anditstechnologiesstimulatedthediscussionofdigitalbusinessecosystems(Klünder,2021).Forananalysisofthekeywordsmentioned,theexaminationislimitedtothe100contributionsmostfrequentlyTimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

506494Handbookondigitalbusinessecosystemscitedbetween2011and2020.Theoccurrenceofthe676differentkeywordsisexaminedwithVOSviewer,asoftwaretoolforvisualizingandanalyzingbibliometricnetworks.VOSviewercreatesasimilaritymatrixfromaco-occurrencematrixusingasimilaritymeasureoftwokeywords,theirso-calledassociationstrength(Perianes-Rodriguezetal.,2016).Foranalysis,keywordsareextractedthatoccurratleastfivetimes.Moreover,athesaurusfilemergeswordsofequalmeaningbutdifferentspellings.Subsequently,anumberofgenerictermswithoutcontent-relatedvalue,suchas“review”or“discussion,”wereeliminated.ThetermsinFigure30.1representtheissuesofsufficientrelevanceassociatedwithDigitalBusinessEcosystems.Keywordsthatappeartogetherinmanycontributionshaveahighassociationstrengthandtheirnodesarecorrespondinglyclosetogetherinthebibliometricnetwork(seeFigure30.1).Figure30.1BibliometricnetworkofdigitalbusinessecosystemsTimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

507Thedigitalbusinessecosystemsustainabilitycube495Twelveelementscharacterizedigitalbusinessecosystems:informationmanagement,co-evolution,self-organization,competition,symbiosis,sustainability,scalability,co-creation,innovation,knowledgemanagement(calledheterogeneityinthefollowing),multi-agentsystems,andinteroperability.The12identifiedelementsarecategorizedintoproperties,challengesandobjectives.Inordertoillustratetherelationshipsofthese12elements,thethreecategoriesformatriangle(seeFigure30.2).Figure30.2ScopeofdigitalbusinessecosystemsandthiscontributionAsaworkingdefinitionofdigitalbusinessecosystemsthereforeresults:digitalbusinessecosystemscanbeclassifiedasself-organizedmulti-agentsystemsformingaheterogeneous,co-creatingnetworkthatappearasawaytofacethechallengesofinteroperability,informationmanagement,scalability,andcompetitiontogenerateinnovation,co-evolution,mutualbene-fits,andsustainability.SustainabilityistheobjectivethatappearstoconflictmostwiththepropertiesoftheDigitalBusinessEcosystem.Despitenumerousattemptsatconcretization,thedefinitionoftheWorldCommissiononEnvironmentandDevelopmentfrom1987remainstheonlyinterdisciplinaryandinternationallyrecognizeddefinition:“[Sustainabledevelopmentisdevelopmentthat]meetstheneedsofthepresentwithoutcompromisingtheabilityoffuturegenerationstomeettheirownneeds”(UnitedNationsConferenceonEnvironmentandDevelopment,1987).Sustainabilityrequiresanoperationalizationspecifictothecontextinwhichitisused.Thetriplebottomlinemodel,themost-knownoperationalizationinbusiness,referstotheperfor-manceofacompanyintermsofsocial,environmental,andeconomicaspects.ItisassumedTimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

508496Handbookondigitalbusinessecosystemsthatsustainabledevelopmentandsuccessofthecompanycanbeachievedthroughanequalfulfilmentofthethreedimensions(Elkington,1998).TheconflictingrelationshipsarehighlightedinblackinFigure30.2,whilethosenotrele-vantforthischapterareshowningrey.DigitalBusinessEcosystemsrequirethegreatestpos-siblemethodologicalsupporttoachievetheobjectiveofsustainability.AcrucialroleinthiscontextisassignedtothepropertiesandchallengesthatpromoteorobstructtheobjectiveofsustainablevaluecreationinDigitalBusinessEcosystems.Therefore,thesewillbepresentedindetail.Theremainingproperties,challenges,andobjectivesoftheframeworkgiveninFigure30.2areonlybrieflyexplained.PropertiesofDigitalBusinessEcosystemsInaDigitalBusinessEcosystem,independentcompaniesandpeoplearecooperatingwhoexpectmutualbenefitsfromeachother(Karakas,2009).Thenetworkofindependentcompa-niesandpeoplecanbeconsideredasmulti-agentsystemwithagentsthatareperformingasetofoperations(Ferber,1999).Adigitalecosystemfollowstheprinciplesofself-organization,heterogeneity,andco-creation,withadigitalplatformatitscenterthatsupportsthiscoopera-tionparticularlywell(LurgiandEstanyol,2010):Multi-agentsystemscontributetoinnovationthroughtheinteractionofagents(Razavietal.,2007).Sincenumerousagentsinteractinacollaborativemanner,thesustainabilityofcollaborativevaluecreationisdifficulttomeasure.Thethreedifferentlayers—corebusiness,extendedenterprise,andbusinessecosystem—representthelevelofcommitmentwiththeecosystemandtheorchestratingcompany(Moore,1999).Thecorebusinessinvolvestheagentscorecontributors,suppliers,anddistributionchannels.Traditionally,thislayerwouldberunbythesupplychains’focalcompany.Theentitiespredominantlypursueeconomicgoals.Theextendedenterpriselayersupplementsthecorebusinessbyaddingthestandardbodies,customers,complementors,andsuppliersofsuppliersaswellasresearchanddevel-opment(R&D)initiativesintherelevantbusinessarea.Thebusinessecosystemlayerwidenstheviewbyaddingentitiesthatarenotdirectlypartofthevaluecreationprocessbutmayhaveaneffectonthebusinessessuccess.Societyandsuperiorpublicbodiessetenvironmentalandsocialrequirements(Muntaner-PerichanddelaRosaEstava,2007).DigitalBusinessEcosystems’self-organizationwithoutadominantcenterisproblematicforthestandardizationofprocessesandforsustainablevaluecreation(seeFigure30.2).Self-organizationdescribesnetworksthatindependentlypursueagivenobjectiveormaintainastatewithoutanydirectandhierarchicalorderfromexternals.Whileinecosystemsthelawsofnatureallowforself-organization,inbusinessanorchestratorandincreasingautomationarenecessary.Self-organizationleadstoaheterarchicandpolycentricnetworkstructurewithoutadominantcenter.DigitalBusinessEcosystemshaveaheterogeneousstructure,withagentsperformingverydifferentrolesthatinfluencedifferentaspectsoftheecosystems’stability,quality,andproduc-tivity.Heterogeneitysupportsco-evolutionandsymbiosis,buthasanegativeeffectontheele-mentsofinteroperability,informationmanagement,andsustainability(seeFigure30.2).Theyareparticularlyrelevantwhencomplexknowledgeisrequiredandthesourcesofexpertisearewidelydispersed.AsuitableexplanationfortheemphasisonDigitalBusinessEcosystemsisprovidedbythetheoryofcorecompetenciesaccordingtoPrahaladandHamel(1990).Accordingtothistheory,everyorganizationlimitsitselftothoseresourcesandskillsthatareTimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

509Thedigitalbusinessecosystemsustainabilitycube497profitableorhaveadifferentiatingeffect(corecompetencies),andacquiresnecessaryskillsthroughcollaborationwithotheragents.Corecompetenciesarecharacterizedbythefactthattheycannotbetriviallyimitatedorsubstituted.ThecorecompetenciesintheDigitalBusinessEcosystemarecomplementarytoeachother.Threecategoriesofcomplementaritycanbedifferentiated:unique,generic,andsupermodularcomplementarities(MilgromandRoberts,1990;AroraandGambardella,1990;CassimanandVeugelers,2006).Uniquecomplementar-itiesexistwhenAcannotfunctionwithoutB.AandBrepresentcompanies,processes,skills,ortechnologies.Auniquecomplementarityunderpinstheideaofco-specialization(Teece,1987).Genericcomplementarityiscomparabletouniquecomplementarity,buttheconnectionisnotsufficientlyindividual.Forexample,althoughcarsandfuel,computersoftwareandhardware,andshoesandshoepolish,arecomplementarygoods,theirrelationshipiscom-moditizedinsuchawaythattheproduceroftherespectivegooddoesnotnecessarilyhavetointegrateintoacompany’secosystem.SupermodularcomplementarityisdefinedasmoreofAproducesahighervalueforB(Leeetal.,2010).Forexample,thenumberofchargingsta-tionsforelectricvehiclesincreasestheperceivedvalueofanelectricvehicle.OfrelevancetoDigitalBusinessEcosystemsareuniqueandsupermodularcomplementarities.Thesecanexistsimultaneously,ascanbeshownintheexampleoftheelectricvehicle.Theelectricvehicledoesnotfunctionwithoutsuitablechargingstations,andviceversa(two-directional,uniquecomplementarity),thenumberofchargingstationshasapositiveeffectonthesalesofelectricvehicles(supermodularcomplementarity)(Jacobidesetal.,2018).Co-creationisalsoinconflictwiththeobjectiveofsustainability.However,theachieve-mentoftheotherobjectivesisfavoredbythischaracteristic(seeFigure30.2).Duetothecomplementaritiesinaheterogeneousnetwork,thecompaniesareforcedtogenerateaddedvaluecollectively.Ifthecomplementaritiesareonlyontheconsumptionside,cooperationmayonlybenecessaryinproductdevelopment.However,ifthecomplementaritiesextendintothesphereofproduction,intensiveco-creationisrequired(Nachiraetal.,2007).NormannandRamirez(1993)hadalreadyarguedthatvaluecreationintheeconomyshouldnotbeunder-stoodasachain.Instead,valuecreationshouldbeunderstoodasaconstellationofmultipleagents.Buildingonthesearguments,PrahaladandRamashwamy(2004)haveactivelyadvo-catedavaluemodelofco-creationinwhichcustomers,suppliers,andotheragentsactivelyparticipateinvaluecreationalongsidethetraditionalorganization.Thesefourcharacteristicsformadigitalplatform:platformscombineanddeploytech-nologiestoincubateandcoordinateanecosystemofsupplyanddemand(Heinetal.,2019).Intheecosystem,agentsonthedemandsidetaketheroleofcomplementorsbyco-creatingcomplementaryproductsorservices(LucasandGoh,2009;Altetal.,2010).Onthesupplierside,complementaritiesarisethroughtheperfectinteractionofrawmaterialsandintermediateproductsofthepartnersinvolved.Thus,theoverallbenefitofaDigitalBusinessEcosystemresultsfromthecombinationofthedigital,mediatingplatformandalargenumberofpartnerswhoparticipateintheDigitalBusinessEcosystemformutualbenefits.However,theDigitalBusinessEcosystemdiffersslightlyfromapureplatform:whileadigitalbusinessecosystemisaveryconcretenetworkofcompanies,people,andinformationtechnology(IT)systems,platformeconomicsisafundamentaleconomicprinciple.ADigitalBusinessEcosystemcanbebuiltwiththeintentionoffunctioningaccordingtotheprinciplesoftheplatformeconomy.Thismeansthatsuchadigitalbusinessecosystemisbasedoncleareconomicinterests,andtypicallytherearemultilateralmarketsinwhichparticipantsconducttheirtransactionsviaadigitalplatform.Inprinciple,acompanymustmakeadecisionastotheroleitwantstoplay.TimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

510498HandbookondigitalbusinessecosystemsInexistingdigitalbusinessecosystems,acompanycanenterasapartnerandparticipateinthebusinessthatisconductedthroughtheappropriatedigitalplatform.Ifadomaindoesnotyethaveasuccessfuldigitalbusinessecosystemorifacompanyfeelsitcanestablishanevenmoresuccessfuldigitalbusinessecosystem,itcantakeontheroleofanecosysteminitiatororso-calledorchestrator.Thisisaccompaniedbyawiderangeofchallengingtasks,whichaboveallmustachieveacoordinatedoverallpictureofthebusinessmodel,technicalimplementationintheplatform,andcontractualdesignbetweenallecosystemparticipants(Lin,2010).ChallengesofDigitalBusinessEcosystemsAfteranin-depthdescriptionoftheproperties,thechallengesaccompanyingtheachievementoftheobjectivesarealsooutlinedbriefly.Thepropertiesofdigitalbusinessecosystemsposethechallengesofinteroperability,informationmanagement,scalability,andcompetition.Theproblemofinteroperabilityofinterfaces,especiallycausedbytheecosystems’heter-ogeneity(seeFigure30.2),isthecentralprerequisiteforanecosystem-wide,real-timeinfor-mationexchange.Interoperabilityrepresentstheabilityoftwoormoreagentstoexchangeinformationandtousethisinformation(IEEE,1990).Interoperabilityrequiresanintegrationofinformationandapplication.Informationintegrationconcernsthelinguisticlevelofinfor-mation,whileapplicationintegrationcreatesthetechnicalprerequisites(Herdonetal.,2010;Chenetal.,2008;Tsujimotoetal.,2017).Thechallengeofinformationmanagementoccursduetothepropertiesofself-organizationandheterogeneity(seeFigure30.2).Masteringthischallengeensurestheaccuracyofinfor-mationaswellasofphysicalproducts,enablingfrictionlessproductionandservicecreation.Scalabilityistheabilityoftheecosystemtovaryinsize(Briscoeetal.,2007).Thisisamajorchallenge,sincedigitalbusinessecosystemsareaheterogeneousmulti-agentnetwork,withagentspossessinguniqueresourcesandcompetenciesthatresultinuniqueorsuper-modularcomplementarities(Briscoe,2010).Aco-evolutionisnotpossiblewithoutsufficientscalability(seeFigure30.2).Moore(1996)proclaimsthedeathofcompetitionthroughestablishmentofbusinesseco-systems.Thishasproventobetrueinsofarastheagentsareincreasinglyfocusingontheircorecompetenciesandinevitablycollaboratemoreclosely,buttheagentsarepartofseveralcompetitiverelationshipstoco-createvaluethroughshareddigitalplatforms.Competitionisauniversalchallengeforeveryorganization.However,competitionisaparticularchallenge,asco-creationisakeypropertyofdigitalbusinessecosystems(Senyoetal.,2019).Thechallengeofcompetitionexistsonthreelevels:digitalbusinessecosystemscompetewithotherdigitalbusinessecosystemsthatofferthesamevalueproposition;theyarecompetingwithtraditionalindustrystructures;andtheagentsofadigitalbusinessecosystemarealsoincompetitionwitheachother(Subramaniametal.,2019;WestermanandBonnet,2015).Especially,thecompetitionofcollaboratingagents,forexamplebycarmanufacturersinthedigitalbusinessecosystemIonityoftheintroductoryexample,representsanewformofcom-petition.Masteringthechallengeofcompetitionisakeyenablerfortheaccomplishmentofallobjectivesassociatedwithdigitalbusinessecosystems(seeFigure30.2).TimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

511Thedigitalbusinessecosystemsustainabilitycube499ObjectivesofDigitalBusinessEcosystemsThefourobjectivesofinnovation,co-evolution,symbiosis,andsustainabilitymotivatetheactivitiesofcompaniesintheestablishmentofecosystems.Innovationandnovelknowledgeenhancingindigitalbusinessecosystemsaregeneratedthroughcomplexanddynamicinter-actionprocesses(Wilkens,2017;Selanderetal.,2013).Co-evolutionaimstotransformasasystemcollectivelyfromonestagetoanother(Moore,1996;Senyoetal.,2019).Naturalsymbiosisreferstothesocializationofindividualsoftwodifferentspecies,whichisbeneficialforbothpartners.Consequently,symbiosisinabusinesscontextreferstomutualbenefitsthroughcollaboration(Cusumano,2010;Lin,2010;Clarysseetal.,2014).Sustainabilityappearstobeahighlyconflictingobjectiveofdigitalbusinessecosystems,aseveryconstitutivepropertyobstructstheachievementofsustainability.Sustainabilityisconsideredinseveralpublicationsasapropertyorobjectiveofdigitalbusinessecosystems(Nachiraetal.,2007;Briscoe,2010;GracaandCamarinha-Matos,2017).Inordertopreservehumanexistence,productivepotential,andfreedomofaction,asustainabledevelopmentaimsattheinter-aswellasintra-generationallyfairsatisfactionofhumanneeds.Thedegreeofsatisfactionoftheseneedsistheresultoftheeconomic,ecological,andsocialperformanceofasociety.METHODS:BENCHMARKINGANDUTILITYANALYSISResearchrelatedtodigitalbusinessecosystemsispredominantlyconceptual.GapsinresearchandproblemsofDigitalBusinessEcosystemsareidentifiedbyseveralauthors,butsolutionsarerarelyprovided(Herdonetal.,2010;Jacobidesetal.,2018).Benchmarkingisoftensug-gestedasapossiblemethodtocopewiththeproblemofdecidingoncooperation(Selanderetal.,2010;Senyoetal.,2019).Ingeneral,benchmarkingdescribesasystematicprocessfortheeconomicornon-economicperformancecomparison(focus)ofcompanies,strategies,products,services,techniques,andprocesses(objectofcomparison),basedonperformancecriteria(performancemeasures)forthepurposeofcompanypositioningandcompanyimprovement(objective).Xerox,atechnologyandservicecompanyfordocumentmanagement,wasthefirstcompanytosystematicallyusebenchmarking,in1979.Comprehensivebenchmarkingreducedthenumberofmalfunctioningcopierswithinthewarrantyperiodby90percentandincreasedproductivitybyapproximately5percent.ThebenchmarkingprojectwasgiventheprogramtitleLeadershipthroughQualitybyXerox(Camp,1993).Thechallengeofdigitalbusinessecosystemsiscomparable:digitalbusinessecosystemscompetewithotherdigitalbusinessecosystemsandtraditionalstructures,andtheagentscompetewitheachotherintheirrespectivedomains.Sustainabilitybecomesakeycompetitivecriterionfromthecustomer’sperspective.Thesustainabilityperformanceofadigitalbusinessecosystemistheaggregateoftheagents’performances.Theorchestratordecidesontheadmissionofacandidate.FollowingtheprogramtitleofXerox,thegoalofthebenchmarkinginstrumenttobedevelopedisLeadershipthroughSustainability.TimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

512500HandbookondigitalbusinessecosystemsTheprocessmodelforthedevelopmentandapplicationofbenchmarkingtoolscontainssixcentraltasks:●Thedocumentationofthegeneralsituationdescribesthetopicssurroundingthebench-marking:digitalbusinessecosystemsandsustainabilityhavealreadybeendiscussedindetailabove.●Thefollowingstepofdefiningthebenchmarkingelementsdeterminesthebenchmarkingfocus,thesubjectsandobjectsofcomparison.●Theconceptualizationstep,onlynecessaryifnosuitablebenchmarkinginstrumentisavailable,servestodevelopthebenchmarkinginstrument.●Inthedatacollectionstep,therequireddataneedstobeprepared.●Intheanalysisstage,theanalysisoftheconsideredcandidatetakesplace.●Thedevelopmentandimplementationofactionsservestosystematicallyclosethegaptothedesiredlevelofperformance(Klünder,2021).Subsequently,thecentralstepsofdefinition,conceptualizationandanalysisaredescribed,usinganumericalexample.Thebenchmarkingtoolprovidestheplatformorchestratorwithstraightforwardguidanceonthecollaborationdecision.Fromtheagents’perspectivethebenchmarkinginstrumentprovidesastatementaboutthelikelihoodofconsiderationinadigitalbusinessecosystem.Withinthebenchmarkingprocess,especiallybyconductingthestepofconceptualization,theutilityanalysiswillbeused.TheutilityanalysisintroducedbyZangemeister(1976)isastraightforwardtoolforthesystematicpreparationofdecisions,whichallowsavarietyofindicatorsandcausescomparativelyfewpracticaldifficulties.Thethreeobjectivesofeconomy,ecology,andsocialaffairsrequireatransformationinthree-dimensionalspace.DEVELOPMENTANDAPPLICATIONOFTHEDIGITALBUSINESSECOSYSTEMSUSTAINABILITYCUBEReferringtotheintroductoryexampleofIonity,thedevelopmentandapplicationofthedigitalbusinessecosystemsustainabilitycubewillbedemonstratedusingafictionaldigitalbusinessecosystemcomprisingcarmanufactures,gasstations,andregionalenergysuppliersoperatinganetworkofchargingareasforelectricvehicles.Theorchestratorisaleadingenergysupplierthatdecidesontheadmissionofacandidate,anautomobilemanufacturer,tothedigitalbusi-nessecosystem.Afteradefinitionoftherequiredelements,theconceptofthebenchmarkinginstrumentissetupandthebenchmarkingresultobtainedinthisnumericalexampleconcludesthissection.DefinitionFigure30.3combinesthepreviouslevelsofobservationandlinksthembytenperformancemeasuresobtainedfromseveralstudiesaddressingsupplychains,digitalnetworks,andsus-tainableproduction(GracaandCamarinha-Matos,2017).Systemsofperformancemeasurescontaining10‒20performancemeasuresareconsideredasanappropriatenumberfrompracti-tioners’perspective.Inordertoestablishasimpleprocedure,thefiveelementsofmulti-agentTimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

513Thedigitalbusinessecosystemsustainabilitycube501system,self-organization,heterogeneity,co-creation,andcompetitionidentifiedasrelevanttosustainabilityareoperationalizedbytwoperformancemeasureseach(seeFigure30.3).Figure30.3DeductionofperformancemeasurestobeimplementedinthedigitalbusinessecosystemsustainabilitycubeByusingthetenperformancemeasuresandtheirpossiblemanifestations,atransparentandintuitiveoperationalizationofacandidate’santicipatedsustainabilityperformanceinthedigitalbusinessecosystemispossible.Theimplicationofeachmanifestationonthethreedimensionsofsustainabilityisassignedasathree-linecolumnvectorwiththepossiblevaluesof-1foranegative,0foraneutral,and1forapositiveinfluenceontherespectivedimensionofsustainability.Line1representstheeconomic,line2theecologicalandline3thesocialdimension.Digitalbusinessecosystemsrepresentmulti-agentsystemsthatrequirehorizontalintegrata-bilitytonetworkandflexibilityduetothedynamicsofthesystem.Horizontalintegrationbasicallydescribesthenetworkingofacompanywithitspartners.Networkingenablessyn-chronizationoforderingandproductionprocesseswithsuppliers;competence-,time-,orcapacity-baseddistributionofvalue-addingactivitieswiththeirpartners;andtheanticipationofcustomerneeds.Horizontalintegratabilitymightbelimitedorend-to-end,fromthefirstsuppliertothefinalcustomerofthecreatedgoodsandservices.Thedegreeofhorizontal11integrationhasapositive1ornegativeeffect1onallthreedimensionsofsustainability11duetotheinteractionsoutlinedabove.TimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

514502HandbookondigitalbusinessecosystemsAcompany’sflexibilityistheabilitytoeffectivelyandquicklyreallocatecapacitiesandcompetencesintheeventofuncertainandsuddenchanges.Thus,flexibilityisatwo-partconcept:productflexibilitydescribesthebandwidthofpossiblemodifications,whilereactiontimeistheresponsespeedtochanges.Arigidcompanyhastofacenegativeeconomicconse-1quencesbecauseitcannotreactsufficientlytomarketchanges0.Aversatilecompany01realizesalleconomicpotentials0.0Thepropertyofself-organizationofthedigitalbusinessecosystemcreatesrequirementsregardinginterfacecompatibilityandprocessorganization.Thestandardizationandcompati-bilityofinterfacesisaprerequisitefortheintegrationofobjectsandagentsinthedigitalbusinessecosystem.Comprehensivelycompatibleinterfacesensuresymmetricallydistributed1real-timeinformation,thuspreventingeconomicandecologicalmisallocations1.0Theprocessorganizationofacompanymightberealizedviafunctionalsilos,cross-functionalprocesses,orviaafullintegrationofsuppliersandcustomers.Whilestrictlyseparatedfunc-1tionalsilosareexpectedtohavenegativeeffectsforallsustainabilitydimensions1,11acompleteintegrationofcustomersandsuppliersleadstotheoppositeresult1.More1complexistheeffectofcross-functionalprocesses:ascross-functionalprocessesinvolvemultipledivisions,ecologicalwasteisprevented.Theinclusionofseveraldivisionsleadstohigherprocesscosts,butsincetheoutcomeismoreprogressive,theseeffectsarelikelyto0compensateeachother1.0Inordertoutilizeheterogeneityasasuccessfactorofdigitalbusinessecosystems,opennessofproductsandservicesisjustasnecessaryassuitablecomplementarities.Thecombinationoftangibleproductsandintangibleservicesraisescustomers’benefits(Goedkoopetal.,1999).Thisopennessofproductsandservicesisthecrucialfactorincreatinglinkswithcollaboratingpartners.StandaloneproductsandservicesoffernoopportunitiesforsynergiesinallthreeTimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

515Thedigitalbusinessecosystemsustainabilitycube5031dimensionsofsustainability1,whilefullymodularandupgradeablegoodsandservices11holdsubstantialpotential1.1Inadditiontogeneralopenness,thenatureofthepossiblecomplementarityisalsoimpor-tant.Uniquecomplementaritiesdescribeasituationwherethegoodsandservicesofecosystemmembersdonotfunctionwithouttheservicesofthecandidate.Accessionwouldthushave1immediatepositiveeconomiceffects0.Genericcomplementaritiesaresounspecificthat0theaccessionofthecandidateonlyhaspositivesocialeffects,asthecandidatelacksexclusive0performancecapabilities0.Supermodularcomplementaritiesdescribearangeofthecan-1didate’scompetenciesthatenhancestheattractivenessoftheagents’offeringsineachdimen-1sionofsustainability1.1Theagentsofadigitalbusinessecosystemareco-creatinggoodsandservices.Theinterac-tionwithcustomersandsuppliersaswellastherecyclingcapabilitiesareofparticularimpor-tance.Theinteractionrelationshipwithcustomersandsuppliersisbasedonadichotomousapproach:atransactionalisdistinguishedfromthecollaborativeexchangerelationship.Thejointserviceprovisioniscarriedoutwithagentsthatincludecompaniesofthesamevalue-creationlevel,butalsocustomersandsuppliers,sothattheinteractionwithcustomersandsuppliersisofinterest.Whileatransactionalexchangerelationshipcanbeeconomically1advantageous,noecologicalorsocialbenefitscanbegenerated1.Inacollaborative11exchangerelationship,potentialscanalsoberaisedhere1.1Inthedigitalbusinessecosystem,therecyclingcapabilitiesareofparticularimportance,asthe(undesired)outputsofthecompaniescanrepresenttheinputsofothercompanies.Without1anyapproachtorecycling,economicandecologicaldisadvantagesaretobeexpected1.0Withapurelyinput-orpurelyoutput-orientedrecyclability,nomaterialcyclesareclosed,butTimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

516504Handbookondigitalbusinessecosystems1atleasteconomicadvantagesaregenerated0.Circularitydesignsoutwasteandpollution,0closestheproduction‒consumptionsystem,andregeneratesthenaturalsystemfeaturingpos-1itiveeffectsonallthreelevelsofsustainability1.1Thecandidate’swillingnesstoshareknowledgeandtheanticipatedcandidate’sdependenceontheecosystemareindicatorsthatservetoevaluatetheirhandlingofthecompetitivesitua-tion.Adistinctioncanbemadebetweenarestrictiveandafreesharingofknowledgebythecandidate.Throughthesharingofknowledge,theecosystemisabletodevelopcompetencies1thatarebeneficialtoallthreedimensionsofsustainability1.Arestrictivesharingofknowl-1edgewouldhavenoconsequencesfortheecologicalandsocialdimension.However,sincethecandidateskimstheknowledgefreelysharedbytheecosystemwithoutcontributingtoit1themself,theecosystemisthreatenedwithnegativeeconomicimpactsinthelongrun0.0Theanticipateddependenceofthecandidateontheevaluatingdigitalbusinessecosystemalsoimpliesconsequencesforthethreedimensionsofsustainability.Ifthecollaborationaspiredtowiththeevaluatingecosystemrepresentstheonlyparticipationinanecosystem,therestofthebusinessactivitiesofthecandidatewouldbecarriedoutintraditionalorganizationstructures.Thisredundancyandthedirectcompetitionhavenegativeeffectsinalldimensions1ofsustainability1.Ifthecandidateisactiveinseveralecosystemsandrenouncesworking10intraditionalstructures,socialbenefitsareassociated0.Anexclusivepartnershipofthe1candidatewiththedigitalbusinessecosystemisthemostadvantageousdependencyrelation-1ship1.1Themorphologicalboxdecomposestheproblemintoitsmainattributesandassignsthepossiblemanifestationstoeachperformancemeasure(seeFigure30.4).TimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

517Thedigitalbusinessecosystemsustainabilitycube505Figure30.4Morphologicalboxofdigitalbusinessecosystems’sustainabilityandidentifiedcharacteristicattributesofthecasestudyConceptualizationandAnalysisThedigitalbusinessecosystemsustainabilitycubeiscomparabletotheprincipleofutilityanalysis.TheutilityanalysisintroducedbyZangemeister(1976)isastraightforwardtoolforthesystematicpreparationofdecisions,whichallowsavarietyofindicatorsandcausescomparativelyfewpracticaldifficulties.Thethreeobjectivesofeconomy,ecology,andsocialaffairsrequireatransformationinthree-dimensionalspace.Correspondingtothethree-linecolumnvectorintroducedpreviously,thethreesustainabil-itydimensionsrepresentthethreeaxesofthedigitalbusinessecosystemsustainabilitycube(Figure30.5):thex-axisrepresentstheeconomic,they-axistheecological,andthez-axisthesocialdimensionofsustainability.Thepurposeofauser-orientedandtransparentdecision-makinginstrumentisaccompaniedbytheabandonmentofindicator-specificweightings.Theoverallvalueofacandidateresultsfromthelinkingofalltenvectors.Fortheevaluationoftheadvantageousnessonlytheendpointisofimportance.Ifacandidatehasapositiveeffectonthedigitalbusinessecosysteminallthreedimensionsofsustainability,thedigitalbusinessecosystemshouldclearlycollaborate(octantI).Ifthecandidatemakesapositivecontributionintwoofthethreedimensionsofsustainability,col-TimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

518506HandbookondigitalbusinessecosystemsFigure30.5Conceptionandinterpretationofthedigitalbusinessecosystemsustainabilitycubelaborationismorelikelytoberecommended(octantsII,IV,andV).Ifthecandidatesupportsonlyonesustainabilitydimension,collaborationisrathernotrecommended(octantsIII,VI,andVIII).Ifthecandidatedoesnotsupportanyofthethreedimensionsofsustainability,nocollaborationisrecommended(octantsVII).Thecarmanufacturerinthenumericalexample(seeFigure30.4)doesnotcontributetosustainabledevelopment(octant7),soadmissiontotheDBEisnotrecommended(seeFigure30.5).CONCLUSIONANDFUTURERESEARCHOPPORTUNITIESNatureservesbusinessecosystemsasamodelintermsofstructureandorganization.Togetherwithdigitization,thisbiomimicryisacontributiontothefactthatthedigitalbusinesseco-systemisperceivedasapromisingconceptforcopingwitheconomic,ecological,andsocialchallenges.AnalogoustotheShinkansen“BulletTrain,”whichgeneratedeconomicandeco-logicalbenefitsbyimitatingthekingfisher’sbeak,digitalbusinessecosystemsarecapableofrealizingsimilarbenefits.Nowadays,companiesespeciallyfaceincreasingchallengesregard-ingsustainablevaluecreation.Sustainabilityalreadydisplaysacomplexsetofobjectivestosinglecompanies.Forcompaniescollaboratingindigitalbusinessecosystemsthechallengeiseventougher,astheynotonlyhavetomonitortheirownsustainabilityperformance,butalsoneedtoevaluatecandidates.Despitethefactthatbothsustainabilityanddigitalbusinessecosystemsareconsideredpromisingconceptsinanisolatedview,anintegratedconsiderationandawidelyacceptedsetofindicatorsarenotavailable(GracaandCamarinha-Matos,2017).Inordertodevelopatoolfortheevaluationofacandidatetobeacceptedinadigitalbusi-nessecosystemwithregardtotheobjectiveofsustainability,theconceptofdigitalbusinessTimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

519Thedigitalbusinessecosystemsustainabilitycube507ecosystemshasbeenexaminedindetail.Atbaseline,theconceptisdecodedusingabibliomet-ricanalysisbyidentifying12descriptiveelementsconsistingofanequalnumberofproperties,challengesandobjectives.Sustainabilityisoneoutofthefourcentralobjectivesofdigitalbusinessecosystems.Theinteractionsofthe12definingelementswerejustifiedlogically.Itisevidentthatsustainabilityrepresentsahighlyconflictingobjective.Hence,withthedigitalbusinessecosystemsustainabilitycubeadecisionsupportwasdevelopedforthisobjective.Thedigitalbusinessecosystemsustainabilitycubeisbasedonthefundamentalideaofbenchmarking.Theend-pointofatrajectoryofalltenindicatorsissituatedinoneoftheoctants,sothataclearrecommendationforcollaborationcanbegiven.Theapproachoutlinedhereisnotstrictlyquantitative;onthecontrary,itisbasedonamorphologicalboxwithintuitivelyunderstandable,butalsoverylimited,manifestationsperindicator.Furtherresearchmightaimatquantifyingthepresentedapproach.Anexpansionofthesetofindicatorswouldbejustasconceivableasanenhancementoftheprocedurebyaddingindicator-specificweightings.Thepracticalsuitabilityofthedigitalbusinessecosys-temsustainabilitycubehasnotyetbeenproven,sothatpilotapplications,evaluationsofpilotexperiments,workshops,andotherinteraction-triggeringmethodswithpotentialuserscancontributetotheimprovementoftheinstrument.Theresearchconceptpresentedhereadvocatestheincorporationoftwoindustrialdevelop-mentsthatpromiseaprofoundtransformationofcurrentproductionandconsumptionpatterns:digitalbusinessecosystemsandsustainableproduction.Anintegratedconsiderationinfurtherresearchactivitiesisessentialtoharnessthepotentialinherentinbothconcepts.REFERENCESAdner,R.(2017).Ecosystemasstructure:anactionableconstructforstrategy.JournalofManagement,43(1),pp.39–58.Alt,R.,Abramowicz,W.,andDemirkan,H.(2010).Service-orientationinelectronicmarkets.ElectronicMarkets,20(3),pp.177–180.Arora,A.,andGambardella,A.(1990).Complementarityandexternallinkages:thestrategiesofthelargefirmsinbiotechnology.JournalofIndustrialEconomics,38(4),pp.362–379.Briscoe,G.(2010).Complexadaptivedigitalecosystems.ProceedingsoftheInternationalConferenceonManagementofEmergentDigitalEcoSystems,pp.39–46.Briscoe,G.,andSadedin,S.(2009).Digitalbusinessecosystems:naturalscienceparadigms.Arxiv,abs/0910.0646(2009).Briscoe,G.,Sadedin,S.,andPaperin,G.(2007).Biologyofapplieddigitalecosystems.InauguralIEEE-IESDigitalEcoSystemsandTechnologiesConference,pp.458–463.Camp,R.C.(1993).Abibleforbenchmarking,byXerox.FinancialExecutive,9(4),pp.23–27.Cassiman,B.,andVeugelers,R.(2006).Insearchofcomplementarityininnovationstrategy:internalR&Dandexternalknowledgeacquisition.ManagementScience,52,pp.68–82.Chen,D.,Vallespir,B.,andDaclin,N.(2008).Anapproachforenterpriseinteroperabilitymeasurement.ProceedingsoftheInternationalWorkshoponModelDrivenInformationSystemsEngineering:Enterprise,UserandSystemModels(MoDISE-EUS’08),pp.1–12.Clarysse,B.,Wright,M.,Bruneel,J.,andMahajan,A.(2014).Creatingvalueinecosystems:crossingthechasmbetweenknowledgeandbusinessecosystems.ResearchPolicy,43(7),pp.1164–1176.Cusumano,M.A.(2010).Theevolutionofplatformthinking.CommunicationsoftheACM,53(1),pp.33–35.Darking,M.,andWhitley,E.(2007).TowardsanunderstandingofFLOSS:infrastructures,materialityandthedigitalbusinessecosystem.ScienceStudies,20(2),13–33.TimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

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521Thedigitalbusinessecosystemsustainabilitycube509Prahalad,C.K.,andRamaswamy,V.(2004).TheFutureofCompetition:Co-CreatingUniqueValuewithCustomers.Boston,MA:HarvardBusinessSchoolPress.Razavi,A.R.,Moschoyiannis,S.K.,andKrause,P.J.(2007).Acoordinationmodelfordistributedtransactionsindigitalbusinessecosystems.InternationalConferenceonDigitalEcosystemsandTechnologies,pp.159–164.Availableathttps://doi.org/10.1109/DEST.2007.371963(accessedOctober10,2020).Selander,L.,Henfridsson,O.,andSvahn,F.(2010).Transformingecosystemrelationshipsindigitalinnovation.ICIS2010Proceedings.Selander,L.,Henfridsson,O.andSvahn,F.(2013).Capabilitysearchandredeemacrossdigitalecosys-tems.JournalofInformationTechnology,28(3),pp.183–197.Senyo,P.,Liu,K.,andEffah,J.(2019).Digitalbusinessecosystem:literaturereviewandaframeworkforfutureresearch.InternationalJournalofInformationManagement,47,pp.52–64.Subramaniam,M.,Iyer,B.,andVenkatraman,V.(2019),Competingindigitalecosystems.BusinessHorizons,62(1),pp.83–94.Teece,D.J.(1987).Capturingvaluefromtechnologicalinnovation:integration,strategiepartnering,andlicensingdecisions.InNationalAcademyofEngineering(ed.),TechnologyandGlobalIndustry,CompaniesandNationsintheWorldEconomy.Washington,DC:NationalAcademiesPress,pp.S.65‒96.Tsujimoto,M.,Kajikawa,Y.,Tomita,J.,andMatsumoto,Y.A.(2017).Areviewoftheecosystemconcept—towardscoherentecosystemdesign.TechnologicalForecastingandSocialChange,136,pp.49–58.UnitedNationsConferenceonEnvironmentandDevelopment(1987).OurCommonFuture.NewYork:OxfordUniversityPress.Westerman,G.,andBonnet,D.(2015).Revampingyourbusinessthroughdigitaltransformation.MITSloanManagementReview,56(3),pp.10–13.Wilkens,U.(2017).Digitalisationandnewformsofvalueco-creationinecosystems.Exploitingpoten-tialsandcopingwiththechallengesoftransformation,JournalofPractitioners,32,pp.6–9.Zangemeister,C.(1976).NutzwertanalyseinderSystemtechnik:EineMethodikzurmultidimensionalenBewertungundAuswahlvonProjektalternativen(4thedn).München:Wittemann.TimoKlünderandMarionSteven-9781839107191DownloadedfromPubFactoryat05/28/202210:26:11AMviaColumbiaUniversityLibrary

52231.BigdataanalyticsfordevelopingsustainablecapabilitiesofdigitalbusinessecosystemsRaissaPershinaINTRODUCTIONAchievingsustainabledevelopmentisacomplexchallengethathastobesolved.Organizationsarefrequentlyonthefrontlineofsuchefforts,asaddressingthesustainabilitydemandsoftheincreasinglyawarecustomers,policy-makers,andemployeesbecomesamatterofsurvival.Intheirattemptstotacklesustainabilitychallengesandkeepupwiththetimes,manyorganiza-tionsturntheirattentiontonoveltechnologies(HazasandNathan,2018;Georgeetal.,2020),whichhavelongbeenviewednotonlyasthesourceoforganizationalcompetitiveadvantagebutalsoasanessentialcatalystforchangeandsustainabledevelopment(Newell,2010;Grubb,2004).Lately,noveladvanceddigitaltechnologyhasreceivedparticularattention.Therearestrongindicationsthattheyhaveapotentialtopositivelysupportandenableorganizationalandsoci-etaltransformationtowardsustainability(HazasandNathan,2018;Kewelletal.,2017;Höjeretal.,2018).Forinstance,Adamsetal.(2018)discussedpotentialapplicationsofblockchain,aformofdistributedledgertechnology,todeliverpositivesocialandenvironmentalout-comes.Salam(2020)examinedtheroleoftheInternetofThings(IoT)inbuildingsustainable,resilientcommunities.Loyetal.(2016)exploredthree-dimensional(3D)printingcapabili-tiesinsupportingsocioculturalsustainability.However,despitetheincreasingevidenceonpositivesynergiesbetweeninnovativedigitaltechnologiesandsustainabledevelopment,knowledgeofthephenomenaremainsfragmentedandincomplete.Thisseemstobethecasepartiallybecausemuchoftheexistingliteratureinthisresearchareaisconceptualinnature.In-depthempiricalstudiesremainscant.Consequently,thereisnodeepunderstandingofhowexactlydigitalinnovationcanbeusedforgood,andwhataretheenablingprocesses,players,conditions,andmechanisms.Bydrawingontheemergingliteratureondigitalbusinessecosystems,thisempiricalstudyaimstoaddressthisgapbyexploringtheroleofdigitalinnovation,namely,(big)dataanalyt-icsandrelatedtechnologies(DAT),inthedevelopmentofsustainablecapabilitiesandusingtheindustryoflast-milefooddeliveryastheempiricalsetting.DATliesattheheartofthedigitalbusinessecosystemoffooddelivery,enablingdeliveryfirms’ongoingoperationsaswellasshort-andlong-termdecision-making.Inparticular,inthischapter,IexploretheroleofDATinenablingvariousorganizationalfunctionsanditsimplicationsforthesustainablecapabilitiesofnotonlythedeliveryorganizationbutalsoitswiderbusinessecosystem,com-prisingpartners,customers,andcontractors.Thetwoquestionsthischapteraimstoanswerareasfollows:Howdoorganizationsusedataanalyticsandrelatedtechnologies?Whataretheirimplica-tionsforsustainablecapabilitiesofthedigitalbusinessecosystem?510RaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

523Bigdataanalyticsfordevelopingsustainabledigitalbusinessecosystems511Altogether,thisstudypointstotheimportantpathwaystowardmoresustainablebusinesspracticespavedbyDATandshowsthecrucialroleofthecircularparticipationandpur-posefulactionsofecosystemmembersinreachingsuchpositiveoutcomes.Moreover,thefindingsofmyworkilluminatenonhumanactors(thatis,artificialintelligence,AI)askeydecision-makers,whoplayacriticalroleintheincreasingsustainablecapabilitiesofthedigitalbusinessecosystem.Inthefollowingsections,Ifirstdiscussthetheoreticalunderpinningandkeyinferencesfromtheexistingrelevantliterature,followedbytheintroductionoftheempiricalsetting,methodologicalapproaches,andfindings.Iconcludethischapterbydiscussingcontributionsofthisworktotheliteratureaswellastheoreticalandpracticalimplications.THEORYBACKGROUNDOrganizationalSustainableCapabilitiesResolvingglobalchallengessuchasclimatechange,socialinequalities,andresourcescarcityisbecomingincreasinglyurgent.Infact,wholeindustriesareunderpressuretobecomemoresustainable.Onesuchexampleisthepetroleumindustry,which,intheageofrenewableenergy,isbecomingincreasinglypressurizedandevenstigmatized(Welin,2020)byactivists,governments,andthepublic.Reducingcarbonemission,tappingintorenewableenergy,andbuildinganoverallmoresustainability-orientedbusinessmodelaresomeofthemajorgoalsontheagendaofmanyoftheseorganizations.Anotherexampleispharmaceuticalorganiza-tions,whicharerequiredtoaddressissuesrelatedtopollution,andprotectnaturalresourcesandwildlifefrom“pharmawaste.”Increasingly,existingmeansofcreatingvalue,whichfrequentlyprioritizeorganizations’bottomlineoversustainability,arebecomingobsolete,andmanyorganizationsfaceanurgentneedtoreinventthemselves.Consequently,developingsustainablecapabilitiesisontheagendaofmanyorganizationsthatwouldotherwiseriskalienatingtheirstakeholders(SoppeandPershina,2019)andjeopardizingtheirveryexistence.Sustainablecapabilitiescanbedescribedastheabilitytoorchestrateresourceseffectivelytoachievesustainablegoalsanddevelopmoresustainablepractices(SinghandEl-Kassar,2019).Intheorganizationalcontext,sustainablecapabilitiesoftenbecomeintegraltoastrat-egyorabusinessmodelandfrequentlyimplythecreationofinnovativesolutionsthataddressstakeholderneedsandenvironmentalimperatives(Libonietal.,2017;Gableretal.,2015;Beske,2012).Researchhassuggestedthatsustainablecapabilitiescanbeenabledviavariousinternalandexternalmechanisms.Authorshavementionedthecriticalroleoforganizationalculture,collaborations,andinnovativeness,amongothers,infacilitatingorganizationalsus-tainablecapabilities(Sehnemetal.,2012;Beske,2012;Rashidetal.,2015).Theliteraturealsoindicatesthatonewaytoincreaseorganizationalsustainablecapabilitiesisbyusingadvancedtechnologies(Benitez-Amadoetal.,2010;Hofmannetal.,2012)andharnessingthesynergiesbetweendigitaltransformationandsustainability(RanjanandJha,2019).AdvancedDigitalTechnologiesforSustainableDevelopmentAscantbutgrowingbodyofliteraturehassuggestedmobilizingnoveldigitaltechnology(forexample,cloudandmobilecomputing,IoT,andblockchain)asastrategythatorgani-RaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

524512Handbookondigitalbusinessecosystemszationscanpursuetodevelopmoresustainablebusinesspractices.Forinstance,IoT-basedtechnologies,thecoreofthe“smart”revolution,arepredictedtotransformavarietyofeco-nomicsectors,forexample,agriculture,medicine,manufacturing,andengineering.Amongothers,theyarecrucialtonewandmoresustainablewaysofmanagingwasteandenergy,andvariousindustrialprocesses(Nižetićetal.,2020;Kumaretal.,2019;Beieretal.,2018).Blockchaintechnology,whileispredominantlyassociatedwithbitcoin,isalsoappliedtopromoteenvironmentalandsocialsustainability(Kewelletal.,2017).OneexampleofthisistheSolarCoininitiative,whichincentivizesproducersofsolarenergybyrewardingthemwithblockchain-baseddigitaltokensformegawatt-hoursofsolarenergyproduced(SolarCoinwebsite).Altogether,Höjeretal.(2018)outlinedfourwaysinwhichdigitaltechnologiescanassistinreachingenvironmentalgoals.Theseare:“inform,”whichreferstolargeamountsofdatageneratedbydigitalmeansthatcanilluminateenvironmentalissues;“replace,”whichrelatestoanalogartifactsbeingreplacedbydigitalartifacts;“intensify,”whichdescribestheincreaseintheuseofexistingthingsachievedviadigitalmeans;and“streamline,”whichreferstotheoptimizationofresourceutilizationbyusingdigitaltechnology.Althoughseveralstudieshavepresenteddigitalinnovationasinstrumentaltoenactingsus-tainabledevelopment,adegreeofdoubtandcontroversyremains(Tomlinsonetal.,2020).Forinstance,somescholarssuggestthattheenvironmentalbenefitsfacilitatedbydigitaltechnol-ogiesmightbeoverestimated(Fuchs,2008),orthatthepositiveenvironmentalimpactmightbetarnishedbytheenvironmentalfootprintoftheproductionandconsumptionofthetech-nologies(Schneider,2019).Reachingsustainabledevelopmentisindeedacomplexsubject,withnoone-size-fits-allsolution(Hargadon,2015).Ultimately,furtherempiricalresearchisrequired,whichcanofferafine-grainedunderstandingofthephenomenaandelaborateonhowexactlythepositivesynergiesbetweendigitalinnovationandsustainabledevelopmentcanbeachieved(Nižetićetal.,2020;Libonietal.,2017).Thischapteraimstofillthisgapbyfocusingononeparticularlypromisingdigitalinnova-tionthathaslatelybeengainingmomentum,thatis,(big)dataanalyticsandtechnology.DATcanbedefinedasa“holisticapproach”ofcollecting,managing,andprocessinglargedatasetstocreateactionableideas(BoydandCrawford,2012).Studieshaveindicatedthatthepositiveoutcomesofbigdatagobeyondeconomicvalue(Güntheretal.,2017;Mikalefetal.,2020;Acharyaetal.,2018),alsobringingbenefitstothesocietyandtheenvironment(LoebbeckeandPicot,2015;Güntheretal.,2017).Forinstance,DAThasbeenshowntoincreasetheunderstandingofthedynamicsofinfectiousdiseases(Chenetal.,2017),andhasbeenusedinsmartenergymanagement(Zhouetal.,2016),andtopromotecitizeninclusion(GSMA,2019).However,theliteraturehasalsoindicatedthatsolvingthecomplexchallengesofsustain-abilityisnotpossiblebyusingsolelydigitaltechnologyorrelyingonsingleindividualsororganizations(Reficcoetal.,2018;McCormicketal.,2016).Thesedifferenttypesofactors,whilebeingcriticalpiecesofthepuzzle,cannotbeconsideredinisolation.Rather,examin-inginterrelationsandinteractionsbetweenthemandhowtheyaffectsustainabilitycouldbeapromisingwayforward(Pappasetal.,2018),whichsofarhasreceivedonlylimitedresearchattention.Aparticularlyusefultheoreticallenstoaddressthisresearchgapistheconceptofdigitalbusinessecosystems(DBEs).RaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

525Bigdataanalyticsfordevelopingsustainabledigitalbusinessecosystems513DigitalBusinessEcosystemsDBEsareanemerginginterdisciplinaryresearchfieldthatrequiresfurtherconceptualizationandtheorization(Senyoetal.,2019).ResearchhassuggestedvariousdefinitionsforaDBE,withashiftingfocusfromthetechnologytoorganizationalaspects(e.g.,Lenkenhoffetal.,2018;Briscoe,2010;Selanderetal.,2013;KochandWindsperger,2017).Overall,aDBEcanbedefinedasabusinessenvironmentofconnectedorganizations,individuals,anddigitaltechnologiesthataimtoco-createvalue.ExamplesofDBEsarediverseandabundant:aninterorganizationalnetworkofcarmanufacturersacquiringdigitalmappingservicestobuildsmartvehicles(KochandWindsperger,2017);clothmanufacturersbuildinga“customertomanufactory”platformtoeliminateintermediariesandreachcustomersdirectly(Huetal.,2016);andorganizationsandconsumersco-creatingbrandingonsocialnetworkplatforms(Kambojetal.,2018).Potentially,themostprominentexamplesofDBEarerecentlyemergedorganizationsbasedonmulti-sidedadvancedplatforms,suchasUber,Airbnb,andTripadvisor(SussanandAcs,2017;Alaimoetal.,2020).TheseexamplesshowthatDBEsareheterogene-ousincharacterandcontent,theycrossgeographicborders,anddissolveindustryboundaries(KochandWindsperger,2017).DBEscomprisediversetypesofactorssuchasincumbentorganizations,newventures,andindividuals.Moreover,followingthemetaphorofanaturalecosystem,aDBE’sdistinctionisthe“digitalspecies”inhabitingecosystems(forexample,softwarecomponentsorapps)(Nachira,2002),whichareascrucialtotheecosystemfunction-ingasits“living”counterparts.ThemajorityofDBEs,disregardingtheircomposition,nature,andgoalofcollaboration,arecharacterizedbymutuallybeneficialrelationshipsleadingtothecreationofvaluegreaterthanwhatcanbeachievedbyanysingleorganization(Senyoetal.,2019;Adner,2006).PreviousresearchonDBEshaspredominantlyfocusedonexploringco-creationofvalueinthecontextofbusiness-orientedgoalsandobjectives,suchashowtoincreaseinnovationcapabilities,buildabrand,orachieveacompetitiveadvantage(e.g.,Adner,2006;Selanderetal.,2013;Kambojetal.,2018).WhatseemstoreceivelimitedattentionishowDBE’sparticipantscanincreasetheirsustainablecapabilitiestoreducetheenvironmentalburdenassociatedwithachievingeconomicperformance(Yorketal.,2003).Thereareindicationsthattheecosystemperspectivemightgeneratevaluableinsightsintothedevelopmentofsustainablecapabilitiesofecosystemsandinvolvedactors.Romanelli(2018),forinstance,discussedthecriticalroleofinformationandcommunicationtechnology(ICT)andinteractionsamongindividuals,governmentalagencies,andbusinessesinincreas-ingthesustainabilityofcitiesandcommunities.Maetal.(2018)empiricallyinvestigatedthesharingmobilityindustryanddiscussedthecruciallinksandrecursiveprocessesamongtheactorsoftheevolvingbusinessecosystemandthegovernmentinrealizingdigitalinnovation,whichaddressesacity’ssustainabilityagenda.Takentogether,thislimitedbodyofworkindicatesthatachievingsustainabledevelopmentrequirestheinvolvementandcooperationofvarioustypesofactors,andthisfrequentlyoccursarounddigitaltechnologies.Inthischapter,Iattempttoadvancethislineofthoughtbyexploringhowinteractionsamongparticipantsofadigitalbusinessecosystemcontributetothedevelopmentofsustain-ablebusinesspractices.Moreover,Iexplicitlyfocusonnoveldigitaltechnologyasacentralparticipantofsuchecosystems.RaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

526514HandbookondigitalbusinessecosystemsMETHODOLOGYLast-MileLogistics:DigitalBusinessEcosystemofOnlineFoodDeliveryTheempiricalsettingforthisstudyisthelogisticsfirmsprovidinglast-miledelivery.Specifically,Ifocusononlinefooddelivery.Onlinefooddeliveryreliesontheecosystemofparticipantsandisbasedoncollaborationbetweenincumbentfirmpartners(forexample,res-taurantsandgroceries)anddigitalentrepreneurs:thedeliveryfirms.Othercriticalparticipantsoftheecosystemarecustomerswhoplaceordersandcourierswhodelivertheorders.Thesevarioustypesofstakeholdersareunitedbyadigitalplatformonwhicheachhasadedicateddigitalspace(thatis,awebsiteoranapp).Theincreasingdemandfordeliveredfoodistheimpetusoftheaccompanyinggrowthintheonlinefooddeliveryindustry.SomeexamplesoforganizationsincludedeliverycompaniessuchasDeliveroo(intheUnitedKingdom)andPostmates(intheUnitedStates).Whilemanyorganizationsstartedupbyprimarilytargetingthefooddeliverymarket,someeventuallydiversifiedtheirportfoliowitharangeofapplications.Thefooddeliveryapplication,however,potentiallyrepresentsthemostprominentcaseandillustrateswellthevalueco-creationbene-fitswithinadigitalbusinessecosystem.Here,deliverycompaniescollaboratewithrestaurants,coffeeshops,andothereatingplaceswhosemenustheyaggregateonadigitalplatformtoofferendcustomersavarietyofdishesandcuisines.Customersselectmenuitemsandplaceordersviaanapporawebsite.Couriers(frequently,independentcontractorsmakingdeliveries)pickupordersfromrestaurantsanddeliverthemtocustomers.Thus,customerscaneatrestaurantfoodathome,restaurantscanoutsourcedeliveryandincreasetheirdigitalpresenceandcapa-bilities,andcourierscanearnalivingbymakingdeliveries.Thedeliveryfirmmakesmoneybychargingrestaurantsandcustomersafee(flatorperorder).Despitebeingnascent,thisrapidlygrowingmarkethasattractedasubstantialamountofinvestmentandisexpectedtobeworthatleast$200billionby2025(Singh,2019).Atthesametime,sustainabilitypracticesofthedigitalbusinessecosystemoffooddeliveryarecontroversial.Itsmembersareexperiencingthreemajorsustainabilitychallenges.Onechallengeisthecarbonemissionsgenerated.Thelast-miledeliverysegmentisconsiderednotonlyasthemostexpensivepartoflogistics,butalsoasthemostpollutingone(BrownandGuiffrida,2014).Anotherchallengeisfoodwastage.Strikingly,one-thirdoffoodproducedgloballyislostorwasted,whichthreatensfoodsecurityandtheenvironment(Chalaketal.,2018;Papargyropoulouetal.,2019).Finally,thethirdchallengeistheamountofdisposableplasticandpackagingwastegeneratedbytheecosystem.Forinstance,atypicaldeliverymightincludemultipletypesofmaterials(forexample,cardboard,plastic,aluminumfoil,andstyrofoam)(Chueamuangphanetal.,2020),withonlyafractionofitbeingrecovered(AarnioandHämäläinen,2008).AccordingtotheWorldEconomicForum,inthenexttenyears,thedemandfordeliveriestothedoorwillincreaseby78percent,whichundertoday’sconditionswouldexacerbatethesustainabilityproblems(Whiting,2020).ResolvingthemisbecomingevenmoreurgentinthelightoftheCOVID-19pandemic,whichmorethandoubledthedemandforonlinedeliveries(UnnikrishnanandFigliozzi,2020;Marketwatch,2020).Furthermore,manyofthedeliveryfirmsarenascentandfrequentlybuiltwithdataanalyticsattheircore.DATiswidelyusedintheindustryinmanywaysandacrossvariousorganiza-tionalfunctions(Jeskeetal.,2013):frompoweringmachinelearningmodelsresponsiblefororder–courierallocationandpredictingcustomerdemandtoinformingcustomerrelationshipRaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

527Bigdataanalyticsfordevelopingsustainabledigitalbusinessecosystems515managementpractices,withsomeorganizationsreportingrelianceondatain90percentofdecisionsmade(Wong,2018).Takentogether,thecaseoftheonlinefooddeliveryindustryrepresentsfruitfulgroundtoexplorethebigdataphenomenaandtoachievethegoalsofthisstudy.ResearchDesign,DataCollection,andAnalysisDuetothelimitedunderstandingoftheroleofdataanalyticsinthedevelopmentofsustainablebusinesspractices,thischapteradoptsaqualitativeexploratoryresearchdesign.Themaingoalofthisstudywastoadvancetheunderstandingofthisphenomenononthebasisofcompre-hensiveempiricalinsights,whichrequiredthecollectionandanalysisofdatafrommultiplesources(Milesetal.,2014).TheinitialstepindatacollectionwasmappingoutimportantplayerswithheadofficesinEurope(mostlyinScandinavia,theUnitedKingdom,andGermany)andtheUnitedStates,focusingonorganizationsthatpositionedthemselvesasfirmsattheintersectionoffooddeliveryanddigitaltechnology.Mostofthesefirmsfocusspecificallyondeliveringfoodandrelatedproductsincollaborationwithrestaurantsandotherfoodsuppliers,butsomeofthempositionthemselvesasgeneralists.Thisinitialstepwascrucialtobuildinganunderstandingofthefooddeliveryindustryandeachoftheinvolvedpartiesconstitutingthedigitalbusi-nessecosystem,aswellasvarioususecasesandapplicationsofdataanalytics.Besidestwoinformalconversationswiththeindustryinsiders,keyactivitiesinthisinitialstepincludedcollectinginformationonorganizationsfromtheirwebsitesaswellasarticlesandpublicationsondominantplayersandtheindustrymoregenerally,focusingonpiecesespeciallyrelevanttothisstudy’sresearchcontext.Oneoftheinformantspointedtodevelopers’blogs(forexample,https://doordash.engineering/)asavaluablesourceofinformation,whichwasaddedtothegrowingcorpusofrelevantdata.Alreadyinthisinitialstage,itbecameevidentthatdataanalyticsplayanessential,albeitoftenindirect,roleinthedevelopmentofsustainablecapa-bilities.Thispreliminaryinvestigationalsouncoverednotableandunexpectedfindingssuchas“nonhuman”participantsofthedigitalbusinessecosystem.Itshiftedtheresearchfocustoexploreinmoredetailnotonly“human”participantsandhowtheyusedatabutalsononhumanparticipants,namely,thedecision-makingalgorithmsandtheirroleindevelopingsustainablecapabilitieswithinadigitalbusinessecosystem.Suchshiftsinresearchfocusareinnatetostudiescharacterizedbyexploratoryresearchdesign(SaundersandLewis,2012).Thenextstepinvolvedcontactingrelevantindustryinformantstodiscussandfurtherenrichtheemerginginsights.Theseindustryinformantsincludedorganizationalmembersworkingwithdataanalytics(forexample,dataandbusinessanalysts,andbusinessintelligencespe-cialists),businessdevelopment,andvariousindustryexperts(forexample,researcherswithinthefield,andjournalistsspecializingintheindustry).Table31.1providesanoverviewofthedataset,whichwasmainlycollectedin2020.Datacollectionandanalysiswereconcurrent,asrecommendedbytheliteratureonqualita-tiveresearch(Milesetal.,2014).Datawerecodedandanalyzedbyusingthestrategy,whichcanbedescribedasthematicanalysis(MaguireandDelahunt,2017).However,ratherthanexclusivelyapplyingopencoding,ahybridapproachwasused;thus,somethemeswereiden-tifiedinadvance,andothersemergedduringthecodingprocess(FeredayandMuir-Cochrane,2006).Forinstance,somepredesignedthemes,whichmotivatedthestudyoremergedduringthepreliminarydatacollectionandanalysis,included“digitalbusinessecosystemoffoodRaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

528516HandbookondigitalbusinessecosystemsTable31.1DatacollectionDatasourcesanddetailsKeyissuesandconcerns10in-depthsemistructuredinterviewswiththedeliveryIndustrystateoftheartindustryexpertsandrepresentativesofdeliveryorganizationsInvolvedparticipantsandtheirrolesandrelationsworkingwithdataanalyticsorbusinessdevelopmentUsecasesofdataanalyticsacrossorganizationalfunctions98itemsofmagazinearticles,onlinepublications,Dataanalyticsforsustainabilityorganizationalblogs,anddevelopers’blogsInvolvedintheecosystemtools,technologies,nonhumanactorsAppscreenshotsand“how-to”sections(e.g.,Deliveroo,“Digitalspaces”forstakeholdergroups,functionality,andoptionsDoorDash,UberEats)delivery,”“datasources,”“sustainabilitychallengesoffooddelivery,”and“applicationsandusecasesofdataanalyticswithinfooddeliveryorganizations.”Somecorethemes,whichsubsequentlyemerged,included“challengesrelatedtoDATimplementation,”“nonhumandecisionmakersascriticalparticipantsofDBE,”andthoserelatedto“circularparticipation.”Figure31.1illustratestheanalyticalreasoningbehindthedevelopmentofcircularparticipa-tion,acoreconceptofthischapter.ThisapproachtodatacollectionandanalysisenabledmetobuildacomprehensiveaccountoftheroleofDATinthedevelopmentofsustainablecapabilitieswithinadigitalbusinessecosystemofonlinefooddelivery.OPTIMIZATIONANDDAT-ENABLEDSUSTAINABLECAPABILITIESTheanalysisofcollecteddataindicatesthatDATprimarilyenablessustainablecapabilitieswithinadigitalbusinessecosystemthroughtheprocessofoptimization,whichreferstohowDATassistsDBEparticipantstooptimizetheirvarioussystems,processes,andresourceutilization.Ultimately,optimizationcontributestoreducingcarbondioxide(CO)emissions2andfoodwaste,encouragingenvironmentallyfriendlybehaviorandamoreefficientuseofresourcesoverall.Itispredominantlyachievedbyusingtwospecificmechanisms:enablingandsupporting.EnablingdescribesthecrucialrolethatDATplaysinenablingnonhumanactors’decision-making.SupportingrelatestoDAT’ssupportiveroleofhumanactors’decision-making.Figure31.2presentsthesefindingsinmoredetail.Overall,DATreliesonavarietyofdata,sourcedautomaticallyviavariousonlineplatformsandapplications(forexample,thedeliveryplatformandsocialmediaplatforms)andpro-videddirectlybyvariousstakeholdergroups(forexample,datafromsuppliersandpartners,couriers,andcustomers).Digitalandnondigitalactorsandsomecoreprocessesofvariousbusinessfunctionsrelyonthecollecteddataandinsightsderivedfromit.Atthesametime,DATenablesthesustainablecapabilitiesofthedigitalbusinessecosystemandcontributestoreachingsustainabilitygoals.ThefollowingtwosubsectionsexplainFigure31.2andthefindingsofthischapterindetail.Specifically,IexplicatetheroleofDATinenablingdecision-makinginnonhumanactors,andsupportinghumanactors’decision-making,anditsimplicationsforthedevelopmentofsustainablecapabilitieswithinadigitalbusinessecosystemofonlinefooddelivery.RaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

529Bigdataanalyticsfordevelopingsustainabledigitalbusinessecosystems517Figure31.1IllustrationofdataanalysisprocessEnablingDecision-MakinginNonhumanActorsRealtimeoperationalmonitoringDATisusedincourier–orderallocationanddynamicrouteoptimizationsystems.Fooddeliveryroutingisadynamicvehicleroutingproblemandamajorchallengeinlast-milelogistics(Reyesetal.,2018),whichhasbeenextensivelydiscussedintheexistingliterature(e.g.,Ghianietal.,2020;Jüngeretal.,1995).Thisisthecaseduetotheon-demandnatureoftheindustry,thescaleofoperation(thousandsoforderssimultaneously),highstandardsandexpectations(forexample,deliveryofpipinghotmealswithinminutes),andunpredictabilityRaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

530518Handbookondigitalbusinessecosystems(forexample,fluctuatingdemand,trafficcongestion).DATiscrucialinbuildingaresponsive,flexiblebusinessecosystemthatcansolvethedynamicroutingproblem.Thisusedtobeper-formedmanually,buttodaydeliveryfirmsrelyonartificialintelligence.Figure31.2Roleofdataanalyticsandrelatedtechnologiesinincreasingandco-creatingsustainablebusinesspracticeswithinadigitalbusinessecosystemofonlinefooddeliverySuchnonhumanactorsarecommonlyemployedintheindustryandareespeciallyimportantinfacilitatingkeyongoingoperations.OneexampleisDeliveroo,whoseengineersbuilta“supersmart”dispatchenginetheycallFrank,namedafterDannyDeVito’scharacterfromthetelevisionshowIt’sAlwaysSunnyinPhiladelphia.FranksucceededanotherdispatchenginecalledLouie.Amongothers,Frankhasacapabilityto“changeitsmind”andreassignordersonthebasisofreal-timedata.Moreover,engineersatDeliveroocreatedavisualizationtoolcalledFrank’sBraintoobservetheinnerworkingsofFrank’sdecision-making(Pudwell,2017).Deliveroo’sFrankisnotaloneonthemission.Infact,thedigitalbusinessecosystemofonlinedeliveryisbubblingwith“cyberlife.”DoorDash,forinstance,hascreatedadispatchenginecalledSibyl,namedaftertheGreekoracleknowntoutterpredictionsin“anecstaticfrenzy”(Zeng,2020).Similarly,thedeliverygiantUPSemploysORIONtooptimizeroutesandreducedeliverymilesby100millionannually(Marr,2019).Thesenonhumanactorsdistributeordersamongthecouriersinthemostoptimalwayinrealtime.Givenunpredictableconditionsof“living,breathingcities,”theymustconsidermultipledatapointssuchascourierandrestaurantlocations,possibletravelroutes,foodpreparationtime,thenumberofcouriersontheroad,andweatherconditions;datathatenablethemtoselectacourierandtocalculatethemostoptimaldeliveryroute.Suchadvanceddigitaltech-nologybecomesevenmorecriticalinfacilitating“orderstacking”situationswhenacourierisassignedmultipleorderspertrip.RaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

531Bigdataanalyticsfordevelopingsustainabledigitalbusinessecosystems519UsingDATtoaddresssuchoperationalobjectivesultimatelybenefitsallecosystemparticipants.Customersreceivetheirfoodasquicklyaspossibleandcantracktheirorders.Couriers,duetonotlosingtimewaitingatrestaurants’doorsteps,cansecuremoredeliveriesandincreasetheirearnings.Forthedeliveryorganization,DATmakesdeliverymoreefficientandreliable.Forinstance,FrankenabledDeliverootodecreasethedeliverytimeby20percent(Shead,2017).Forabusinessinwhichcustomersvaluequickdeliveryandhotfood,thespeedofdeliverybecomesacompetitiveadvantage.Regardingorganizationalsustainablecapabilities,optimizationofkeyorganizationalsystemsandprocessesleadstofindingoptimaldeliverysolutions.Thisseemstopositivelycontributetocrucialenvironmentalgoals,forexample,reducinggreenhousegasemissions.Inthisparticularcase,thispositiveeffectisachievedbecauseofthepossibilityofusingonecouriertripformultipleordersandbycalculatingoptimalroutestodestinations,eliminatingunnecessarymileage.Asoneoftheinterviewedexpertssharedwithme:thebeautyofitisthatthesealgorithmsareself-learning,theykeeprefiningitself.Itsignificantlyimprovesefficiencyoffooddelivery…Optimizingvehicleroutingandcuttingtimethatcouriersspendontheroadpositivelycontributestocuttingcarbonemissions.Youknow,thishugeglobalproblemhastobeaddressedatalllevels…Soabsolutely,advanceddigitaltech,AIparticularly,canhaveanimpactontheenvironment.Advancedalgorithmsalsocontributetoincreasingsustainablecapabilitiesbyenablinginno-vativebusinessmodels.Forinstance,NewYork’sfoodtechstartupGebniapplieswhatitcallsa“stockmarketforfood”businessmodel.Thefirm’svisionistodecreasefoodwaste,agoalmainlyachievedbyenablinguserstoplaceordersweeksinadvanceandbyadjustingpricesinrealtime.Specifically,Gebni’sbusinessmodelreliesonanadvancedalgorithmthatanalyzesthedemandformenuitemsinrealtimetooptimizeanitem’spricesbyincreasingordecreasingthemaccordingly.AccordingtoGebni’schiefexecutiveofficer,“Whatmakesouralgorithmuniqueandeffectiveinfightingfoodwasteisthatwedonotupdatepricesofmenuitemsasawholebutratherdynamicallypricemajoringredientsmakinguptheitemitself”(FoodTank,2017).SupportingHumanActors’Decision-MakingDATsupportsdecision-makingacrossdifferentorganizationalfunctionsandlevels.Inthefooddeliveryindustry,organizationsdrawfrommultipledatasourcestogeneratebusinessinsightsthatsupportmarketing,customerrelationshipmanagement,productmanagement,strategicdecision-making,andoperationalcapacityplanning.Forinstance,onthequestion“Whatareyouusingdataanalyticsfor?”,oneoftheinterviewedseniordataanalystsreplied,“Itiseasiertosaywhatwearenotusingitfor.Dataisthefoundationofourorganization,itwasbuiltarounddata.”Notably,thiscaseisubiquitousinthefooddeliveryindustry.Forexample,accordingtoseniorstaffatDeliveroo,datarunthroughtheveinsofeverythingtheydo,andeverysingleemployeeprobablyusesanalyticsatleastonceaday(Looker,2018).Amongother,intervieweesmentionedthatDATassistswithmakingdata-drivendecisions,increasingunderstandingofcustomers’tastesandbehavior,adjustingtomarketshifts,track-ingmarketingefforts,andmarketsegmentation.RaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

532520HandbookondigitalbusinessecosystemsStrategyandoperationalcapacityplanningOneexample,especiallyrelevanttosustainability,istheroleofDATinoperationalcapacityplanning(Figure31.2).Thelargelyunpredictablenatureoftheindustrydoesnotpreventorganizationsfromattemptingtoforecastdemandinhopetooptimizeutilizationofresources;acrucialfactorforaprofitablebusinessinlogistics(Jeskeetal.,2013),andanessentialsus-tainabilityconsideration.Asstatedbyaninformant:“ourdataforecastsfooddemand…Wecanseewhichcityareaisthebusiest,whichhelpswithresourceallocation…Forecastingdemandincreasesthemarginsandreduceswaste.”Capacityplanning,therefore,isavitalbusinessfunction.Here,DAT’spredominantrolesaresupportingorganizationalmembersinforecastingshort-andlong-termdemand,locations,andthenumberofcouriersrequiredonduty,andidentifyingimportanttrendsforinvestmentdecision-making.Improvingpredictivecapabilitiesofadvancedregressionsandmodelingtechniquesrequiresarangeofinputdatasuchasgeographiclocation,timeoftheday,dayoftheweek,events,season,andweatherconditions.Bydrawingonhistoricaldata,DATsupportsdecision-makingbyprovidinginsightsintoimportantpatternsandtrends.Thisapproachenablesorganizationstoscalethecapacityupordowndependingontheforecast,whichtranslatesintoincreasingtheefficiencyoftheuseofresourcesinthelongrunandinday-to-dayoperations.Ultimately,itincreasesorganizationalsustainablecapabilities.PartnerrelationshipmanagementandDAT-enabledsustainablecapabilitiesThefindingsofthischapteralsodemonstratethatDATiscrucialinenablingorganizationalpartners(thatis,restaurantsandotherfoodsuppliers)toachievegrowthandincreasetheirsustainablecapabilities.Asmentioned,deliveryfirmscollectdatafromavarietyofvarioussources.Basedonthisdata,analystsderivecriticalbusinessinsightsrelatedtogeneraltrendsandpatternsaswellasinsightsspecifictoeachsinglepartner.Thegeneraltrendsilluminateorderpeaktimes,macrofoodtrends,popularcuisines,aswellastherelationsamongvariousfactorssuchasgender,weatherconditions,seasons,holidays,andorders.Forexample,womenaremorelikelytoordercupcakes,sushi,orsalads,whilemenaremorelikelytogoformealscontainingbacon(Samuely,2017).Insightsspecifictopartnersrelatetoratings,deliveredorders,preparationtimes,andoutcomesofmarketingefforts.ThefindingsofthischapterdemonstratethatDATiscrucialtounderstandingandmanagingsurplusinventory,namely,theexcessfoodandingredientsthatrestaurantsbuyorproduce.Asstatedbyoneoftheexperts,“Therearemanybenefitsofdataanalytics.Ithinkeveryonelearnedtoappreciateit…Forecastingdemandisapowerfultool,ithelpstomakebetterdeci-sions…It[forecasting]helpstoincreasethenetprofitbyreducingwaste…So,yes,ithasthisenvironmentaleffect.”Reportsanddashboardshighlighttheunderperformingmenuitems,leadingtomenuoptimizations.Infrequentlyordereditemsareremoved,replaced,oradjusted.DATalsoassistspartnersindecreasingfoodwastebyprovidinginsightsintoingredientsthathavenotbeenusedorsold,andbyassistingintheirutilization.Someinitiativesinvolvepart-nershipswiththird-partyfoodrecoveryorganizations(forexample,Copia),whichredistributeunsoldrestaurantfoodtononprofitorganizations.Overtime,combineddatainsights,namelythoseprovidedbyCopiaandthedeliveryfirmtotheirpartnerrestaurants,enablerestaurantstounderstandoverbuyingandoverproduction.DAThelpsorganizationalpartnerstooptimizetheirresourceutilizationandconsumptionbypointingout,forexample,infrequentlyorderedmenuitems,ingredients,anddemandspikes,reducingoverbuyingandoverproduction(cuttingfoodwaste).Forinstance,usingsuchdatainsights,VIOS,avirtualspinoffbrandofaGreekRaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

533Bigdataanalyticsfordevelopingsustainabledigitalbusinessecosystems521restaurant,decreasedfoodwastebyupto15percent(Wong,2018).Ultimately,improvingtheunderstandingofconsumerpreferencesandwhatingredientsarefrequentlyleftinstockhelpspartnerstoavoidsurplusinventoryandincreasesorganizationalsustainablecapabilities.ProductmanagementandthecreationofnewsustainableproductfeaturesBuildingnewandmanagingexistingproductsisacomplexorganizationalendeavor(PershinaandSoppe,2017).Here,DATfrequentlyplaysanessentialrole.Itsupportstheproductdesignanddevelopmenteffortsofproductteamsandisinstrumentalforexperimentation.Experimentationenablesteamstoidentifyproductfeaturesandinitiativesthatworkbest.DATassiststeamswithevaluatingtheeffectsofproductchangeoverallandacrosscus-tomersegmentsorgeographicmarkets.Moreover,DATisusedtoidentifyareasforproductimprovement.Thisispredominantlyperformedthroughtheanalysisofcustomerfeedbackanddataprojectsdedicatedtoincreasingtheorganizationalunderstandingofhowconsumersuseproductfeatures.ThefindingsofthischapterdemonstratethatDAToftenplaysanimportantpartinenablingmoresustainableproductoptionsandfeatures.Forinstance,asstatedbyonedataanalyst,thedatainsightshisteamproducedshowedthatthemajorityoftheircustomersorderfoodfordeliverytotheirhomes,andifgiventhechoicewouldoptoutofreceivingdisposableplasticcutlery.Manycustomerswouldalsolikefoodineco-friendlypackaging.Afterimplementingsomeofthechangestotheproduct(forexample,opt-intocutleryfunction),DATalsohelpedtotestandevaluatecustomerreactiontothechange.Analyzingin-appuseractivitiesrepre-sentsamoreobjectivewaytobuildanaccuratepictureofconsumers’genuinebehaviorandsentiments.Ultimately,DATisausefultoolforthedevelopmentofmoreenvironmentallyfriendlyproductoptions.CircularParticipationDATcancontributetoenvironmentalsustainabilityofthedigitalbusinessecosystem.Myfindings,however,pointtoacrucialconditionnecessaryforenablingsuchpositiveoutcomes:circularparticipation,anovelconceptthatthischapterintroduces.Circularparticipationisaconceptthatdescribesthecircularnatureofdataexchangeandparticipationrequiredforenablingpositivesustainabilityoutcomes.ItrelatestothewillingnessofDBEparticipantstosharerequireddatawiththefocalorganizationandthenactonderivedsustainability-orientedinsightsandproductoptions(Figure31.3).First,DBEparticipantsmustsharerelevantdatawiththedeliveryfirm.Forinstance,part-nerswouldshareinformationonproducts,ingredients(forexample,localorigins,being“eco,”andCOemittedduringproduction),anddishes’completiontime;customers’surveyanswers2andfeedback;andcouriers’location,choiceoftransportation,andavailability.Second,DBEparticipantswouldhavetochoosetoactinasustainablemannerondatainsightsorproductfeaturesprovidedbythedeliveryfirmandenabledbyDAT.Oneillustrationisacourier’schoiceoftransportation.Whiledatainsightsshowthatcyclingissometimesthefastestwaytoreachcustomers,couriers(riders)needtochoosetousebicycles.Similarly,restaurantsneedtochoosetodonatefoodsurplusoroptimizetheirmenustoreducefoodwaste.Customersneedtochoosetoopt-outfromcutleryandcondiments,usethe“shareddeliverytime”option,buydiscountedmeals,orpreordermealsdaysinadvance.Therefore,sustainablecapabilitiesRaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

534522Handbookondigitalbusinessecosystemswithinadigitalbusinessecosystemrequiresharingvariousdatawiththedeliveryfirmandactingontheinsightsderivedfromit.Figure31.3CircularparticipationDISCUSSIONThischapter’smaingoalwastoexplorehoworganizationsuseDAT,anditsimplicationsforsustainability.Here,itisimportanttoacknowledgethatmanyoftheDAT-enabledenviron-mentalgainsdescribedinthisstudyprimarilystemfromorganizations’desiretooptimizetheirprocessesandresourceutilizationtodecreasetheassociatedoperationalcosts.However,italsoseemsthatthegrowingenvironmentalawarenessandtheunderstandingofDAT’spotentialanditsproliferationacrossvariousorganizationalfunctionsincreasinglyinfluencesorganizationstoalsointentionallysearchforsynergiesbetweendigitalizationandsustainabil-ity.Thissearch,amongothers,sometimesleadstothedeliberatecreationofnovelsustainablebusinessmodels,andproductfunctionsandfeatures,thatencourageimprovedenvironmentalRaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

535Bigdataanalyticsfordevelopingsustainabledigitalbusinessecosystems523behavior.Overall,thisstudyilluminateshowDATassistsDBEparticipantsindecreasingfoodwaste,carbonemissions,andoverexploitationofaDBE’sresources.Next,Ielaborateonthecontributionsofthisworktotheliterature.MoststudiesonDBEshaveexploredtheirvaluecreationcapabilitiesinthecontextofcommercialgoalsandobjectives(Kazanetal.,2015;Selanderetal.,2013).Thischaptershiftsthisfocustowardsco-creationofsustainablevaluesthroughparticipationanddataexchangeinadigitalbusinessecosystem.Particularly,thisstudyhighlightsthecrucialroleofinteractionsamonginvolvedactors,reaffirmingthatpositivesustainabilityoutcomesfrequentlyrequirejointeffortsofmultiplestakeholdergroups(Reficcoetal.,2018;McCormicketal.,2016).Thefindingsofthisworkalsoindicateandelaborateonthespecificrolesthesedifferentstakehold-ersplayinenablingsuchpositiveoutcomes.Moreover,thischapterfocusesontheuseofcutting-edgedigitaltechnologiesandrelatedinteractionsamongDBEparticipants.Specifically,thefindingsindicatethatDATplaysacrucialroleinenablingthesustainablecapabilitiesofDBEviatwospecificmechanisms:enablingnonhumandecision-makers,andsupportinghumandecision-makers.Thesemecha-nismsultimatelyleadto:findingoptimaldeliverysolutions;enablingnovel,moresustainablebusinessmodels;managingsurplus;anddevelopingmoresustainableproductoptionsandfeatures.Researchershaveproposedthatdigitaltechnologymayassistwithstreamliningandintensifyingresourceutilization,thuspositivelycontributingtosustainability(Höjeretal.,2018).Mystudyempiricallycontributestothislineofworkbyexplicatingconcretemecha-nismsandconditionsrequiredtoenactsuchpositiveoutcomesusingDAT.Importantly,thefindingsofthischapterilluminatetheprofoundsignificanceofnonhumanparticipantsoftheecosystem(forexample,FrankandSybil),which,togetherwithhumanactors(forexample,employees,customers,andpartners),collectivelycontributetothedevel-opmentoftheDBE’ssustainablecapabilities.Thus,whilemostresearchershavefocusedonthecreationofvaluetogetherwithcustomersandpartners(Kambojetal.,2018;Ceccagnolietal.,2012;PrahaladandRamaswamy,2004),thisworkunderscorestheimportanceofdigitalentities.Withthat,mychapteranswersrecentcallsformoreresearchonemergingtechnolo-giesandtheirintegrationwithinDBEs(Senyoetal.,2019).Overall,thisresearchcontributestotheemergingbodyofliteratureexaminingtheeffectsofdigitaltechnologiesonsustainability(SinghandEl-Kassar,2019;Höjeretal.,2018;SeeleandLock,2017).Specifically,thefindingsofthischapterdemonstratethatalthoughdigitaltech-nologycanbeapplied“forgood”(Kewelletal.,2017),inmanycasessuchpositiveoutcomesseempossibleonlythroughcircularparticipation.Thisinsightindicatesthatsustainablecapa-bilitieswithinadigitalbusinessecosystemrequirenotonlysharingdata(SinghandEl-Kassar,2019)butalsoembracingitsoutputsandactingontheinsights.Moregenerally,thefindingsofthisworkcontributetoincreasingourunderstandingofhowpositivesustainabilityeffectscanbeachievedthroughcollaborationsbetweendigitalentrepre-neurs(deliveryfirms)andanalog“pre-digital”incumbents(restaurantsandfoodsuppliers).Withthat,whileamajorityofexistingresearchadoptsamacroperspectivethatfrequentlyilluminatescompetitionandincompatibilitiesbetweenpre-digitalincumbentregimesandemergingdigitalentrants,thisstudyemphasizesthecooperativedynamicsbetweenthemandthesustainabilitypotentialofsuchsettings(Markardetal.,2012).RaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

536524HandbookondigitalbusinessecosystemsCONCLUSIONDigitaltechnologiestransformexistingbusinesslandscapesandtriggerthecreationofnovelones,resultingincostreduction,efficiency,andoverallcommercialgainsforitsvariousactors.Suchpositiveoutcomesofdigitaltechnologies,however,mightoffermorethanmereeconomicbenefits.Thischapterillustratesthepotentialofdigitaltechnologiesinopeningupmoreenvironmentallyfriendlyroutesfororganizationsandtheirpartnersandcustomers.However,althoughdigitaltechnologiesharborsuchpotential,realizingitrequiresinvolve-ment,closecollaboration,andpurposefulactionsofmultiplestakeholdergroups.Digitaltechnologiesarepowerful,butultimatelyjusttools.Intheend,itisuptoorganizationsandindividualstodecidewhethertorealizethesustainabilitypotentialwithinthemandcatalyzethechangetowardamoresustainablefuture.Inconclusion,althoughthischapteroffersessentialempiricalinsightsintothesynergiesbetweendigitalizationandsustainability,thenetenvironmentalimpactofDATisdifficulttodetermineandbeyondthescopeofthischapter.Electronicwaste(e-waste),increasingelectricitydemands,exploitationofrareearthmetals,aresomeoftheconcernsthatsurrounddigitaltechnologiesproductionanduse.Withthat,somecentralquestionsremainlargelyunanswered:Aredigitaltechnologiesultimatelygoodorbadfortheenvironment?Howcandigitalinnovationberesponsiblybuiltandusedforthebenefitoftheenvironmentandhumanity?REFERENCESAarnio,T.andHämäläinen,A.(2008).Challengesinpackagingwastemanagementinthefastfoodindustry.Resources,ConservationandRecycling,52(4),pp.612‒621.Acharya,A.,Singh,S.K.,Pereira,V.andSingh,P.(2018).Bigdata,knowledgeco-creationanddecision-makinginfashionindustry.InternationalJournalofInformationManagement,42,pp.90‒101.Adams,R.,Kewell,B.andParry,G.(2018).Blockchainforgood?Digitalledgertechnologyandsustainabledevelopmentgoals.In:WalterLealFilho,RobertW.MaransandJohnCallewaert(eds),HandbookofSustainabilityandSocialScienceResearch(pp.127‒140).Cham:Springer.Adner,R.(2006).Matchyourinnovationstrategytoyourinnovationecosystem.HarvardBusinessReview,84(4),p.98.Alaimo,C.,Kallinikos,J.andValderrama,E.(2020).Platformsasserviceecosystems:lessonsfromsocialmedia.JournalofInformationTechnology,35(1),pp.25‒48.Beier,G.,Niehoff,S.andXue,B.(2018).Moresustainabilityinindustrythroughindustrialinternetofthings?AppliedSciences,8(2),p.219.Benitez-Amado,J.,Perez-Arostegui,M.N.andTamayo-Torres,J.(2010).Informationtechnology-enabledinnovativenessandgreencapabilities.JournalofComputerInformationSystems,51(2),pp.87‒96.Beske,P.(2012).Dynamiccapabilitiesandsustainablesupplychainmanagement.InternationalJournalofPhysicalDistributionandLogisticsManagement,42(4),pp.372‒387.Boyd,D.andCrawford,K.(2012).Criticalquestionsforbigdata:provocationsforacultural,techno-logical,andscholarlyphenomenon.Information,CommunicationandSociety,15(5),pp.662‒679.Briscoe,G.(2010).October.Complexadaptivedigitalecosystems.In:ProceedingsoftheInternationalConferenceonManagementofEmergentDigitalEcoSystems(pp.39‒46).Brown,J.R.,&Guiffrida,A.L.(2014).Carbonemissionscomparisonoflastmiledeliveryversuscustomerpickup.InternationalJournalofLogisticsResearchandApplications,17(6),pp.503‒521.Ceccagnoli,M.,Forman,C.,Huang,P.andWu,D.J.(2012).Cocreationofvalueinaplatformecosys-tem!Thecaseofenterprisesoftware.MISQuarterly,36(1),pp.263‒290.RaissaPershina-9781839107191DownloadedfromPubFactoryat05/28/202210:26:14AMviaColumbiaUniversityLibrary

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54132.Digitalbusinessecosystems:acomparisonofdifferentindustriesFranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMecklINTRODUCTIONDigitizationbooststhereductionofcommunication,information,andtransactioncosts;ontheotherhand,itbreaksdownindustryboundaries,connectscompaniesfromdifferentindustries,andchangesthetraditionalstructureofvaluecreation(Remaneetal.,2017).Companiescanreactflexiblyandquicklytomarketchangesbybreakingindustryboundariesandcompanies’linkagefromvarioussectors(Lingensetal.,2019).Theygainrapidaccesstoallocatingcomplementaryresourcesandcompetenciesfromothercompanies(ZahraandNambisan,2012).Thus,companiesconcentrateprogressivelyontheircorecompetenciesandcooperatewithotherorganizationswiththenecessarycomplementaryresources.Horizontalandverticalnetworking,progressiveco-specializationforthejointdevelopmentofcompetitivevaluepropositions,aswellasever-increasinginteractionsbetweencompanies,characterizethesecooperationsandchangenotonlytraditionalindustrystructuresbutalsoconventionalbusinessmodelsofcompanies(Pützetal.,2019;Riasanowetal.,2020).Inthiscontext,theliteraturereferstoso-calleddigitalbusinessecosystems(DBEs),whichhavebecomeincreasinglyimportantinvariousindustriesandhavegainedincreasingatten-tioninbusinessliteratureinrecentyears(Jacobidesetal.,2018).Ecosystemsarereferredtoasconceptsofnewvaluecreationapproaches(AdnerandKapoor,2010).Theformerlycompany-centeredvaluechainisbecomingmoreofavalue-creatingnetworkofdifferentpartners(Lingensetal.,2019).Hence,companiesnolongeractmerelyasindividualplayersbutarepartofanentireecosystem(Bharadwajetal.,2013).AlthoughDBEsaregraduallyestablishingthemselvesinalmostallindustries,theyshowdifferentdevelopmentspeeds,integrationdepths,andmaturitylevels.Thesedifferencesareduetoeachindustry’scharacter-isticsandmarkets,whichdiffer,forexample,intermsofgovernmentregulation,competitivestructure,degreeofdigitization,technologicalintensity,depthofvalueadded,orservitization.Drivenbydigitization,privatecustomersandcompaniesarebecomingincreasinglyinter-twined(Riasanowetal.,2020).DuetothehighlydynamicnatureofDBEs(Götzetal.,2020),companiesmustcontinuouslyreviewtheirbusinessmodeltoreacttochangingconditions,anticipatefuturetrends,andpromotetheirinnovations.ThechoiceoftheappropriatebusinessmodelisbecomingmorecomplexduetonovelvaluecreationbyDBEs,sincetraditionalbusinessmodelscannolongerbeapplied(AdnerandKapoor,2010).DBEstransformtheenvironmentintoaself-organizing,interactivemarketinwhichcost-efficientdigitalservicesandvalue-creatingactivitiesoccur(ChangandWest,2006).Changingcustomerbehavioranddigitizationarethetwomostvitalfactorsdrivingthischange,restructuringandchanginganyindustry(PousttchiandDehnert,2018).Prominentexamplesfromindustries,suchastheentertainment,media,andretailsectors,showthatthere530FranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

542Digitalbusinessecosystems:acomparisonofdifferentindustries531isnotimetoclingtotraditionalbusinessmodels.Thereisaneedtofurtherdevelopthebusi-nessmodelandincludedigitalbusinessmodels.Oneofthebest-knownexamplesisprobablythedemiseofvideostores,whichhavemissedtheopportunitytoadapttheirbusinessmodelsindigitization(forexample,on-demandvideostreaming)andhavethusbeenreplacedbymarketparticipantssuchasNetflix(Smolinskietal.,2017).Inthiscontext,moreandmorecompaniesaretryingtosetuporbepartofDBE.Sofar,theliteratureonDBEsfocusesonparticularindustries(BaggioandDelChiappa,2014;Tanetal.,2020),orcasestudies(Senyoetal.,2016;Tanetal.,2009),orparticularaspectsoftheDBE(BriscoeandSadedin,2009;Namugenyietal.,2019;Razavi,2007).ThequestionofhowfardifferentindustrieshaveprogressedindevelopingDBEsremainsunanswered.Hence,itisessentialtoknowwhatchallengeseachindustryfacesandhowtoreacttothem.Forthisreason,thischapteraddressesthefollowingresearchquestion:HowarecompaniesfromtraditionalindustriesinGermanydealingwiththechallengesofincreasingdigitalizationandtheresultingmeltingofindustryboundariesregardingthedevelopmentandimplementationofDBEs?Basedoninterviewswithindustryexpertsandcasestudies,weanalyzeandcomparethedevelopmentandimplementationofDBEsfromGermancompaniesacrossfourdifferentindustries.FollowingtheworkofRiasanowetal.(2020,p.4),wegathereddatathroughconductinginterviewsin“substantiallytransforming”industries,includingtheautomotive,bankingandfinance,andinsuranceindustries.Atthesametime,thesportinggoodssectorservesasavividexampleforanindustrywithahighpotentialfortheexpansionofaDBE.Theindustriesreferredtointhischapterareallinternationalindustries.Characteristicsoftheseindustriesarethattheunderlyingmarketstructureoftheindustryisinternationallycomparable.Theremainderofthischapterisstructuredasfollows.First,wepresentthetheoreticalback-groundofDBEs.Next,weintroducethereadertoeachselectedindustry’sstatusregardingthecurrentdevelopmentofDBEs.Finally,weconcludethechapterwithadiscussionoftheresultsaswellasaconclusion,limitations,andfurtherresearch.KEYCHARACTERISTICSOFDIGITALBUSINESSECOSYSTEMSTheterm“ecosystem,”originallyfrombiology,hasfounditswayintoeconomicliteraturemainlythroughMoore(1993).Inhisseminalwork“Predatorsandprey:anewecologyofcompetition”,Moore(1993)arguedthatcompaniesshouldnolongerseethemselvesaspartofanindustry,butratheraspartofabusinessecosystem.Inthiscontext,Moore(1993)definesabusinessecosystemasaneconomiccommunityofinterrelatedorganizationsandheteroge-neousactorsproducinggoodsandservicesforitscustomersduetocross-industryoperations.Duetotheseinterrelations,theecosystemactorsdeveloptheircapabilitiesandfunctionsinthesenseofco-evolutionarybehavior,tendingtoorientthemselvestothespecificationsofthecentralenterprise(s)whilecontributingtothevaluecreationprocesses.Moore’sunderstandingofsuchabusinessecosystemwasthenfurtherdevelopedbyIansitiandLevien(2004,p.76),definingabusinessecosystemas“alargenumberoflooselyinterconnectedparticipants,whodependoneachotherfortheirmutualeffectivenessandsurvival.”Inthiscontext,Teece(2016,p.1),statesthatanecosystemis“agroupofinterdependentorganizationscollectivelypro-vidinggoodsandservicestotheircustomers.”Themembers’diversityvarieswithindifferentecosystemsandisdependentontheindustriesinwhichtheecosystemoperates.FranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

543532HandbookondigitalbusinessecosystemsAccordingtoSenyoetal.(2019),DBEsfurtherdevelopMoore’sbusinessecosystems.Theystate:“whilebusinessecosystemportraysgenericorganizationalinterdependence,DBEextendsthisconceptbyplacingmoreimportanceonthecentralityofdigitaltechnology”(Senyoetal.,2019,p.53).AccordingtoMasak(2009,p.213),thetermisunderstoodasa“dynamicandsynergeticcomplex...consistingofinterconnected,interactingandmutuallydependentdigitalspecies”actingasafunctionalunitononeplatform(HadzicandChang,2010).Anecosystemishencefundamentallydifferentfromlinearbusinessmodels.Whileintraditionalbusinessmodels,resourcesthataredifficulttoimitatepredominantlysecureacom-petitiveadvantage(Götzetal.,2020),withintheecosystemitisthenetworkofecosystemmembers(vanAlstyneetal.,2016).Suchecosystemsfocusprimarilyondigitaltechnologiesordigitalcontent(Subramaniametal.,2019)andevolvearoundadigitalplatform(Senyoetal.,2019).Thedigitalplatformrepresentsthebasisoftheecosystem,enablingtheintegrationofresources,andisthereforefundamentalforcreatingvalueintheecosystem(Senn,2017;Thomasetal.,2014).Thedigitalplatformisusuallycontrolledbyacorefirm,alsoknownasplatformleader(GawerandCusumano,2014),hubfirm(DhanarajandParkhe,2006),orchestrator(MarkusandLoebbecke,2013),orkeystone(IansitiandLevien,2004).Thus,theplatformsimplifiesthenetworkingofactorsandtheexchangeofresourcesandservices(Götzetal.,2020).WilliamsonandMeyer(2012)notethatanecosystemismoresuccessfulwhenithasacentralcompanyactingasanorchestrator,duetointernaldifferencesingoalsettings,interdependen-cies,orecosystemstructure.Moreover,theleadershouldprotecttheecosystemfromexternalthreatsandinfluences,suchasrivalecosystemsorcompaniesthattrytocompeteformarketsharethroughimitation(Moore,1993).Ingeneral,theorchestratorplaysadominantroleandmerelyintegratesotheractorsintothesystemoractivelypromotesdiversityintheecosystem,includingrecruitmentandnetworkingoutsidetheecosystem(Dedehayiretal.,2018).Theorchestratoralsodeterminestheplatform’sdesignand,thus,thedegreeofopennessoftheeco-system(Dedehayiretal.,2018).Supportingactorsorso-calledsupplierscontributetovaluecreationthroughcomplementaryresourcessuchasexpertknowledgeandmarketaccess,andthereforeextendtheecosystemactivities(GawerandCusumano,2014).Thesupplieractivitiesthushaveadirectimpactonvaluecreation(Kapoor,2018).DBEshavedifferentcharacteristics.Thesimultaneousexistenceofcooperationandcom-petitiverelationships(coopetition)intheecosystemcreatesafieldoftensionthatcanhaveapotentiallypositiveimpactontheabilitytoinnovate,strengthenknowledge(share,create,acquire),improvebusinesssuccess(financialsuccess,quality,competitiveadvantages,andsoon),andtherelationshipbetweenthepartners(trust,commitment,goalorientation,andsoon)(GawerandCusumano,2014).Diversecompetenciesandclosecooperationfacilitatelearningeffectsforthemembers(Gulatietal.,2000),whichhaveapositiveeffectonproductivityand(international)competitiveness(ChangandWest,2006).This,inturn,offersmembersprotec-tionthroughresilience(IansitiandLevien,2004).Forthisreason,weadoptthedefinitionofSenyoetal.(2019)anddefineaDBEas“asocio-technicalenvironmentofindividuals,organ-izationsanddigitaltechnologieswithcollaborativeandcompetitiverelationshipstoco-createvaluethroughshareddigitalplatforms”(p.53).AccordingtoSenyoetal.(2019),DBEscanhaveseveraladvantages.First,DBEscanreacthighlyflexiblytochangingenvironments(Lenkenhoffetal.,2018).Second,DBEscangenerateanincreaseinvaluecreationthatcompaniesasindividualmarketparticipantscannotachieve(Lenkenhoffetal.,2018;Tanetal.,2009).Third,duetothediversityofactorsacrossFranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

544Digitalbusinessecosystems:acomparisonofdifferentindustries533industries,ahigherdegreeofinnovationintheecosystemcanbeachieved(Lenkenhoffetal.,2018;Tanetal.,2020).Fourth,bycooperatingwithothercompanies,companiescangainaccesstoknowledge,experience,and,aboveall,abroadercustomerbase(Tanetal.,2009;Tanetal.,2020).Fifth,actorscansharetechnicalinformationwithintheecosystemtoaccel-erateandoptimizeprocessesandinnovation.Inthiscontext,anecosystemfacilitatesaccesstoexpertisethatwouldotherwisebedifficultorimpossibletoaccess.Finally,byusingandsharingcomplementarycorecompetenciesandresources,companiescanmaintainthefocusontheirstrengthsandcorecompetencies,whichleadstoincreasedefficiencyandeventuallyalsotocostsavings.Mostimportantly,DBEsopenupnewopportunitiesandsuccessfactorswithinandacrossdifferentindustries.COMPARINGDIGITALBUSINESSECOSYSTEMSACROSSDIFFERENTINDUSTRIESOurstudyisbasedonacombinationoffiveinterviewsintheinsuranceindustryand11interviewsinthesportinggoodsindustry,andcasestudies(automotive,bankingandfinance,insurance,sportinggoodsindustry).Weconductedsemi-structuredexpertinterviewsbasedonaspecificinterviewguideline.Allexpertshaveprofessionalexperienceindigitizationintherespectiveindustryrangingfromfivetotenyears.Apatternemergedfromcomparingtherespectiveindustriesbyanalyzingtheseinterviewsandcasestudies(Table32.1).Basedonthispattern,weanalyzeeachindustryfromthreeperspectives(industry,digitization,valuecreation)consistingofsevencriteria(industrychallenges,governmentregulation,competitivestructure,degreeofdigitization,technologicalintensity,depthofvalueadded,servitization).Characteristicsofeachindustryarechallenges,regulations,andcompetitivestructures.Industrychallengesmeanstructuralupheavals.Regulationsrepresentrestrictionsonthepartofthegovernmentthatlimittheeconomicactivityofacompany.Competitorswhichofferatleastsimilarproductsand/orservicestriggercompetitivestruc-tures.Intermsofdigitization,eachindustryshowsdifferentmaturitylevelsregardingdigitiza-tionandtechnologicalintensity.Inthiscontext,differentcompetitiveforces,whichgofurtherthantheestablishedcompetitorsgo,whichimpacttheprofitabilityofthecompany,charac-terizethecompetitiveenvironmentofacompany.Thedegreeofdigitizationcoverstheinno-vationclimateintermsofpromotionandopennesstodigitaltopicsaswellasdigitalprojects.Thisalsoincludesthecontinuousmonitoringoftheecosystemconcerningnewcollaborativealliances.Digitizationdescribestheuseofdigitaltechnologiesforprocessoptimization,costreduction,andserviceimprovement,amongothers.Thedepthofvalue-addedandservitizationmainlydefinesvaluecreation.Depthofvalue-addedstandsforcreatingrevenuegrowthandprofitabilityforthebusiness.Servitizationreferstothegrowthofserviceprocesses,whichimpliesachangefromaproduct-centrictoaservice-centricapproach,andareconfigurationoftheresourcepoolandstructuresintheorganization.Bainesetal.(2009,p.547)thusdefineservitizationas“theinnovationofanorganization’scapabilitiesandprocessestobettercreatemutualvalue”throughshiftingfromone-dimensionalvaluepropositionstomultidimensionalvaluebundles.AsTable32.1demonstrates,theindustriesfacedifferentchallengesandhence,showdifferentprogressinthedevelopmentofDBEs.FranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

545534HandbookondigitalbusinessecosystemsTable32.1ComparisonofdifferentindustriesaccordingtothedevelopmentofdigitalbusinessecosystemsFieldofKeycriteriaAutomotiveindustryBankingandfinanceInsuranceindustrySportinggoodsinvestigationindustryindustryIndustryIndustry●Mobilityasaservice●Paymentasaservice●Insuranceas●Sportasaservicechallenges●Penetrationofnew●Penetrationofnewaservice●Individualizationactorsactors●Penetrationofnew●Sustainability●Sustainability/regu-●Legalframework/actorslatoryissuesregulatoryissues●Legalrestrictions/regulatoryissuesGovernmentMediumHighMediumLowregulationCompetitiveHighHighHighMediumstructureDigitizationDegreeofMediumMediumMediumLowdigitizationTechnologicalHighMediumMediumLowintensityValuecreationDepthofvalueHighMediumHighMediumaddedServitizationHighHighHighMediumTHENEEDFORREINVENTINGTHEAUTOMOTIVEINDUSTRYIndustry:IndustryChallenges,GovernmentRegulation,CompetitiveStructureDuetoitseconomicimportanceandtheemergenceofmanyDBEs,theautomotiveindustryservesasavividexampleofthedynamicchangesthatdigitizationbringswithit.Sofar,thecorecompetenceoftheGermanautomotiveindustryhasconsistedofproducingpremiumautomobilesonanindustrialscale,usingtheappropriateexpertiseforcarmanufacturingandselling.However,duetodigitization,incumbentsfaceseveralchallenges,whichforcethemtoadapttheirestablishedstrategiesandreinventtheircurrentbusinessmodel(Riasanowetal.,2020).Aparadigmshifttowardsmobilityasaservice,andthepenetrationofnewactorsenteringthemarket,forcestraditionaloriginalequipmentmanufacturers(OEMs)tocompeteonseveralfrontssimultaneously.Forexample,mobilityproviderssuchasDidi,Uber,andGojek,technologygiantssuchasAppleandGoogle,andemergingOEMssuchasTesla,areincreasingthecomplexityofindustrycompetition(Gaoetal.,2016).Apartfromdigitization,theautomotivesectorfacesadditionalchallenges.Ownership,forexample,isbecominglessimportantastheautomobileisundergoingatransformationfromasymbolofstatustoanobjectofuse(Matzleretal.,2016).Moreover,theconceptofurbanizationisgrowing.Hence,parkingproblems,trafficjams,andincreasingavailabilityofpublictransportationmayharmthesalesandturnoverofvehiclemanufacturers(FirnkornandMüller,2012).Intermsofownershipandurbanization,carmanufacturersaretryingtokeepupwithmodernmobilitysolutionsbasedondigitalplatformssuchasride-hailingservicesfromUber,Didi,andGojek.Third,sustainabilityisbecomingincreasinglyimportant.Inthiscontext,governmentregulationssuchasemissionlimitsandotherenvironmentalregulationsputincumbentsevenmoreunderpressure(Whitmarshetal.,2009).FourthisthelackofFranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

546Digitalbusinessecosystems:acomparisonofdifferentindustries535profitstreamsduringtheproductlifecycle(OrsatoandWells,2007).Thisincludesafter-salesmeasuressuchasrepairandmaintenancework,andthesparepartsbusiness.Overall,mobileservicesaretakingupanevergreatershareoftheoverallbenefitsofanautomobile.Inthiscontext,accesstoadigitalplatformsupplementsthepreviousvaluepropositionsofmobility,security,comfort,andstatussymbol.Digitization:DegreeofDigitization,TechnologicalIntensityTheglobaldigitalinfrastructureofcomputers,mobiledevices,broadbandnetworkconnec-tions,andadvancedapplicationplatformsisacceleratingnewdigitalinnovationsintheauto-motiveindustry(Fichmanetal.,2014).Mobilityplatforms,emergingdisruptivetechnologies,andthemergingofindustryboundariesplayacentralroleinDBEsintheautomotiveindustry(Riasanowetal.,2017).Companiesfromthefinancialsector,whichprovidemobilepaymentsystems,serveasanexampleforsuchmergers(Riasanowetal.,2017).Consequently,theroleofGermanOEMsischangingfromproductsupplierstoserviceproviders(Helbigetal.,2017),includingmobilityservices(Accenture,2018).CustomerscanaccessthevariousservicesviathecentralplatformofaDBE.Moreover,duetoartificialintelligence(AI),machinelearning(ML),anddeepneuralnetworks,vehiclesarebecomingmoreandmoreautonomous.ValueCreation:DepthofValueAdded,ServitizationAnotherwayofextendingtheautomotiveecosystemistointegratethirdpartiesfromothersectorssuchastheinsuranceindustry.Pützetal.(2019,p.4)stateinthiscontext:“theincreas-inginterconnectionofmodernvehiclescouldbeadecisivegame-changerforthecompetitiveenvironment.”Theconnectivityofmodernvehiclesservesasafacilitatoroftelematics-basedservices.Inthecaseofmotorinsurance,forexample,“thepossibilitytoaccesscustomersviaadigitalinterfaceinthevehiclepotentiallyexpandsthealreadyexistingcompetitionbetweenOEMsandtraditionalinsurersfromthenewvehiclemarketalsototheusedcarmarket”(Pützetal.,2019,p.4).Othervalue-addingservicesincludesmartnavigationsoftwareaswellasdrivingassistancesoftware(Riasanowetal.,2020).Therefore,thedigitalplatformformsthedigitalbackboneoftheDBEandturnsthecarinto“anapponwheels”(KesslerandBuck,2017,p.115).Volkswageniscurrentlydevelopingthe“largestdigitalecosystemintheautomotiveindustry”calledVolkswagenWe,turningtradi-tionalvehiclesinto“digitaldevicesonwheels”(VW,2020,p.1).Withanoverallinvestmentof€3.5billionindigitizationby2025,theincumbent’sgoalistotransferthecarintoacentralhubwiththehelpoftheInternetofThings(IoT).Daimlerpresenteditsversion,theMercedesMeApp,linkingthevehiclewiththesmartphoneandturningitintoadigitalecosystem.Bothincumbentsofferopeninnovationaccessthroughsoftwaredevelopmentkits(SDKs).Inthisway,thecarmanufacturersencouragethirdpartiestocontributetoanddevelopthesoftwarebyopeningupinterfacesoftheplatform(Daimler,2020;VW,2020).Thus,automotiveeco-systemsmainlyfocusoncloudinfrastructures,platforms,andservices(Riasanowetal.,2020).FranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

547536HandbookondigitalbusinessecosystemsTHENEEDFORREINVENTINGTHEBANKINGANDFINANCEINDUSTRYIndustryChallenges,GovernmentRegulation,CompetitiveStructureAlthoughbanksareaccustomedtoconstantchangeintheirindustryanddigitizationisnotanewphenomenonforfinancialinstitutions,theyarenotusedtodisruptivechange,whichiscurrentlyshakinguptheindustry(Walter,2016).Inadditiontothelegalframework,whichhasbeenfurthertightenedsincethefinancialcrisisin2008,technology-orientedcompanies,primarilystartups,arechallengingtraditionalinstitutionsinthesectorduetotheirliberationoflegacyliabilities(Walter,2016).Theterm“FinTech”derivesfromtheEnglishwordsfinancialandtechnology(Altetal.,2018).Ontheonehand,FinTechisacollectivetermforinnovativesolutionsbasedoninformationtechnology(IT)inthebankingsector(Puschmann,2017).Ontheotherhand,thetermdescribescompaniesspecializingininnovativefinancialtechnologysolutionsanddigitalfinancialservices(Puschmann,2017).Thesefasterandcheaperservicesincreasethepressureontraditionalfinancialinstitutionsandtheirbusinessmodelsthroughdigitaltechnologies(Oehleretal.,2018).Moreover,governmentspromoteregionalFinTechecosystems.Forexample,thestateofHessenispromotingtheTechQuarterinFrankfurt.TheimportanceofFinTechsforthebankingandfinanceindustrycanbeseeninthewaybanksrespondtothem.Establishedinstitutionsincreasinglyfocusoncooperationratherthancompetition,inadditiontoinvestmentsinyoungfinancialtechnologycompanies,strategicpartnerships,takeovers,andprogramsforthedevelopmentoftheirFinTechs(ArslanianandFischer,2019).Moreover,largetechandinternetcompanies,so-calledTechFins,areenteringthemarketandbecomingseriouscompetitors(ArslanianandFischer,2019;Catlinetal.,2018).Forexample,Google,Apple,andAlibabahavesuccessfullyimplementedtheirpaymentsolutionswithGooglePay,ApplePay,andAlipay.Finally,increasingcustomerrequirementsposechallengesforbanks(BarariandFurrer,2018).Digitization:DegreeofDigitization,TechnologicalIntensityAsthebankingandfinanceindustryishighlynetworkedbynature,itisdifficulttodrawtheboundariesofFinTechecosystems(Dapp,2017).ManybanksintegrateFinTechsintotheirecosystemsothatnoclearboundariesarediscernible(Ornau,2017).Thus,bilateralcooper-ationsandthenetworkingofecosystemsreflectthechangefromcompetitiontocooperationbetweenFinTechsandbankingandfinanceinstitutions.ING,forexample,offersitsclientstheopportunitytouseScalableCapital’srobo-advisorserviceinadditiontoitsbrokerageservices.TraditionalbankingandfinanceinstitutionsalsobuildtheirFinTechecosystems.TheSpanishbankBBVArecognizedtheopportunitiesofFinTechsataveryearlystageandthusintegratedthemintoitsecosystemtobuildaFinTechecosystem(BasoleandPatel,2018).ValueCreation:DepthofValueAdded,ServitizationInGermany,N26servesasavividexample.Withavaluationof€3.1billionandmorethan3.5millioncustomers,N26isoneofthelargestFinTechsintheworld(Ksienrzyk,2019).N26actsasaplatformwherevariousFinTechscanoffertheirservicestogetherwithN26.Inthisway,theneobankN26concentratesonitscorecompetenciesonly.ThecooperationpartnersincludeFranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

548Digitalbusinessecosystems:acomparisonofdifferentindustries537auxmoney,Barzahlen,TransferWise,Weltsparen,Clark,andYounitedCredit,amongothers.Byprovidingtheplatformandselectingthecooperationpartners,N26orchestratestheentireecosystemasakeystone.Moreover,N26involvesitsprivateandbusinesscustomersingen-eratingproductsuggestionsandimprovements,guaranteeingauniquecustomerexperience.THENEEDFORREINVENTINGTHEINSURANCEINDUSTRYIndustryChallenges,GovernmentRegulation,CompetitiveStructureThecompetitivesituationintheGermanmarketandworldwidehasalsointensifiedovertheyears.Recently,startupcompanies,so-calledInsurTechs,haveemergedintheinsuranceindustry(Catlinetal.,2018).InsurTechsofferinsuranceproductstailoredtotheneedsofprivatebusinessandsolutionsforoptimizationwiththehelpofnewtechnologiesatalllevelsofthevaluechainofinsurers.Inadditiontothespin-offsofestablishedinsurers,suchasHUK24,successfultechnologygroupshavealsoenteredtheinsurancemarket.Forexample,AmazonboughttheIndianinsurerAckoin2018.Inthemeantime,Amazonisusingitsplat-formtosellAmazonProtectproductsandhasintegratedtheinsurancebusinessmodelintoitsDBE(Bergfeld,2018).Finally,foreigninsurersmonitortheGermanmarket,suchastheChineseplatformoperatorPingAn(Duhr,2018).PingAnalreadyhasaDBEwithmorethan350milliononlinecustomers.andstrivesforgrowthinforeignmarkets(Catlinetal.,2018).TheUnitedStatesinsurerLemonade,inturn,enteredtheGermanmarketin2019(Burghardt,2019).Moreover,theinsuranceindustryissubjecttohighregulatoryrequirements(Catlinetal.,2018).Hence,manyregulationsregardingdigitizationhavenotyetbeenintroducedbythelegislator,norhasthescopeofdataprotectionregulationsbeendefined(Lünendonk,2018).Digitization:DegreeofDigitization,TechnologicalIntensityDigitalchangeisnotanewphenomenonfortheinsuranceindustryeither.Nevertheless,tech-nologicaltrendsarebringinganewdynamictothemarketenvironment,includingchangestotheinfrastructure,suchascloudsolutions,digitalsalestools,advancedanalyticsforbetterriskassessment,machinelearningformoreefficientworkingmethods,theIoT,andvirtualreality(Kotalakidisetal.,2016).Thesechangesprovidegreatpotentialforcostsavingsforinsurers,whichisparticularlyrelevantasthepricepressureongeneralinsuranceproductscovering,forexample,health,home,travel,andvehicles,isincreasingprogressively.Thedigitaltransformationisafar-reachingstructuralchangeanddemandsagreatdealofattentionfrominsurancecompaniesduetoitsspeedandscopeofchange.Forexample,thetechnicaltrendsintheinsuranceindustryinthefieldoftelematicsrequiretheprocessingoflargedatastreamsandthesubsequentevaluationwiththeuseofbig-dataanalysistools.ThisrequiresaninnovativeformofITprocesses.Hence,technologicalexpertiseindispensableforremainingestablishedinthemarketinthefuture(Catlinetal.,2018).This,inturn,leadsinevitablytohighinvestmentcostsfortheITlandscapeandemployeetraining.Manyinsurersarealsoinhibitedfromsettingprioritiesregardingtechnologicaltrends,asnotalltechnologiescanbeadaptedsimultaneously(ElingandLehmann,2018).Additionally,alackofwillingnesstotakerisksiswidespreadamongcompanies.TheprincipleoftoleratingmistakesandlearningFranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

549538Handbookondigitalbusinessecosystemsfromthemisoftenonlyfoundincompanieswithanovertinnovationculture(Lünendonk,2018).ValueCreation:DepthofValueAdded,ServitizationTheuseofcomplementaryservicescanfacilitatetheexpansionofinsurancecompaniesintoadjacentandnewbusinessareas.Innovativehybridsolutionsininsuranceandserviceoffer-ings,suchassmartparking,preventivecare,andmaintenance,canimproveinsuranceriskmanagementbyleveragingsensordata.Industriesofinterestforthesehybridsolutionsintheecosysteminclude,amongothers,theautomotive,healthcare,andengineeringsectors.Inaddi-tiontothecorebusinessofinsurance,servicessuchastelematicsarebecomingincreasinglyrelevant.Inthiscontext,MunichREfoundedtheDigitalPartnersecosystem,whichsupportsthedevelopmentofstartups.Theseinclude,forexample,Trov,anon-demandinsurancepro-vider;andWrisk,anInsurTechcompanythatoffersmotor,travel,andhomeinsurancedirectlyviasmartphones.AnotherexampleistheWüstenrotandWürttembergische(W&W)Group,whichfoundedtheso-called“brandpool”in2018.Withinthebrandpool,thecompanyinvestsininnovativedigitalbusinessmodelsfromfinance,health,mobility,andhousing,tocreateanecosystemwithdecentralized,independentbrandssuchasAdamRiese.DIGITALBUSINESSECOSYSTEMSINTHESPORTINGGOODSINDUSTRYIndustryChallenges,GovernmentRegulation,CompetitiveStructureCompanieswhichbelongtothesportinggoodsindustryincludeallcompaniesthatoperateatthemanufacturinganddistributionstageofthevaluechain.Ingeneral,threesignificanttrendshavebeenshapingthesectorforyears:digitization,individualization,andsustainability(Javorovic,2019).Duetodigitization,customersbecomelessbrand-loyalandfocusmoreonindividualbenefitsforthemselves.Consequently,digitizationdrivesthetrendtowardsindividualizedproductsintextiles,shoemanufacturing,complementarygadgets,wearables,andmatchingapps.Thecustomerispersonallyinvolvedinthedevelopmentandproductionprocessesandleavesapersonalfingerprintthroughbiometricdataorself-createddesigns.Formanufacturers,bigandsmartdataarethusessential,astheyneedtodefinetheirtargetgroupsmorepreciselytomeetthechangingneedsoftheircustomers,withthehelpofalgorithmsandartificialintelligence.Sincecustomersofthissectoroftenpracticetheirsportoutdoors,theyexpectenvironmentallyfriendlyproductsandsociallyresponsiblecompanies.Sustainabilityconcepts,positiveenergybalances,andhighrecyclingratesareexpected.Apartfromthecustomergroup,thegovernmentsetshigherstandardsformanufacturingcompaniesregardingsustainabilityandenvironment-friendlyproductionprocesses.Hence,manufacturersfocusmorethaneveroncarbondioxide(CO)savings,recycling,sustainability,andvaluecreation.2Amongthetop-sellingmanufacturersintheworldistheGermancompanyAdidas(€21.9billioninsales),whichservesasavividexampleforthecreationofDBEsinthesportinggoodsindustry,asthefollowingsectionsshow.FranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

550Digitalbusinessecosystems:acomparisonofdifferentindustries539Digitization:DegreeofDigitization,TechnologicalIntensityIn2015,AdidasacquiredRuntasticGmbH,aglobalplayerinhealthandfitnessapps,tocombinesportswithdigitalresourcesanddata.BasedonanappdevelopedbyRuntastic,AdidascreatedanAdidasRunnersCommunity,whichturnedfromlistingeverydayrunningeventsintoagloballynetworkedonlinecommunity.Sincethen,theDBEhasbeengrowing.MembersoftheAdidasbusinessecosysteminclude:themusic-streamingproviderSpotify,tolistentomusicwhilerunning;SAP,foranoptimizedevaluationofcustomer-relateddata;OechslerMotionGmbH,forhighlyfunctionalqualityindividualshoedesigns;Salesforce,aninternationalproviderofcloudcomputingsolutions;Carbon,todevelopnewproducts,materials,andmanufacturingprocesses.Inaddition,thetiremanufacturerContinental,forthedevelopmentofnewshoesoles.Intermsofsustainability,ParleyandEvrnu,specialistsforsustainablefootwearandtextilesandinnovativetextilesolutions,arepartoftheAdidasecosystem.ValueCreation:DepthofValueAdded,ServitizationRegardingthevaluecreationofsportinggoodsmanufacturers,AdidasandNikebothshowachangeintraditionalvaluecreation,especiallyinproduction,sales,distribution,andresearchanddevelopment(innovation).TheintegrationofsoftwarecompaniesenablesAIandrobotics,whichinturnmakesproductionmoreefficientandeconomical.Insalesanddistribution,fasteraccesstotheonlinestoregoeshandinhandwithindividualproductsuggestionsandfast,securepaymentprocessing.Throughmemberships,bothcompaniestrytobindtheircustomerstotheirecosystems.Atthesametime,customersbecomepartofaglobalcommunitywhosemembersexchange,compare,andmotivateeachotherviathecompanies’platforms.Thedigitalconnectionbetweenproductandcellphonefurtherenhancestheproductexperience.Themanufacturerusesitsextensivenetworkandthehighbargainingpowerofitsleadingpositiontoattractothercompanies,startups,andcustomers.Finally,thelinkageofcompaniesacrossindustrieshelpstodevelopandimplementinnovativeideasatallstagesofthevaluecreationprocess.DISCUSSIONANDIMPLICATIONSOverall,theindustriesdescribedaboveareincreasinglymovingtowardsamoreservice-orientedperspectiveratherthanaproduct-orientedperspective.Thisgoeshandinhandwithunder-standingtheservice-dominantlogic(VargoandLusch,2008).Fromanacademicperspective,wecanstatethatDBEsopenupnewopportunitiesandsuccessfactorswithinandacrossdifferentindustries.First,buildinggoodrelationsbetweenthecooperationpartnersisafunda-mentalsuccessfactorforastableecosystem.Agoodrelationshipmeanstrustingcompaniesthatareusuallycompetitors,andsharingknowledge,data,andthereforerisks(Chinetal.,2008).Second,asthenumberofcompanieswithintheDBEincreases,participationintheecosystembecomesmoreattractiveforothercompanies(Jacobidesetal.,2019).Thirdistherightchoiceofpartners,primarilyselectedbytheorchestrator(Lyman,2018).Diversificationinindustryandgeographycanleadtomoresuccessfortheentireecosystem(Jacobidesetal.,2019).Fourtharetheformsofcooperationwithinanecosystem,whicharegenerallynotFranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

551540Handbookondigitalbusinessecosystemshomogeneous.Fromsimplecontractsbetweentheorchestratorandacompany,tojointven-turesorminorityshareholder,tomergersandacquisitions(M&As),therearevariouswaysofdevelopingcooperation(Meffertetal.,2019).Themoreheterogeneouslythesecollaborationoptionsareused,themoresuccessfulanecosystemis(Jacobidesetal.,2019).Fifth,connect-ingvariousactorswithintheecosystemandfacilitatingtheexchangeofresources,suchasknowledgeordata,oftheplatformitself,isasuccessfactor(IansitiandLevien,2004).Inthiscontext,programminginterfacesforsimplifiedconnectiontoasystem(platform),so-calledapplicationprogramminginterfaces(APIs),areconsideredveryimportant(Huhtamäkietal.,2017).Sixth,resistancetoexternalenvironmentalchanges.Thismeansresistancetodisruptionandtechnologicalchange(IansitiandLevien,2004).Seventh,theplatformistobedesignedinsuchawaythatfurtherservicescanextendit.Itisimportanttonotethatthecentralactorcanalwaysexercisecontrolovertheserviceofferingthroughgovernancemechanisms.Eighth,thenumberofplayersinvolvedshouldbeashighaspossibleduetopositivenetworkeffects.Inaddition,theactorsshouldhavedifferentskillstooffervariedbenefitstothecustomer.However,enteringanecosystemnotonlyopensupopportunities,butitalsocarriesrisksforeachindustry.First,duetothecross-linkageofdifferentactors,interdependenciesarisewithintheecosystems(Kopalleetal.,2020).Suchdependenciesalsomeanlosingautonomyandmarketpowerforindividualcompanies(Lenkenhoffetal.,2018).Second,especiallyfortheorchestratorofanecosystem,thereisariskofhighcoordinationcosts.Thesearisefromtheincreasedneedforcoordinationbetweenthepartners.Thelargertheecosystemis—thatis,themorecompaniesjointheecosystem—thehigherthecostsofcoordinationandalignment(Lenkenhoffetal.,2018).Furthermore,althoughtransactionandcommunicationcostsaredrasticallyreducedovertime,itmustbenotedthatecosystemstructureshavehighertransac-tioncoststhantraditionalorganizationalstructures,forexample,verticallyintegratedformsoforganization(WilliamsonandMeyer,2012).Finally,theallocationofprofitscanbecom-plicated.Determiningwhichcompanyearnswhatpercentageoftheproductorservicesoldisachallenge.Anon-transparentallocationcanleadtoindividualcompanieslosingprofits,oreventodisputesbetweenpartners(WilliamsonandMeyer,2012).Hence,theecosystemshouldremaineconomicallyattractiveforasmanycompaniesaspossible(Pidunetal.,2020).AutomotiveIndustryIntheautomotiveindustry,DBEsareanexcitingandpromisingapproachforcreatingjointvalue.However,ecosystemsarenotapanacea.DaimlerandBMWhavefailedwiththeircar-sharingecosystemintheUnitedStatesbecausetheyhavenotestablishedthemselvesastheleadingecosysteminthecar-sharingmarket(Knauer,2020).Nevertheless,ifsuccessful,businessecosystemsoffercompaniesgoodopportunitiestobroadentheirbrand,increasetheirmarketshare,enhancetheirvaluecreation,andultimatelygainacompetitiveadvantagewithoutgivinguptheirindependence.Regardingdigitization,theroleofGermanOEMsischangingfromproductsuppliertoserviceprovider(Helbigetal.,2017).Automobileman-ufacturerswillbecomeserviceprovidersformobilityandotherservices(Accenture,2018).Customerscanaccessthevariousservicesviathecentralplatformofadigitalecosystem.CriticalsuccessfactorsforDBEswithintheautomotiveindustrycanbeseeninthepartnerselection,creatinglock-ineffects,digitalventures,andinnovations(NischakandHanelt,2019).Overall,criticalsuccessfactorsfortheautomotiveindustryareconnectedcars,cap-turingdata,andgettingclosertotheconsumertoenhancethe“in-carexperiences”(BuckandFranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

552Digitalbusinessecosystems:acomparisonofdifferentindustries541Reith,2020,p.310).TheGermanautomotiveindustryisthusrespondingtocurrentchallengesandtryingtomasterthetransformationfromapureproductioncompanytoaserviceproviderwiththehelpofdigitization.Nevertheless,incumbentsarestillintheirdigitalinfancy.Toremaincompetitiveinthelongterm,manufacturersmustcontinuetoexpandtheirecosystemtogainaccesstodigitalcorecapabilitiesessentialforexecutingthetransformation,butarenotyetpartofthemanufactur-ers’corecompetencies.Therefore,thematurityofdigitaltransformationintheautomotiveindustryisstilllessadvancedthaninthefinancialindustry.Duetotheirasset-heavyproducts,carmanufacturersstruggletoexecutethedigitaltransformationwiththesamespeedasotherindustries(Riasanowetal.,2020).Apartfromthesechallenges,thereisanentirelynewworldofmobilitysolutionsandbusinessmodelsopeningupforincumbentswithintheDBE.Incumbents,therefore,needtobuildstrongrelationshipswithothercompanies(forexample,startups,IT,consulting,andsoftwaredevelopmententerprises),focusingondigitalexpertisetocomplementandexpandtheirproductionskillstoamoredigitalservice-orientedandservice-drivencustomerjourneyexperience.FinanceIndustryTraditionalinstitutionshaverecognizedtheopportunitytobuildtheirFinTechecosystems(Diamondetal.,2019).Ontheonehand,FinTechecosystemscanhelptoovercomethechal-lengesabove(LeeandShin,2018),primarilysinceFinTechsoftenfocusonparticularservicesandoccupyaniche(Arneretal.,2015).Ontheotherhand,FinTechsexpandorevenmakethevaluecreationactivitiesofbanksmoreefficient(Beieretal.,2016).AlthoughtheinvestmentsinFinTechsarestillverysubstantial,thesehighsumsaredistributedamongfewerandfewerFinTechs.Inaddition,moreandmoreFinTechsareexpandingabroadandenteringintofurthercollaborations;hence,amaturingphasehasbegun.RegardingtheconsolidationoftheFinTechmarket,moreandmoreFinTechecosystemsareformingonthenationalandcompanylevel(BasoleandPatel,2018).CriticalsuccessfactorsinFinTechecosystemsareseeninastabledemandforFinTechservices(KPMG,2017).IncountriessuchasChinaandIndia,theacceptancerateofFinTechofferingsisveryhigh,whichhasalreadyledtothedevelopmentoflargeFinTechecosystems.Theavailabilityandsupplyoftalentedspecialistsisanothercriticalsuccessfactor.ITspecialistswithknowledgeindatascienceorAIareparticularlyindemand(ArslanianandFischer,2019).Thesupportofregu-latorsandgovernmentsisalsoacriticalsuccessfactor(Diemersetal.,2015).Governmentsexertinfluence,inparticularthroughtaxbreaksortheprovisionofcapital(SaksonovaandKuzmina-Merlino,2017).Moreover,regulatorymeasures,suchasregulatorysandboxesinwhichFinTechscantesttheirbusinessmodels,canpromotethematurityanddevelopmentofFinTechsand,accord-ingly,theecosystem(KPMG,2017).Oneofthemostcriticalsuccessfactorsissearchingforandselectingsuitablepartners,whichissupremelydecisiveforthevalueproposition(Diemersetal.,2015).Essentialcriteriaofselectionincludecomplementaryresourcesandskills,andthecompatibilityofcorporatecultures(Capgemini,2018).Anotherprerequisiteforcooperationisacompany’swilltocooperateandsharedata.Thisistheonlywayforanecosystemtosucceedinthedata-intensivefinancialservicesindustry(Capgemini,2018).TheGermanfinanceindustryishenceshowingsignificantprogressintermsofdigitaltransformation.Nevertheless,althoughtheindustrydoesnothaveanyheavyassets,itisstillhighlyregulatedandstronglyFranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

553542Handbookondigitalbusinessecosystemsinfluencedbytherespectivemarketandnationalconditions.Thus,thereisnoexpectationofacomplete,possiblyevenglobal,networkingofthefinancialsystemssoon.InsuranceIndustryInsurersarerisk-averseandcarefullyweighanychangeintheirorganizationalstructure(Bühleretal.,2017).Therefore,thedegreeofmaturityofGermaninsurancecompaniesconcerningdigitizationcanbeclassifiedasmedium.Manyinsurancecompaniesalreadyhaveadigitizationstrategyinplace,althoughsofartheyseparateitfromtheITstrategy.Meanwhile,manycompaniesareconcentratingonthedigitizationandautomationofpro-cesses.Trend-settingdigitaltrends,suchastheIoT,areactivelypursuedbytheinsurersbutarenotusedwithinthecompany(Maieretal.,2017).Therefore,thedigitizationofcustomerinterfacesandthepromotionofinnovativebusinessmodelsisonlybeingcarriedoutverycautiously(Lünendonk,2018).Accordingly,thereisgreatpotentialforincreasingcompeti-tivenessthroughthetargetedimplementationofdigitalmeasures.Moreover,efficiencyinproceduralstructuresandcostpressurearestrongdriversintheinsuranceindustry.Duetotherapidtechnologicaldevelopmentofthelastthreedecades,thesystemlandscapeofinsurancecompaniesconsistsofanon-uniformstructure.Consequently,thecoexistenceofseveralportfoliomanagementsystemsiscommonintheGermaninsurancemarket.ThepotentialofdigitalizationcanhelptoremedythissituationandcontributetothedisentanglementofcomplexITstructures.Atthesametime,technologicalinnovationssuchasAIcanoptimizeandaccelerateprocessesinprocessingandsalesdepartments,andreducecosts.TheinsuranceindustryoffersgreatpotentialregardingtheimplementationofDBEs,primarilybecauseinsuranceproductsarestronglyassociatedwithproductsfromothersectors,suchastheautomotiveorhealthcareindustry.Forthisreason,insurancemanagersshouldviewpotentialalliancesaspromising(Catlinetal.,2018).SportingGoodsIndustryDBEshavenotyetestablishedthemselvesasanewformofvaluecreationnetworkintheentiresportinggoodsindustry.WhileDBEsarestillunknownprimarilytosmallandmedium-sizedcompaniesinthissector,theyareveryrelevantformarketleaderssuchasAdidas.TheGermanmanufacturerultimatelytriestofulfillasimilarvalueproposition:itisnotjustaboutsellingaproduct,itisaboutsellinganexperience.Therefore,thebigplayersbuildtheirvalueprop-ositiononthecooperationwithdifferentindustrypartners,turningvaluecreationintovalueco-creation.Atthesametime,theconsumerbecomesaco-producerbymakingpersonaldataavailableandprovidingfeedbackontheproductsviaplatforms.Adidas(2016),forexample,intendstoimprovethebrandexperienceatallrelevantconsumertouchpointsthroughaninte-gratedbrandandbusinessecosystem.Moreover,Adidas(2016,p.50)states:“Ourgoalistocreateanend-to-endecosystemthatconnectsconsumergroupsalongwithdifferentsportscategorieswithrelevantproducts,activations,andshoppingexperiences.”Hence,theformerbusinessecosystemturnsmoreandmoreintoaDBE.Forsmallandmedium-sizedcompaniesinthesportinggoodsindustry,thepictureisdifferent.Thesecompaniesstillconcentrateonaclassicvaluechainandtrytoholdlong-termpartnershipswithsuppliersorretailers.Thesportinggoodsindustryisaverydynamicandexcitingmarket.TheretaillandscapeischangingduetodigitalizationandtheFranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

554Digitalbusinessecosystems:acomparisonofdifferentindustries543resultingincreasinglyrelevantonlinetrade.Duetotheattractivenessofthemarket,newinves-torsarestreamingintothemarketandnewformatsandvaluecreationstrategiesareemerging.TheassociateddynamicsmakethesportinggoodsindustryahighlyinterestingmarketforfurtherexaminationintermsofDBEdevelopments.CONCLUSION,LIMITATIONS,ANDFURTHERRESEARCHDuetoincreasingdigitalization,themultiplyingnetworkingofallmarketplayers,andthefar-reachingpossibilitiesofintegratingconsumers,valuecreationstructures,marketstruc-tures,andvaluecreationmechanismsarechanging.DBEsareonewaytogeneratestrategiccompetitiveadvantagesinanincreasinglydigitalandcomplexcompetitiveenvironment(Götzetal.,2020).DBEsrepresentecosystems,sometimesacrossindustryboundaries,whichenablenewformsofvaluecreationandvaluedelivery.Thischapterintroducesthebasicunderstand-ingoftheDBEandshowsthecurrentstateofDBEsintheautomotive,finance,insurance,andsportinggoodsindustries.Basedontheanalysisofqualitativedata,thechapterderivesananalyticalstructureofDBEswiththreelevelsandsevencriteria.Thestudyofthefoursectorsconsideredshowsbothwide-rangingdifferencesintheuseofDBEs,andthechallengestobuildingthem.Astomanagerialimplications,thechaptershowshowtoovercomethesechallenges,astheongoingtransformationintheinsuranceindustryillustratesfornow.Onefieldofcon-siderationtoovercomethesechallengesistheformofcooperationwithinaDBE.DBEshaveemergedagainstthebackgroundofcombiningagileandchangeableinfrastructuresinoneoverallsystem(Ostadzadehetal.,2015).Sofar,therearethreelessonslearnedfromtheinsuranceindustryontheimplementationprocessofDBEs,whichcanbetransferredtootherindustriesaswell.First,sincemanyinsurersarehavingdifficultieswithdigitalchange,itiscrucialtohaveagileteamsandagilecollaborationstospeedupthechangemanagementandcreationofDBEs.Second,digitalskillsareanessentialsuccessfactorforthedevelopmentofaDBE.Sincedigitalchangeintheinsuranceindustryhasnotyetprogressedasfarasinotherindustries,developinganindividualtrainingconceptforemployees’digitalskillswithintheDBEisadvisable.Third,product-servicedesignisaparticularlyrelevantcompo-nentinbuildingadigitalecosystem,asthevisualappearanceoftheplatformdependsonit.Asimpleproduct-servicedesignleadstoasimplecustomerinterfacedesign,whichismoreuser-friendlyand,inturn,criticaltothesuccessofsales.Thelastaspectconcernstrust-relatedindustriessuchasthefinanceandinsurancesector:onlyatrustworthyandfunctionalbrandmakestheDBEattractivetopartners.Inthefinanceandinsuranceindustry,trustisofutmostimportance.Accordingly,thepositiveperceptionofabrandisalsoasuccessfactor.Financeandinsurancecompaniesandtheautomotivesectorneedtoensureahighleveloftrustinthelongterm,forexamplethroughdataprotection.Thischapter’sresultsandconceptualconsiderationsrepresentagenericcharacter,andtheresearchworkisstillwithlimitations.WebasedourobservationsonlimitedqualitativedatamaterialwithafocusonGermanareasofglobalmarkets.Thisprovidesavaluableviewfortheoryandpractice,butwecanonlyderiveverylimitedgeneralizability.Futureresearchshouldthereforefocusonamorein-depthconsiderationofallsectorsandexpandthedata-base.Furthermore,inthepresentstudy,wedidnotconsiderexistingintermediariesexplicitly.FranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

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559548HandbookondigitalbusinessecosystemsvanAlstyne,M.W.,Parker,G.G.andChoudary,S.P.(2016).Pipelines,platforms,andthenewrulesofstrategy.HarvardBusinessReview,April,pp.54–62.Vargo,S.L.andLusch,R.F.(2008).Service-dominantlogic:continuingtheevolution.JournaloftheAcademyofMarketingScience,36(1),pp.1–10.VW(2020).Volkswagendevelopsthelargestdigitalecosystemintheautomotiveindustry.Availableat:https://www.volkswagenag.com/en/news/stories/2018/08/volkswagen-develops-the-largest-digital-ecosystem-in-the-automot.html(accessedMarch5,2021).Walter,G.F.(2016).GeschäftsmodellevonBankeninZeitenfundamentalenWandels.In:M.Seidel(ed.),BankingandInnovation2016.Wiesbaden:SpringerFachmedienWiesbaden,pp.29–40.Whitmarsh,L.,Swartling,Å.G.andJäger,J.(2009).Participationofexpertsandnon-expertsinasustain-abilityassessmentofmobility.EnvironmentalPolicyandGovernance,19(4),pp.232–250.Williamson,P.J.andMeyer,A.de(2012).Ecosystemadvantage:howtosuccessfullyharnessthepowerofpartners.CaliforniaManagementReview,55(1),pp.24–46.Zahra,S.A.andNambisan,S.(2012).Entrepreneurshipandstrategicthinkinginbusinessecosystems.BusinessHorizons,55(3),pp.219–229.FranziskaGötz,ChristophBuck,MichaelRosemann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:26:38AMviaColumbiaUniversityLibrary

56033.Doingdigitalnews:acomparisonofthreebusinessmodelsfromanecosystemsperspectiveCindyPriceSchultzINTRODUCTIONOneoftherealitiesofthe21stcenturymarketplaceisthatanyonecanbeapublisherbypostingablogoruploadingavideo(Albarran,2017).However,thereisstillaneedforjournalism;newsfromsourcespeopletrust(Paul,2017).Küng(2015)foundthatdigitalnewsorganiza-tionsthataremostsuccessfulblendjournalism,technology,andbusinessknowledgewithaculturethatseestheopportunityinthedigitalformat.Digitaltechnologiesenabletimelyinformationsharingandhaveuniqueplatformsthatorganizationscanusetocreatedigitalbusinessmodels(Aagaard,2019).Unfortunately,manydigitalnewsstartupsendinlessthantwoyears(Hollifieldetal.,2016).Therefore,organizationsneedtobestrategicastheytrav-ersetheecosystemofdigitaljournalism.Traditionally,anecosystemreferstoorganismsthatinteractwitheachotherandadapttotheenvironment(Hawley,1986).Abusiness“ecosystemisconceivedasaneconomiccommunityofinteractingactorsthatallaffecteachotherthroughtheiractivities”(Jacobidesetal.,2018,p.3).Kapoor(2018)wrotethatthegeographicenvironmentofacompanyispartofdefiningitsecosystem.Krcoetal.(2019)statedthatbecausechangehappenssorapidly,itismuchmoreefficienttopartnerwithpeoplewhohaveknowledgeinanarea,thantotakethetimetodevelopaninnovationontheirown.Indigitalbusinessecosystems,organizationscanbepart-nersandcompetitorssimultaneously,companiesareco-dependent,andvalueisco-created.Becauseofthisco-dependency,traditionalbusinessmodelsareinadequate(Aagaard,2019).Previousresearchhasexaminedlargerorurbandigitalnewsoutlets(Küng,2015),butthepurposeofthisstudyistocomparethreesuccessfulbusinessmodelsfordigitalnewsinaruralgeographicecosystemandshowhowoverathree-yearperiodtheorganizationshavestrategicallyadaptedtheirbusinessmodels:anon-profit,anentrepreneurialmodel,andacorporate-ownedoutlet.Itexaminestheactivities,actors,architectures,complementarities,interdependencies,platforms,andinnovationsusedbyeachbusinesswithintheecosystem(Jacobidesetal.,2018;Kapoor,2018).Theimportanceofstudyingbusinessmodelsisthattheunderlyingideasfoundinthemcouldbereplicatedbyothermanagers(FossandSaebi,2015;Picard,2011).Kostovskaetal.(2021)suggestedthatmorecasestudyresearchshouldexaminetheeffectsoftheplatformsonthethird-partycomplementors.Therefore,thischapteraddressesthecalltoexaminethebehaviorsoforganizationsthatareworkinginadigitalfieldthatdoesnothaveanexactblue-printforhowtonavigateanecosystemanddevelopabusinessmodel.549CindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

561550HandbookondigitalbusinessecosystemsLITERATUREREVIEWEcosystemsPerspectiveforBusinessesAlthoughtraditionallyusedtodiscussbiologicalsystems,ecosystemshavebeenappliedtohumanecologyaswell.Hawley(1986)statedthathumanecosystemsinvolveadaptionstotheenvironmentthroughforminginterdependencies;systemdevelopmentcontinuesuntilitisthemaximumsizeforthetechnologyandcommunicationpotential;andsystemsareredevelopedasnewinformationisacquired.Adaptingthistobusiness,Moore(1993)wrotethattobesuccessful,businesseshavetochangequickly.Forexample,companiescanworktogetherinabusinessecosystemtoincorporateinnovationsandhelpcustomers,evenwhileoperatinginacompetitiveenvironment.Anotherimportantaspectofecosystemsisthattheycancontributetoentrepreneurship,especiallywithinaspecificgeographicregion(Kapoor,2018).Kapoor(2018)statedthatecosystemresearchincludescomplementaritiesandinterde-pendenciesbetweenactors.Complementaritieshelptocreateorenhanceuservalue,whileinterdependenciesareconnectedwithinasystem-levelarchitecture.Inotherwords,com-plementaritiesareaneconomicrelationship;interdependenciesareastructuralrelationship.Togetherthesecreatevaluefortheecosystem.Whendoingecosystemresearch,itisimportanttoexaminetheactivities,actors,andtechnologicalarchitectures.Bottlenecks,orconstraintstotheecosystem,canlimitvalueorgrowth.Oftenecosystemshaveaplatformaroundwhichthedifferentorganizationsoperate.Intheseecosystems,platformownerssetupthearchitectureandrulestoparticipate.Therefore,participantsmustthinkaboutwhetherornotitisworthfollowingthoserules,orwhethertheywilloperateonmanyplatforms.Jacobidesetal.(2018)discussedthreetypesofecosystems:businessecosystemscenteraroundafirmanditsenvironment;innovationecosystemsfocusonparticularinnovationsornewvaluepropositionsandtheactorsthatsupportthem;andplatformecosystemscon-siderhowactorsorganizearoundaplatform.Platformecosystemshavebeendescribedas“meta-organizations”becausetheirdevelopmenthasspurredinnovationandhelpedtodevelopnewproductsandservices.However,becausetheplatformsareusedbymanydifferentaudiencesorcomplementors,theirrulesmayaffectthesegroupsindifferentways,whichcanleadtoconflictsbetweenwhatisgoodfortheplatformandwhatisgoodforthoseusingit(Kretschmeretal.,2021,p.1).Digitalbusinessecosystemsnowhavewholeindustriesthatrevolvearoundaplatformastheprimarybusinessmodel.Therefore,thewayaplatformgovernsitsmembershipcanaffectthesuccessorfailureofparticipantsinthatecosystem(RietveldandSchilling,2020).Kostovskaetal.(2021)examinedmediaecosystemsandhowtheydifferfromotherbusi-nesses.Numerousmediaorganizationshavehadtorestructureinthelastdecadebecauseoftechnologyandmarketchanges(Baumann,2013).Asasubcategorywithinthemedialandscape,electronicnewsoutletshavetorelyonplatforms,suchasFacebookandTwitter,tohelpthemcreatevalue.Thereasonswhythemediaorganizationsareontheplatformmaydifferfromthoseofthetargetaudienceofusers,sochangestotheplatform’sstructurecannegativelyaffectthemediaoutlet’srevenueandbusinessmodel.Oneoftheaspectsofamediaecosystemiscoopetition:cooperationamongcompetitorsfortheirmutualbenefit(Kostovskaetal.,2021).Therefore,eventhoughalldigitalnewsoutletscouldpotentiallybecompetitorsbecauseoftheeaseofaccesstocontentacrossgeographicareas,itisadvantageoustothesediverseoutletstoworktogethertofindthebeststrategiestofunctionwithintheplatformandCindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

562Doingdigitalnews551enhancejointvalue,suchasthecreationoftheLocalIndependentOnlineNews(LION)groupintheUnitedStates(LIONPublishers,2021).Butparticipationinthemediaecosystemisnotonlyajointinitiative;eachparticipantcaresabouthowtocapturevalueforitsbusiness(Kostovskaetal.,2021).DigitalBusinessModelsKotleretal.(2016)definedabusinessmodelasdeterminingthreethings:choiceofproductandmarket;howtheorganizationwillbefunded;andexecutingvalue-addingactivities.Newbusinessmodelsneedtoincorporatelong-termcustomerrelationshipmanagement,morecomplexrevenuemodels,integratedperformancesystems,andcooperativenetworks.Krcoetal.(2019,p.87)wrote:“(B)usinessmodelsneedtobeopen,dynamic,ecosystem-centricconstructsthattakeintoaccounttheneedsandspecificationsoftoday’senvironmentwhilemakingbusinessmodelreinventionacontinualandinclusiveprocess.”Includedinthatideaisgeographiccoverage.AccordingtotheStGallenBusinessModelNavigatormagictrianglemodelbyGassmannetal.(2014),anybusinessmodelconsistsoffourmainbuildingblocks:Who?,What?,How?andValue.Theauthorsarguedifabusinessdoesnothaveamodel,itismuchmorelikelytobeunsuccessfulcomparedtothosethatdo.Theoverarchingideais:Whatvalueisbeingprovidedtothecustomer,andhowcanthecompanymakeaprofitdoingthat?(ElSawyandPereira,2013).Aagaard(2019)suggestedthatdigitalbusinessmodelsneedtotakeintoaccountthetransitionofdisruptivechangefromthetraditionalbusinessmodelstodigital,mappingthedigitalstructuretoincludetheecosystemactorsandrevenuestreams,andincludeconcretedigitalpatternsforrevenue.Fornewsorganizations,thetraditionalbusinessmodelisbasedonadvertisersgivingmoneytotheorganizationbecauseaudiencesaredrawntothecontentprovided.Theassumptionisthattheaudiencewillseetheadvertisingwhilelookingatthenewscontent(Küng,2008).Eventhoughdigitalmediacanpotentiallybeavailableworldwide,thegeographicfocusofamediaoutletisstillimportant,especiallytoadvertiserswhowantlocalcustomers.Mediaorganizationscanhaveuptofourrevenuestreams:consumers,advertisers,sponsorships,andbusiness-to-business.Businessmodelshavetobeexaminedregularly,totweakthem(Picard,2011).Successfuldigitalnewsorganizationshavetobeveryflexibletobeabletoquicklyrespondtoopportunitiesandthreatsinthemarketplace(Küng,2015).Contentorganizationisvaluabletoaudiencemembersbecauseofthetimesavingstheygainwhencompaniesorganizecontentfortheminawaythatmakessense(Picard,2011).Byincreasingthenumberofusers,contentproviderscanincreasethedemandforadvertising.However,theycanalienateusersiftheycatertoadvertiserstoomuch(Sandullietal.,2014).Becausetechnologyandconsumers’tastesinmediacontentchangesorapidly,mediamanag-ersneedtoexaminetheirbusinessmodelstoadapttotheaudience’sdesiretofeelasthoughtheyarebeingtreatedlikeindividuals(Picard,2011,p.125).Becausecloselyexaminingorganizations’businessecosystemsandbusinessmodelscanprovideexamplesforotherstofollow,thefollowingresearchquestionwasasked:ResearchQuestion:Howdoesaruralgeographicecosysteminfluencehowdigitalnewsorganizationsstrategicallyrespondtochangesinthejournalismindustry?CindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

563552HandbookondigitalbusinessecosystemsMETHODAcasestudymethodologywasused.Thepurposeofusingcasestudiesistoexaminearesearchgap,sotheoreticalsamplingofparticularlysuitableorganizationsisappropriate(EisenhardtandGraebner,2007).Whenexamininginnovativebusinessmodels,“smallNresearchisneededandindeedjustified”(FossandSaebi,2015,p.19).Kapoor(2018)wrotethatqualitativemethodsareusefulfortheorizinginecosystemresearch.Thethreefirmsinthisstudyare:WyoFile,anon-profitorganizationthatconductsonlinelonger-formandinvestigativestoriesaboutpolitical,economic,andenvironmentalaspectsinWyoming(WY),andusesFacebook,Twitter,anditswebsite;OilCityNews,adigitalmediaoutletthatusesFacebook,Twitter,anditswebsitetoreachtheCasper,WY,market;andLaramieLive,adigitalmediaoutletthatusesFacebook,Twitter,itswebsite,andadownload-ableapplicationtoreachtheLaramie,WY,market.Thethreecasesarethematicallysimilar;thatis,theyallaimforatargetaudienceinWyoming.However,thesecasesaredifferentbecausetheirbusinessmodelsaredistinct.WyoFileisanon-profitjournalismorganizationthatisfundedbydonors,foundations,andunderwriters.OilCityNewsisanindependentdigitalnewsorganizationthatisfundedbyadvertisingandisownedbyanentrepreneurwhoalsoownsanadvertisingagencyinCasper.LaramieLiveprovidesdigitalnewsforLaramie,butitisownedbyTownSquareMedia,acorporationthatownsnumerousradiostationsacrosstheUnitedStates,includingtheumbrellaorganizationforLaramieLive,KOWBandY95CountryradioinLaramie.DataCollectionThewaystocollectevidenceinacasestudyincludeinterviews,archivalrecords,anddocu-ments(Yin,2012).In-depthinterviewswereconductedinJuneandJuly2017withtheeditorofWyoFile;thedirectorofmediaengagementandthedigitalsalesexecutiveforLaramieLive;andtheownerofOilCityNews,andtranscribedforanalysis.Todeterminetheadapta-tionsthattheseorganizationshaveundergone,follow-upinterviewswereconductedwiththesameindividuals(exceptanewdigitalmanagingeditorforLaramieLive)inOctober2020.SecondaryDataandAnalysisForWyoFile,thewebsite(http://www.wyofile.com/),Facebookpage(@WyoFile),andTwitterfeed(@WyoFile)wereexamined.ForOilCityNews,thewebsite(https://oilcitywyo.com/),Facebookpage(@oilcitywyo),andTwitterfeed(@oilcitywyo)werealsoexamined.ForLaramieLive,allofthoseoutletswereexamined(http://laramielive.com/;@laramielive;and@LaramieLive),aswellasthewebsiteoftheumbrellaradiostation(http://kowb1290.com/category/wyoming-news/laramie-news/)andthemobilephoneapplication(SearchintheAppStore:LaramieLive).ANALYSISOFORGANIZATIONSThecasestudydataispresentedinthefollowingmanner:asummaryofthegeographiceco-system;adescriptionoftheplatformsandbottlenecks;andadescriptionoftheinnovationsofCindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

564Doingdigitalnews553eachfirmthatincludesthecomplementarities,interdependencies,andrevenue.Finally,eachorganizationdescribeditsadaptationstotheenvironmentoverathree-yearperiod.GeographicEcosystem:WyomingAsmentionedearlier,geographicecosystemsarestillimportantasaneconomicfoundationformanybusinesses(Kapoor,2018;Krcoetal.,2019).Picard(2011)saidthatinmediaorgani-zationsgeographyisvital,becausethemaineconomicdriveraretheadvertisersorsponsorswhocareaboutageographicmarket.ThethreeorganizationsinthisstudyareallinWyoming.AccordingtotheUnitedStatesCensusBureau(2018,2019),Wyomingisthetenth-largeststatebysize,butithasthesmallestpopulation,withonly579000residents(5.8persquaremile).Politically,Wyomingisoneofthemostconservativestates.Thevastmajorityofitsleg-islatorsareRepublican,asareallofitsconstitutionalofficers(BenderyandRosenfeld,2017).Asdigitalnewsoutlets,itisimportantforthesefirmstounderstandhowjournalismisper-ceivedintheirarea.WyomingisthetopstateintheUnitedStates(US)fordistrustinmediasources.InaGallupPoll,only25percentofcitizenshad“agreatdealorafairamount”oftrustinnewsoutlets(Sullivan,2019,para.2).Therefore,in2019theSocietyofProfessionalJournalistsconductedaprojectinCaspertobuildmutualunderstanding.Althoughtheprojectdirectorsaidnomindswerechangedattheendofthesixmonths,therewasvalueinshowingpeoplehowjournalistswork(Sullivan,2019).Becausethestatehasa“newsdesert,”itisonthecutting-edgeofdigitalnewsintheUS(Collins,2020).Wyominghasfourdigitalnewsorganizationsthatwerefoundedseveralyearsago:WyoFilein2008;County10in2011;SweetwaterNowin2013;andOilCityin2014(Collins,2020;County10,2020;WyoFile,2019).GaryCollins,formerchiefoperatingofficerofSweetwaterNow,saidthatintheLocalIndependentOnlineNewsgroup,anationalnewsorganization,Wyomingconsistentlyhasthreeofthetoptensitesintermsofonlineengage-ment.“Wehavelearnedbestpracticesandhavebeensuccessfulwiththat.InWyoming,wehavetheabilitytotestourmarketsbecausethereisnosaturation.Thefactthatweallinde-pendentlyfindsuccessshowsthatWyomingisdoingwell”(Collins,2020).Incontrast,asofAugust2020,Wyomingistheonlystatethathasnodailyprintednewspaper(Garrett,2020).Platforms:DigitalandFacebookJacobidesetal.(2018)andKapoor(2018)saidthattheuseofaspecificplatformcanbindtheecosysteminawaythatiscontrolledbytheplatformitself.Allthreefirmsinthisstudyusetheirownwebsitesasaplatformfornewsdelivery,butaseachofthemcontrolsthatplatform,therearefewbottlenecks.TheyalsouseTwitter,butbecauseoflowinteractionintheWyomingmarketsanddifficultytoaddadvertisingtothatplatform,itisnotaneconomicdriverforthem.However,fortwoofthefirms,LaramieLiveandOilCity,Facebookdrivesclosetotwo-thirdsoftheirreadership.ThemainbottleneckisthatFacebookhasanalgorithmthatitusestoprovidethereaders’feeds.TheorganizationssaidFacebookdetermineswhatisinthenewsfeedoftheirFacebookfollowersbasedonanalytics,especiallyengagement.Therefore,ifanewsproviderposts40storiestoitsownFacebookfeed,itsfollowersmayonlyseeoneortwooftheseintheirnewsfeeds.Ifareaderhasinteractedwithastorywithalikeordislike,itcountsasengagement.Therefore,evenifareaderkeepsdislikingstories,thosetypesofstoriescancontinuetobeshowninthenewsfeed,whiletheothersarenotshown.CindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

565554Handbookondigitalbusinessecosystems“Thebigchallengeforpublishersisgivingreadersthetoolsandawarenessthatthere’sothercontentwaitingforthem.TheyjusthavetogobeyondtheirFacebookwalltofindit,”OilCityownerShawnHoucksaid.“NoonecanreallytellwhattheFacebookalgorithmis,sowedothebestwecantoworkwithit,”digitalmanagingeditorofLaramieLiveBenKuhnsstated.Eachorganizationhasfounditsownwaytoworkaroundthebottleneckaswellassufferthroughit.Thesewayswillbediscussedintheinnovationsectionsthatfollow.InnovationsbyEachFirmWyoFileOrganizationandactivitiesWyoFilewasfoundedin2008andalthoughitisofficiallyheadquarteredinCasper,itproducesjournalismforthewholestate.OnitsTwitterfeed,WyoFiledescribesitselfas:“anindepend-ent,non-profitnewsorganizationfocusedonthepeople,placesandpolicyofWyoming.”Thewebsitesaiditsmissionis,“toinformandengageWyomingthroughin-depthreportinginthepublicinterest.”MatthewCopeland,WyoFile’seditor,stated,“Weprovidetop-notch,fact-basedjournalisminonlineandmobileplatformsthatarebothaccessibleandimpartialforouraudience.Wefillagapofthein-depthcoveragethathasdiminishedintraditionalmediaasithascontinuedtostruggle.”Astheeditor,hesaidhisvisionistochangeconversationsinandaboutWyoming.“Weliterallyaffectwhatpeopletalkaboutinthebars,statehouse,andthevirtualcommunityaswell.Ourbasicpremiseisreliableaccessaboutfactualinformationabouttheinstitutionsthatsteerourlives.It’samust-haveforciviclife.”ActorsOnitswebsite,WyoFilehasdefineditsreadersas:morehighlyeducatedthantheaverageWyomingite;extremelycommittedtoWyoming,andcontinuetoreadWyoFileevenwhentheymoveoutofstate;andinfluentialpeopleinpolicy,education,healthcare,energy,andtheenvironmentsectors.Copelandsaidthetargetaudienceis“folksthatcareaboutWyomingandarenaturallyengagedinhelpingthemselvesstayinformed.Theyfeelthatitispartoftheircivicdutytostayinformed.”ArchitectureItsTwitterfeedhas7100followers(upfrom5600in2017),andthepinnedtweetaskspeopletodonatetotheorganization.SubscriptiontotheweeklynewssummaryisrequestedinitsFacebookandwebsitepages.TheFacebookfeedhas5600followers,upfrom4100.IntheFacebookandTwitterfeeds,postsandtweetscanbeaccessed,butonlyforashorttime.However,allpostssincethebeginningoftheorganizationareavailableonthewebsiteunderitsArchivessection.WyoFile’sreadershipisacquiredby:organicsearchfromsearchengines,45percent;directtowebsite,28percent;andallsocialmediacombined,20percent.“Wewantthemtoengagewithourecosystemandinteractwiththemthere,sowedon’tfocusonsocialmedia,”Copelandsaid.ComplementaritiesAccordingtoFacebook’sAboutsection,WyoFileisamemberoftheInvestigativeNewsNetwork,anationalassociationofindependentnewsorganizations;andanassociatememberCindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

566Doingdigitalnews555oftheWyomingPressAssociation,whichisprimarilyrelatedtonewspapers.ItcollaborateswithWyoming’slegacymediaandothernewsorganizationstocreatenewsstoriesandtodistributeitsownstories.Accordingtoits2019AnnualReport,700WyoFilestorieswereusedinWyomingnewspapers,anincreaseof21percentfromthepreviousyear(WyoFile,2019).RevenueAccordingtoitswebsite,foundationsaccountformuchfunding,oftenrelatedtospecificaspects,suchashiringreporters,increasingcoverageofgovernmentandpolicy,andenhanc-ingcoverageoftheWindRiverIndianReservationandNativeAmericanissues.AmongthosesponsorsaretheKnightFoundationandtheEthicsandExcellenceinJournalismFoundation.WyoFileisalsosupportedbyitsreaders.TheAboutsectionsays:Ifyousupportourin-depthreportingonWyoming’speople,placesandpolicy,pleasedonatewhatyoucan.Ifyoucan’tmakeafinancialdonation,pleasecampaigntogetyourfriendsandco-workerstosignupforWyoFile’sfreeemailsubscription.Thelargeroursubscriptionlist,theeasieritisforustoraisemoney.(para.4)ThewebsitehasaDonatebuttonwherethesuggestionsarefrom$25to$5000.Monthlydona-tionsarealsoencouraged.WyoFilealsohasunderwriters,whichinafor-profitcontextwouldbecalledadvertisers.However,thatisnotalargesourceofrevenue.AdaptationsOverthethree-yearperiod,WyoFilehasmadesomeadjustmentstobetterenhanceitssuccess.NewsMatchisanewrevenueaddition.Itisanorganizationthathelpsnonprofitnewsroomsraisematchingfundstosupportindependentjournalismthroughanopenplatformforgiving.Thisispartofthereadershipfundingfortheorganization.In2017,aboutone-thirdofthefundscamefromfoundations;one-thirdfrombigdonors,over$1000;andone-thirdfromsmallerdonors.Now,about40percentisfromfoundations;40percentfromlargerdonors;and20percentfromsmallerdonors.Membershipsareupfrom476to786.WyoFilehasaddedreportersandamanagingeditor.UniquevisitorsandvisitstotheWyoFilewebsiteincreasedmorethan30percentfrom2018.WyoFileaddedanewcomplementarity,apartnershipwiththeAmericanJournalismProject(AJP),whichselectedWyoFileasoneofonly11organizationsnationwideinitsinauguralcohortofgranteesin2019.TheAJPinvestsinthe“innovativecommunity-supportedjournal-ismmodel”(WyoFile2020,p.2).Copelandexplained:Thesimplestsummaryofourchangesiswehavehadthreeyearsofhypergrowth.Wehadafour-personteamandnowit’ssevenpeople,soontobeeightornine.Readershiphasquadrupled.Ourbudgetdoubledfrom$400000toalmost$800000.Thisisindicativeoffolksneedinganalter-nativeandfindingitinthesenewmodels.OilCityNewsOrganizationandactivitiesOilCitywasfoundedin2014aspartofthePitchEngineCommunityNewssystem.TheFacebookpage’sAboutsectionsays:“OilCityNewsisCasper’sCommunityNewsStream.OurprofessionaljournalistsarededicatedtopublishingCasper’smostimportantstoriesfirst,CindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

567556Handbookondigitalbusinessecosystemsfastandfree.”Italsosays:“OilCityisawebandmobile-basedmediaoutletprovidingCasper,Wyomingandsurroundingcommunitieswithinstantnewsandupdates.”AccordingtoownerShawnHouck,OilCityisthenumberoneplatforminthestateintermsofreaders.Atleast30000Wyomingresidentsreadatleastonearticleaday.Adailynewsletter,offeredbyclickingonSubscribeonthewebsite,hasabout7000followers.ActorsTheaudienceisprimarilylocatedwithin50milesofCasper.Thewebsite’sAboutpagesays:“Weappreciatethattheyhavedescribedourplatformasthemost‘preferred,’‘timely,’‘accu-rate,’‘trustworthy,’‘easy-to-use,’‘cool,’and‘relevant’newsplatforminthearea.”Accordingtoa2019survey,83percentofCasperrespondentssaidthattheyhadreadOilCityinthepreviousmonth.ArchitectureThewebsitealwayshasthetenmajorssponsorsofOilCity,calledCommunityPartners,atthebottomofthepage.Olderpostscanbeaccessedbyclickingabutton,butthearchivesonlygobacktwoweeks.Thewebsitegeneratesmorethan1millionpageviewsamonthfrom168000readers.OntheFacebookpage,morethan44000peoplefollowOilCity,upfrom30000in2017.TheTwitterfeedhas1400followers,upfrom1000.TheFacebookpagehassimilarstoriestothewebsite,butinadifferentorder.“WithoutFacebooktoaiddiscovery,noneoftheseplatformswouldexist.Also,becausewehavetheresourcestocreatetheplatform,thereisnoadditionalcostinowningitexceptforthecostofthejournaliststhatisoffsetbyadver-tisingrevenue,”Houckstated.“Wehavehadsuccesswithourmodelintermsofbuildinganaudience,butthechallengeforusisexplainingthattopotentialsponsorsbecausetheystillthinkofusasthefreeFacebooknews.”ComplementaritiesOilCityjoinedLION,theLocalIndependentOnlineNewsgroupthathasseveralhundredmembersintheUS.Moreabouttheadaptationsthathavecomefromthisallianceispresentedattheendofthissection.InterdependenciesandrevenueBecauseOilCityisinownedbyHouck,whoownstheadvertisingagencyAdbay,“webringourcreativeexpertisetotheads.”OilCityistieddirectlytotheagencyasAdbayis“hired”tosell,manage,andbuildalladsandplacements.Therevenueissplit50/50.OilCityusedtobepartofanorganizationofdigitalnewssourcesacrossWyoming.Themodelprimarilyfocusedonnativeadvertising,storiesthatweresponsoredcontent,butsimilartonews.However,whenHouckboughtthebusinessfouryearsago,hefoundthatthoseadsdidnotworkintheCaspermarket.So,hechangedtosponsorshipsanddisplayads.Communitypartnershipscostthemostandallowtheadvertisertoalwaysbeonthebottomofthewebpageandinsponsored/promotedposts.Displayadsarepartofthenewsfeedonthewebsite,asarethepromoted/sponsoredposts.Onthewebsite,allrecentpromotedadsarelinkedtogetherunderthesub-headingofPromoted.AlthoughtherearenoadsdirectlyintheFacebookorTwitterfeeds,whenreadersclickonastorytheyaretakentotheOilCitywebsitewherethereisadvertising.AccordingtoHouck,becauseCasperhasseveralformsoftraditionalmedia,someofhisclientscannotaffordaTVornewspaper,butcanafforddigital.WhenhefirsttookoverOilCindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

568Doingdigitalnews557City,itusedcategoryexclusivity,whichrelatestoeachfieldofadvertisers,suchaslawyersorItalianrestaurants.Eachadvertiserwasassuredthatnootherbusinessintheirspecificcategorywasallowedtoadvertiseforthatweekonthesite.Houcklearnedaboutcategoryexclusivitybyworkingwithcinemaadvertising,wherehesoldouttheentireinventory.AdaptationsOilCityhasmadeseveraladaptationsinthelastthreeyears.ThemostimportantonesaredealingwiththebottlenecksthattheFacebookplatformbrings.“Wetrytobefirstwithnewsbecausethenwegetthereadersandtheengagement,”Houckstated.Becauseofthealgorithmonlyshowingthetypeofnewsthathasbeenengagedwith,OilCityhadseveralcomplaintsaboutitonlypublishingnegativenews.SoHouck’steamcreatedTheBreeze,adailynewslet-terwithallpositive,localnewscontent.“Wehaven’tpublicizedityet;wehavejustfunneledthepeoplewhohavecomplained.Forsomepeople,it’swhattheywantandwehavehadpositivefeedback.”Thenextstepisgrowingtheaudienceandfindingawaytomonetizeit.Newmonetarysourcesofreaderrevenueweredeveloped.First,aDonatebuttonisonthetopofthewebsiteandstates:OilCityNewsisCentralWyoming’slargestlocallyowned,independentnewsplatform.Wespecial-izeinhyperlocalcoverageofthepeople,placesandeventsthatshapethecommunitywelove.YourgifthelpstosupportOilCity’saward-winningstaffofCasper-based,professionaljournalistswhoarededicatedtobringingreadersstoriesfast,firstandforeverfree.Second,onceamonththefirmhasOilCityHonors,apre-formattedsystemwherepeoplecanuploadpicturesforfree,butiftheywanttoaddinformationandkeepituplonger,theypay$25.“It’snotatonofmoney,butitaddsup,”Houcksaid.Anotherchangewasinadvertisingexclusivity.NowtheCommunityPartnersareexclusivetoabusinesscategory,butthedisplayadsarenotexclusiveunlessabusinesspaysmuchmoreforthatright.Thenewsroomhasexpanded,intermsofbothpeopleandlocations.InCasper,itgrewfromonefull-timepersontofive.InDecember2019,thecompanycreatedCapCityNewsinCheyennewithonereporter.Theoutletsoperateasonenewsroom,withnewssharingbetweenthegroups,butwithtwodistinctbrands.“TheideaistogrowitthesamewaywegrewOilCity.”Athirdmarketisscheduled,butthelaunchwasdelayedbyCOVID-19.BecauseofLION,OilCityhasaconnectiontothelargerdigitalnewsecosystem.ItlearnedaboutGoogleRevenueAcceleratorthatputsinadswhenthereaderisoutsideoftheCasperarea.FacebookhasasimilarsystemthatOilCityalsolearnedaboutfromLION.Thishasbecomeanimportantcomplementarityforthefirm:“Wewerejustonourownandlearningaswewent,butnowwehaveatribeandweareexcitedaboutthat.”Thishasledtoanotherecosystem:acollaborationwithdigitalnewspublishersinWyoming.“Wewanttorepresentourownindustry.Whenitisfullyformed,wecanrecognizeexcellenceinourindustry,lobby,anddootherthingsthattradegroupslikethisdo.”LaramieLiveOrganizationandactivitiesFoundedin2011,theFacebookpage’sAboutsectionstates:“LaramieLiveisyoursourceforanythingandeverythingLaramie.VisitourwebsitetokeeptrackofwhatisgoingonaroundLaramie,Wyoming.Youwillfindnews,stories,eventsandbusinesslistingsforthetownofCindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

569558HandbookondigitalbusinessecosystemsLaramie.”ThecontenthaslocalLaramiestoriesproducedbyareporter,regionalstoriesfromitssisteroutletinCheyenne,andnationalstoriesfromtheAssociatedPress.ActorsLaramieLive’sdifferentportalscallit“thesourceforeverythingLaramie.”FormerdigitalmanagingeditorSenecaRigginsstatedthatthereisanengagedhyper-localaudiencethatisslightlymorefemalethanmale,andabout80percentreadLaramieLivefromamobiledevice.Everystoryismonitored,sothatasconsumersgivefeedback,thestoriesarechanged.“Ifpeopleareinterestedinseeingakittenupatree,wekeeprepeatingbasedonwhatpeoplelike.Thereisreal-timefeedbacktoaccommodatetheaudience.”DigitalsalesexecutiveJaredNewlandsaidthatthelocalangleisveryimportant.“Thatiswhatouradvertiserswant,soweworktobuildthataudience.”ArchitectureThewebsitehasalargebanneradatthetop.DirectlyunderthatisalinktoaSubscriptionpagewhereapersoncanreceiveadailysummary.Therightthirdofthepagehasacombinationofadvertising,weatherupdates,andotherfeatures.TheTwitterfeedhas1400followers,upfrom1000in2017;andtheFacebookpagehas19000followers,upfrom14000.Theapphasmorethan5000downloads,whichisupfromzerobecausetheapphadnotbeenofficiallylaunchedinJuly2017.TheaveragemonthlycountonLaramieLive.comwas305000in2017with66percentuniquevisitors.Insummer2020,totalpageviewswere6.4million.About60percentoftraffictoLaramieLivecomesfromFacebook,theappissecond,followedbythewebsite.“ItisuptoustotrytoworktheFacebookalgorithm.WewanttomakesurethatpeopleinLaramieseeit,notjustthosewhohaveengagedwithstories,”BenKuhns,currentdigitalmanagingeditor,stated.InterdependenciesTheAboutsectionoftheFacebookpagesays,“LaramieLiveisoperatedbyTownSquareMediaLaramie,whichalsooperatesKCGY&KOWBRadio.”TownSquareMediaisanationalcor-porationthatownsmorethan300radioanddigitalmarketingoutletsin67marketsintheUS.BecauseitalsoownsaCheyenneradiostation,CheyenneandLaramiestoriesareprovidedfortheLaramieLivefeed.Newlandstatedthattherelationshipwithcorporateisgood.LaramieLivedoeswhatitneedstodo,buttherearecorporatedigitalmediarulesthatmustbefollowed.“Wehaveastrongdigitalteamthatkeepsusuptodateonalgorithmsandtrends.That’sbeengoodbecausewecouldhavejustbeendoingwhatweweredoingandnotkeepingup.”TheLaramieLivewebsitereferstoTownSquareMedia’sabilitytobuildwebsites,aswellastohavevideo,mobile,andbranding,sotheLaramieLivesitecanhelptoshowtheoverallcom-pany’scapabilities.“Wewillcontinuetobeattheforefrontofdigitaladvertisinginthearea.That’swhatourcorporatesupportanddigitalteamistherefor,”Newlandsaid.RevenueAdvertisingisthemainrevenueforLaramieLive.Onthewebsite,abanneradisalwaysatthetopofthescreenandontheright-handside.AtthebottomofthewebsiteisalinkcalledLaramieFeaturedBusinessListingswithlinkstoseveralofthesite’sadvertisers.AswithOilCity,therewerenoadsonFacebookorTwitter,butreadersaretakentothewebsitewhentheyclickonastory,sotheyhaveaccesstothoseads.NewlandstatedthatthelargebillboardCindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

570Doingdigitalnews559styleadsweresolddailyandhad100percentshareofvoice,meaningthatthebusinesshadthatspaceforthewholeday.Thesmalleradsweresoldbytheweekandhadsixthatrotated.AdaptationsInthethreeyears,LaramieLivehasmadesomeadaptations.AlthoughitstillhasaTwitteraccount,nonewsstoriesarepromotedthroughitbecauseofalowaudiencecount.Theapphasbeenaroundforthreeyears,butitstillhasnotbeenmonetized.Partofthereasonistherewasnonewsreporterforayear,butnowthatonehasbeenhired,Laramienewshasincreasedtomakethatappviableformonetizationinthefuture.Anotherchangehasbeentheamountoflocaladvertisingonthesite.“Ouradspacesare90%soldout.Inthethreeyears,wehaveraisedourpricestwotimesbecauseofsupplyanddemand.Becauseofthis,thenumberofGoogleadshaslowered,sothereadersarehappierwiththelocaladvertising,”Newlandmentioned.Theadvertisersnowbuyone-sixthshareofvoice,whichmeanssixadvertisersrotateinthebannerlocation.Anewadvertisingoutletthatcamethroughthecorporatedigitalpersonneliscarouselads,15-secondvideosconnectedtonewsstories.“Thosearegreatnewopportunitiesforourclientstoreachreaders.”DISCUSSIONDigitalnewsisachallengingbusinesstoenter(Hollifieldetal.,2016).AfterseeingseveraldigitalnewsorganizationsatLION,OilCityownerShawnHouckstated,“Manyareone-ortwo-personoperationsservingsmallcommunities.Theyarerunbyformerreporterswhounderstandnews,butdon’tunderstandthebusinessside.”ThatiswheretheseWyomingfirmshavesucceededwheresomehavefailed:theyhavecreatedconnectionsthatsupportthemtobesuccessfulbusinessesaswellasjournalistswithintheirgeographicecosystem.Theresearchquestionasked:Howdoesaruralgeographicecosysteminfluencehowdigitalnewsorganizationsstrategicallyrespondtochangesinthejournalismindustry?Wyominghasfewerthan600000people,andaculturethatisconservativeanddistrustfulofmediaoutlets.However,manycitizensvaluealocalperspective.Forexample,CasperresidentDonBaileysaidthathecaresaboutlocalnews,“whichmaybethemostimportantnewsthereis”(Garrett,2020).Therefore,ifyouthinkofthestateasanecosystem,digitalnewsisarelativelynewarea.Regardingtheplatform,Facebookiswhattwofirmsusetodrivereadership,sothoseorganizationsareconstrainedbyhowFacebookdecidestheplatformwillbe.Kapoor(2018)wrotethatcomplementorsneedtostrategicallyselectplatformsanddecideiftheyshouldbeonmultipleones.TheWyomingfirmsareinvolvedinFacebook,butalsorelyontheirownwebsites,anapplication,orcreatednewsletterstolessenoravoidFacebook’sbottlenecks.EachofthesethreeWyomingfirmsstrategicallycreatedinnovationstoenhancetheirdistinctbusinessmodels.Aagaard(2019)suggestedthatinecosystemresearch,theeconomicandstructuralcomponentsoftherelationshipbetweenactorscreatevalue.BecauseWyoFileisanon-profit,ithasseveralcomplementaritiesthatenhanceitsdigitalbusinessmodel.Itcooperateswithothermediaorganizationstowriteanddistributestories,andisamemberofanationalindependentnewsorganization.Mostofitsfundingcomesfromreadersandfounda-tiongrants,whichhelptosupportitsnewsstyle.WyoFileisuniqueinthatmosttrafficcomesfromsearchenginesordirectlytothewebsite.ThereadersfindstrongvalueinthequalityofthenewsinWyoFile,sotheyconnecttothewebsiteinsteadofthroughsocialmedia.IntheCindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

571560Handbookondigitalbusinessecosystems2019AnnualReport,onereaderwrote,“IhatetoimaginewhatlifeasacitizeninWyomingwouldbewithoutyourexcellent,in-depthreporting”(WyoFile,2019).AseditorCopelandstated,thereadersvaluethisalternativemodel.OilCityispartofacompanythatownsanadvertisingagency.Itsdigitalstrategyincludeswhatwaslearnedfromtheadagencyrelatedtoadvertisinginmovietheaters.Theowneradaptedtheadvertisingmodelofthepreviousownerfromprimarilynativeadvertisingtooneofexclusivity.Morerecently,headapteditagainsothatexclusivityisonlyforlargesponsors.OilCityhasacomplementaritywithanationaldigitalnewsorganizationandisworkingtoformthistypeofgroupatthestatelevel.Thevalueitcreatesforreadersislocal“fastandfree”newsthatnumerousreadersbrowseeverymonth.Currentadvertisersseethevalueofthemodel,butthechallengeiswithpotentialsponsorstoseebeyondtheFacebookplatform.LaramieLiveisinterdependentonitsrelationshipwithTownSquareMediaasitscorporateowner.Itisitsownmediaoutlet,butiseconomicallydependentonthelargerentityforitsexistence.However,thisinterdependencybringsvaluetotheorganizationanditsreaders.Althoughcorporaterulesmustbefollowed,thedigitalknowledgefromheadquartersisvalu-ableforcurrenttechnologytrends.ReadersgetLaramieandregionalnews,aswellasimme-diatefeedbackonengagement.Advertisersgainastrongerconnectiontolocalaudiences,whereasreadershavefewerGoogleadsandmorelocalones.Regardingdigitalbusinessmodels,thefactthatthreeverydifferentexamplesexistinthesamegeographicecosystemshowsthatabusinessmodelneedstoadapttothecontentthereaderswant,aswellasadjustforthespecifictarget.WyoFilehaschosenthewholestateofWyomingasitsaudience,butitprovidesdistinctcontent.ThisdrivetohaveinvestigativestoriesaboutthepolicyandpoliticsinWyomingsetsitupforbackingfromfoundationsthatcareaboutqualityjournalism,aswellasdonorswhowanttosupportin-depth,reliableinformation.Incontrast,theentrepreneurmodelinOilCityisbasedonHouck’sknowledgeofrunningasuccessfuladvertisingagencyandadaptingthattoprovidequalityjournalism.Becausesomeofthesameresourcescouldbeusedfortheagencyandthejournalismoutlet,thatprovidedmoreefficiencyforthebusinessmodelwhichitiscurrentlyexpanding.TheLaramieLivemodeliscorporate-owned.However,insteadofbeinginflexible,thecorporationencouragedcreativityintheemployeesandmanagersatthevariousradiostations.Itprovidesknowledgeandresourcesfortheoutlettouseforitslocalaudience.Theattitudeofallthreefirmsisthatadaptationisimportantforsurvival.AsPicard(2011)wrote,mediamanagersneedtounderstandconsumerpreferencesanddevelopbetterrelation-shipswithaudiencesiftheirbusinessmodelsaretopersist.Healsosaidthatportalsareoftenhowdigitalcontentisbeingarranged;whichishowallthreeoutletsoperate,notasaspecificmedium.HouckofOilCitysaid,“I’mthepublisherandIhiretheeditorialstaff.Theyhavetheeditorialdecisions;Ihavethebusinessdecisions.Aslongasthereadersrespond,thatiswhatwewillcontinuetodo.”WyoFile’sCopelandsaid:Themostimportantthingtoknowisthemodelwillalwayscontinuetoevolve.Adaptabilityandanentrepreneurialspiritiscriticaltomakingitwork.Themediumischangingdaybydayandtheread-ershipischanginghowtheybehaveandwhattheyvalueforcontent.It’samovingtarget.TheentrepreneurialvisionisimportantforLaramieLiveaswell,accordingtoRiggins:“Somenewspeoplearenotveryforwardthinking.Theyneedtomakeproactivedecisionstodosome-thingabouttheircontent.Lotsofpeoplesay,‘Wedon’tknowwhatworks.’OpenyoureyesCindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

572Doingdigitalnews561orlookforapattern.Theaudienceisclearlydemandingstuff,sofindoutwhattheywant.”Insum,theseorganizationshavepracticesthatcouldbemodeledbyotherdigitalnewsoutletstohelpthemsucceedintheirgeographicecosystems:anabilitytofindtargetaudiencesothershadnotreached;successwithnewformsofrevenuetoenhanceadvertising;connectionwithalarger,nationalecosystemthatcouldhelpwithinformationandresourcesharing;abilitytomonetizenewoutletsfortheirinformation;andtheabilitytoadaptrapidlytonumerouschanges.CONCLUSIONEcosystemresearchopensanewavenuetocomparehowdifferentfirmsaresuccessfulataddressingsimilarproblemsinbusinessmodeldevelopment,asJacobidesetal.(2018)pointedout.ThesedigitalnewsorganizationsareallfightingagainstthenegativeperceptionthatmostWyomingresidentshaveofnews,buttheyaresuccessfulinprovidingvalueforboththeirtargetaudiencesandtheadvertisersorsupportersoftheirorganizations,becausegeographystillmatterstobothreadersandsponsors.Ecosystemresearchcanalsocontributetoentrepre-neurship(Kapoor,2018).Thesedigitalnewsorganizationsarepromotinginnovationthatcanhelptoenhanceanentrepreneurialspiritinastatethathaslongbeendependentonnaturalresourcesforitseconomicviability.Thisstudyaddsvaluetodigitalbusinessecosystemresearchbyexaminingtheevolutionofthesedigitalnewsoutletsoverathree-yearperiod.Becausemostdigitalnewsbusinessesdieinlessthantwoyears,thistimespanshowshowtheseorganizationsadaptedtothriveinadifficultarea,andhowtheirperspectivesonbusinessmodelscouldbeusedbyfledglingdigitalnewsbusinessesinthefuture.Thisstudydoeshavelimitations.ItlookedatoneruralstateintheUSandhadtwointer-viewspernewsoutletoverthethree-yearperiod.Futureresearchneedstoexaminemoreruralstatestoseewhethertherearesimilaritiesinbusinessmodels.Additionally,howdoruraldigitalnewsorganizationsoperateinothercountries?Morelonger-termresearchneedstobeconductedtoseewhatcharacteristicsareconsistentwiththebusinessmodelsofsuccessfuldigitalnewsorganizations,andwhethertherearesimilarecosystems.Peoplemaynotthinkofruralareasasbeinginnovative,butthesedigitalnewsorganizationsinWyomingarenotboundbylegacysystems,sotheyhavebeenadaptableandareopentonewideasfromalargergeographicecosystemofnationaldigitalnewsoutlets.Whenbottle-necksorotherthreatshaveappeared,theyhavestrategicallyadjusted.Theseorganizationsareagreatexampleforotherdigitalbusinessecosystemsbecausetheyshowcasecreativityandresponsiveness.OilCityownerShawnHoucktalkedaboutbecomingmotivatedthroughfindinga“tribe”oflike-mindedentrepreneursatthenationalandstatelevel.Thisstudycanhelpotherstobemotivatedtofindordeveloptheirowndigitalbusinessecosystemsandworktogethertocreatelong-termsuccess.REFERENCESAagaard,A.(2019).TheConceptandFrameworkofDigitalBusinessModels.In:A.Aagaard(ed.),DigitalBusinessModels,pp.1–26.Availableat:https://doi.org/10.1007/978-3-319-96902-2_1(accessedOctober7,2020).Albarran,A.(2017).TheMediaEconomy,2ndedn.NewYork:Routledge.CindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

573562HandbookondigitalbusinessecosystemsBaumann,S.(2013).AdaptingtotheBraveNewWorld:innovativeorganisationalstrategiesformediacompanies.In:T.StorsulandA.Krumsvik(eds),MediaInnovations:AMultidisciplinaryStudyofChange.Gothenburg,Sweden:Nordicom,pp.79–92.Bendery,J.,andRosenfeld,A.(2017,13October).ShadesofRed:IssuesthatExciteConservativesElsewhereFallFlatinWyoming.Why?CasperStarTribune.Availableat:http://trib.com/news/state-and-regional/issues-that-excite-conservatives-elsewhere-fall-flat-in-wyoming-why/article_4b869b96-4197-586b-bcc2-2efacf4f7a61.html(accessedOctober14,2020).Collins,G.(2020,7Oct.).PersonalInterviewabouttheHistoryofWyomingDigitalNews.County10.(2020).WhereItAllStarted.Availableat:https://county10.com/about/(accessedOctober14,2020).Eisenhardt,K.,andGraebner,M.(2007).TheoryBuildingfromCases:OpportunitiesandChallenges.AcademyofManagementJournal,50(1),pp.25–32.ElSawy,O.,andPereira,F.(2013).BusinessModellingintheDynamicDigitalSpace.SpringerBriefsinDigitalSpaces.Availableat:DOI:10.1007/978-3-642-31765-1_3(accessedOctober14,2020).Foss,N.,andSaebi,T.(2015).BusinessModelInnovation:TheOrganizationalDimension.Oxford:OxfordUniversityPress.Garrett,M.(Anchor)(2020,August1).Wyoming’sLoneRemainingDailyNewspaperAdjuststoChangingTimes.CBSNews.Availableat:https://www.cbsnews.com/video/wyomings-lone-remaining-daily-newspaper-adjusts-to-changing-times/#x(accessedOctober14,2020).Gassmann,H.,Frankenberger,K.,andCsik,M.(2014).TheStGallenBusinessModelNavigator.WorkingPaper,UniversityofStGallen,ITEM-HSG.Hawley,A.(1986).HumanEcology:ATheoreticalEssay.Chicago,IL:UniversityofChicagoPress.Hollifield,C.,Wicks,J.,Sylvie,G.,andLowrey,W.(2016).MediaManagement:ACasebookApproach.NewYork:Routledge.Jacobides,M.,Cennamo,C.,andGawer,A.(2018).TowardsaTheoryofEcosystems.StrategicManagementJournal,39,pp.2255–2276.Availableat:DOI:10.1002/smj.2904(accessedOctober14,2020).Kapoor,R.(2018).Ecosystems:BroadeningtheLocusofValueCreation.JournalofOrganizationDesign,7(12),pp.1–16.Availableat:https://doi.org/10.1186/s41469-018-0035-4(accessedOctober14,2020).Kostovska,I.,Raats,T.,Donders,K.,andBallon,P.(2021).GoingBeyondtheHype:Conceptualising“MediaEcosystem”forMediaManagementResearch.JournalofMediaBusinessStudies,18(1),pp.6–26.Availableat:DOI:10.1080/16522354.2020.1765668(accessedApril10,2021).Kotler,P.,Berger,R.,andBirkhoff,N.(2016).TheQuintessenceofStrategicManagement:WhatYouReallyNeedtoKnowtoSurviveinBusiness,2ndedn.NewYork:Springer.Krco,S.,vanKranenburg,R.,Loncar,M.,Ziouvelou,X.,andMcGroarty,F.(2019).DigitizationofValueChainsandEcosystems.In:A.Aagaard(ed.),DigitalBusinessModels,pp.81–116.Availableat:https://doi.org/10.1007/978-3-319-96902-2_1.Kretschmer,T.,Leiponen,A.,Schilling,M.,andVasudeva,G.(2021).PlatformEcosystemsasMeta-Organizations:ImplicationsforPlatformStrategies.StrategicManagementJournal,pp.1–20.Availableat:DOI:10.1002/smj.3250(accessedApril10,2021).Küng,L.(2008).StrategicManagementintheMedia:TheorytoPractice.London:SAGE.Küng,L.(2015).InnovatorsinDigitalNews.London:I.B.Tauris&Co.LIONPublishers(LocalIndependentOnlineNews)(2021).Availableat:https://lionpublishers.com/(accessedApril10,2021).Moore,J.(1993).PredatorsandPrey:ANewEcologyofCompetition.HarvardBusinessReview,71(3),pp.75–86.Paul,G.(2017,24March).WhyWeNeedJournalism.NewsActivist.Availableat:http://newsactivist.com/en/articles/b-102-technical-communication-cegep-de-jonquiere/why-we-need-journalism(accessed14Oct.2017).Picard,R.(2011).TheEconomicsandFinancingofMediaCompanies,2ndedn.NewYork:FordhamUniversityPress.Rietveld,J.,andSchilling,M.(2020).PlatformCompetition:ASystematicandInterdisciplinaryReviewoftheLiterature.JournalofManagement,pp.1–36.Availableat:DOI:10.1177/0149206320969791https://doi.org/10.1177/0149206320969791(accessedApril10,2021)CindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

574Doingdigitalnews563Sandulli,F.,Rodriguez-Duarte,A.,andSanchez-Fernandez,D.(2014).ValueCreationandValueCapturethroughInternetBusinessModels.In:F.Martinez-Lopez(ed.),HandbookofStrategice-BusinessManagement.Berlin:Springer,pp.83–108.Sullivan,M.(2019,September22).WyomingisGroundZeroforMediaMistrust.TheseJournalistsWentThereHopingtoMakeItBetter.WashingtonPost.Availableat:https://www.washingtonpost.com/lifestyle/style/wyoming-is-ground-zero-for-media-mistrust-these-journalists-went-there-hoping-to-make-it-better/2019/09/20/b23b21e8-db96-11e9-a688-303693fb4b0b_story.html(accessedOctober14,2020).USCensusBureau(2018).StateAreaMeasurementsandInternalPointCoordinates.Availableat:https://www.census.gov/geographies/reference-files/2010/geo/state-area.html(accessedOctober13,2020).USCensusBureau(2019).Wyoming.Availableat:https://www.census.gov/quickfacts/WY(accessedOctober13,2020).WyoFile(2019).WyoFile2019AnnualReport.Availableat:https://www.wyofile.com/wp-content/uploads/2020/03/WyoFile-2019-Annual-Report.pdf(accessedOctober13,2020).WyoFile(2020).WyoFile2020AnnualReport.Availableat:https://wyofile.com/wp-content/uploads/2021/03/WyoFile-2020-Annual-Report-Online-Version-FINAL-v4.pdf?_gl=1*1y5swwo*_ga*YW1wLXlmWlBOOTJIUGcxc0lUeFlvdWlvcEE.(accessedDecember16,2021).Yin,R.(2012).ApplicationsofCaseStudyResearch.ThousandOaks,CA:SAGE.CindyPriceSchultz-9781839107191DownloadedfromPubFactoryat05/28/202210:26:43AMviaColumbiaUniversityLibrary

57534.Digitalbusinessecosystemsinthemedia:VRtechnologyimplementationmodelsAnnaJupowicz-GinalskaandKrzysztofSokółINTRODUCTIONThischapterisdevotedtotheimplementationofvirtualreality(VR)technologyinthemediafromtheperspectiveofdigitalbusinessecosystems(DBEs).Specifically,diversetypesofdigitalcollaborationbetweenmediaandnon-mediaentitiesinthecontextofVRimplementa-tionarestudied.Themediaareunderstoodhereas“thesender,”whichis:[a]complexorganizationthatusesstandardizedpracticestodisseminatecontentwhileactivelypromoteitselfinordertoattractasmanyaudiencemembersaspossibleandconditionthoseaudiencemembersforhabitualrepeatedexposures…[Theaudienceiscomposedof]peoplewhoarewidelydispersedgeographically…areawareofthepubliccharacterofwhattheyareseeingorhearing,andencountermessagesinavarietyofexposurestates…Channelsofmessagedisseminationaretech-nologicaldevicesthatcanreachaudienceswithinarelativelyshorttime…makemessagespublic…andextendtheavailabilityofmessagesintimeandspace.(Potter,2013,pp.16‒17)Themediaarerepresentedherebyrecognizableforms,bothtraditional(“analog,”forexample,print,press,broadcasting)andcontemporary(digital,forexample,portals,socialmedia,streaming,videoondemand).Asaresultofconvergenceanddigitalization,contempo-rarymediaexistinmanydifferentformssimultaneously.AsJärventie-Thesleffetal.(2014)stated,themediaadoptanambidexterityapproach,whichallows“theorganizationtocon-tinuouslyexplorenewwaysofdoingbusinesswhileexploitingexistingcapabilities.”Whilethe“exploitationisaboutefficiency,increasingproductivity,control,certainty,andvariancereduction,exploration…isaboutsearch,discovery,autonomy,andembracingvariation”(p.134).Themediaareinastateofconstantmediamorphosis,alsoconditionedbytheirusers’needs,who—asthemembersofthesociety,transformingintoanetworkcommunity(Castells,2000)—seemtoberathermoreconcernedwithexperiencingvariousstimulithroughthemediathanwithbeingonlyinformedbythem(deLaPeñaetal.,2010;Bailenson,2018).Therefore,inordertoevolve(explore)andrespondtousers’needs,themediahavetoresorttoinnovations(Jupowicz-Ginalska,2018).OneoftheseisVR:animmersiontechnologythatfocusesonpolysensoriality.Whenitisaddedtoamediamessage,itenrichesitwiththeimmersionandemotionalinvolvementofitsrecipients,thusinfluencingthemmorestrongly(deLaPeñaetal.,2010;Bailenson,2018).Theimmersivemessage(containingVRelementsorusingVRtechnology)becomestactile-audiovisual:itenablestheuseofmovement,touch,andothersensestoexploreandinteractwithafullydigitalsurrounding.VRalsodifferentiatesbetweenthe“immersion”and“traditional”mediaproductionchain:theformerdoesnotyethaveadevelopednarrativesystem,itisnotformatted,andituses564AnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

576Digitalbusinessecosystemsinthemedia565non-traditionalmethodsofconveyingcontentandtheelementsofnarrativessofarencoun-teredincomputergames(delaPeñaetal.,2010).However,althoughmediawithVRusesolutionsfromthevideogameindustry,theyarenotactuallyvideogames.Thereisalsoatech-nologicaldifference.Mediaproductionhousesprimarilyemployaudiovisualspecialists,astheproductionteamisfocusedontheeffective,high-qualityoperationoftheaudiovisualsystemsandtechnology;whereasthesoftwarehouseshiremainlysoftwaredevelopmentprofessionals,whodesign,develop,test,implement,andmaintainvarioussoftwaresystems,forexample,forcomputergames(Billings,2014).VRcanbeconsiderednotonlyastechnologybutalsoasanewdigitalecosystemformedaroundit,comprisingcompanies(designers,manufacturers),users,hardwareinterfaces,applications,specializedknow-how,andaninnovativeprocessofproductionanddistributionofmediacontent.Itsimplementationrequiresareorganizationofmedia’scurrentworkandachangeintheirmodusoperandi.Itisimportanttostrengthenclosecooperationwithentitiesthathavenotyetbeendirectlyassociatedwiththemedia,especiallywithjournalismandreporting(inspheresofbothnewsandentertainment).Obviously,themediahavealwayscooperatedwithotherinstitutions(publicrelations,production/actingagencies,andsoon)andthusfunctionedincomplexbusinessecosystems.However,thiscooperationhasconnectedthesectorsremainingintheuniversallyunderstoodmediasphere,entertainmentandcommunica-tion.Astheinternethasdeveloped,allthesesectorshavebecomedigitalized(DBEs),sothecurrent,ambidextrousmediaofferproductsresultingfromthecooperationofmanydifferentdigitalizedindustries.ThisisfurthermodifiedwhenVRisinvolved,asthecooperatingentitiesarejoinedbytheadvanceddigitaltechnologysector,redefiningtheproduction/distributionchainofmediamessagesandchangingtheroleoftherecipient.Therefore,itseemsthattheimplementationofVRinthemediaisaninterestingexampleofthedifferentformsDBEscantaketoday.Unfortunately,theresearchontherelationshipbetweenthemedia,VR,andDBEsisinitsinitialphase.AccordingtoSenyoetal.(2019),whoperformedasystematicliteraturereviewonDBEs,therearenostudiesanalyzingDBEsinthemediawithimplementedVR.Giventhis,inthischapterwestudytheprocessofVRimple-mentationinthemediainthecontextofDBEs.ThemajorobjectiveistoexaminewhetherthisphenomenoncanberegardedasaDBEinitiative,andifso,whatitsspecificityis.Thischapteradoptsthefollowingstructure.Inthetheoreticalsection,wereviewtheliterature.Asaresultoftheanalysis,theacademicgapsareidentified.Thisleadstothreeresearchquestionson:(1)whethertheimplementationofVRtechnologyinthemediacanberegardedasDBEs;and(2)whetheritwouldbepossibletofindanyroutinesolutions,andifso,tosystematizethem.Inthemethodologicalsection,wereachforamulti-casestudyanalysis,carriedoutinseveralstages.Onthebasisoftheliteraturereview,weidentifytheexamplesofVRimplementationsinthemedia.Next,weanalyzetheexamplesselectedandevaluatetheminlinewithDBEs.Finally,wesystematizethestudiedphenomenonandofferoriginalmodelsofimplementingVRinmedia(inrelationtoDBEs):thecooperativeplatform,theinternalplatform,andthepartnership-platformmodel.Intheempiricalsection,wedescribeandcharacterizethesemodels.ThechapterconcludesbypointingoutthefeaturesofVRimplementationinthemediainthecontextofDBEsandsummarizingthespecificsoftheemergedmodels.AnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

577566HandbookondigitalbusinessecosystemsLITERATUREREVIEWDBEsandtheMediaTherootsofDBEtheorygobacktothesystemstheoryandbiologicalevolutiondescribedbyMoore(1993).Heindicatesthateconomicentities“likeindividualplantsoranimals…cannotthrivealone—theymustdevelopinclustersoreconomicecosystems,”resembling“aneco-nomiccommunityofindividualsandorganisations”(p.76),whichprovidesspacefordifferentqualitiesandinterests,connectedbymutualrelations.Suchavisionofbusinessecosystemscomesfromthepre-digitalera.Later,basedonMoore’sidea,Nachiraetal.(2007)formulatedadefinitionofDBEs,describingitas“acollaborativeenvironmentmadeupofdifferententi-tiesthatco-createvaluethroughinformationandcommunicationtechnologies”;so,concludeSenyoetal.(2019,p.52),“DBEstranscendtraditionalindustryboundariestofosteropenandflexiblecollaborationandcompetition.”Thecapabilitiesofindividualnetworkentitiesco-evolvethroughmutualinnovations,whichatthesametimetriggercooperationandstrengthencompetitiveness.Thecompetition,inturn,triggersanotherinnovationcycle.StanleyandBriscoe(2010)usethemetaphornotonlyoftheecosystem,butalsoofthemonocultureandthegeneticpool,statingthat“thebestofbiologicalcommunitieshaveapopulationtailcomprisingalargenumberofspecies,eachpresentinsmallpopulationnumbers,manyhavingnichedoutintospecialisedanddemandinghabitats,towhichtheyhavebecome…adapted”(p.1).Atthesametime,inabusinessecosystem,“ifoneacceptstheanalogytobiologicalecosys-tems,thepresenceofsuper-dominantscanberegardedasaconfigurationthatimpactsallotherbusinessspecies”(StanleyandBriscoe,2010,p.2).Monopoliesleadtobusinessmonoculture,whereasDBEssupportthefunctioningofsmallandmedium-sizedenterprises,whicharethegenetictailofthepopulation.Theseenterprisesexhibitahighdegreeofadaptabilityandspecialization,whichmakesthemmoreresponsivetosuddenchangesinthebusinessclimate.Theabove-mentionedauthorsusethemetaphorofgeneticdiversity,whichmeansachanceforthediscussedecosystemstosurviveintheabsenceofpredatory,market-dominantcompaniesinterestedinbusinessmonocultureormonopoly.StanleyandBriscoe(2010)identifyDBEslayers.Inthemostfundamentalcoordinationlayer,workisdoneondistributionlogisticsand“homogeneousdatacentreswheregoodconnectivity,constantpresenceandcentralisedinfrastructurecanbeassumed.”Theresourcelayer,“inwhichresourceprovisionandconsumptionarearranged,”(pp.7‒13)worksmoreefficientlyinacongruentenvironmentthaninadispersedone.Intheservicelayer,resourcesaredistributedamongvariousentities.ThelastlayerofthedigitalcomponentofDBEsisapplications,whicharethecustomers’platforms.Delinaetal.(2012)observedthatDBEscreatean“environmentbasedonthepropertiesofself-organization,self-adaptability,scalabilityandsustainability,inspiredbynaturalecosys-tems,andshouldbecapableofsupportingco-operation,knowledgesharing,thedevelopmentofopenandadaptivetechnologiesandevolutionarybusinessmodels”(p.29).Therefore,inDBEsthenetworked,nodalinteractionbetweenthecooperatingentitiesiscrucial.JohnstonandPattinson(2015)seeDBEsasaperspectivebasedondigitalizationanddatafication,emphasizingthattheDBEnetworkissupportedandshapedbythefollowingcomponents:informationserviceplatforms(enablingtheintegrationofdatastreamsintoinformation),BigData,andtheInternetofThings(collectingdatafromintelligentdevices).AnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

578Digitalbusinessecosystemsinthemedia567PeltoniemiandVuori(2004)emphasizethattheDBEnetworkisusedwhenthe“adoptionofInternet-basedtechnologiesforbusiness”isonsuchalevelthat“businessservicesandthesoftwarecomponentsaresupportedbyapervasivesoftwareenvironment,whichshowsanevolutionaryandself-organisingbehaviour”(p.5).DBEs,comparedtobusinessecosystems,changetheparadigmofthinkingaboutabusinessmodeltoaparadigmbasedondiversity,resource-useefficiency,innovativeness,andinterac-tivity.Thedigitallayerpromotesthecooperationoftheentities,facilitatestheircollaboration,andmakesthemlesssusceptibletoexternalconditions.Thedigitalaspectmakesthebenefitsofcreatingabusinessecosystemevenmorenoticeableandprofitable.ThechangesintroducedbyDBEsintothemeasuresofcompetitionarecrucialforsmallandmedium-sizedenterprises(SMEs),allowingthemtoleveragethepotentialfornewdistributionchannelstobecreatedwithinlocalecosystemsandtoextendtheirmarketreach,thusempoweringthesefirmstocompetewithlargerones.AliteraturereviewbySenyoetal.(2019)provesthatthereareveryfewpublicationsonDBEsinthemedia(andnopublicationsonDBEsinthemediawithVR).Thecurrentliter-aturefocusesontheimpactofDBEsonfourmainareas:business,technology,conceptualmatter,andsubjectmatter.Businessandtechnologicalperspectivesdominate.Thecategoryofbusinessincludes,forexample,management(Tsatsouetal.,2010),analysisoftheSMEs(TanandMacaulay,2011),theresource-sharingprocess(PetrouandGiannoutakis,2009),andrelationshipsbetweenshareholders(Selanderetal.,2010).Inthesecondcategory,technology,attentionispaid,forexample,tonetworkstability(BaggioanddelChiappa,2014),andprob-lemswithnetworkaccessandavailability(BurfordandResmini,2017).Inotherexamplesofliteraturereviewpapers,RietveldandSchilling(2021)presentthemostpopularDBEresearchareas(economics,managementandorganization,informationsystems,andmarketing),whiledeReuveretal.(2018)undertaketheproblemofvarioustrendsandchallengesencounteredinthedevelopmentofdigitalplatforms.Theyconstructaresearchagendafordigitalplatformresearchininformationsystems,butitdoesnotfocusonthemediainthewayweproposeinthischapter.Theliteratureconsidersthemedia/communicationresearchfieldinDBEsframeworkwithinthecontextsofvideogameconsoles,mobileapplicationbusiness(ShankarandBayus,2003;KapoorandAgarwal,2017),andmediaecosystems(Kostovskaetal.,2021).However,thesestudiesdonotinvolvetheimplementationofVRinthemediawithinDBEscontext.DBEsrepresentanopportunityformediaentitieswillingtocooperatewithsectorswithappropriatecharacteristicstocreateimmersiveenvironmentsandmultisensorycontent.StanleyandBriscoe(2010)pointoutthepositiveeffectsofcross-sectoralcooperation,notingthatDBEsarefightingmarketmonopolization,helpingsmallerentitiestotakeadvantageofthenetworkeffectaswell.Senyoetal.(2019)claimthatthissymbiosisleadstotheco-evolutionofindividualnetworkactors.SinceDBEsallowforaratherloosecooperationbetweentheentities,basedoncombiningcooperationinordertousecommunicationtechnologies,DBEsseemtobetheperfectplatformtosupportandaccelerateVRimplementationprocessesinthemedia.VRandtheMediaThedefinitionofVRhasevolvedovertime.Atfirst,VR—atermcreatedbyLanier(VirtualRealitySociety.com,n.d.)—didnotlinkthistechnologytocommunicationandtheAnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

579568Handbookondigitalbusinessecosystemsmedia.ThesituationchangedwiththestudybyBricken(1990),whoidentifiedinteractionandcommunicationintheVRenvironmentasthesourcesofimmersion.StudiesconductedbyHamit(1993)describedtheuseofVRasastageinthedevelopmentofcommunicationmedia.Additionally,BioccaandLevy(1995)sawVRasacommunicationchannelusedtoreproduceinterpersonalcommunicationinanon-intermediatedform.Ellis(1995)treatedVRasacommunicationmedium.Currently,VRisunderstoodinanarrowersenseasthree-dimensional,computer-generatedenvironmentinwhichtherecipientcanoperatevirtualcomponents(BurdeaandCoiffet,2003);andmorebroadlyasamediumforreplicatingrealorcreatedenvironments,withcom-ponentsthattheuserisabletointeractwithtovariousdegrees(BurdeaandCoiffet,2003;delaPeñaetal.,2010;Bailenson,2018).DespitetheevolutionintheunderstandingofVRandthedeparturefromatechnocentricperspective,theissueoftechnologyuseinthemediahasonlyjustappearedinacademicdiscourse.Itcanbeseeninpublicationsonimmersivejournalism(delaPeñaetal.,2010;Dominguez,2017;HardeeandMcMahan,2017;Longhi,2017;Keyser,2018;ReisandCoelho,2018;Steedetal.,2018;Aitamurto,2019).Forexample,Bailenson(2018)wroteaboutthereceptionofVRinthemedia;Barricellietal.(2016),Longhi(2017),andSánchezLaws(2017,2019)studieditsrhetoricandethics;BioccaandLevy(1995),HohstadtandKeast(2009),andBaştuğetal.(2017)focusedonthecommunicationaspectsofVR.However,theimpactofVRonthemediaiswider.Itsgrowingpopularityhasledtothedevelopmentofinnovative,immersivewaysofconveyingcontentandbuildingnarrativesystems.Thisisrelatedtothephenomenonofexperiencingthemediaasopposedtoitsreceptioninatradi-tional,transmissionmodelofcommunication.Intraditionalmedia,therecipientsparticipateinsomeoneelse’snarration,whileinVRmaterialstheyproducerealityonanongoingbasis.Sofar,thestimuliassociatedwiththereceptionofthemediahavebeenreceivedinamostlymotionlessfashion,whereasVRisatactile-audiovisualmediumthatisspatialandwhereonecanmovearound.ThemediahavebeenexperimentingwithVRforadecade.Fromthebeginningthiscouldbeconsideredasanexampleofamediamorphosisprocessinthemediaenvironment(becauseofthecontentproduction/distribution,tactile-audiovisualnature,polysensority,rhetoric).ThemediahavealsopopularizedVR:itcanbeobservedthatthebarriersregardingtheavailabilityofVRarebecomingweaker(theequipmentischeaperandmobile,andtherearefreeapplica-tionsforVRreception).Moreover,itsusersdeclarethatmediaenrichedwithimmersionaremoreinterestingthantraditionalones(Burch,2015).Currently,VRisregularlyusedbyabout171millionusersglobally,comparedtoabout200000in2014;70percentoftheseuseVRforentertainment—mainlyforplayinggames—butitisincreasinglyusedinotherareasoflife(Statista,2021).GoldmanSachs(2016)predictedthatby2024thevalueofalmostallsectorsoftheVRmarketwillhaveincreased,withthemediabecomingthesecondmostprofitableindustryusingthistechnology.ThegrowingpositionofVRisconfirmedbyEricsson(2019),whichseesitbecomingasoneofthemainmediatrendsin2030.ResearchQuestionsTheliteraturereviewprovedtheexistenceofacademicgapsinthestudiedarea.ThereisavisiblelackofresearchanalyzingDBEsphenomenainthecontextofthemediaindustry.AnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

580Digitalbusinessecosystemsinthemedia569AlthoughtheliteratureontheimplementationofVRtechnologyinthemediaisricher,thereisasignificantlackofstudiesfocusingonVRinDBEs.Tothebestofourknowledge,therearenostudiescombiningDBEs,VR,andthemedia,whichmeansthatthischapteristhefirstattempttoanalyzethephenomenonofVRimplementationinthemediaindustryinthecontextofDBEs(theterm“media”shallbeunderstoodinaccordancewiththedefinitionprovidedearlier).Asaresultoftheseconsiderations,thefollowingresearchquestionswereasked:RQ(1):CantheimplementationofVRtechnologyinthemediabetreatedasanexampleofDBEs(accordingtoDBEscriteriasuchascooperationbetweenentitiesfromdifferentsectors,newqualityofofferedproduct/service,exchangeofexperienceandgainingmutualbenefitsbetweenpartners,valuefortherecipient,embeddingtheprocessinthedigitalenvironment,andredefiningtheproduction-distributionchain)?RQ(2):IfthereareexamplesofVRimplementationinthemediainthecontextofDBEs,woulditbepossibletoidentifyanyreplicablesolutionsbetweencollaboratingmediaandnon-mediacompanies?Whatwouldbetheirspecifics?Obtaininganswerstothesequestionswouldcontributetotheacademicliteratureontherela-tionshipbetweenDBEs,VR,andthemediabyofferingageneralattempttostructuretheserelationships.METHODOLOGYTheresearchquestionsfitintotheoverarchingresearchobjectiveindicatedintheintroduction,andaddacomplementaryobjective:systematizingwaysofintroducingVRintothemedia(withreferencetoDBEs).Owingtotheexploratorynatureofthestudy,weformulatednohypothesis.Wedecidedtousethemultiple-casestudymethod.AsBecker(1970)stated,casestudyhelpsto“properlyacquireknowledgeofthephenomenonfromintensiveexplorationofasinglecase”(p.75).Itsupportsdeveloping“moregeneraltheoreticalstatementsaboutreg-ularitiesintheobservedphenomena”(Fidel,1984,p.274),bytakingtheformofsingle-caseormultiple-casedesigns,where“amultipledesignmustfollowareplicationratherthansam-plinglogic”(Tellis,1997,p.6).The“singlecase”hereisthephenomenonofimplementingVRtechnologyinthemediaindustry;thiswasthenanalyzedfromtheDBEsperspective.Atthesametime,thisresearchmethodrespondstothemultiple-casecriterionbydescribingandsystemizingpracticalcasesofcollaborationbetweenmediaandnon-mediacompaniesintheadoptedresearcharea.Byapplyingthismethod,wegathereddifferent,realexamplesregardingtheadoptionofVRinthemediaindustry,analyzedthemfromtheperspectiveofDBEs,andfinallyattemptedtosystematizethegainedknowledgeinto“generaltheoreticalstatements”(asobservedbyFidel).ToavoidarandomselectionofpracticalexamplesofVRimplementationinthemedia,itwasdecidedthatexamplescitedintheliteraturereviewshouldformthecoreoftheresearchsample.Thisstructuredtheresearchprocessbydividingitintoseveralstages.Firstly,examplesofVRimplementationsinthemediawereidentifiedfromthereviewedliterature.Secondly,anin-depthanalysisoftheseexampleswasconducted(basedonthemediacompa-nies’websites,theirsocialmedia,newsreferringtoagivenexample).Thirdly,weevaluatedAnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

581570HandbookondigitalbusinessecosystemswhethertheseexampleswerealignedwiththeconceptofDBEs(seethecriterialistedinRQ1).Fourthly,afewadditionalcoherentexampleswerestudiedonthebasisoffitwiththeideaofimplementingVRinthemediainthecontextofDBEs.Fifthly,basedontheselectedfinalresearchsample(Table34.1),weattemptedtosystematizethewaysofimplementingVRinmediainthecontextofDBEs(thus,originalmodelsofimplementingVRinmediainthecontextofDBEswereproposed).Table34.1ReferencestomediaimplementingVRintheacademicliteratureAuthor(s)MediamentionedintheliteraturereviewMediaanalyzedinthischapterSánchezLawsandUtne(2019)NewYorkTimes(NYT),WashingtonPost,NYT,WashingtonPost,Guardian,AlVice,Guardian,Sunnmørsposten,AlJazeeraJazeeraSánchezLaws(2017)NYT,TheGuardianNYT,GuardianSánchezLaws(2019)TheGuardian,PBS,EuronewsGuardian,PBSLonghi(2017)TheGuardianGuardianDominguez(2017)WashingtonPost,Guardian,NYT,MSNBC,WashingtonPost,Guardian,NYT,MSNBC/CNNNBC,CNNHardeeandMcMahan(2017)NYT,Vice,ABC,BBCNYT,ABC,BBCSteedetal.(2018)Guardian,BBCGuardian,BBCKeyser(2018)Guardian,AlJazeeraGuardian,AlJazeeraSundaretal.(2017)NYTNYTReisandCoelho(2018)NYT,BBC,ABCNYT,BBC,ABCAdditionalexamples(outsidetheIdealog,Empire,SportsIllustrated:Swimsuit,Time,USAToday,HBOliteraturereview)DBESANDVRIMPLEMENTATIONMODELSINTHEMEDIA:AMULTIPLE-CASESTUDYANALYSISImplementingVRintheMediaandDBEsTheimplementationofVRdisruptstheexistingproduction‒distributionchains.Itsparksadebateonwhotheauthorofthemediamaterialis.Thephenomenonofimmersionassumesthattherecipientshouldhavearealsenseofparticipatinginanevent,ofbeinginagivenspace.Thisinvolvesthepossibilityofinteractingwithit;thus,bytakingsuchactions,theuserbecomesaco-creator.Thecomplexityoftheproductionprocessofanimmersionmediumleadstomediacontentbeingcreatedbycross-disciplinaryteams,accompaniedbyspecialistsinnarrowfields,suchascognitiveneuroscienceorhaptics.Theorganizationofmediaproductionactivitiesalsochanges:theeditorialdepartmentturnsintothecameracrew,andtheproductiondepartmentprocessesthedigitalmediuminsuchawayastoprovideasenseofimmersion.Thus,theproportionsofpre-productioninrelationtopost-productionaremodified.Finally,mediaworkersmustlearnnewskills,suchasusing360°camerasordatavisualization.ItisworthhighlightingthedifferencesbetweentheproductionprocessesoftraditionalmediaandofmediausingVR.Thetraditionalmediaproductionchaininvolvesmediaformatscreatedorpurchasedbytheproductiondepartment,whichusefamiliarlayersofaudiovisualmedialanguage.Collaborationinmessageproductionisalsofrequentlyformatted,takingplaceatahorizontallevel,assumingthecooperationofentitiesfromoneorrelatedindustries.Evenwhensomeoftheproductiontasksareoutsourced,thepost-productionofthistypeofmaterialishandledbyindustry-relatedentities.Inthecaseofimmersivemedia,themedialanguagehasAnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

582Digitalbusinessecosystemsinthemedia571notbeenestablished;theyarestillanexperimentalmedium,developingtheirownnarrative.Theyarebasedoninteractivity,theboundariesofwhicharestillbeingexpanded.Moreover,traditionalaudiovisualmaterialsarecreatedforstandardizedbroadcastingplatforms.Itisdif-ferentwithimmersivemedia,wherenostandardizationisyetpresent.Thus,thecollaborationbetweendifferententitiesoccursinthedesignofimpressions;thatis,thegraphicengine,thevirtualenvironment,thescopeofinteraction,andsoon.Theframeworkofcooperationintheproductionofmediamaterialgoesbeyondthetraditionalcontentcreationorpost-production,withavarietyofentitiesrelatedtootherindustriesbeinginvolvedintheprocess.IncaseofVR,thefunctioningoftheinterfacecanbeadaptedtotheneedsofthecontentcreators.Inviewofthesedifficulties,onlyafewmediaentitiescanestablishtheirownVRdepart-ments,fullyresponsiblefortheproduction,distribution,pricing,andcommunicationoftheimmersivecontent.Therefore,itisnecessarytocooperatewithrepresentativesoftheindus-trieswithwhichthemediahavenotpreviouslycooperatedcloselyandsystematically.Mediaregularlyuseoutsourcing,yetthecreationoftheVRenvironment—despitethedynamictech-nologicalprogress—stillseemstobeterraincognita.Forthisreason,mediabenefitfromtheexperienceofexternalcompanieswiththeexpertiseandskillstoproduceimmersivecontent.Inthisway,thefoundationsfornewvarietiesofDBEsarelaid:cross-sectoral,experimentalbusinessecosystems,embeddedinthedigitalworld,withtheiraudiencesbeingofferedanewqualityofmediacommunication;andwithnetworksofcooperatingentitiesreceivingnewexperiencesandskills,andthereputationasthepioneersofinnovativesolutionstochangethemodernmediasystem.SinceVRimplementationintothemediaproductionprocessiscomplex,therearebothsimilaritiesanddifferencesinthetiming,rationale,andmethodsusedbyvariouscompaniestoimplementVRtechnology.Theimplementationdifficultiesdependonthefieldsofactivityinthemediaindustryandthespecificityoftheactivities.Basedontheanalysisoftheselectedresearchsample,wehaveextractedmodelsconcerningtheimplementationofVRinmediainthecontextofDBEs:thecooperationmodel,theinternalplatformmodel,andthepartnership-platformmodel.Thesemodelsoriginatefromourownobservations,andweexploreandcharacterizethembelow.TheCooperativeModelThecooperativemodelassumescollaborationofatleasttwoindependentorganizations.Aspartofit,themedia,withoutcreatingadditionalinternalstructures,engageincooperationwithotherentities,suchasITones,socialmediaplatforms,universities,andsoon.TheNYTusedVRin2015byreleasinganimmersivedocumentary,TheDisplaced.Althoughthematerialcouldbeviewedinabrowserasadocumentaryshotwithomnidirec-tionalcameras,thepublishersuggestedusingtheNYTVRapplicationandbuyingGoogleCardboardviewers.Inaddition,theheadsetwasincludedforfreein1millioncopiesofthemagazinesoldthroughsubscriptions.Later,intheVRSEapplication,anotherVRvideowasadded:WalkingNewYork(2015).ItdocumentedtheworkonthecoverofNYTMagazineandwascreatedincooperationwithWevr.In2016,NYTlaunchedTheDaily360,aplatformwithjournalisticcontentcreatedintheomnidirectionaltechnique(lastvideofrom2017).Thistime,thecompanycooperatedwithSamsung.Theplatform’sreporterswereequippedwithGear360camerasandpublished“itspremiumVRcontentserviceaswellasasectionofitsSamsung837buildinginNewYorkAnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

583572HandbookondigitalbusinessecosystemsCity”(Fingas,2016).TheDaily360“allowed[one]toquicklyiterateonayoungstorytellingform,[and]trainjournalistsinanewreportingtool”(Hopkins,2017).AsimilarVRimplementationmodelwasusedbytheGuardian.In2016,itofferedafreeGuardianVRapplication(distributorandproducer:GuardianNewsandMediaLimited).Theapplicationenabledviewersto“exploreanewworldofGuardianjournalism”(Guardian,2016a).Initially,thecardboardswereinsertedintotheselectedcopiesofthemagazine.Thenthepublisher’swebsitetookitsvisitorsdirectlytotheGoogleonlinestoresothattheycouldbuytheVRdevices,orpreparethemontheirownaccordingtothemanualinstructionsprovided.Currently,theGuardianprovidesseveralmaterialsinVR.Ascommentatorsemphasize,theirproductionistheresultofsynergy“acrosseditorial,digital,designandcommercialteams”(Virtualrealityreporter.com,n.d.).Itisworthmentioningthe6x9.WelcometoYourCellpublication,which“placesyouinsideaUSsolitaryconfinementprisoncellandtellsthestoryofthepsychologicaldamagethatcanensuefromisolation”(Guardian,2016b).TheproductionwasaresultofcooperationwithPBS,butGoogleandSamsungdeviceswerealsodisplayed.Theprojectwaspresentedintheformofpublicinstallationsin,forexample,NewYork,Berlin,andLondon.AnothermediumthatusedVRwasNBCNews.In2017,thebroadcasterlaunchedatalkshowinVR.Inordertowatchit,onehadtorunafreeapplication,AltspaceVR(producedbyAltspaceVR,Inc.),createdespeciallyforvirtualmeetings.NBCalsousedthisapplicationin2016for“avarietyofdifferentVRevents,includingdebatewatchparties,Q&A[questionandanswer]sessionswithpoliticalexperts,politicalcomedyshows”(Perez,2016).In2017,thebroadcasterlaunchedacooperationwithNextVR,whichresultedinanenter-tainmentprogramaboutthebackstageoftheWorldofDanceshow.In2018,NBCSportofferedVRstreamingoftheopeningceremonyoftheWinterOlympicsinPyeongChang.ThebroadcasterofferedaNBCSportsVRapplication.InthesameyearapartnershipbetweenNBCandGooglewasannounced.Itspurposewas“tomakeprogrammingthatcouldhelpthemediumpickupsomemoremainstreamappeal”(Lunden,2018).ThecommentatorsspeculatedthatthecooperationwouldnotonlyenhancetheNBCUniversaloffer,butalsoallowGoogletotestthejumprig,whichis“amulti-cameraarraydevelopedinconjunctionwithGoPro”(Etherington,2015).Anothermedium,thePublicBroadcastingService(PBS),whileimplementingdocumen-taryprojectswithintheFrontlineseries,cooperatedwithsuchentitiesastheTowCenterforDigitalJournalismatColumbiaUniversity,SecretLocation(adigitalproductionstudio),andBrownInstituteforMediaInnovation.Facebookwasoneofthedistributionchannelsfortheseproductions.In2015,PBSformedapartnershipwithEmblematicGroupand,withthesupportofotherentities(financialhelpwasofferedbytheJohnS.andJamesL.KnightFoundation,andtheproductionwassupportedbyWGBHinBoston),startedworkonfurtherVRmaterials,withanemphasisontechnical,procedural,andethicalaspectsofVRjournalism.TheresultwastheWhyisGreenlandMelting?documentary;itsproductioninvolvedtheNationalAeronauticsandSpaceAdministration(NASA),xRezStudios(whichassistedwithmodelingandphoto-grammetrycapture),andPBSNova.VRprojectshavebeenundertakenbyHBO.In2020,itpromotedtheLovecraftCountryseriesthroughtheVRLovecraftCountry:Sanctumcycleofevents,inwhichselectedinfluencers—thankstoVROculusQuestequipment—movedaroundthedigitalworld;theirAnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

584Digitalbusinessecosystemsinthemedia573adventureswerebroadcastonline,commentedoninrealtime,andshapedthroughtheVRChatinstantmessenger.PolishHBOhasalsoreachedforVR.In2016,thebroadcasteruseditafterapresscon-ferencepromotingThePactseries.Theinvitedjournalistshadanopportunitytoputontheheadsetandplayanescaperoomgame.ItwaslatermadeavailableintheSamsungBrandStoreinshoppingmallsinPoland.TheImmersioncompanypreparedtheapplication.TheserieswasalsoaccompaniedbyaVRtrailer,createdbytheCinematicVRcompany.In2018,CNNcreatedCNNVR,aplatformtobroadcastnewsinaVRenvironment.Userscanwatchmorethan100differentmaterialsfromabout20regionsoftheworld,createdincooperationwithPixvanaInc.(responsibleforcoding).AsimilarofferisalsoprovidedbyMSNBC(incooperationwithOvrture),whichcreatesitsownmediaapplicationswhicharebasicallydocumentaryseries,suchasLockup360describingtheUnitedStatesprisonsystem(FreedmanandFrenchman,2015).VRhasalsoappearedinthepress,forexamplein2016,onthecoveroftheIdealogmag-azine.Theeditorialstaffdecidedthentostrengthenthemessageoftheissuedevotedtonewtechnologiesbyaskingthemselves,“Couldwecodeacover?…Getreaderstodownloadanappandmakeitcometolife?”Theanswertoeachquestionwas:“Wedidn’tknowhowtodoit”(Idealog,2016).Thesolutionwastoestablishapartnershipwithanexternalcompany.ThechoicewasResn,whichdesignedaconceptoftheVRcover.BendandSpark,companiespro-vidingdigitalmediaservices,werealsoinvitedtocooperate.Afterwards,inordertouseVR,onehadtoscanthequickresponse(QR)codefromthemagazinecoverortheResnwebsite,insertthesmartphoneintothecardboard,andthenstartexploringthedigitalworld.AsimilarexampleofVRimplementationcanbefoundonthecoverofthemonthlyEmpiremagazinein2017,whichcommissionedtheproductiontoexternalentities:theVRcardboardwasmadebytheGarthwestcompany(marketingmaterials)andVirtualRealitySolutions(adigitalindustry).TheprojectsupportedtheEmpirebrandand20thCenturyStudios,theproduceroftheAlien:Covenantmovie.ThelastexampleisSportsIllustrated:Swimsuit(SIS).ThemagazineadoptedVRin2016,introducing“aseriesoffirst-of-their-kindvirtualrealityexperiencestogoalongwiththeprintissueanddigitalextensions”(SIS,2016).TheSISSwimsuitAppwascreatedforthispurpose.WevrwasresponsiblefortheentireVRimplementation.SISemphasizedthat“partneringwithWevr…allowedustoutilizebothofourcollectiveresources,includingtheirbestin-markettechnologyandcreativenetwork,tohelpdirect,produceandpostproducethisone-of-a-kindexperience”(SportsIllustratedSwimsuit,2016).In2018,SISagainofferedaVRissue,movingtowardsapartnership-platformmodel:inordertoenterthedigitalworld,itwasnecessarytousethefreeLifeVRapplication(describedlater).ThenonecoulduseanyVRcardboardorwatcha360ovideo.TheInternalPlatformModelTheinternalplatformmodelfocusesoncreatingaspaceofcooperationwithinthemedium.ThismeansthatamediaentityestablishesitsinternalVRunit/departmentandtransfersfurtherworkonimmersioncontenttoit.ThismodelincludestheactivitiesoftheWashingtonPost,whichcreatedtheWPBrandStudiodivision,providingpromotionalservicestoexternalcus-tomersaccordingtothefollowingformula:“Findthebrand’sstory,thentellitwithexactlytheAnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

585574Handbookondigitalbusinessecosystemsblendofwords,imagesandimmersiveactivityitrequires,”inorderto“getaWashingtonPostreaderemotionallyandintellectuallyengaged”(WashingtonPost,n.d.).TheWashingtonPost’sorganizationalstructureshavebecomeaplatformforcooperationbetweenthemediaandotherindustries.Dickers(2017),thenewspaper’sheadofproductandtechnology,emphasizedthattheuseofaugmentedreality(AR),VRand360°materialsinjournalismmustbe“platform-specific,”adaptedtothedifferentpillarsofactivity,sothatthelanguageofthemediumconvertstotherightreception.Thus,theWashingtonPosthasbeentreatingtheimplementationofimmersionmaterialsinanopenlyexperimentalwayfromthebeginning.However,itmustbesaidthatafterMars:AnInteractiveJourney(2016),nonewmaterialwasreleaseduntil2019.AnotherexampleofthemodelistheVRtuallyThereshow,launchedbyUSATodayNetworkin2016.ThisweeklyVRnewsshowwasto“takeonatruenetworkapproachwithscheduledsegmentsfromnewsroomsaroundtheUS”(Steele,2016).ThepresentedmaterialswerepreparedbyjournalistsfromUSATodayandfromover100localpresspublicationsownedbythepublisher.Thecooperationonthecreationofimmersioncontentwascarriedoutontwolevels:thehorizontalone,withinonesector(media);andtheverticalone,becauseGETCreativestudio,alsoownedbytheUSATodayNetwork,wasinchargeoftheproject.Alltheconceptualandproductionworkwasonthepublisher’sside:“Wedon’toutsource…OurVRteamiscomposedofproductpeopleandeditorialpeople,who…arereallyproducingVRand/or360°videomostofthetime”(Heslop,2016).Forthesakeoftheproject,theso-calledcubemercialswerealsodesigned;thatis,“VRadvertisingandvirtually-brandedcontentexperienceswhichhavebeenbuiltseamlesslyintotheshow’sexperience”(Businesswire.com,2016).VRtuallyTherecouldbereceivedthroughtheUSATodayandVRStoriesapplications,butalsothroughtheYouTube.com/VRtually_Therechannel(thesitehadexclusiverightstothematerialsfor60daysfromtheirpublicationdate).Thefirstseasonoftheshowwassuccessful,whichiswhythesecondeditionoftheshowwaslaunchedin2017.However,thedistributionoftheshowwasmodified.Attemptsweremadetoincreaseitsreachbymakingitavailablethroughotherapplications.Anotherdocument(abouttheBuffaloTraceDistillery)wasbasedoncooperationwithOculus.Thus,inrecentcases,USATodayhasmovedontothepartnership-platformmodel.ABCNewsfitsintotheinternalplatformmodelaswell.ThestationimplementedVRin2015,andthemostrecentmaterialsandthemostrecentmaterialspublishedonitswebsite(https://abcnews.go.com/VR)datebackto2017.AseparateABCNewsVRdepartment,apartofABCNews,wasresponsibleforcreatingthecontent.Thematerialswerepublishedonthesocialmediachannelsofthestation.TheABCexampleshowsthatindependentimplementa-tionofinnovationsthroughaninternaldivisionmayfinallyresultinabandoningVRdevelop-mentplans:in2019theABCNewsVRdivisionwascloseddown.ThePartnership-PlatformModelThepartnership-platformmodelhasamixedform.Itisbasedonamedium’sownVRunit,whichperformspartoftheworkandestablishescooperationwithexternalentities,coordinat-ingtheiractivities.AnexampleofthissolutionistheLifeVRapplication,whichfunctionsasaplatformforaggregatinginteractivepublicationsofvariousmagazinespublishedbyTimeInc.(forexample,Time,People,SportsIllustrated,Life).ItwasdistributedbyTIMediaAnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

586Digitalbusinessecosystemsinthemedia575SolutionsInc.TheapplicationwasalsotheonlydistributionchannelfortheDefyingtheNazisVRvideo,whichwascreatedinanadditionalcollaborationwithVRPlayhouse,ArtemisJoukowsky,andFarmPondPictures.ItisalsoworthmentioningtheTimeImmersiveapplicationfrom2019,whichprovidedmaterialtocommemoratethe50thanniversaryofthemoonlanding.Theproductionwasaresultofthecooperationofmanyentities,workingwithaspecializedunitofTimeEnterpriseandImmersiveExperiencespublisher,includingJohnKnollzfromIndustrialLight&Magic(three-dimensionalor3Dimaging),theSmithsonianNationalAirandSpaceMuseum/Smithsonian’sDigitalizationProgramOffice,Trigger(appdeveloper),RYOT(theimmersivesounddesign),NASA(providedarchivalsoundsanddigitizedtelemetrygraphs),andtheJimmyDeancompany(sponsoring).ThelunarlandscapewasbuiltwiththeuseofdatafromtheLunarReconnaissanceOrbiterlaseraltimeter.ThematerialwasavailablethroughtheTimeImmersiveappandYahooNews(viatheYahooNewsXRProgram).In2019,Timeannouncedfurtherprojects,including“TheMarch”.Theproject,coordinatedbyTimeEnterpriseandImmersiveExperiences,tooktheformofanexhibitionscheduledtopremiereattheDuSableMuseumofAfricanAmericanHistoryinChicago.Itwasassuredthat“visitorswillenterintoafullyinteractiverecreationofthathistoricmoment…witnessingfirsthandKing’siconic…speech”(Time,2019).TheprojectwaspromotedonthecoverofTime.Accordingtothecommentators,theprojectshowedtheevolutionofTime“fromalegacypublicationwhollyreliantonprintadvertising…toamodern-daymediacompanythatinvestsinawidearrayofpotentiallyrevenue-generatingmaterial,fromeventsto…edu-cationalimmersiveexperiences”(Jerde,2020).“TheMarch”wasimplementedwiththeparticipationofIntellectualPropertiesManagement,GRXImmersiveLabs(productionofAR/VRcontent),RYOT,DigitalDomain(immersivestudio),JuVeeProductions(productioncompany),CAA(thestrategicadvisor),LocalProjects(thedesignoftheexhibition),andAmericanFamilyInsurance(sponsoring).Anotherexampleofimplementingthepartnership-platformmodelistheactivityoftheBBCVRHub,aspecialdivision“createdasamultidisciplinaryinnovationteamtospearheadtheBBC’sexplorationofimmersivemediaforstorytelling”(BBC,2019,p.4).ThebroadcasterclaimedthatunderstandingtheaudienceshouldbethefoundationofVRprojects.Onlyaftergatheringsuchknowledgecaneditorial,production-technological,anddistributiondecisionsbemade.SharingVRexperience,understoodas“maximisingreachthroughtouringwork”(BBC,2019,p.4),wasalsoimportantfordisseminatingthetechnologyandarousingtheinterestoftheusers.TheBBCVRHubhasbecomeaplatformforcooperationbetweenvariousentities:internal,withintheBBCstructureandartists,externalcompanies,andevenuniversities(UniversityCollegeLondon,UCL;andtheUniversityofBarcelona).Amongthesection’sproductions,itisworthmentioningTheRunaway,ananimatedepisodeoftheDoctorWhoseries.ItwascreatedbyPassionAnimationStudios(3Danimationbasedonmotioncapture),VictoriaAsare-Archer(thewriter)andSegunAkinola(thecomposer).TheRunawaywasthenreleasedasafreeBBCVRapplication.ThejointBBCStudiosandGoogleproject,BBCEarth:LifeinVR,shouldalsobemen-tioned.Itwas“publishedbyBBCStudiosandcreatedbyPreloadedincollaborationwithBBCStudio’sVRteam”(Preloaded,2020).In2019theBBCVRHubcloseddown.Thebroadcasterconcludedthat“we’vebuiltupexperienceacrosstheBBCsodifferentareaswillbeabletodeveloptheirownideas”(Feltham,2019).AnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

587576HandbookondigitalbusinessecosystemsThismodelhasalsobeenadoptedbytheAlJazeeraMediaNetwork,whichin2017launchedAJContrast“groundedintheprinciplesofco-creationandcollaboration”which“usescuttingedgetechnologiestoamplifystoriesofunrepresentedcommunitieshithardestbyconflictandinequality”(Ajcontrast.com,n.d.).AJContrastunderlinestheimportanceofcooperationwithexternalentitiesthat“alignwiththestudio’seditorialmissionandareopentoexploringinnovativestorytellingthroughemergingtechnologies.”OneexampleofsuchcollaborationwastheStillHeremovie,wheremembersoftheWomen’sPrisonAssociationwereinvolvedinitscreation.CONCLUSIONSTheanalysisofmarketexamplesofVRimplementationhasshownthattheycomplywiththeassumptionsofDBEs,exemplarizingcooperationthat:●isdigital:thefoundationofthecooperation,witheachofitsstagesbeingdigitalized,fromproduction,throughdistribution,tothefinalusebytherecipients;●ismulti-sectoral:occurringmainlybetweenthemediasphereandnewtechnologies(com-paniesdesigningapplications,software,VRhardwaresuchascamerasanduserinterfaces),althoughtherewerealsoentitiesassociatedwitheducation,culture,orpro-socialactivity;●isinnovativeandmutuallybeneficial:themediaareofferedanewqualityintheproduction-distributionchainaswellasanevolutioninthewaytheirofferisconstructed;therecipientsenjoytheexperienceoffullinteractivity,immersiveness,andco-creationofmediamessagesinrealtime;andthecooperatingentitiescanpopularize/testthetechnolo-giestheyoffer,oraddanew,futuristicdimensiontotheircurrentactivity;●stimulatesthedevelopmentnotonlyofthecooperatingentitiesbutalsooftheindustriestheyrepresent:thusalsostrengtheningtheircompetitivenessandtheirabilitytoadjusttoconstantchanges,includingVRadaptationonascaletailoredtothecapabilitiesandneedsofthemedium,andindirectlytotherecipient.ByconfirmingtherelationshipbetweenVRinthemediaandDBEs,themajorobjectiveofthestudywasachieved,andthefirstresearchquestionwasansweredaffirmatively.Attemptsweremadetosystematizethephenomenon,whichresultedinthreemodelsofVRimplementationinthemediainthecontextofDBEs.EachoftheseisbasedstrictlyonthemarketexperienceofthemediaandindicatesdifferentwaysofimplementingVRinthemedia.Thecooperativemodelisalmostofanoutsourcingnature,inwhichmostofthetechnicalandorganizationalworkisdonebyexternalentities.Here,themediumisawareofitstech-nologicalorhumanresourcelimitationsandestablishespartnership-basedcooperation,andinexchangeoffersthepowerofitsbrandandreachamongitscustomers.Themodel,inadditiontotherecognizedmedia,isoftenchosenbySMEs,whichcannotaffordtocreateseparatestructuresforVRimplementation.Itisanopportunityforthemtolaunchinnovationsandbecomecompetitorsforlargermediamarketplayers.Thisisimportant,becauseinthecaseofimmersionmediathereisnocompanythatwouldholdamonopolyinthisrespect.Intheinternalplatformmodel,thecross-sectoralnatureoftheproductionanddistribu-tionchainhasthesmallestshare,asitisthemediumwhichisresponsibleforthewholeprocess,becomingaplatformforexternalstakeholders.Itisadifficultmodel,asitrequiresthemediumtoprovidetheappropriatetechnicalbackground,staff,andknow-how.PerhapsAnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

588Digitalbusinessecosystemsinthemedia577thatiswhyitiscurrentlytheleastpopular(themediapracticingithavemovedtowardsthepartnership-platformmodel).Thepossibilitytocontroltheimplementationoftheinnovationsmadethismodelpopularatthebeginning.AlthoughitassumestheuseofDBEs,theirfunc-tioningoftenresembledthatofacorporateproductionchain.Inthepartnership-platformmodel,agivenmedium(itsspecializedunit)becomesthecenter(theplatform)oftheproductionanddistributionchain,coordinatingtheactivitiesofthecooperatingentities.Cooperationisnecessary,butthemediumtakesoverpartoftheactivitieswithintheVRimplementation.Theuseofthisimplementationmodelassumesastrongposi-tioninthetraditionalanddigitalmediamarket,andoptimizesthecostsandresources,whichmakesitpreferredbyentitiesthatareusedtopursuingtheirown,moretraditionalstructureswithinthecorporation.Thepresentationofthemodelsmetthesecondresearchobjectiveofthischapter,andansweredthesecondresearchquestion.Itshouldbenotedthattheattributionofthemediatotheindividualmodelscannotbeper-manent:theanalysisshowsthatthemediaredefinetheproductionanddistributionprocessesofVRmaterials,changingtheinternalplatformapproachtothepartnership-platformone.Thereasonsforsuchinstabilitycanonlybespeculatedupon.TheyarerelatedtothesignificantdynamicsoftheVRmarket:itsdevelopment,growingavailability,anincreasingnumberofhardwareandsoftwarecomponents,thecreationofnewentitiesresponsibleforthedesignofenvironments,thelackof(orinsufficientlydeveloped)businessmodelsforVRimplementa-tion,andtheconditionofthemediamarket.Despiteallitsadvantagesandnovelty,VRisnotamasstechnology,withitsregularpro-ductiongeneratinghighcosts:financial(forexample,purchaseofnecessarycameras,creationofsoftware/applications),logistic-organizational(forexample,arrangementoftheproduction/distributionchain,networkingofcooperation,multi-sectoralcharacter),andhuman(forexample,stafftraining).Themedia,alongwiththeirDBEspartners,mustcalculatewhethertherisksofimplementingVRaresufficientlyprofitabletobringmoretangiblebenefitstotheecosystemthanrisks.Sofar,itcanbesaidthatthephenomenonisinitsexperimentalphase:afterthefirstwaveofpopularityin2016–2017,therehasbeenacertainslowdown(anumberofunitsdealingwithVRcloseddownin2019;forexample,intheBBC,ABC).Perhapsitisbeinginfluencedbythepandemic,whichhashadanegativeimpactonthebroadlyunder-stoodmediasphere.Ontheotherhand,asmediaprofessionals(Katanich,2020)observe,theimmersionmedia,inviewoffurtherproblemsintraditionallyunderstoodsociallife(theclimatecrisis,otherpossiblepandemics),maybethemosteffectivemeansofcommunication,facilitatingthefunctioningofeducational,cultural,andsportsinstitutions.Sothequestionremainsopenofwhether,andtowhatextent,therewillbeasecondwaveofimplementingVRinmediapractice.Itcanbesaidthatuntilthemediapermanentlyincorporateitintotheirstruc-turesanddevelopmentstrategies,itwilltaketheformofachaotic,multi-sectoralplatformandnetworkedcooperation,focusedonimmersiveinteractivityandovercomingfurtherbarrierstoexperiencingmediamessages.Itisimportanttostatethatthischapterhascertainlimitations.Thelistofcasestudiesdefi-nitelydidnotincludeallVRimplementationsinthemedia.WemaynothaveaccessedcertaindetailedinformationonVRproductioninthemedia,whichtheymayhaverejectedowingtothelackofaclearlinkwithDBEs.Onlinemediawerenotstudiedhere.Finally,wefocusedononlyoneresearchmethod,thoughitwouldbeinterestingtoexaminetheperspectiveofprofessionalsfromthemediaindustryandtheindustriescooperatingwithit,whichincorpo-rateDBEsintheanalyzedarea.TheselimitationscanbetreatedasaclueonhowtoperformAnnaJupowicz-GinalskaandKrzysztofSokół-9781839107191DownloadedfromPubFactoryat05/28/202210:26:46AMviaColumbiaUniversityLibrary

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59335.ThedigitalinnovationecosystemofeSports:astructuralperspectiveKatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichertINTRODUCTIONThesurgingpopularityofcompetitiveonlinegaming,oreSports(Reitmanetal.,2020),hasledtotheemergenceofamulti-billiondollarindustry(Ludwigetal.,2020;Newzoo,2021).Characterizedbyadiversesetofactors—rangingfromhighlytrainedteamsatprofessionaltournamentstocasualgamersbroadcastingfromtheirlivingrooms,traditionalsportsclubs,orlargecorporationswithdedicatedeSportsdivisions—theeSportsindustryinvolvesvariousindividuals,start-ups,andorganizations.Theprevalenceofmultilateralrelationships,butalsoalackofinstitutionalization,hasledtoanindustrythatcanbestbedescribedasanecosystem.ResearchoneSportsfromabusinessandmanagementperspective,however,isatanascentandfragmentedstage,andsofardoesnotofferholisticinsightsintothenovelstructuresoftheeSportsecosystem.ThiselicitsthequestionofwhichinterrelatedcomponentsconstitutetheeSportsecosystem,andeventuallywhetheritsevolutioncanofferactionableinsightsforpracticeandacademia.Astructural,activity-basedviewofecosystemsintroducedbyAdner(2017),furtherspeci-fiedbyJacobidesetal.(2018),helpstocapturethekeyactors,activities,andtheirinterdepend-enciesfromanecosystemperspective.Theecosystemconstructassuchisdefinedas“asetofactorswithvaryingdegreesofmultilateral,nongenericcomplementaritiesthatarenotfullyhierarchicallycontrolled”(Jacobidesetal.,2018,p.2264).Also,interdependenciesandcom-plementaritiesrepresentdriversofallianceformationandrelationshipswithinanecosystem(ShipilovandGawer,2020).DespitesimilaritiesoftraditionalsportsandeSports,suchastheentertainmentofaudiencesshowingcompetingprofessionalathletes(HamariandSjöblom,2017),thekeyactors,activities,andarchitecturesdiffersubstantiallyduetothedigitalandnon-centralizednatureofsportanditsconsumption.AlthoughsomeresearchershavestartedtoaddressthenoveltiesoftheeSportsecosystemwithinthedisciplinesoflaw(HoldenandBaker,2019),mediamanagement(Scholz,2020),andsportsmanagement(Cunninghametal.,2017;Funketal.,2018),researchoneSportsisstillatanascentstage,especiallywithrespecttobusinessandmanagementresearch(Scholz,2019).Moreover,nostrategicecosystemviewhassofarbeenemployedtodescribetheeSportsphenomenonatthebusinesslevel.OurchapterisintendedtocapturethestructureoftheeSportsindustryfromanecosystemperspective.Basedonaselectionofstate-of-the-scienceworksacrossdistinctlinesofeSportsresearch,aswellastheconsiderationofdomain-specificbusinessreports,wemakethreemaincontributionsinourchapter.First,theassessmentofeSportsasanarguablyprototyp-icaldigitalinnovationecosystemprovidesinsightsintonovelinter-organizationalstructuresandcoordinatingmechanismsofadigitallydrivenecosystem.Thiscaninformandadvancemanagerialunderstandingofthisrapidlyevolvingandtechnology-drivenindustry,itsactors,582KatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

594ThedigitalinnovationecosystemofeSports583andtheirinterdependencies.Second,weoutlinefutureavenuesforeSportsresearchbasedonrecentdiscussionsinthestrategicecosystemliterature.Third,andlastly,ourinterdisciplinaryapproachcaninformthebridgingdiscoursebetweenstrategicandmediamanagement.Theremainderofthischapterisorganizedasfollows.First,wedescribetheeSportsphe-nomenonwithregardtoitsoriginanddefiningcharacteristics.Next,weintroduceandapplytheestablishedecosystemconceptfrommanagementresearchtotheeSportsindustryanddescribeitskeycomponents.Finally,weoutlineadvancementsinecosystemresearchandcorrespondingfutureavenuestoinvestigatetheeSportsecosystem.THEESPORTSPHENOMENONeSportsisasubstantiallyexpandingculturalphenomenon(Scholz,2020),andtheongoingacademicdiscourseofitsdefiningfeaturesreflectsthecomplexity,nascency,andnoveltyofeSports.Inbroadterms,JennyandcolleaguesdefineeSportsas“organizedvideogamecompetitions”(Jennyetal.,2017,p.4).ArecentliteraturesynthesisbyReitmanetal.(2020)pointstoamorecomprehensivedefinitionofferedbyTaylor(2016),whodefineseSportsas:“theenactmentofvideogamesasspectator-drivensport,carriedoutthroughpromotionalactivities;broadcastinginfrastructures;thesocio-economicorganizationofteams,tourna-ments,andleagues;andtheembodiedperformancesofplayersthemselves”(Taylor,2016,p.116).Furtherin-depthdiscussionsaboutdefinitionsofeSportsoftenquestionwhetheritcanbecharacterizedasaformalsport(Cunninghametal.,2017;HallmannandGiel,2018;Heere,2018),andtheinclusionofeSportsintheOlympicGamesremainssubjecttocontroversialdebate(PackandHedlund,2020;Parry,2019).NotwithstandingtheanswertotheratherphilosophicalquestionofwhethereSportsqualifiesasanactualsport,today’simpactoftheeSportsphenomenonhasbecomemostapparentineconomicterms.In2014,globaleSportsrevenuesstoodatUS$194millionandreachedanaudienceof114millionviewers(Newzoo,2016).Atpresent,marketresearchputsestimatesoftheworldwiderevenuevolumeoftheeSportsindustryatUS$1.1billionin2021,withaglobalaudienceof474millionpeople,continuouslyexceedingrevenuegrowthrateexpectationsthatareprojectedtoreachUS$1.6billionin2024(Ludwigetal.,2020;Newzoo,2021).Figure35.1illustrateseSportsgrowthratesandthesubstantialeconomicandsocietalevolutionoftheeSportsphenomenonoverthecourseofadecade.Keyhistoricalmilestonestothistrajectorycanbefoundinthe1990sinSouthKorea,wherethegovernmentfacilitatedbroadbandinternetinfrastructure,whichsparkedcomputercafésandmadeonlinevideogamingeasilyaccessible,leadingtoafast-growingcompetitivescene(Huhh,2008).ItshouldbenotedthatthisandthefollowingdepictionsaggregatethevariousvideogamegenresandcommunitiesthatarepartofeSports,eachofwhichinvolvedistinctsubcultures,andalsoresultindivergingperceptionsbythegeneralpublic;forexample,withrespecttosimulationsofphysicalsportsorfirst-personshootergames(Cranmeretal.,2021;Jennyetal.,2017).WhilethepopularityofeSportsincreasedduringthe2000s(Scholz,2019),itonlybecametrulyglobalwiththeadventoftheonlinestreamingplatformTwitch,whichallowedforfreelyaccessiblelivebroadcastingofsingle-andmulti-playergameplayofprofessionaleSportsathletesandteams(HamariandSjöblom,2017;JohnsonandWoodcock,2019).Followingthesubstantialgrowthinworldwideviewership,interestsurgedamongindustry-unrelated(thatis,non-endemic)actors,suchastraditionalsportsclubs(BertschyKatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

595584Handbookondigitalbusinessecosystemsetal.,2020)andsponsors(Rogersetal.,2020).Further,theCOVID-19pandemicrestrictedmosttraditionalsports,andpromptednewallianceswitheSportspartnersandcorrespondinginvestments(KeandWagner,2020;Kimetal.,2020).Source:Newzoo(2021).Figure35.1DevelopmentofglobalrevenueandaudienceoftheeSportsmarketScientificinsightsforthecomplexeSportsphenomenonanditscorrespondingindustry,althoughlimited,spanmultiple,distinctresearchdisciplines.WhileReitmanetal.(2020)provideanarrativereviewofthefieldasawholeuntilearly2018,webuildontheirinsightsandfocushereonstudiesrelatedtotheeSportsindustrypublisheduntilmid-2020.ResearchoneSportsfromalawandeconomicsperspectiveisconcernedwith,forexample,antitrustissues(Miroff,2018),legalframeworks(Fietkiewicz,2020),andemploymentdependencies(HoldenandBaker,2019).Afurthercommonlydiscussedtopicconcernsgov-ernanceandinstitutionswithintheeSportsindustry.Forinstance,aconceptualanalysisoftheindustry’sprogressinginstitutionalizationbyAbanazir(2018)notestheabsenceofamonop-olisticinternationalorganization,andoverlappingrolesoforganizationsbeinggamedevelop-ers,publishers,tournamentandleagueorganizers,allatonce.TheauthorconcludesthattheeSportsindustry’snoveltyandfluiditymakeanassessmentofitslevelofinstitutionalizationdifficult(Abanazir,2018;JonassonandThiborg,2010;Summerley,2019).Interestingly,earlyworksoneSportshavebeenpublishedinthemediamanagementdiscipline(e.g.,Hutchins,2008).RelatedstudiesfocusontheunderlyingmechanicsfortheconsumptionofeSportscontentsuchaslivestreamingplatforms(Jangetal.,2020).Inanedi-torialtoarecentspecialissueoneSportsbyScholz(2020),theauthordetailsacategorizationframeworkofstakeholders(Scholz,2019).Thelayered,circulardepictionofthestakeholderKatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

596ThedigitalinnovationecosystemofeSports585ecosystemputseSportsplayersatthecenter,aroundwhichstakeholdersbuildan“interwovenbusiness-modelnetwork”(Scholz,2020,p.4).Anextensionofthisframeworkisofferedinanempirical-qualitativestudybyMcCauleyetal.(2020),wholookatthe“offline”implicationsofeSportstournamentsfortheSwedishcityofJönköping(McCauleyetal.,2020).Theauthorsfurtherdifferentiatestakeholdersateachcircularlayerforthisregionalcontext,forexamplebyaddinglocaltournamentorganizers.Duringthelastdecade,agrowingnumberofstudieshaveaddressedthepsychologicalandphysiologicalimplicationsofeSports,asrecentlyshowninseveralreviews(Bányaietal.,2019;Cranmeretal.,2021;LeisandLautenbach,2020;Pedraza-Ramirezetal.,2020;Reitmanetal.,2020).Forexample,intheirsystematicassessmentof52studiesonthistopic,Pedraza-Ramirezetal.(2020)emphasizetheneedforfurtherresearchontheroleofthe“rapidlychangingesportssystem”itselfonitsactors(Pedraza-Ramirezetal.,2020,p.343).ThesportsmanagementliteratureistraditionallyatthecenterofeSportsresearchandfre-quentlyrelatesthisnovelphenomenontotraditionalsports(Cunninghametal.,2017;Funketal.,2018).Forexample,Bertschyetal.(2020)recentlystudiedtheengagementoftraditionalfootballclubsintheeSportsindustry,andrecommendforsuccessfulbrandextensionsthat“clubmanagementwillhavetostrategicallysetupasequenceofhighlyinvolvingevents”(Bertschyetal.,2020,p.63)inco-creationwithmultiplestakeholders(Gawrysiaketal.,2020).Researchfromthedisciplineofbusinessandmanagementmainlyrevolvesaroundimpli-cationsformarketingorsponsoringactivitiesineSports(Seo,2013,2016).PublicationsfromthisdisciplinethataddresstheeSportsindustryinparticularanditsinterorganizationalrelationsarerare.Ontheotherhand,managementscholarshavesofardirectedsubstantialinteresttowardsthevideogameindustry,whichiscloselyrelatedtoeSports(Cohendetetal.,2021;deVaan,2014;Rietveldetal.,2019;Rongetal.,2018).WithspecificregardtotheeSportsindustry,tentativeinsightscanbedrawnfromgreyliteraturesuchasindustryreportsbyPwC,Deloitte,andNewzoo(Ballhaus,2020;Ludwigetal.,2020;Newzoo,2021),eachofwhichdescribetheeSportsindustryusingsomeformofecosystemterminology.Buildingonthesepreliminaryfindingsandclaims,wewillintroducetheecosystemconceptfromthemanagementliteratureinthenextsection,todiscusswhetheritisappropriatetodescribetheeSportsindustry.THEESPORTSECOSYSTEMTheEcosystemPerspectiveinManagementResearchAdvancingdigitaltechnologiesnurturenewproductsandserviceofferings,businessmodels,platforms,andnewactors(Hiningsetal.,2018).Thisleadstoincreasingcustomerdemands,morecomplexvaluechains,andfinallytochangingindustryormarketstructures.Consequently,establishedindustriesfaceincreasingmarketdynamicscharacterizedbya“systemofinterlinkagesandindependencies”(Subramaniam,2020,p.2)drivenbynewdigitaltechnologies.Inthiscontext,thenotionofecosystemshasgainedsubstantialattentionamongmanagementscholars(Jacobidesetal.,2018;ShipilovandGawer,2020;Tsujimotoetal.,2018).Theconceptoftheecosystemallowsustocapturethesedynamicsandtoaddresstheprevalenceandvaryingdegreesofmultilateralrelationshipsinoneormoreindustries.AttheKatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

597586Handbookondigitalbusinessecosystemssametime,thereisalackofinstitutionalizationinmanagingnon-genericcomplementaritiestoserveafocalofferingcreatedbytheecosystemactors(Adner,2017;Jacobidesetal.,2018).AccordingtoanintegrativereviewbyMölleretal.(2020),ecosystemsrepresentamesolayerinbetweenthemicrolayerofactorsandthemacrolayerofbusinessfields.Therearevariousformsrelatedtoecosystemsinmanagementliterature,suchasbusiness,digital,entre-preneurial,innovation,knowledge,platform,service,ortechnologicalecosystems,aswellasmulti-actornetworks(Guptaetal.,2019;Tsujimotoetal.,2018).Atpresent,acommonlyaccepteddefinitionforecosystemsisstillpending(ShipilovandGawer,2020).Fromastra-tegicmanagementresearchperspective,however,ecosystemscanbenarroweddowntothreemaintypes:businessecosystems,innovationecosystems,andplatformecosystems(Jacobidesetal.,2018).First,Teece(2007)describesabusinessecosystemas“thecommunityoforganizations,institutions,andindividualsthatimpacttheenterpriseandtheenterprise’scustomersandsup-plies”(Teece,2007,p.1325).Inastrictsense,consideringbusinessecosystemsmeansfocus-ingonthemechanismsofasinglefirmcapturingvaluewhileaccountingfortheinteractionofvariousstakeholderssharingmutualinterests(Cohendetetal.,2021;IansitiandLevien,2004).Second,theconceptofinnovationecosystemfocusesonaparticularinnovationbasedonacustomerperspective,thatis,acoherentfocalofferingorvalueproposition,whereheteroge-neousactorsinacollaborative,formal,andinformalmannercontributetothevaluecreationwiththeirspecific,complementarycomponents(Adner,2006;GranstrandandHolgersson,2020;ShipilovandGawer,2020).Offeringafocalvalueinasetofinterdependenciesandcomplementarities,theinnovationecosystemrequirestheexchangeandalignmentofactivitiesandknowledgebetween“amultilateralsetofpartnersthatneedtointeract”(Adner,2017,p.47).Third,aplatformecosystemcreatesvaluefortheend-usersbycombiningtheplatformtechnologyasthecentralcomponentwiththeproductsandservicesofthecomplementors(Thomasetal.,2014).Theconnectionbetweentheplatformandcomplementaryofferingsisoftenenabledbystandardizedoropeninterfaces(GawerandCusumano,2002).Thesetech-nologicalstandardsaresetbydistinctcentralplatformleaders,whoarealsoresponsiblefortheecosystem’sattractiveness.Thisincludesthetechnologicaldevelopmentoftheplatformaswellasthestimulationofinnovativecomplements.Thecomplementorscreatevalue,andatthesametime,gainaccesstocustomers.Withanincreasingnumberofcomplementaryoffer-ings,theplatformprovidesgrowingvalueforthecustomers(GawerandCusumano,2002).Whileplatformecosystemsexclusivelybuildondigitaltechnologies,ecosystemsingeneralarealsodescribedinthecontextofdigitalecosystems(Guptaetal.,2019).Thecoreofdigitalecosystemsliesindigitalenablersforcollaborationandapplications,andismainlyconsideredinthecontextofengineeringorcomputingarchitecture(Guptaetal.,2019).Scientificworksondigitalecosystemsemergedasaratherindependentresearchstream.Still,Guptaetal.(2019)identifiedintheirbibliometricanalysisanoverlapofdigitalecosystemsandtheliter-aturesforbusinessecosystemsandinnovationecosystems.Therelatedtopicsofinformationsystemsandservice-orientedissuesareattheboundaryofbusinessanddigitalecosystems.AdedicatedchapterinthisHandbookemploysaserviceecosystemperspectiveontheeSportsindustry,inwhichtheauthorsdrawfromtheservice-dominantlogic(seeChapter36,KunzandRoth).Withregardtoinnovationecosystems,afurtherperspectivecanberec-ognizedwhenconsideringtheinterfacebetweenthesetwostreams.Here,especially,themesaroundvirtualandsocialsystemsrepresentboundarytopics.ThepresentedboundarytopicsKatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

598ThedigitalinnovationecosystemofeSports587betweenbusinessecosystemsandinnovationecosystemswithdigitalecosystemsindicatethattheseecosystemsstreamsareexclusive,butalsosharesomerelatedoverlappingtopics.Insummary,takingtogetherthesedifferentstreamsofecosystemresearchrevealsthatthefocusliesonthestrategicallyalignedvaluecreationthroughasetofmultilateral,interde-pendentactorswhocontributenon-genericcomplementaritiesforafocalvaluepropositionthatisenabledbydigitaltechnologies.ThefollowingsubsectiondescribeseSportsfromanecosystemperspective,byreflectingeSportsregardingitsoriginanddefiningcharacteristicstothevariousecosystemspresentedabove.TheeSportsIndustryfromanEcosystemPerspectiveToconsidereSportsfromanecosystemperspective,itisnecessarytounderstandtheevolutionoftheeSportsindustry.Here,animportantcharacteristicliesinthedigitalandcommunity-drivenstructureofeSports.Theaudienceisanactivelyengagedcommunity,bringingitsownculture.Onefoundationalaspectofthiscultureisthecompetitivespiritamongtheplayersatboththeamateurandtheprofessionallevelinvideogaming,whereplayersbelongtoteamsorsponsoredbusinessorganizations(HamariandSjöblom,2017;Scholz,2019).Astrongindicatorofthispronouncedcommunityculturearguablycomesfromtheintegrativeandinterchangeablecharacteroftheactors’rolesandactivities.Forexample,professionalplayers,developers,andmanyotherstakeholdersemergefromtheaudienceatthatmomentwhenengagedfanswanttoparticipatemoreactivelyintheirhobby(Jangetal.,2020).AdistinctandimportantaspectisthatineSportsthereareseveralcommunities,duetotheheterogeneousandpartlyregion-specificinterestofgames(Cohendetetal.,2021;Scholz,2019).Comingfromacommunity-basedculture,somefurtherkeycharacteristicscanbeidenti-fiedintheliterature.ScholzandStein(2017)describetheeSportsindustryasbasedonsixdistinctcharacteristics:(1)eSportsactorsarehighlyfocusedongoalsetting;(2)themarketis“glocal”;and(3)change-oriented;(4)resourcesareallocatedbottom-up;(5)participantsareover-energetic;and(6)digitizationisintegraltoeSports(ScholzandStein,2017).Thesecharacteristicsareindicatedbythedynamicsoftheactors,butalsointhemarket,thefastevo-lution,andthechangeoftheeSportsindustry.AseSportsiscontinuouslygainingeconomicrelevance(forexample,drivenbyarisingnumberofparticipants,events,sponsoring,orincreasingamountsofprizemoneyattournaments),anotablegrowthofstakeholdersengageintheindustry.Thisleadstoaprevalenceofdifferentstakeholdersfrominsideandoutsidetheindustry,andconsequentlyhighdynamicsbetweenthemanagementofnon-genericcomplementaritiesoftheactorsastherearevariousdegreesofregulations(Scholz,2019).Especially,theriseofnon-endemicactorssuggestsfast-changingstructuresintheeSportsindustry(Rogersetal.,2020).ConsideringtheroleofdigitizationineSports,HamariandSjöblom(2017)addresstheinte-grativedigitalcharacteristicintheirdefinitionofeSportsas“aformofsportswheretheprimaryaspectsofthesportarefacilitatedbyelectronicsystems;theinputofplayersandteamsaswellastheoutputoftheeSportssystemaremediatedbyhuman‒computerinterfaces”(HamariandSjöblom,2017,p.213).eSports,whichfromtheverybeginninghasconnectedcommunitiesaswellasplayersandvirtualteamsbasedondigitaltechnologies,thusalsoenablestheinterac-tiveexchangeandnurturesknowledgeflowsasadriverforinnovation.Consequently,eSportsdemonstratesleading-edgetechnologyby“massivereal-timenetworking,cloudcomputing,KatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

599588Handbookondigitalbusinessecosystemsandstate-of-the-artdatasecurity”(LeVoir-Barry,2020)torealizeentirelydata-driven,virtual,andinteractiveeSportseventsforthousandsofparticipantsgloballyatthesametime.SummarizingthecharacteristicsoftheeSportsindustrythatencompassawiderangeofvarioushighlyinteractive,innovative,andcommunity-drivenactorsthatarepredominantlyconnectedbydigitalplatforms,severalkeyaspectsacrossthediscussedecosystemarebeingaddressed.Morespecifically,thedynamicsoftheeSportsecosystemcanbeexplainedthroughthefocusoftheactorsandtheiractivities(orcontributionofnon-genericcomplementarities)onacoherentfocalofferingorvaluepropositiontotheaudiences.ThisimpliesthatthevaluepropositionofeSports,initsessence,isthevirtuallyaccessible,community-drivenenter-tainmentforaglobalaudienceprovidingcompetitivevideogameplayamongprofessionalathletes.Therefore,wearguethatduetoitsdigitalnatureandalignmentmechanismsaroundthevalueproposition,eSportscanbeviewedasadigitalinnovationecosystem.Basedonrecentindustryreports,itcanbearguedthattheeSportsecosystemisstillatanascentstageinitslifecycledevelopment(Newzoo,2021).Accordingly,thecharacteristicsoftheeSportsecosystemareconsistentwithadescriptionofyoungecosystemsprovidedbyMöllerandcolleagues,whostatethat“openandflexibleconstellationsaretypicalintheearlyconstructionstageofcomplexandextensiveecosystemsthathave‘fluid’participationandnoformalinclusionorexclusioncriteriaorguidingrules”(Mölleretal.,2020,p.385).Figure35.2BlueprintoftheeSportsecosystemConsideringthenascentstageoftheeSportsecosystem,variousprimaryandsupportingactorscreatingvaluehaveemerged,whileatthesametimenewstakeholders,forexample,regardingeSportsgovernance,areenteringtheindustry(Pengetal.,2020).However,inmanagementliterature,acategorizationoftheeSportsindustryasanecosystemhasonlybeenintroducedbyScholz(2019,2020).TocapturethedescribeddynamicsandtheunderlyingvaluepropositionoftheeSportsecosystemsinmoredetail,weintegratefurtherrecentframeworkendeavors(Ballhaus,2020;Newzoo,2021),whichencompassestheinterlinkagesbetweentheactorsintoKatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

600ThedigitalinnovationecosystemofeSports589thecategorizationmodelofScholz(2019,2020).Byextendingtheinitialstaticecosystemcat-egorizationofScholz(2020)throughthespecificationofnon-profit-drivenactors(Pengetal.,2020)andtheintegrationofevolvinginterdependencies,weofferamoreholistic,structuralperspectiveoneSportsasadigitalinnovationecosystem.Furthermore,wespecifyinFigure35.2thecorrespondingproposedblueprintoftheeSportsecosystem.ComponentsoftheeSportsEcosystemTheeSportsecosystemcanbeexplicatedbasedonadifferentiationofitsfocalcomponents,followingKapoor(2018),alongthekeyinterdependentactors,activities,andarchitectures,whichwewillbrieflydescribenext.ActorsWhilethemembershipandparticipationofparticularactorsintheeSportsecosystemareconstantlychanging,actors’parentingcategorieshaveremainedessentiallysimilar,suchasgamedevelopersorpublishers.ThiscollectionofactorcategoriescanbedifferentiatedduetotheirdegreeofinvolvementinrealizingthevaluepropositiondirectedtowardstheeSportsaudience.Table35.1providesanoverviewofthemainactorcategoriesandcorrespondingroleswithintheeSportsecosystem,listedwiththeirproposedproximitytothefocalvaluepropositionindescendingorder.ThiscompilationbuildsonacatalogofstakeholdersoftheeSportsindustrydetailedbyScholz(2019),whoclassifiesprimaryandsecondarystakeholdersduetotheirdirectorindirectinvolvement.Ecosystemactorsatthecoreofdeliveringthevaluepropositiontotheaudienceinvolveprofessionalteamsandathletes,videogamepublishersanddevelopers,streamingplatforms,mediaoutlets,andtournamentorganizers.Enablingrolesareheldbysponsors,supportingpro-viders(forexample,fordigitalinfrastructures),investors,andeducationalinstitutions.Finally,withthegrowingsocio-economicimpactofeSports,moredistalactorssuchasgoverningbodiesareincreasinglyimportantfortheeSportsecosystem.Inperspective,acrosstheavailabledepictionsoftheeSportsecosystem,themultilateralinterdependenciesamongitsactorstowardsafocalvaluepropositionbecomeapparentinlieuofastricthierarchyorcentralactor(forexample,streamingplatforms)dominatingtheecosys-tem.Forinstance,theentryoftheshort-livedstreamingplatformMixer,ownedbyMicrosoft,hadsubstantialimplicationsforallinvolvedactors(forexample,platform-exclusiveleaguesandtournaments).MicrosoftacquiredMixerwiththeattempttobecomeanalternativelive-streamingplatformtoestablishedstreamingplatformsbyofferingamoreinteractiveuserexperience,andto“engageaglobalaudienceandbringinthatvisiontobuildcommu-nitieseverywhere,onanyplatform,onanydevice”(Microsoft,2017).Mixerinvestedinleadingstreamerstogainhightake-uprates.Afteronlyfouryears,MicrosoftclosedMixer,andinsteadstartedtocooperatewithFacebookGaming.StreamersandcommunitieshadtoabruptlyreorientthemselvesintheeSportsecosystem.Despitehighinvestments,Mixerwasnotabletodeliveravaluepropositionleadingtoexpectedgrowthrates,andfelloutoftheeco-system.However,theshutdownofMixerwascompensatedalmostimmediatelybythemainstreamingplatformTwitchownedbyAmazon,andatthesametime,alsoshiftednewattentiontotheformernichestreamingplatformsofYouTubeandFacebook(Bass,2020).KatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

601590HandbookondigitalbusinessecosystemsTable35.1ActorsintheeSportsecosystemActorcategories*DescriptionExamplesAudienceInbroadterms,theaudienceistheaddresseeofthefocalvaluepropositionStreamingspectators,whoconsumecompetitivegameplayperformedbyprofessionalathletes.Thetournamentspectators,fans,audienceisanactivelyengagedcommunitywithrespectivesubcultures.communities,prosumers(Xueetal.,2019)ProfessionalTeamsProfessionalteamorganizationsarecompanieswhichemploy,train,andFnatic,Astralis,G2Esportssupportprofessionalathletes,organizedinsmallergenre-specificworkteams.Teamorganizationscreateanenvironmentforprofessionalplayerswherethosecansolelyfocusonpracticingtheirplay.Further,theytakecareofadministrativetaskslikeorganizingsponsorships,coaching,andteamhouses.ProfessionalDependingonthespecificgenreandvideogame,professionalathletesAndreas“Xyp9x”Højsleth,Athletescompeteindividuallyornestedinteams.ForcompetingattheprofessionalJohan“N0tail”Sundstein,level,eSportsathletesusuallyfocusononeparticularvideogameentirely.Ksenia“vilga”KlyuenkovaGameDevelopersOrganizationsthatprovidevideogamesinwhichprofessionalathletesValve,Blizzard,ElectronicandPublishersandteamsarecompeting.Dependingonthevideogame,developerscanArtsbepublishers,distributors(videogameplatforms),andleagueaswellastournamentorganizersatthesametime.StreamingWhilemainlybeingusedforstreamingcasualvideogaming,platformssuchTwitch,YouTubeGaming,Platforms/MediaasTwitcharethemainsourceofconsumptionforthebroadcastofeSportsESPN,eSportsObserverleaguesandtournaments,andalso,thetrainingsessionsofprofessionalathletesandteams.‘Traditional’mediaoutletssuchasTVstationsorwebsitesalsoprovideeSportscontentsuchaseSports-relatednews.League/Organizationswhichcoordinatephysical,digital,orblendedeventsinwhichESL,PGLTournamentprofessionalathletesandteamscompeteinadedicatedformat,usuallyforOrganizersprizemoney.SponsorsThesourcesofsponsorshipofeSportsathletesandteamsareoftenIntel,SAP,Pepsi,organizationsrelatedtothevideogamesindustrywhichsellgames,hardware,Mercedes-Benzsoftwareandservices,foodandbeverages,orapparel(i.e.,endemicsponsors).Peripheralsponsors(non-endemic)increasinglyspanthecompletebandwidthoforganizationsinterestedintheeSportsaudience(e.g.,carmanufacturers).SupportingTypicallyalsoengagedinsponsorships,supportingproviderscontributeLogitech,Corsair,Razer,ProviderseSports-specifichardware,software,andservicestoathletesandteams(e.g.,Newzooperipherals,analytics,coaching)aswellasleaguesandtournaments(e.g.,digitalinfrastructure).SportsTraditionalsportsbodies(e.g.,associations)whichengageineSports,forFIFA,NBA,NFL,MLB,orOrganizationsinstance,byengagingwithdedicatedleaguesandtournaments.NHLInvestorsFinanciallyinvolvedentities(e.g.,individuals,organizations)whichholdTencent,Comcast,Celebritiessharesforprofessionalteamsorforleaguesandtournaments.EducationalThetrainingandeducationofeSportsgamingormanagementskillscanUniversityofCaliforniaIrvineInstitutionstraditionallybefoundaroundprofessionalteams,whereasmorerecently,EsportsProgram,Germandedicatedstudyprograms,courses,platforms,orinstitutionsareemerging.‘InstitutfüreSports’(IES)GoverningBodiesThiscategoryencompassesorganizationswhichareresponsibleforreleasingInternationale-SportsandenforcingrulesineSportsandcanbespecifictogames,interestgroups,Federation(IESF),orregions(national,international).Insomecases,gamedevelopersandeSport-BundDeutschlande.V.publishersgoverntheirowntitles,leagues,ortournaments.(ESBD)Note:*ActorcategoriesarecompiledandadaptedfromScholz(2019,2020)andBallhaus(2020),listedindescendingorderduetotheirproximitytothefocalvalueproposition.KatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

602ThedigitalinnovationecosystemofeSports591ActivitiesDefinedas“[t]asksthatunderliethedifferentoffersthatcontributetothefocaloffer’suservalueproposition”(Kapoor,2018,p.6),activitiesarecarriedoutbytheinterdependentactorsoftheecosystem.Forinstance,videogamedevelopers,publishers,andplatforms(Abanazir,2018)relyonactivitiessuchasperiodiceventsinwhichprofessionalteamsandathletescompeteinordertocapturetheinterestoftheaudience.TheperformancesofeSportsathletesrepresentacoreactivity,followedbyrelatedactivitiessuchasstreamingandbroadcasting,sponsoringactivities,aswellasthedesignandcoordinationofleaguesandtournaments.WedisplaythemainactivitiesamongthefocalactorsandtheiroverallcontributiontothevaluepropositionoftheeSportsecosysteminFigure35.2.Whilesomeactivitiesaresimilartotra-ditionalsports,thedigitallyenabledactivitiesmakeeSportsmostvaluabletolookatfromtheperspectiveofecosystems.ArchitecturesThedigitalunderpinningsoftheeSportsecosystemarecomprisedofseveralarchitectures,thatis,“[t]echnologicalinteractionsbetweenoffersandinput-outputflowinteractionsbetweenactors”(Kapoor,2018,p.6).Apparentarchitecturesarevideogameplatforms(forexample,Steam)andstreamingplatforms(forexample,Twitch);whereaslessvisiblearchitecturesinvolvetheso-called“netcode”(aparentingtermforsoftwaretechnologiesthatenablenetwork-basedgaming)andareessentialforeffectivemultiplayergaming.Afurtherexamplearevideogamesthemselvesthatinturnrelyongameenginessometimesownedbycompet-ingdevelopers,whichcreatefurtherarchitecture-basedinterdependenciesintheecosystem.Notably,thedigitalarchitecturesoftheeSportsecosystemaresharedacrossvideogamegenres,forexamplewithregardtocollaborationsoftwaresuchasDiscord.FUTURERESEARCHAVENUESThefutureinquiryoftheeSportsecosystemcan,ontheonehand,drawfromtheoreticalandmethodologicaladvancementsinmanagementresearchonecosystems,andontheotherhand,providesavaluableavenueforecosystemsresearch,giventhattheeSportsindustryrepresentsanoveldigitalinnovationecosystem.EcosystemDynamicsandTrendsTherapidevolutionoftheeSportsecosystemwarrantslongitudinalassessmentstounderstandbetterhowitselementsandinterdependenciesco-evolveandadapttointernalandexternalchangesovertime.Thiscouldinvolve,forexample,entriesorexitsofkeyactors(Bass,2020),increasedparticipationbynon-endemicactors(Rogersetal.,2020),progressinginstitution-alization(forexample,theemergenceofassociations),technologicalinnovations(Ludwigetal.,2020),strategiesforovercomingconflicts(Jonesetal.,2021),orimplicationsoftheCOVID-19pandemic(KeandWagner,2020).Moreover,severalproblematicdevelopmentsoftheeSportsecosystemmeritfurtherinvestigation,forexample,healthissues(LeisandLautenbach,2020),cheatingandgambling(MaceyandHamari,2018),orthegenderimbal-anceofathletesandaudiences(Llorens,2017).KatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

603592HandbookondigitalbusinessecosystemsEcosystemDataandMethodsThedigitalnatureoftheeSportsecosystemallowsfortheuseofseveralmethodologicalapproaches.Liketraditionalsports,statisticaldatacanberetrievedforathletes,teams,tourna-ments,andleaguesfromeSportsplatformsanddatabases(forexample,HLTV.org).SpecifictoeSports,scholarscanfurtherleverageotherdigitalfacetsaswell;forinstance,bydesigningfieldexperimentsusingdigitalin-gametelemetryorobservationaldata(forexample,voicechat)forindividualandteam-levelanalyses.Archivaldatasourcescomeintoquestionattheecosystemlevel,suchasnewsreportsfromspecializedoutlets(forexample,theeSportsObserver)forbigdatastudies(forexample,networkanalysis,topicalmodeling).TogaugetheincreasingcomplexityofinterdependenciesintheeSportsecosystem,simplifyingvisuali-zationsisvitaltodevelopasharedunderstanding.WhileconceptualattemptstovisualizetheeSportsecosystemhavebeenputforthinindustryreports(Ballhaus,2020)orinthescientificeSportsliterature(Scholz,2020),furtherresearchshouldvalidatetheproposedrelationshipsusingfielddata.Tothisaim,thebusinessecosystemliteratureoffersecosystem-specificmeans,forexample,topresentnetworkdata(Basoleetal.,2015;Battistellaetal.,2013).EcosystemIntegrationTheecosystemperspectiveinmanagementresearchofferssophisticatedframeworksforfuturestudiesoftheeSportsecosystem.Forexample,PhillipsandRitala(2019)recentlyintroducedaframeworkfollowingacomplexadaptivesystemsapproach,comprisedofaconceptual,structural,andtemporaldimension,eachofwhichconnectscommonecosystem-relatedresearchquestionswithmethodologicaloptions(PhillipsandRitala,2019).Viceversa,theeSportsecosystemanditscorrespondingdataopportunitiesalsooffergroundstoadvancethe-oriesofecosystemsinmanagementresearch.Infact,therecentvirtual80thAnnualMeetingoftheAcademyofManagementfeaturedadedicatedprofessionaldevelopmentworkshoptitled“eSports:ANaturalLaboratoryforManagementResearch?”whichalsoindicatesthegrowinginterestofmanagementscholars.CONCLUSIONTherapidlyemergingeSportsindustryisattractingincreasingattentionacrossvariousschol-arlydisciplines.Itischaracterizedbyadiversesetofactors,rangingfromhighlytrainedteamsatprofessionaltournamentstocasualgamersbroadcastingfromtheirlivingrooms,traditionalsportsclubs,orwholeindustrieswithdedicatedeSportsdivisions.Theprevalenceofmultilat-eral,interdependentrelationships,butalsoalackofinstitutionalization,hasledtoanindustrythatcanbestbedescribedasanecosystem.Inparticular,wearguethatduetoitsdigitalnatureandalignmentmechanismsaroundthevalueproposition,theeSportsindustrycanbeviewedasadigitalinnovationecosystem.Inthischapter,weassesstheprincipalcharacteristicsoftheeSportsindustryandproposeatheory-drivenecosystemblueprint.Thisstructuredviewoffersamoreholisticandnuancedunderstandingtoresearchersandpractitionersregardingtheactors,activities,interdependencies,andcomplementaritiesthatconstitutetheeSportsecosys-tem.TheawarenessofthenovelstructureoftheeSportsindustryallowsforspecificengage-mentsandinterventions.Ultimately,thefuturescientificinquiryoftheeSportsecosystemandKatharinaHölzle,OliverKullik,RobertRose,andMatthiasTeichert-9781839107191DownloadedfromPubFactoryat05/28/202210:26:48AMviaColumbiaUniversityLibrary

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60736.Valueco-creationineSportsfromaserviceecosystemperspectiveReinhardE.KunzandAlexanderRothINTRODUCTIONElectronicsports(eSports)representanemergingsectorofthesportandentertainmentindus-trywithstill-evolvingconsumerdemand(Funketal.,2018).Althoughhighlyfragmented,withteamscompetingacrossmultiplegames,leagues,andtournaments(Green,2016),eSportsareaglobalphenomenon.TheglobaleSportsmarketgeneratedUS$950millionin2020andwassettoreachUS$1.39billionin2021.Theannualgrowthratewillincreaseintheperiod2018–2023,andisexpectedtocontinuetogrowatarateof18.33percent(PwC,2019;Newzoo,2020).Worldwide,approximately380millionpeopleattendedeSportseventsin2020,rootingforchampionsingamessuchasFortnite,Dota2,andLeagueofLegends(LoL)(LeVoir-Barry,2020).WitheSports,severalactors(forexample,eSportsorganizations,broadcasters,fans/par-ticipants,orotherstakeholders)areconnected,forinstance,throughsocialmediaandonlineplatformchannelssuchasTwitch,YouTube,Instagram,orFacebook,wheretheyinteractwithinabroadervaluenetworkofaspecificorunique(digital)ecosystem(Morgan-Thomasetal.,2020).Fromtheperspectiveoftheservice-dominantlogic(SDL),firms,consumers,andotherbeneficiariesareallpartofaserviceecosysteminwhichvalueisco-createdinapar-ticularenvironmentthatalsocontributestovaluegeneration,implyingbothvalue-in-useandvalue-in-context(VargoandLusch,2008,2011,2014,2016).Relativetovalueco-creation,themulti-levelperspectiveoftheSDLcancaptureandconceptualizetheentirecontextofacomplexnetwork(Gummesson,2007),suchastheeSportsecosystem.ThemanagementofeSportspresentsachallengingtaskintermsofgovernance,fosteringrelationships,cooperationwithotheractors,andremainingcompetitivewhentakingintoconsiderationtheactors,interactions,andpossibleoutcomesofecosystems(GummessonandMele,2010).Moreover,thequalityandpotentialeffects(forexample,amplificationortrade-offs)ofinteractionsinthevalueco-creationprocessremainunclearandcannotyetbeaccountedfor.Todate,therehasbeenlittleinformationonhowinteractionsareembeddedinthecomplexeSportsecosystemandhowvalueisco-createdbymultipleactorsthroughserviceexchange.Hence,theidentificationofdifferentroles,relationships,anddynamicaspectsareunknown.Moreprecisely,thetopologiesofinteractionsremainrelativelyobscureanduncertain(Furreretal.,2020).Therefore,weaimtoconceptualizeaneSportsserviceecosystemanddevelopaframeworktounderstandthedifferentroles,relationships,andmultipleinteractionsinvalueco-creation.Toachievetheresearchobjective,thestepswetakearethreefold.First,weconceptualizeaneSportsecosystembydrawingontwometa-theoreticalfoundationsofSDL:actor-to-actornetworksandvalueco-creationbymultipleactors(SDLAxioms2and5posedbyVargoandLusch,2016).Second,weidentifyclearandcriticalpathwaystointegrate596ReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

608Valueco-creationineSportsfromaserviceecosystemperspective597eSportsresearchwithSDLanddigitalecosystemresearchbysystematicallyreviewingtheliteraturetocontributeto,andadvance,eSportsandserviceresearch.Theservice-systemapproachhelpstodifferentiateamongactors’rolesineSportsand,hence,tobetterunder-standemergent,changingconstellationsandrelationshipsinvalueco-creation.Third,weconductacasestudybydescribingvalueco-creationofmultipleactorsduringoneeSportsevent.Derivingfromthelackofinsightsintovalueco-creationincontext-specificserviceecosystems,andourresearchobjectivetodevelopaconceptualframeworkthatincorporatestheactorsandtheirvalueco-creationactivitiesintheeSportsdomain,weraisethefollowingresearchquestion:HowdomultipleactorsineSportsserviceecosystemsinteractwitheachothertoco-createvalue?Thischapter’skeycontributionliesinaconceptualizationthroughtheSDLlensthatbringstogetherprofoundtheoreticalthemesandconceptsinserviceresearchandexplicatesthenatureandstructureofabroadenedviewofinteractionsinserviceecosystems.ThisnovelframeworkhasthepotentialtoexplicateabstractconceptualizationswithinSDLandvalueco-creationprocesses,basedonempiricalevidenceinthespecificcontextofeSportsecosystems.ESPORTSANDECOSYSTEMSElectronicsportsareorganizedvideogamecompetitionscommonlyreferredtoascybersport,virtualsport,orcompetitivegaming(Jennyetal.,2017).Funketal.(2018)describedthedifferenteSportsgenres,suchasfightinggames(forexample,StreetFighterIV),first-personshooters(FPS)(forexample,CounterStrike:GlobalOffensiveorCS:GO),real-timestrategygames(forexample,StarCraftII),multiplayeronlinebattlearenas(forexample,LoL),andsport-basedvideogames(forexample,FIFA19).BecausethedefinitionofeSportsvariesamongresearchers,itisessentialtoclarifytheterm.Taylor(2016)providesadetaileddefi-nitionthatconsidersdifferentaspectsbetweengivenframeworks(BorowyandJin,2013;Harper,2013;Taylor,2012;Taylor,2016):“E-sportsinvolvestheenactmentofvideogamesasspectator-drivensport,carriedoutthroughpromotionalactivities;broadcastinginfrastruc-tures;thesocioeconomicorganizationofteams,tournaments,andleagues;andtheembodiedperformancesofplayersthemselves”(Taylor,2016,p.116).TheinvestigationofeSportsisrelevantforbothresearchandpractice.Electronicsportsrepresentanemergingresearchareathatcouldredefinehowsportisintegratedintothedigitalenvironment(Funketal.,2018).Also,companiesmaybelookingforwaystoreachnewtargetgroupsinadigitalenvironmentwhilebeginninganinternaldigitaltransformation,forinstance,throughpartnershipswitheSportsorganizations.StudiesinthisfieldhaveanalyzedthelaunchofaneSportssectionfortraditionalsportsclubs(Bertschyetal.,2019).TheyconcludedthatmanagementneedstoorganizeeventsthatlinkthetraditionalsporttotheneweSportssectiontoenablebothfancommunitiestoexperiencethebrand’scoremeaning.OtherstudiesinvestigatingeSportsandmediamanagementlookedfordifferencesbetweenconsumerswithandwithoutaneSportsbackground(JiandHanna,2020).Foreffectivecommunicationandsuccessfulmarketingstrategies,marketersneedtoconsideraudiencecharacteristics.Theauthorsshowedthatconsumerswithanextensivegamingbackgroundaremorewillingtodisclosepersonaldataforin-gamecontentandmediaexperiences.McCauleyetal.(2020)investigatedactorrelationships,theirinvolvement,androlesinregionalofflineeSportsmarketssuchasJönköping(Sweden).Toorganizesuchevents,thenetworksshouldReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

609598Handbookondigitalbusinessecosystemsbestructuredaccordingtoactors’resourcestocreatebettercoordinationamongpresentactors.Moreover,Cunninghametal.(2018)arguethateSportsscholarshipcouldadvancethroughthestudyofitsgovernance,marketing,management,andtheorizingaboutit.Scholz(2020)mentionedthat,particularlyfortheeSportsindustry,theinterdependenceamongdifferentstakeholdersisaprerequisiteforsuccessandvaluecreation.Generally,eSportsstakeholders’multipleconnectionsthroughdistinctchannelssuchasface-to-face,socialmedia,andonlineplatformsleadtothenotionofabroadervaluenetwork(Scholz,2020).Thisideaofvaluecreationwithinanetworkofdifferentstakeholders,partners,andsoon,isinlinewiththeecosystemperspective.AccordingtoAdner(2017),ingeneral,ecosystemsarestructuresthatofferabroadexpli-cationfornetworksdescribingmultilateralrelationshipsinsteadofmerelyanagglomerationofbilateralrelationships.Thisoverviewshouldcreateopportunitiestoinvestigateecosystemscombinedwithotherconstructs(forexample,platformsortechnologysystems)instrategyliterature.Jacobidesetal.(2018)gaveanoverviewofecosystemsinthecontextofbusi-nesses,innovations,andplatformstowardanecosystemtheorysupportingthisstructuralviewofecosystemscomprisingmulti-levelrelationships.EcosystemscanalsobedescribedasInternet-enabledordigitalenvironmentsinwhichmultipleactors—fromorwithinaparticularcontextsuchasthecomputerandentertainmentindustries—areconnectedthroughtheInternet(Kelleheretal.,2019;Poleseetal.,2017).FewstudieshavealreadylinkedtheecosystemconceptwitheSports.Reitmanetal.(2020,p.35)statedthat:“Esportshasevolvedintoacomplexecosystemofconsumers,players,organizations,andotherstakeholders.”InChapter35ofthisHandbook,Hölzle,Kullik,Rose,andTeichertintroducetheeSportsecosystemfromastructuralperspective.TheydescribeeSportsasadigitalinnovationecosystemexplainingthefeaturesofadigitallydriveneco-system.OurstudyistheoreticallyandconceptuallygroundedinSDLandhighlightsvalueco-creationamongeSportsactorsfromaserviceecosystemperspective.THEORETICALFOUNDATION:SERVICE-DOMINANTLOGICANDVALUECO-CREATIONINSERVICEECOSYSTEMSAccordingtoVargoandLusch(2004),alleconomiesareconsideredtobeserviceeconomies.Service-dominantlogicprovidesatelescopiclensthroughwhichtoinvestigatespecificcon-textsinwhichvalueisco-created(VargoandLusch,2008,2011,2014,2016).IncurrentdigitaleconomiessuchastheeSportseconomy,valueco-creationhasbecomeamatterofvariousinteractions,thusdevelopingspecificrolesanddynamicrelationshipsamongmultipleactors.Companieshavebeguntointegratecustomers,partners,andotherstakeholdersinamutualvalue-co-creationprocessinnetworks.Consequently,LuschandVargo(2011,p.185)statedthat:“networksarenotjustnetworks…theyaredynamicsystems.”Large-scalesocialstructures,sharedvaluesandbeliefsofactorsevolvefromserviceeffortsbetweendyads,triads,andcomplexnetworks(ChandlerandVargo,2011).IntermsofSDL,VargoandLusch(2016)focusonthecontextinwhichanecosystemcanemerge.VargoandLusch(2016,p.11–12)definedserviceecosystemsas“relativelyself-contained,self-adjustingsystemsofresource-integratingactorsconnectedbysharedinstitutionallogicsandmutualvaluecreationthroughserviceexchange.”ReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

610Valueco-creationineSportsfromaserviceecosystemperspective599Usingthisdefinition,wecananalyzeserviceecosystemsatmicro(forexample,dyadicexchangeofafirm),meso(forexample,includingtheindustryandthemarket),ormacrolevels(forexample,overallsocietylocally,nationally,andglobally).VargoandLusch(2016)derivedfiveaxiomsfrompreviouslyestablishedandadaptedfoundationalpremises.Inthecontextofourinvestigations,SDL’sAxioms2and5playanessentialroleastheybuildafoundationuponwhichtodevelopaconceptualframeworkforeSportsserviceecosystems.Axiom2statesthatvalueisco-createdbymultipleactorsprovidingandacceptingresourcesthroughinteraction.Axiom5describeshowinstitutions,actor-createdrules,orappliednormsplayanimportantrolebecausetheyprovidethenecessaryplatformtoco-createvalue(VargoandLusch,2017).Service-dominantlogicsupportstheholisticviewofactorsinagenericsenseofco-creatingvaluethroughresourceintegrationandserviceprovision(Edvardssonetal.,2011;VargoandLusch,2011).However,atthesametime,somecriticsquestiontheabilityofSDLtoprovideaclearterminologyoftheconceptstheyintroduce(Brown,2007;O’ShaughnessyandO’Shaughnessy,2009;FisherandSmith,2011).Theratherabstractcon-ceptualizationsofSDLindeedposeachallengetobeoperationalizedforabetterunderstand-ingofvalueco-creation.Furthermore,EcheverriandSkålén(2011)suggestedthatinteractionsdonotsupporttheco-creationofvalueonly:theyintroducetheconceptofvalueco-destructionwherebyaninteractioncanalsohaveadverseeffects.ArchpruAkakaandChandler(2011,p.250)alsostatethat“itisunclearhowactorsotherthanfirmsparticipateinvalueco-creationprocesses.”LuschandVargo(2006,2014)reactedtosuchcritiquesbyreconceptualizingandadaptingthetermstocountermisinterpretationandimproveclarity.ExistingSDL-basedliteraturethatfocusedonvalueco-creationisstillpredominantlytheoretical(VargoandLusch,2016).Nevertheless,initialempiricalstudiesusingqualitativeapproachescanalsobeidentifiedinmarketing(forexample,branding,customerengagement,marketingstrategy,orcommunication)(VargoandLusch,2017).FyrbergandJüriado(2009)demonstratedtheimportanceofinteractionquality,whilesomeactorsarelikelytobemoreinfluentialthanothers.Therefore,theyraisedtheissueoftrustandrelationshipbetweenactors.Gustafssonetal.(2012),inturn,investigatedhowcustomersco-createvaluewithcompaniesintermsofserviceinnovation.Theyshowedthatco-creationismainlyaboutcommunicationwithcustomerstounderstandtheirfutureneeds.Becausevalue(co-)creationisalwayscontext-specific,previousresearchhas,forinstance,highlightedthesportscontextthatisalsosimilartoeSports.Intheirstudy,Kolyperasetal.(2018)investigatedthedistinctivecharacteristicsofsportsfansandtheirrolesinvalueco-creation(assimilators,adaptors,andauthenticators)byusingcaseexemplarstoapplySDLinthesportcontext.Suchpreviousempiricalworkfocusedmainlyonthedyadicrelationshipsbetweencustomersandserviceproviders(EcheverriandSkålén,2011;Ballantyneetal.,2011;Taxetal.,2013).Thefindingssuggestlookingbeyonddyadicrelationshipstoafull-valuenetworkperspective.RecentworkbyCockayne(2019)offersanSDLapproachforthesportmarketthatcanleadtohighermarketvaluepotential,fulfilleconomicinterests,andpositivelyimpactsocietywhenorganizationsunderstandserviceecosystems’dynamics.AdoptingtheSDL,Hedlund(2014)andPinhoetal.(2014)showedthatvalueisco-createdbymultipleactorsinsportseventsbydepictingtherelationshipamongmultipleactors(thatis,teams,fans,andotherstakeholders).Actorsinthesportcontextwerealsoembeddedinserviceecosystems(Woratscheketal.,2014;Gerkeetal.,2020).Woratscheketal.(2014)createdthe“sportvalueframework,”showingsimilardynamicstructuresdescribedbySDLforactorsinsports.InReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

611600HandbookondigitalbusinessecosystemslinewithSDL,theauthorsdescribedtherelationshipsandinteractionsamongactorsnestedinsportecosystems.Inadditiontosports,othercontextsrelatedtotourism,media,andleisureactivitieshavebeeninvestigatedintermsofvalueco-creationinnetworksgroundedinSDL.Intheirquali-tativestudy,Cabidduetal.(2013)examinedtheinfluenceofinformationtechnology(IT)onvalueco-creationintourism.OtherstudiesinvestigatedmarketingcommunicationthroughthelensofSDLforpersonalmedia(Bacileetal.,2014)anduser-generatedcontent(Halliday,2016).FigueiredoandScaraboto(2016)attemptedtoexplainthesystemiccreationofvalueincollaborativenetworksbyanalyzingtheco-creationprocessofvalueinacasestudywithinthegeocaching(amoderntreasure-huntingapp)consumernetwork.Thesearefirstapproachestoinvestigatevalueco-creationfromtheSDLlensinmany-to-manycontextsbyanalyzingserviceecosystemsindifferentsectors.Overall,empiricalpapersarestillnascent.CONCEPTUALFRAMEWORK:ESPORTSSERVICEECOSYSTEMSBasedonthetheoreticalbackground,wedevelopaconceptualframeworkthatwilleven-tuallybeusedtoanalyzeourcasestudy.Weintegratethetwointroducedmeta-theoreticalfoundationsofSDL,actor-to-actornetworks(Axiom5)andvalueco-creationbymultipleactors(Axiom2),toconceptualizetheeSportsserviceecosystem.Thisapproachcanleadtounderstandingtheinteractionsandtheprocessofvalueco-creationbymultipleactors.FromanSDLperspective,thefundamentalconceptsofrelevanceforsettinguptheframeworkareservice,resourceintegration,exchange,valuecreation,co-creation,institutions,andserviceecosystems.ServiceSDLusesthetermserviceinsteadofservicestoemphasizethatgoodsandservicearenotalternativeformsofproducts(thatis,servicesareseenasunitsofoutput,likemanufacturedgoods,products).Thecoreofprovidingserviceistheapplicationofresourcesbyactorsfortheprofitofotheractors(orthemselves),providedeitherdirectlyorindirectly(VargoandLusch,2008).Consequently,economicactivityshouldbeconsideredasaservice-for-serviceexchangeratherthanagoods-for-goodsexchange.ResourcesWeadoptedthedefinitionofservicefromSDL,seenastheapplicationofresources.Consequently,thisdesignationneedstheutilityofoperantresources(intangibleandshapedoutofknowledgeandcapacities)oroperandresources(tangibleassetsthatarefactorsofpro-duction).Ontheonehand,itispossibletoactonoperandresourcesaloneorwhencombinedwithotherresourcestobenefit,forinstance,naturalresourcesorothertangibleresources.Ontheotherhand,ConstantinandLusch(1994)conceptualizedoperantresourcesmoreascompetenciesorcapabilities.ThisisinlinewithSDL’sconceptualizationofoperantresourcesasspecializedcompeten-cies(thatis,knowledgeandskills).Scholarsdonotnamedifferenttypesofoperantresources,butspecificintegrations,suchasmarketknowledgeordesigncompetencies(Meleetal.,2010;ReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

612Valueco-creationineSportsfromaserviceecosystemperspective601VargoandLusch,2008).Todeveloptheframeworkforadetailedanalysisofco-creationinteractions,wedistinguishbetweendifferentcategoriesofoperantresources:(1)informa-tionalresources(plans,sheets,statistics,reports,knowledgeaboutmarkets,technology,andcompetitors);(2)human/personalresources(skills,ideas,expertise,overallorspecificknowl-edge);(3)relationalresources(network,relationships,connectionswithcompetitors,supplier,customer);(4)organizationalresources(routines,cultures,competencies);and(5)IT-related/technologicalresources(technologicalinfrastructure,innovations,up-to-datetechnology)(HuntandDerozier,2004;NevoandWade,2010).ExchangeMarketingoccurswheneverparties(individuals,organizations,andothers)exchangeinmarkets.AccordingtotheSDL,theexchangehappenswhentwoactorsinteractformutualbenefitbyprovidingcommonneeds.Forexample,oneactorisspecializedindataanalysisofathletes’performance,andtheotherinthenetworkingofathletesandteammanagers.Whileinteracting,oneactorappliestheirdataanalysisskills,andtheothertheirnetworkingskills.Theoutcomeofsuchaserviceexchangecanbethepromotionofanathletetoapotentiallybetterteam.LuschandNambisan(2015,p.159)statedthat:“thishasprofoundimplicationsforindustryandmarketdefinitions,whichhavelargelycenteredontheoutputsoffirms.”ValueCreationandCo-CreationValueisfundamentallyderivedthroughserviceexchangebetweenmultipleactorsanddeterminedinuse(thatis,theintegrationandapplicationofresourcesinaspecificcontext)ratherthaninexchange(thatis,embeddedinfirmoutputandcapturedbyprice).AsSDLimplies,actorsbecomeinteractingentitiesfortheoverallbenefit,forexample,ofdevelopingnewbusinessopportunities.ValueintheSDLperspectiveisseenasaco-createdoutcome,suchasviability,well-being,coviability,andcontextual,asvalueisthereasonforsocialandeconomicinteraction(VargoandLusch,2016;Wildenetal.,2017).BendapudiandLeone(2003)suggestthatengagement,interaction,self-service,andexperiencearerecognizedastheessentialelementsofthejointcreationofvalue.InlinewithVargoandLusch(2008),wecon-siderco-creationasamoregeneralconceptthatencompassesallthespecifictheoreticalandempiricaloccurrencesinwhichcompaniesandcustomersgeneratevaluethroughinteraction.InstitutionsExistingresearchrecognizesthecriticalroleofinstitutionaltheoryinorganizationalsciences(e.g.,DiMaggioandPowell,1983;LawrenceandSuddaby,2006),economics(e.g.,Williamson,2000),sociology(Scott,2001),andmarketing(Alderson,1965;Arndt,1981;DuddyandRevzan,1953;Hunt,1983).InlinewithVargoandLusch(2016,p.11),weinter-pretthedefinitionofsocialinstitutionsfromScott(2001)as“humanlydevisedrules,norms,andbeliefsthatenableandconstrainactionandmakesociallifepredictableandmeaningful.”Socialinstitutionscoordinateandfacilitateresourceintegrationandserviceexchange,hencevalueco-creation.KeyelementswithininstitutionsidentifiedbyVargoandLusch(2016,p.11)are“formalcodifiedlaws,informalsocialnorms,conventions,suchasconceptualandsymbolicmeanings,ReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

613602Handbookondigitalbusinessecosystemsoranyotherroutinizedrubricthatprovidesashortcuttocognition,communication,andjudg-ment.”Inthiscontext,clarificationisessential,becauseinstitutionsshouldnotbeconfusedwiththesynonymouslyusedterm“organization.”Ingeneral,institutionsexistasarrange-mentsdepictedbyasetofinterrelatedinstitutions(LawrenceandSuddaby,2006).Themoreactors,themorecomplexinstitutionalarrangementsare,becauseofmiscellaneousnormsandrules,whichcanleadtoenhancementorconstraintofvalueco-creation(Luschetal.,2007).Consequently,VargoandLusch(2016,p.11)statedthatcoordinationisenhancedwhen“moreactorsshareaninstitution.”ServiceEcosystemsSource:AdaptedfromWoratscheketal.(2014).Figure36.1ConceptualframeworkoftheserviceecosystemVargoandLusch(2016)proposedthatalleconomicandsocialactorsareresourceintegrators,whichimpliesthatresourcesareintegratedinto“networksofnetworks”toco-createvalue.Normann(2001)emphasizedtheabilitytocombineresourcesamongactorsinnetworks.StorbackaandNenonen(2011)discussedtherelationshipbetweenthedegreeofresourceintegrationandtheeffectivenessofmarketconfigurations.Subsequently,Meleetal.(2018)describedactorsasinfluencingserviceecosystemsnotsolelyforco-creation,butalsofortheself-interestedbenefitsofshapingserviceecosystems.Furthermore,BendapudiandLeone(2003)suggestthatengagement,interaction,self-service,andexperienceareessentialelementsofthejointcreationofvalue.ConsideringthedynamicandemergentnatureoftheReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

614Valueco-creationineSportsfromaserviceecosystemperspective603eSportssector,theterm“serviceecosystem”introducedbyVargoandLusch(2016)describessystembehaviorbetteracrossthemicro,meso,andmacrolevelsthanthevaluenetwork.Morediversityincommunicationchannelscanenhanceopportunitiesforknowledgeintegrationandserviceexchange.Dynamicsanddifferentactorswithinserviceecosystemscandirectlyaffectserviceinnovationandlearningfromotheractors(LuschandNambisan,2015;Nenonenetal.,2018).Figure36.1showstheconceptualframeworkofmultipleactorswithinacomplexserviceecosystemandillustratestheintroducedconcepts.Usingthisframework,wecananalyzetheeSportsserviceecosystemtoshowtherelationshipsamongactorsandthedynamicsofvalueco-creationactivities.CASESTUDY:ESLONECOLOGNE2019Toidentifyhowactorsinteracttoco-createvalue,weappliedaqualitativeapproachandconductedacasestudy(Yin,2009).Thus,usingsecondarydata,wehighlighttheESLONECologneeventthattookplacein2019.Secondarydatacomprisesdocumentationandarchivalrecords.Secondarydataanalysishasbeenappliedinearliercasestudies,whereithasproventobeuseful(e.g.,Wickeretal.,2013;Johnston,2017;Gerkeetal.,2020).Becausethecollectedsecondarydatawerenotintendedtoserveourresearchobjectivespecifically,wecheckedaccuracywithcaution.Datatriangulationwasusedtopreventsecondarydatabias(Yin,2009).ThecasestudyfocusesontheeSportseventESLONECologne2019astheservice.ThisisatournamentforthegameCS:GO.Thegameisafree-to-playmultiplayerFPSandasequeloftheFPSfranchiseCounterStrikedevelopedbyValveSoftware.Competingteams/playerswinthegamebysecuringalocationtoplantabombordefuseaplantedbomb.ThereareseveralcompetitivemapswheretwoteamsoffiveplayersaredividedintoTerroristsandCounter-Terroristsandplayagainsteachotherinabest-of-30match(ValveCorporation,2020).Thefirstteamto16roundswinsthemap.TheESLONECologneeventtookplacefromJuly2throughJuly7,2019,forthesixthtime,andwasorganizedbytheCologne-basedcompanyESL.TheeventwasheldinCologne(Germany)attheLANXESSarena,calledthe“CathedralofCounterStrike”inthecommunitybecauseofitsatmosphere(Ashton,2019).ESLispartoftheModernTimeGroup,aleadinginternationaldigitalentertainmentgroup(ESLGAMING,2019).ESListheleadingorganizerforonlineandofflineeSportscompetitions.InthecaseofthiseventorganizedbyESL,multipleactorsareconnecteddirectlyorindirectlybyprovidingandapplyingtheirresourcesfortheprofitoftheotheractorsandthemselves.ConcerningtheeSportsecosystemofESLONECologne,thefollowingactorswerepresent:teams(forexample,TeamLiquidandAstralis),serviceprovidersinthestadium(forexample,logisticscompanyDHL),fans,broadcasters(forexample,Henry“HenryG”Greer,Anders“Anders”Blume);andmanyotherstakeholders,forexample,endemicandnon-endemicsponsorssuchasITcompanyIntel(presentingpartner),telcocompanyVodafone(premiumpartner),ITcompanyMSI(officialpartner),onlinegamblingcompanyBetway,computerhardwarecompaniesAlienwareandLogitech,onlinepaymentcompanyPaysafecard,gamingchaircompanyNeedforSeat(officialsupplier),brewerycompanyWarsteiner,eSportsclothingcompanyh4x,streetwearandsneakercompanySnipes,ITcompanyASUSRepublicofGamers,snackmanufacturerPringles,andbeveragecompanyReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

615604HandbookondigitalbusinessecosystemsMountainDew.(SeeLiquipedia,2019).ThedifferentactorsfortheESLONECologne2019eventaredisplayedinFigure36.2.Onlyselectedsampleactorsarenamed,tosimplifytheillustrationofthecase(forexample,thetechnologycompanyIntelfortheactorsponsors).Figure36.2IllustrationoftheeSportsserviceecosystemESLONECologne2019Drawingontheconceptualframework,ESLONECologneoffersexamplesofseveraloperantandoperandresources.ESLONECologneoffersinformational,human,andorganizationaloperantresources.Operandresourcesarefinancialresources(forexample,commission,con-tracts,ormoney)andphysicalresources(forexample,theLANXESSarenaaseventlocation,orequipment).TheorganizerESLcreatednewrulesofthinking(thatis,institutions)abouteventscombiningonlineandofflinetoinvolveandengagemoreactorstoco-createvalue.ForESL,joiningforceswithDHLasasponsorispromisingbecause,accordingtoRalfReichert,chiefexecutiveofficeratESL(ESLGAMING,2020,para.4),“Theybringthelogisticsexper-tiseweneedandshareourpassionforesports.”ArjanSissing,headofbrandmarketingatDHLGroupGermany,arguesthat:“withthepartnership,weareverysuccessfullyaddressingayoungtargetgroupthatcanhardlybereachedthroughtraditionalmarketingchannels.”Furthermore,headds,“theyareattractivetousnotonlyascustomers,butalsoaspotentialemployees”(ESLGAMING,2020,para.2).Consequently,thesuccessoftheseco-creatingactivitiescanleadtofurtherinteraction(exchange)andcontinuouslysharedinstitutionsthatenableresourceintegration.Regardingserviceexchange,thefirstexampleofanactorandtheirmultipleinteractionisOliverJames“OJBorg”BorgD’Anastasi,hostoftheevent.Heengagedandentertainedtheattendeesonlineandon-site,andinteractedwiththeplayersandotherexpertsduringtheevent.The15000attendeeschantedfortheirfavoriteteam,reactedtothehost’smessages,andshoweduniquebannersforsupport,creatingadynamicatmospherewithinthearena.Simultaneoustotheon-siteentertainmentprogram,Amazon’sstreamingplatformTwitchReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

616Valueco-creationineSportsfromaserviceecosystemperspective605broadcastedtheeventtoanaudiencewithanaverageof242260viewersandapeakof506371viewers.TheactorTwitchenabledinteractionsamongfanswhoviewedtheeventonlinewithotheractorssuchasbroadcasters,hosts,andtheprofessionalplayers.Overall,onlineattendeesviewed12920509hours,andtheentireeventwasstreamedinover15differentlanguages.AnotherexampleisthesponsorDHLinteractingwithotheractorsthroughtheirmarketingcampaign“dhldrop.”Fanscouldcustomizea“dhldrop”signwiththeirowntextandwina“dhldrop”(DHLpackagecontainingdifferentmerchandise).OnlinefansalsotookpartintheDHLcampaignoverthebroadcast(DHLInMotion,2019).Anotheractor,namelytheCS:GOlegendJaroslaw“Pasha”Jarzabkowski,accompaniedtheentirecampaignbydeliveringthepackagestothewinnersintheLANXESSarena.Hence,fanswhowonadropwerealsorewardedbymeetingoneoftheiridols.Otherinteractionstookplacesimultaneously;forinstance,sponsorssuchasRockstarEnergyprovidedfreedrinksandPaysafecardhelpedtodistributeESLmerchandisewithaT-shirtcannon.Theorganizersetupsigningsessionsforfanstomeetwithplayers,takephotos,andchat.Allinall,fansco-createdvaluebycontributingtotheevent’sreputation,forinstance,bychantingfortheirteam,creatinguniquebanners,orpostingtheirexperienceonsocialmedia.Byzoomingoutfromthemicrolevel,whereonlydyadicinteractionstakeplace,wecanidentifyinteractionsthatdonottakeplaceinisolation,butwithinserviceecosystems.ForESLONECologne,actorsarebroadlyinvolvedforcampaigns,storytelling,presentationonaglobalscale,andsimultaneouslycreatingon-siteactivitiestogenerateuniqueexperiencesthataredirectlysharedviasocialmedia.Forexample,multipleactorscontributedtotheevent’satmosphere.Otheractors’participation(forexample,“dhldrop”duringtheevent),interaction(forexample,DHLwiththeattendees),andcommunication(forexample,“OJBorg”onstageandviaTwitch)areessentialforvalueco-creationinecosystems(ChandlerandVargo,2011).Here,valueisaco-creationofmultipleactorswhointegratedtheirresourcesintheparticularcontextofESLONECologneintheeSportsserviceecosystem.DISCUSSIONManaginganeSportsserviceecosystemrequiresmanagementexpertiserelatedtoevents,sponsorship,marketing,technology,humanresources,socialmedia,andgovernance.BasedonourframeworkanditsapplicationintheeSportsdomainregardingESLONECologne2019,weshowedmultipleactors’interactionswitheachotherandvalueco-creation.ValueCo-CreationProcessesAccordingtoSDLandourdevelopedframework,serviceisprovidedthroughresourceinte-gration,whichistheroleofeveryactorintheeSportsecosystem.Generally,institutionsareessentialtorealizetheengagementofmultiple(incumbent,new,andnon-endemic)actors(Luschetal.,2007;VargoandLusch,2016).AsdisplayedinESLONECologne2019,mul-tipleactorsintegratetheirresourcesduringtheinteraction,andwecanshowtheinvolvementofnewnon-endemicactors,forinstance,sponsorssuchasDHL,Vodafone,andWarsteiner.DHLintegratedorganizational,relational,andinformationalresourcestobuildandmaintainReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

617606Handbookondigitalbusinessecosystemsrelationshipswithotheractorsandprovideauniqueexperienceattheevent,creatingmoreawarenessofandsynergywiththeirbrands.DHLandtheorganizerESLsharedthesameinstitutions,reachingabroadaudienceandengagingfansduringtheeventthroughcollabora-tiveactions(DHLInMotion,2019).ConsideringVargoandLusch(2016),sharedinstitutionsarecrucialforcoordinationandvalueco-creationactivities.Weshowedthatactorsinteractbecauseofsharedinstitutionsand,consequently,integratedtheirresourcesduringtheevent.Thiscreatedadynamicecosysteminabroadercontext,enhancingtheinvolvementofseveralentitiesinsideoneactor’scompany.Profitscanberealizedbeyondtheparticularevent.Sharedinstitutionsconstituterelationshipsinthelongterm,coordinatingandenforcingvalueco-creation(forexample,theongoingrelationshipbetweenDHLandESL).Table36.1showsthemultipleactors’co-creationofvaluethroughtheintegrationoftheirresources.Theseinteractionscoincideduringtheevent,whereallactorscontributetoco-createdvaluefortheirownandoverallbenefit.Theorganizerconnectskeyactorsacrossseveralindustriestocreateauniqueexperiencenotonlyforfansbutalsoforotheractors,suchasthevarioustechnologicalresourcesfromthegameproviderValveandstreamingplatformTwitch.Inturn,thebroadcasterisintegratedtoentertainandinformattendeeson-siteandonline,creatinganengagingnarrativefortheevent.Also,actorsfromotherdomainscancreatevaluebyinteractingduringtheevent,forexample,thesideeventsdescribedinthecaseforRockstaror“dhldrop.”Inlinewiththesedescriptions,Koenigstorferetal.(2010)showedthatsportingcompetitionaloneatasportseventisnotthemostimportantpartforthefans:sideeventsandinteractivestagehostingarebecomingmorecriticaltotheoverallcontributionofco-createdvalue.Linkingdifferentactorstogetherisvital:ourcaseshowedthatinteractionleadstovalueco-creation,andmanagementbecomesmoreimportantatthispointasrivalactorsbegintocompeteforapartoftheecosystem.Forexample,thestreamingplatformsTwitchandYouTubecompeteforexclusivebroadcastingrightsforeSportseventsandcompetitions(forexample,seetheexclusivecontractbetweenYouTube,asubsidiaryofGoogle,andActivisionBlizzard)(Smith,2020).Consequently,actorscanbenefitfromattendeesengagingincommu-nities(vanDoornetal.,2010)orrecommendingtheeventtootherconsumers(Horbel,2013).ImplicationsFromourinsights,severalmanagerialandtheoreticalimplicationsofvalueco-creationinter-actionsintheeSportsserviceecosystemcanbederived.Brandsandmanagersneedtodevelopanunderstandingofthesharedinstitutionsoftheconstellationofresource-integratingactors.Adaptingtheecosystemperspectivehelpsmanagerstoimplementaholisticviewoftheactorsinsteadofindividualrelationships.Hence,adaptingbusinessstrategiesindomain-specificdigitalbusinessecosystemsleadstomoreefficientdecision-makingandanadvantageinahighlycompetitiveenvironmentbyfosteringvalueco-creation.Forcompanies,employingnewtechnologiesiscrucialformanagingandpotentiallyshapingecosystems(Venkatesan,2017;Verleyeetal.,2014).Scholarsarguethatnewdigitaltechnologiescreateawiderangeofopportunitiestoengagewithotheractors(AkakaandVargo,2015;Hollebeeketal.,2019;Venkatesan,2017).DigitalizationandinnovativenesscanbereasonsfortheseactorstostartanengagementineSports.Actorsbecomeactiveinabusinessthatappealstoagrowingcohortofyoungergenerations.Thebroadviewership—consideringtheirrespectivetargetgroupsandrevenuegrowth—encouragesactorstotakeupReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

618Valueco-creationineSportsfromaserviceecosystemperspective607Co-CreatedValue–Generatinganoveralldynamicatmosphereduringtheevent–Attractingmoreactorstotakepartintheevent–PresentingactorsonaglobalscaleNewknowledgetouseforfurtherdevelopmentofthegame–Increasingnumberofdiversecommunitychannelstowatchtheevent–Presentingactorsonaglobalscale–Enablepeopleathometoparticipateindirectlyonline–Entertainingandanalyticalcontentforfurtherusageforseveralactors–Deliveringuniquemomentstoenjoywhileparticipating–Contributingtotheevent’sreputation–Creatingauniqueatmosphereandinstitutionalarrangements–DisplaytheircampaignonaglobalscaletocreateuniqueexperienceswiththeirbrandinthiscontextOutputofExchange–Informationaboutthescheduleofthetournamentandsideeventstothepublic–Relationshipwithkeyactorsacrossseveralindustriestoconnectthem–Expertiseofhostingtheevent–IntegratingallactorsintheprocessesoftheeventProvidingthesoftwaretocompete–Providingstreamingtechnology–Opportunityforotheractorstowatchtheeventonlinealmostallovertheworldindifferentlanguages–Motivatingattendeesonlinetotakepartbyusingthechatfunction,subscription,anddonation–Entertainmentandinformationaboutinsightsoftheplayersusingmoderationskills,insiderknowledge,andspecialsurprises(e.g.,giveaways)–Explainingkeypropertiesofeachteamandgettingtheattendeesexcitedduringtheevent–Buildingandmaintainingrelationshipswithdifferentactors–ProvidingauniqueexperiencecreatingsynergyeffectstoenhancetheatmosphereandattractattendeestotheirproductsResourceIntegrationInformational,relational,human,andorganizationalresourcesInformationalandtechnologicalresourcesInformational,technological,andorganizationalresourcesHumanandinformationalresourcesRelational,organizational,andinformationalresourcesExchangewithAllotheractorsOrganizer,team,playerAttendees(athomeandon–site)Organizer,attendees,player,teams,streamingplatformESLONECologne2019:valueco-creationactivitiesExampleESLValveTwitchandYouTubeHenryGIntelandDHLTable36.1ActorOrganizerGamePublisherStreamingPlatformBroadcasterSponsorReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

619608HandbookondigitalbusinessecosystemsCo-CreatedValue–Contributingtotheevent’sreputation–Buildingandmaintainingconsumer/fancommunities,e.g.,fanbasewithuniqueengagementbeyondtheevent–Creatingspecificsharedvalueswithotheractorstowardproducts,servicesoftheeventengagement–Creatinghypearoundapersonaengagingdifferentactors–“Starplayers”whoattendeescheerfor–Creatingnewrivalriesandtacticsforanalyticsandnewstreamingcontent/marketingduringtheeventOutputofExchange–Employingowncreativity,i.e.,chantingormakinguniquebannerstosupporttheirteams–Engagementinfancommunities–Playersareabletocompeteatthehighestlevelandshowtheirbestperformance–RaisethelevelofawarenessforbrandstocollaborateandcreatetheirownbrandOpportunitytoshowexpertiseinthegameatthehighest-levelduringcompetition,andultimatelycreatethechampionshipsResourceIntegrationHumanresourcesHumanandrelationalresourcesHumanandrelationalresourcesExchangewithSponsor,attendees,broadcasterOrganizer,streamingplatformExampleFans,Media,FriendsPashaTeamLiquidandAstralisActorAttendeesPlayerTeamReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

620Valueco-creationineSportsfromaserviceecosystemperspective609opportunitiesinthisindustry.Overall,actorsineSportsecosystemsactonadigitalscale,asIT-enabledenvironments(Kelleheretal.,2019;Poleseetal.,2017)ensuretechnologicalusageduringtheseeventsandconnectactorsglobally.LuschbegantobridgethegapbetweentheoreticalSDLandmanagerialpractice(Luschetal.,2007;Luschetal.,2010),andwestrivetocontinuethateffort(Bettencourtetal.,2014;LuschandNambisan,2015;McColl-Kennedyetal.,2012)throughourcontribution.Thischapterfocusedonthecontext-relatedeSportsecosystembyintegratingSDL,digital,andserviceecosystemperspectives.WezoomedoutofthedyadicrelationshipinvestigatingtheeSportsserviceecosystemonamacrolevelbyconsideringmultipleactors.Notably,theinsti-tutionalperspectivealsobringsSDLclosertofulfilltheneedforamid-rangetheory,ashasbeenurgedbyBrodieetal.(2011).CONCLUSIONThischaptersupportstheviewoftheeSportsindustryasaserviceecosystemandtheco-creationofvaluebymultipleactorsfromtheSDLperspective.Theinsightsarebasedonaliteraturereview,theoreticalinsights,andonecasestudy.BasedontheideasandconceptsoftheSDL,weconceptualizedaframeworktostudyvalue(co-)creationineSportsserviceecosystems.TheESLONECologne2019caseexplainedhowdifferentactorsinteractwitheachotherinaserviceecosystemandco-createvalueduringaneSportsevent,revealingthedynamicandcomplexinterconnectionsamongactors.Weshowedtheinterplayofthediffer-entactors(forexample,attendees,sponsors,andstreamingplatforms)and,byanalyzingthecase,weconcludethatsoleactorswithintheeSportsecosystemcannotcreatevaluealone.Moreover,wedescribedgeneralinstitutionalarrangementsamongthepresentactors,whichcreateafoundationforvalueco-creation.FutureresearchcanapplyourframeworktostudyothereSportseventsorevendifferentcontextsby,forexample,conductingmultiplecasestudiesandcomparingvalueco-creationprocesses.Qualitativeapproachessuchasinterviewswithrepresentativesofthevariousactorgroupscanbeconductedtogainempiricalevidenceandadditionalin-depthinsightsoneSportsserviceecosystems.Consequently,quantitativeresearchcanconfirmfindingstogeneralizeactors’serviceeffortsineSportsandbeyond.Overall,thischapteroffersrelevantinsightsforthosewishingtoexplorethevalueco-creationprocessandinteractionofmultipleactorsinthespecificcontextoftheeSportsserviceecosystem.REFERENCESAdner,R.(2017).Ecosystemasstructure:anactionableconstructforstrategy.JournalofManagement,43(1),pp.39–58.Akaka,M.A.andVargo,S.L.(2015).Extendingthecontextofservice:fromencounterstoecosystems.JournalofServicesMarketing,29(6‒7),pp.453–462.Alderson,W.(1965).DynamicMarketingBehavior.Homewood,IL:RichardD.Irwin.ArchpruAkaka,M.andChandler,J.(2011).Rolesasresources:asocialrolesperspectiveofchangeinvaluenetworks.MarketingTheory,11(3),pp.243–260.Arndt,J.(1981).Thepoliticaleconomyofmarketingsystems:revivingtheinstitutionalapproach.JournalofMacromarketing,1(2),pp.36–47.ReinhardE.KunzandAlexanderRoth-9781839107191DownloadedfromPubFactoryat05/28/202210:26:55AMviaColumbiaUniversityLibrary

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62537.Entrepreneurialresponsestothecoronaviruspandemic:digitizationoftheUSrestaurantbusinessGeoffreyM.GraybealandBenjaminLawrenceINTRODUCTIONJustasthe9/11terroristattackstransformedthehospitalitylandscape(Korstanje,2017),sotoohasthecoronaviruspandemicwhicharosein2020.Unlikethehotelindustry,dominatedbyseverallargemultinationalfranchisecompanies,therestaurantbusinessishighlyfragmentedwithmanysmallentrepreneursandindependentfranchiseeoperators.Restaurants,moreover,areparticularlyvulnerabletoexternalshocksgiventheirlowmarginsandbarrierstoentry.IntheUnitedStates,nineoutoftenrestaurantshavefewerthan50employees,while70percentaresingle-unitoperations(https://www.restaurant.org/home).Restaurantconsultantsandindustrygroupsestimatethatupto25percentofindependentrestaurantswillnotreopenafterthepandemic(Kirshna,2020).Theimpactofeventssimilartothecurrentpandemic(forexample,SARS,H1N1)hasbeenshowntoaffecttheperformanceofhospitalityfirms(Chenetal.,2007),behavioralintentiontotravel(Leeetal.,2012),andcapitalinvestmentplans(PineandMcKercher,2004).Thesestudieshavefocusedontheimpactofexternalshocksontourismandhospitalityfirmperfor-mance(Chen,2011;delMarAlonso-AlmeidaandBremser,2013;Eisendrathetal.,2008).Muchlessattentionhasbeenpaidtohowentrepreneurialbehaviorisembeddedincontextsthatinfluencethegrowthanddevelopmentofhospitalityfirms(WelterandSmallbone,2011).Ofparticularinterestishowtherestaurantindustryusedthedigitalecosystemtohelppivottheirbusinessmodelstoconnectandservicecustomerswithnewandexistingproducts.Theentrepreneurshipliteratureofferssomeinsight,showingthatentrepreneursrespondtobusinessshocks,includingafinancialcrisis(Cowlingetal.,2015,2012;WilliamsandVorley,2015),byinnovatinganddevelopingnewbusinessesmodels(Parker,2012).Firmcharacteris-ticssuchasageandsize,moreover,havebeenshowntoinfluencesurvivalfollowinganenvi-ronmentalshock(Stinchcombe,1965).Thispositionssmallfirms,withlowercashreserves,asvulnerabletoshocksthatdisruptbusiness(Aleschetal.,1993)andlesslikelytohavecontingencyplanstomitigateexposuretoexternalshocks(Krolletal.,1991).Corporatelyownedchainsandfranchisesystems,meanwhile,canpoolresourcestohelpcounterthenega-tiveimpactofchangingmarketconditions,butarealsolessnimbleandreactivethansmaller“mom-and-pop”operators(Brüderletal.,1992).Onlyweeksbeforecoronavirusrestrictionscloseddine-inoperationsatrestaurantsacrossmuchoftheUnitedStates(US),theNationalRestaurantAssociationprojectedindustrysaleswouldnear$900billionin2020,arecordinadecade-longstreakofgrowth.Instead,manysmall,independentoperatorsamongthe1million-plusrestaurantlocationsundoubtedlywillclosepermanentlyasthepandemicexacerbatesatrendaofdecliningindependentownership614GeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

626DigitizationoftheUSrestaurantbusiness615(Rigie,2017).Withlargerchain-operatedoutletsandfranchiseesabletopoolresourcesandleverageeconomiesofscale,whatwillbecomeofAmericanrestaurantentrepreneursasweemergefromthecurrentcrisis?Inthischapter,weexplorethevariousfactorsthatinfluencethesuccessofdifferentUSrestaurantsegmentsincludingthedigitalbusinessecosystemsinwhichtheyoperate,andproposeseveraluniqueentrepreneurialresponsestochangesintherestaurantindustrylandscape.Inparticular,wefocusonhowrestaurantshavereconfiguredtheirbusinessprocessesandmodelstofacilitatetransitionsfromface-to-faceservicestoadigitalenvironment.LITERATUREREVIEWHospitalityandCrisisResponseThehospitalityliteraturehasexploredtheresponsetoanumberofexternalshocks,includingterrorism(Chenetal.,2005;KosováandEnz,2012;Staffordetal.,2002),epidemics(Chenetal.,2007;Leeetal.,2012;PineandMcKercher,2004),environmentaldisasters(Ritchieetal.,2014;Susskindetal.,2016),financialcrises(delMarAlonso-AlmeidaandBremser,2013;Songetal.,2011),andnaturaldisasters(Henderson,2007;Rittichainuwat,2013;RobinsonandJarvie,2008;Zhang,2005).Broadly,thesestudiescanbecategorizedasinvestigatingmarketingresponsesandcrisismitigationstrategies;consumerpsychologicalprocessesandreactions;and,lastly,theimpactoftheseshocksonoutlet,system,orlocalityperformance.Asignificantstreamofthisresearchhasfocusedonthemarketingactionsofhospitalityfirmsortourismofficesinresponsetoashock,aswellasitspsychologicalimpactoncon-sumers.Collectively,thesestudiesinvestigatefactorsthatinfluencefirmaction,andhelpfulstrategiesformitigatingtheimpactofthecrisisonhospitalityfirmsandmarkets.AcrisismanagementsurveyfromIsraeliandReichel(2003)identifiesfourdistinctresponsefactorsintheIsraelihospitalityindustry:organizedindustry-wideeffort,maintenanceandcostcuts,marketing,andpricereductions.FocusingspecificallyontheHongKongrestaurantindustrypost-SARSepidemic,Tseetal.(2006)proposeafour-stepcrisismanagementprocedurebasedontheworkofStaffordetal.(2002).Applyingthetheoryofplannedbehavior,WangandRitchie(2012)identifythreepsychologicalfactors—attitudes,subjectivenorms,andpastcrisisexperience—thatinfluencecrisisplanningbehavior.Anotherstreamofpapershasfocusedonsystem-wideandoutlet-levelhotelperformanceinthewakeofcrisessuchasfinancialmeltdowns(delMarAlonso-AlmeidaandBremser,2013;Kubickovaetal.,2019;Songetal.,2011),actsofterrorism(KosováandEnz,2012;Staffordetal.,2002),andviralpandemics(Chenetal.,2007).Muchlessworkhasexaminedhowsuchcrisesaffectperformanceintherestaurantindustry(Seoetal.,2014;YounandGu,2009),likelyduetoitsdisaggregatednatureandalackofoutletperformance-trackingdatabases.Takentogether,theseresearchstreamsseektounderstandtheimpactofandreactionstoexternalshocks.Muchlessfocushasbeengiventounderstandinghoworwhysuchexternalshocksimpacthospitalityoutletowners’entrepreneurialactionsortransformbusinessmodelswithinthehospitalityindustry.Researchsuggeststhatentrepreneurshipremainsunderstudiedinthefield(Li,2008)despitethehospitalityindustry’shighentrepreneurialactivity,whichisfueledbylowbarrierstoentry.Evenlessfocushasbeengiventopost-crisisentrepreneurialresponsesorinnovationinthehospitalityliterature(Campoetal.,2014),asurprisinggapGeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

627616Handbookondigitalbusinessecosystemsgiventhesignificantimpactsuchexternalshockshaveontheserviceindustryandtourism.Thoughtheliteraturehasexaminedthespecificimpactofsuchcrises,muchlessattentionhasbeengiventohowbusinessesadaptorpivottheirbusinessmodelstoadigitalecosysteminresponsetomarketplacechanges.EntrepreneurshipandCrisisResponseThoughentrepreneurshipresearchhasexaminedcrisisresponse,studieshavebeenlimitedinscope.Julien(2008)suggeststhatfinancialshocksmayhavelessimpactonnewventuresgiventhattheyareembeddedinalocalcontextandlessexposedtoglobalornationalevents.DavidssonandGordon(2016)foundarelativeabsenceofbehavioralcrisisresponsesamongnascenttechstartupsinanexaminationoftheglobalfinancialcrisisofAustralianentrepre-neurs.Nascententrepreneurs,theyhypothesized,wouldexhibitoneoffourresponsestoamajormacroeconomiccrisis:disengagementfromtheventureattempt;delayintheprogressoftheventurecreationattempt;compensationintheformofincreasedresourceinputs,thusincreasingeffortstolaunch;andadaptationtomaketheventureideamorefeasibleundernewcircumstances.Theauthorsfailed,however,toachievestatisticallysignificantsupportforanyofthesehypotheses.Despitethislackofsupport,theconceptofentrepreneurialresponseisworthrevisitingamidthecurrentpandemic.Responsesinthestudywerelimitedtoasampleofnascententrepreneursintechnologystartups;entrepreneurialresponsescon-sistentwiththeoriginalhypothesesmaybefoundindifferentindustriesandamongdifferententrepreneurialstatuses.Forinstance,entrepreneursworkingonhigh-potentialstartupsweremorelikelytodisengageordelaytheventurecreationattemptamidamajormacroeconomiccrisis(DavidssonandGordon,2016).Priorresearchhasalsofoundthatthepropensitytoexitincreasedto62percentforestablishedindependentbusinessesinresponsetoafinancialcrisis(Bradleyetal.,2011).Thecoronaviruspandemicthreatenstheoperationsandperformanceofbusinessesinalleconomicsectors,butsmallbusinessesaremostvulnerabletocashflowinterruptionsthatcanthreatensolvency.Smallerbusinessesoftenlacktheabilitytoaccessadditionalcapitaltorecover,struggletoaccessgovernmentalassistance,andarevulnerabletoinfrastructureproblems(Runyan,2006).Muchoftheextantentrepreneurialcrisismanagementresearchisconcernedwiththeconceptofresilience(Doern,2016;Doernetal.,2019)asameansofresponse(Kuckertzetal.,2020).Duringpreviouscrises,resiliententrepreneursmadechangesandexploitedopportunities,giventheresourcestheyhad(Martinellietal.,2018).Acrisiscanencouragesuchexploitation(BrünjesandDiez,2013),promptinnovation,andleadtothedevelopmentofnewproductsandservices(Bremetal.,2020).Inarapid-responsestudyofstartupsduringthecoronaviruscrisis,Kuckertzetal.(2020)foundthatentrepreneurswere“takingthebullbythehorns”bycreatingnewvalueproposi-tions,identifyingnewcustomersegments,andsellingthroughnewchannels.Startupshaveapplieda“bricolagecrisisresponsetosolvenewproblems”duringthepandemic,findingnewopportunitiesandmarketsfortheirproductsandservices(Kuckertzetal.,2020).Theyhaveadaptedtodisruptionsincoreinfrastructure,restructuredinternally,andfocusedondeployingresourcestonewservicesandproductsthatcangeneratevalue.Innovativestartupstendtoembraceflexibilityanddeployiterativeapproaches,usingwhatSarasvathy(2001)callseffectuallogic.Extantliteraturehashighlightedthatentrepre-neursoftenencounteruncertaintyandfailure(Mandletal.,2016;Ucbasaranetal.,2013).GeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

628DigitizationoftheUSrestaurantbusiness617Uncertainty“constitutesaconceptualcornerstoneformosttheoriesoftheentrepreneur”(McMullenandShepherd,2006,p.133).Entrepreneursoftendemonstrateresiliencebyidenti-fyingandpursuingnewopportunities,includingadaptingthebusinessmodelandrestructuringinternally(Kuckertzetal.,2020).EntrepreneurshipandDigitalEnvironmentEntrepreneurshipsuccesstraditionallyhasbeendefinedaroundexecutiononawell-definedbusinessplanforanentrepreneurialopportunityassumedtobestablewithfixedboundaries.Butdigitizationandnewentrepreneurialmethodologieshavebeguntoupendthoseassump-tionsinrecentyears.Scholarsmustgrapplewithhowentrepreneurialopportunitiesareformedinanincreasinglydigitalworldwithlessboundedoutcomes(Nambisan,2017).Nambisan(2017)arguesthatdigitaltechnologiesenableentrepreneurialactionsthatneedtobeorientedtowardavaluepropositionthatcontinuouslyevolveswithapotentialforre-scopingtheentrepreneurialopportunity.Researchintobusinessmodelsoftenoverlapswiththebusinessecosystemscomponentsofdigitalbusinessecosystems(Rongetal.,2018).Digitalecosystems(DEs)andbusinessecosystems(BEs)aredisparateliteraturesonwhichtheconceptofdigitalbusinessecosystems(DBEs)wasbased.NetworktheoryandplatformtheoryhavebeendrivingforcesbehindBEs(Senyoetal.,2019).Recentscholarshipondigitalentrepreneurshiphasbeguntoexplorethemixofusingdigitalcomponentsalongwithhumanandsocialelementsofabusinessmodel.Moste-businessmodelsblendvalue,revenue,andlogisticalstreamsthatarecriticaltothebusiness(Mahadevan,2000).ManyrestaurantswouldfallunderwhatHulletal.(2007)wouldclassifyasa“milddigitalentrepreneurship”typology,inwhichanon-digitalproductisdeliveredbyphysicalmeansofdistribution,withoperationsconsistingprimarilyofphysicallocationswithtraditionalinteractions,butmayincludesomevirtualteaminteractions.Inthecontextofestablishingabusinessmodel,muchoftheentrepreneurialresponsesfocusontheearlystagesoftheventurecreation.Underleanstartupapproaches,entrepreneursarefacedwiththreemainoptionsaftertestingaseriesoffalsifiablehypothesesembeddedinafirstversionofabusinessmodel.Entrepreneurscanperseverewiththeproposedbusinessmodel,pivottoarevisedbusinessmodel,orperish,dropthebusinessidea.LeanstartupmethodologyaspopularizedbyEricRies,andcustomerdevelopmentmethodsasdevelopedbySteveBlank,aregroupedunderthetitleofleanstartupapproaches(LSAs)(GhezziandCavallo,2020).Whiletraditionalentrepreneurialapproachescenteredaroundexecutingonalong-termguidingbusinessplan,LSAsfocusonabusinessmodelthatisdesignedtobelessrigidandallowforiterationsandchangesinapproach.LSAsandothersimilar,competingpopularmethodologiesencouragethedevelopmentofabusinessmodelthroughacanvasapproach.The“leancanvas,”asdevelopedbyAshMaurya,encouragesentrepreneurstomapoutprob-lems,solutions,andkeymetricsoftheventurealongwithcustomersegments,valueproposi-tion,revenuestreams,channels,andcoststructure.Withrootsinautomanufacturing,LSAsgainedinitialtractionamongtechnologystartups,butusageofthemethodologicalapproacheshavesincebroadened,astheyaretaughtandutilizedintopestablishedfirmsthroughcorporateentrepreneurshipandintrapraneurshipefforts,aswellasingovernmentandacrossavarietyofindustriesandsectors.GhezziandCavallo(2020)arguethatwell-establishedcompaniesandstartupsshouldnowlookbeyondisolatedproduct,service,orprocessinnovationandfocusinsteadoninnovatingGeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

629618Handbookondigitalbusinessecosystemstheirentirebusinessmodel,whichbecomesthenewunitofanalysisforinnovationefforts(GhezziandCavallo,2020).LSAsarethengroundedinbusinessmodelinnovation.Inbusinessecosystems,entrepreneurialfirmsareoftenspecializedinknowledgecreation,andestablishedfirmsarespecializedinknowledgecommercialization(Clarysseetal.,2014).Businessecosystemsallowfirmstocreatevaluewhichnosinglefirmcouldcreatebyitself.Businessecosystemsalsoinvolvethecreationofnewmarketsandoftenentailthepursuitofrelativelysmallandpoorlydefinedcommercialopportunities(Clarysseetal.,2014).Lingensetal.(2019)definethebasicideabehindabusinessecosystemasa“partnershipbetweenthreeormorecompaniesthatresultsinaserviceofferingthatnoneofthepartieswouldbeabletoofferalone”(p.9).Byunlockingopportunitiesfornewgrowthordifferen-tiation,thevaluepropositionorstrategicissue,therefore,isakeycomponenttothesuccessofabusinessecosystem(Lingensetal.,2019).Acentralcompany,calledanorchestrator,ensuresandpreservesalignment,sothatsuperiorperformanceinthesharedvaluepropositionisreachedamongfirmsinthebusinessecosystem.Arguingfortheecosystemfromastructuralperspective,whichviewsecosystemsascon-figurationsofactivitydefinedbyavalueproposition,Adner(2017)definestheecosystemassuch:“Theecosystemisdefinedbythealignmentstructureofthemultilateralsetofpartnersthatneedtointeractinorderforafocalvaluepropositiontomaterialize.”Therearefourbasicelementsoftheecosystem,accordingtoAdner:activities,actors,positions,andlinks.USRESTAURANTBUSINESSThoughverydiverse,therestaurantindustrygenerallyissegmentedintotwobasicservicecat-egories:full-serviceestablishments,characterizedassit-downrestaurantswithtableservice;andlimited-serviceestablishments,wherepatronsorderandpayatthecashregisterpriortoconsumption.AccordingtotheUSDepartmentofAgriculture,full-andlimited-servicerestaurantsaccountedfor73.1percentofallfood-away-from-homesalesin2019.Withineachcategoryarelevelsofdifferentiation,mostlyrelatedtopriceandservicelevel.Forthepurposesofthischapter,wesegmentthefull-servicecategoryintotwomaincategories:finediningandcasual/familydining.Inthelimited-servicecategory,weincludequick-serviceandfastcasualconceptstoincludesnack-basedconcepts(forexample,coffee,donuts,icecream).Inadditiontothesefourcategories,weincludeafifth:off-premisedelivery.Thoughpizzadeliveryhastraditionallydominatedthiscategory,italsoincludestheemergingandgrowing“ghostkitchen”concept.FullService:FineDiningGiventheimportanceoftheon-premiseexperiencetothevaluepropositionoffull-serviceupscalerestaurants,thepandemichasforcedtheseestablishmentseithertodownscaletoaproductthatwouldprovidevalueoff-premises,ortocompletelypivottoanewcustomerbaseintheshortterm.Theconsumer-facingdigitalecosysteminsuchestablishmentswashistoricallylimitedtoreservations,andeventodayhumanface-to-faceinteractionsdominate.Mostoftheseupscalerestaurants,however,wereunabletotransitiontheirproductofferingtoalimitedserviceoff-premisesmodelgiventhetypeoffoodtheyserved,thepricepoint,andthehumancapitalemployed.Asaresult,manyoftheserestaurantscompletelypivotedtoGeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

630DigitizationoftheUSrestaurantbusiness619short-termsocialcausessuchasfeedingfirstresponders,feedingthehomeless,andprovidingmealsforunemployedhospitalityworkers.Byutilizingthedigitalecosystemtheserestaurantscouldpromotetheirproducts,receivedonations,coordinatedelivery,andtakepayment.Otherfine-diningestablishmentshavereactedtothepandemicbydownscaling.Denmark’saward-winningrestaurantNomaopenedafirst-come,first-serveoutdoorwinebarwithcheeseburgersonthemenu.Canlis,anupscalerestaurantinSeattle,closeditsdiningroomandoffereddinnerdeliveryserviceandtakeoutvia“drive-thru,”wherecustomerscouldpickupburgers,salads,andicecream.Thoughshortterminnature,thispivotallowedCanlistomaintainsomelevelofstaffingandsupplychainpurchasing.Someoftheserestaurantsalsohaveturnedtoonlinemarketplacestosellrawingredients,withsteakhousesfunctioningasbutchers,andseafoodrestaurantssellingwholefishdirecttoconsumers.Restaurantshavealsoinnovatedwithcocktailkits,winepairings,andtastings.Onceagain,thedigitalecosystemhasfacilitatedsuchtransactions.Utilizinghumancapital,includingsommeliers,todevelopeducationalmaterialstoaccompanyproductsisoneinnovativesolutionsomerestaurantshaveadopted.Ratherthanin-personengagement,theseexperiencesmovedtothedigitalenviron-mentallowingforgreater,on-demandaccessandlargeraudiencesforthesetypicallybespokeone-timeexperiences.FullService:Casual/FamilyDiningFull-servicecasual/familydiningvenues,liketheirfine-diningcounterparts,havesufferedsignificantlossesduringthepandemic,butarebetterpositionedtoretooltheirofferingsforanoff-premisesaudience.Somechainrestaurantsinthissegment,includingChili’sandApplebee’s,alreadymaintainedarobustto-gorevenuestreamwithdesignatedpickup,parking,anddigitalorderingprotocols.Additionalproductrolloutsduringthepandemichaveincludedheat-and-servemealkitsandfamilymealdeals.Focusedonat-homemealreplacement,suchproductshighlightvalueandreliefofthefatiguerelatedtothelockdownandcookingathome.Heat-and-eatdishesallowfull-servicerestaurantstoaccommodatefoodsthatdonotholdwellatservicetemperature,whilefoodkitsprovideconsumerswitheasy-to-followinstructionsforcookingandservingmealsathome.Paymentmethodsalsohaveevolved:subscriptionservicesprovideconsumerswithweeklydeliveredmealsandproviderestaurantswithacon-sistentrevenuestream.Thepromotion,selection,payment,anddeliveryofsuchserviceshavemovedonline,supportedbyamorerobustdigitalecosystem.LimitedService:QuickServiceQuick-servicerestaurantsaredominatedbynationalfranchisedchainsincludingMcDonald’s,KFC,andTacoBell.Oftenreferredtoasfastfood,thissegmentfocusesonquicklyprepared,value-basedmealsthatarewidelyperceivedtobeunhealthyandhighlyprocessed.Thoughatmosphericsatmanychainshaveimproved,thissegment’sdominantmodeofdeliveryintheUSmarkethasbeenthedrive-thruascustomersoftenconsumefoodoff-premises.Deliveryviaestablishedthird-partydeliverycompanieshadincreasedevenpriortothepandemic;somefoodcategories,however,arelesssuitedfordelayedconsumption.Customerinteractionislimitedtoordering,thoughsomeestablishmentshaveinstalledkiosksthateliminateface-faceencounters.Includedinthiscategoryaresnack-basedconceptsDunkinBrands,AuntieAnne’s,andDairyQueen.GeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

631620HandbookondigitalbusinessecosystemsOfallthetraditionalrestaurantformats,quickservicehasbeenbestsuitedtothepost-coronavirusmarketplace.Abundantdrive-thruandtakeoutbusinesshasprovidedrobustdistributioncapabilitiesevenwithoutashifttothedigitalenvironment.Mostquick-servicerestaurantsarepartofbrandedchainsthatcanaccessdistributionnetworks,loweringcostsandpoolingresourcestoinnovateandimplementtechnologychanges.Themajorityofquick-serviceestablishmentsarefranchise-based,distributingthroughindependentlyownedfranchisees.Thisallowsthemtoaccessgovernmentloanseventhoughtheyarepartofalarge,brandednetwork.Priortothepandemic,manyquick-servicerestaurantsdidnothaverobustdigitalorderingapps,relyingheavilyonin-personorderingandpickup.Historically,deliveryhasbeenillsuitedtoquick-servicerestaurantsduetothelowaveragecheck,instabilityofthecookedproduct,orrelianceonthird-partydeliverythatcaneatupsignificantmargins.Manyofthesechainsrelyonalow-skilledandlow-paidworkforcethathaslowlevelsofoutlet-levelhumancapitalandismorereliantonfollowingproceduresandpolicies.LimitedService:FastCasualEpitomizedbychainssuchasChipotle,PaneraBread,andFiveGuys,thefastcasualsegmentstraddlescasual,full-service,andquick-serviceestablishments.Likethequick-servicesegment,fastcasualrestaurantsoffernotableserviceandpatronspayatcheckoutwhenorder-ing.Unlikequickservice,fastcasualatmosphericsusuallyaremoreupscale,serviceisslower,andhigher-pricedfoodisviewedashavinghigherquality.Mostfastcasualestablishmentsdonothavedrive-thrus,thoughnewerstoremodelsdo.Foodatfastcasualrestaurantsoftenisviewedasfresher,withmanyitemsproducedonsite.Severalfood-borneillnessoutbreaksatchainssuchasChipotle,however,havepushedsomeestablishmentstomovemorefoodproductionoff-site.Thoughbetterpositionedtosurvivethepandemicthanfull-servicerestaurants,fastcasualestablishmentshavehadtoadapt.Thisadaptationhasbeenparticularlysalientforrestaurantsthattraditionallyattractedlargeon-premiseconsumption,soldfooditemswithlimitedtakeoutappeal,orlackedrobustdrive-thruoronlineorderingcapabilities.Duringthepandemic,distri-butionandorderinghavebeenkeydifferentiatingfactorsforthissegment.Organizationsabletoleveragetheirhumancapitaltopushonlineorderingandcontactlesspickupanddeliveryhaveseensignificantrevenuemaintenance.Valuehasbeenaprimarydriverofsalesastheserestaurantsfocusonbundlesandfamily-basedconsumption.The“healthhalo”associatedwithfastcasualalsohelpstodifferentiatetheseofferingsfromtraditionalfast-foodestablishments.LimitedService:DeliveryThoughnotatypicalcomponentofthelimited-servicecategory,wehaveincludeddeliverytocapturebusinessoutletsthatderivethemajorityoftheirrevenuethroughadelivery-onlymodel.Longdominatedbythepizzacategory(forexample,Domino’s,PapaJohns),thismodelhasseennewerconceptsemergeinmetropolitanareaspriortothepandemic.Oneprominentexampleistheghostkitchen(Yaffe-BellanyandIsaac,2019)orghostfranchisee(Conrad,2021),whichhasnoretailpresenceandcreatesmealsexclusivelyfordelivery.Thisconcept,whichemergedamidtheriseofthefooddeliveryappstransformingtherestaurantbusiness,canfocusonanyfoodcategorythatcanmaintainintegrityduringdelivery.LowerGeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

632DigitizationoftheUSrestaurantbusiness621laborandrealestatecosts,coupledwiththeabilitytoseamlesslyintegratewithonlineorderingsystems,arefuelingthissegment’sgrowth.Delivery-basedrestaurantconceptshaveadaptedwelltopandemicconditions,asevidencedbyrobustoutlet-levelsalesandstockpricegainsforchainssuchasDomino’sandPapaJohn’s.Thesebrandshaveinvestedheavilyintechnologytodriveorderingand,insteadofoutsourcingdelivery,havedevelopedanin-housedeliveryworkforce.Thelackofdirectconsumerinter-action,lowfoodcost,stabilityofthecookedproduct,andsuitabilityasfamilymealallhavecontributedtopizza’sclearstatusasapandemicfoodcategorywinner.RESTAURANTBUSINESSMODELCOMPONENTSLegacyfirmshavestruggledtoadapttheirbusinessmodelsinthefaceofgreatercompeti-tion,butacrisisalsoaffordsanopportunityforreinvention;outofnecessityorotherwise.Are-evaluationofabusinessmodel,forexample,canresultinoneofthreeoutcomeapproachesthroughtheuseofLSAs:perish,persevere,orpivot(GhezziandCavallo,2020).Theperishoutcomecanbetoceaseoperations,bychoiceorthroughgovernment-mandatedpolicies,sometimesasashort-termfixinresponsetoacrisis.Toperseverewouldbetokeepthefunctional,crisis-readyelementsofthebusinessmodelandfocuseffortsthere,whileperhapsmakingincrementalchangesalongtheway.Forexample,arestaurantwithadrive-thrucomponentmaycloseitsdiningroom,butthebusinessdaypart(breakfast,lunchanddinner)couldshiftbecauseofchangingconsumertrends.Whereasbreakfastandlunchmayhaveaccountedforalargeportionofsales,thedrive-thru-onlyoperationmaynecessitateashiftinhoursandefforttodinner,forexample.Apivot,finally,isamajorstrategicchangeindirectionforanoperationandalikelycommonmoveduringacrisisresponse.Here,businessmodelsthatweremorestaticbyservicetypemayshifttoabusinessmodelmorerepresentativeandreflectiveofanentirelydifferentsector.Thebusinessmodel,infact,maybecompletelyoverhauled(seeTable37.1).Forexample,thecrisisresponseofafull-service,finediningrestaurantmaybetoeffectivelybecomealimited-servicerestaurant.NewRestaurantConfigurations(B2C)Themajorityofrestauranttypesdiscussedherefallunderthebusiness-to-consumer(B2C)typology.Pop-uprestaurantsareonecommonconsumer-facingbusinessmodel.Pre-coronavirus,anascententrepreneurornewandemergingrestaurateurmightcommonlyutilizeapop-upapproach,changinglocationsandappearingonalimited,oftentemporarybasis.SuchanentrepreneurialapproachconstitutesanLSAbecauseitprivilegesefficienciesandexperimentation.Whereasfull-service,fastcasual,andquick-servicerestaurantsallhaveconsiderablefixedresources,particularlyintermsofphysicalassets,apop-upapproachfocusesonshort-termmarketexposurewithoutlong-termobligationsorcommitment.Thepop-upapproachalsoreliesheavilyonadigitalecosysteminordertoquicklypivotandreachanewcustomersegment.Muchlikeafoodtruckthatmovesfromlocationtolocation,apop-upcanexperimentwithoptimalgeographiclocationsandcustomersegments,refin-ingright-sidecanvascomponentssuchasdistributionchannels,valueproposition,revenuestream,customerrelationships,andcustomersegments.Typically,arestaurateurmaychooseapop-upasa“starter”business,withalong-termgoalofaphysicallocationinthefull-service,GeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

633622HandbookondigitalbusinessecosystemsTable37.1NewrestaurantconfigurationsBusinessExemplarPre-CovidtrendCovid/beyondtrendStrategicresponsetypeB2CPop-upconceptNascententrepreneurs;Cross-sector;Reversalofconcept;Pivot:PrimarybusinessmodelBrandidentity;AdditionalEstablishedcompaniesmodify(secondary)businessmodelproductsandservicesbutleverageapproachbrandcapital;“brandondemand”B2BGhostkitchenEmergingconceptinAccelerateddemandPerish/Pivot:concepturbanmarketsAphysicalB2Cfacingrestaurantmayperishorpivottoaghostkitchenapproach;resourceutilization/maximization(revenueperavailableseatperhour)sharingphysicalassetsB2B2CHostkitchenExperimentalnature;Industry-wideadoptionPersevere:concept:utilizingonecompanycaseNewmarkets(businessmodeltechnologytoinnovation)improveaccesstoservicecustomersquick-service,orfastcasualsector.Asaresult,apop-uptendstoattractnewandemergingoutletsseekingtobuildabrand,buildabusiness,anddevelopacustomerbasewhilehuntingtheoptimallocation(Hight,2020).Thepop-upitselfhastendedtoserveasadistinctbusinessmodelandrestauranttypeamongB2Cbusinesses.Oncethepandemichit,however,pop-upsemergedasasecondarybusinessmodelapproachfortheotherconsumer-facingrestauranttypes,particularlyfull-servicerestaurants.Restaurantsleveragedthedigitalenvironmenttoquicklydevelopnewbrandsandtoreachnewandexistingcustomers.Withouttheneedtoinvestinphysicalinfrastructure,these“digital-onlybrands”allowedforaninexpensivepivotwithlimitedrisk.Pop-upscutacrosssectorsandtypes:afull-servicesteakchain,forexample,couldofferafastcasualpop-upconcept.Thepandemiceffectivelyreversedthedynamicsofthepop-upconcept,whichgrewpopularamongestablishedbrandsinsteadofrelativelyunknownnewcomers.Brandidentitybecameimportantasestablishedcompaniesmodifiedtheirproductsandservicesbutleveragedtheirbrandcapital,offeringa“brandondemand”thatcouldbeeasilycreatedorchangedinthedigitalecosystem.AsanentrepreneurialLSA,thisisaclassicpivotapproach.Establishedcompanieschangedthecustomersegment,thedistributionchannel,thearchitecturetype,orthevaluecapture,orusedacombinationofthese.Manyrepositionedtheirproductsanddis-tributionusingtechnology,fieldingcall-aheadoronlineordersdaysinadvancetomaximizesalescapacity.Theabilitytoquicklymodifyaconsumer-facingwebsiteatlowcostprovidesrestaurateurswiththecapabilitytopivotrapidly.Somerestaurantcompanies,suchasSeattle’sCanlis,shiftedresourcestoseveralpop-uprestaurantsthathaveevolvedevensincethepandemicbegan.Canlisbegansellingdrive-thrubagels,burgers,andicecream,buthasevolvedintomoresophisticatedhomemealsandmealkits,aswellasaparkinglotcrab-shackconcept.Thesenewerconceptshavehigherpricepoints,allowingforlargercontributionmarginswhilesimultaneouslyutilizingapre-ordersystemthatusestickets.Withticketsales,pop-upscancollectcashpriortoservice,lockinginrevenueandassociatedcoststructurewhilereducingcoordinationcosts,includingreservationGeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

634DigitizationoftheUSrestaurantbusiness623fees.ManyofCanlis’spop-upconceptsselloutonlinedaysinadvanceofdeliveryorservice.Canlis’smostimportantassetsaretherestaurant’sbrandreputationandhumancapital,bothofwhichcanbedeployedinnewandinnovativewaysdigitallytorepositiontheventurebasedonchangingmarketconditions.NewRestaurantConfigurations(B2B)Theghostkitchenconceptisabusiness-to-business(B2B)endeavorinwhichacompanyspecializinginmealpreparation,takeout,anddeliverysellsitsservicestoexistingrestaurantbusinesses.Theresultisarentablesharedfoodproductionspacethatbrandscanutilizetogrowtheirdeliverybusiness.Withadelivery-onlymodel,theseunitscanutilizecheaperrealestatewhilemaximizinglocationforeasydeliveryaccess.Thesefacilitiesoftenhostseveralbrandsthatcontractwiththefacilityfordigitalecosystemsupportandotherservices.Mostghostkitchensfocusexclusivelyondelivery,butsomehaveanin-person,consumer-facingpickupoption.Evenbeforethepandemic,thisconceptwasgrowinginhigh-densityurbanareaswithdemandfordelivery;thepandemichassimplyaccelerateditsgrowthandincreaseditsvaluepropositioninthemarketplace.SeveralkeyplayersintheUSmarketincludeKitchenUnited,CloudKitchens,DoordashKitchens,andZuulkitchens.DeliverooinEuropeandPandaSelectedinChinaareamongtheglobalindustryleaders.NewYorkCity-basedZuulhasa5000squarefootfacilitythatsupportsninedelivery-optimizedkitchens.Withlowerfixedinvestmentcosts,restaurantscanassumelessrisk,quicklyexpandintonewmarkets,andtestnewconceptsandmarketsforexistingproducts,whilesharinginacommondigitalecosystemthatprovidessupportservicesandoptimizesdelivery.Restaurantsmovingtoaghostkitchen-styleapproachrepresentoneoftwoentrepreneurialLSAresponses:perishorpivot.Aconsumer-facingrestaurantmaychoosetoshutterthecorebusinessmodel,closingphysicalrestaurantlocationswithdine-inortakeoutoptions.Anotheroptionistopivottotheghostkitchenmodeleitherasashort-term,pandemic-fueledresponse,orasthelong-termadditionofadifferingbusinessmodeltoaccompanythecorebusinessmodel.NewRestaurantConfigurations(B2B2C)Aconceptrelatedtotheghostkitchenisthehostkitchen,whichallowsrestaurantstoexpandtheirdeliveryscopethrough“host”facilities.Restaurantsthathaveexcesskitchencapacityarematchedtobrandedconcepts,whichsomecallghostfranchisees(Conrad,2021),thatdeveloptailoredmenusaimedatincreasingdeliveryvolume.InApril2020,Atlanta-basedhostkitchenoperatorFranklinJunctionannouncedapartnershipwithNathan’sFamousInc.todistributeready-to-cookkitandcookedversionsoftheNewYorkhotdog.Thesehotdogs,inturn,aresoldviakitchensownedbyFrisch’sBigBoyandRubyTuesdayRestaurants.Byreconfiguringassetsandconnectingbusinesseswithvaryingdemands,FranklinJunctionaddressesatimelyneedtomaximizeresourcesamongpartneringcompanies.Describedasan“AirbnbandMatch.comofrestaurants,”FranklinJunctionservesasabusiness-to-business-to-consumer(B2B2C)operation.FranklinJunctionprovidesthedigitalecosystemthatmatchesphysicalrestaurantstobrandswhilealsoallowingcustomerstoorderandengagewiththesebrands.Likeaghostkitchen,itdirectlyservesrestaurantbusinessesbutwithconsumer-facingcomponentsbuiltintothebusinessmodel.Specifically,thehostGeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

635624HandbookondigitalbusinessecosystemskitchenmodelpopularizedbyFranklinJunctionseekstointroducepopularconsumerbrandstopreviouslyunservedgeographicmarkets;popularCanadianconceptCaptain’sBoil,forexample,iscomingtotheUSthisway.Hostkitchensalsoseektoservedifferentcustomersegmentsfromtraditionalpartnerrestaurants,specificallywithamillennialfocusinNorthAmericanmarkets.Thisconceptemergedpre-coronavirusinexperimentalfashion,FranklinJunctionservingasatestcaseandindustryleader.Theglobalpandemic,however,acceleratedtheconceptandengenderedindustry-wideadoption.Businessmodelsareuniquetoindividualcompanies,thoughindustriesoftencoalescearoundandseektoimitateanestablishedmarketleader’sprovenmodel;asanexample,considerthespikeinfastfoodburgerchainsinthewakeofMcDonald’s.ThisconstitutesanentrepreneurialLSAapproachtopersevere,thoughitalsocouldbeviewedasacaseofbusinessmodelinnovationinwhichabusinesseitherattractsnewcustomersorencouragesexistingonestoconsumemore(Markides,2006;MarkidesandCharitou,2004).FUTURERESEARCHThecoronaviruspandemicwhicharosein2020hasfundamentallytransformedtherestaurantindustry.Theapplicationofnewtechnology,growthofdelivery,andthereconfigurationofbothhumancapitalandphysicalassetswillprovideabroadanddeepsetofresearchcontextsforhospitalityscholarsinterestedinentrepreneurship.Weseethreepotentialavenuesforfutureresearchexaminingentrepreneurshipasitrelatestofuturedigitizationoftherestaurantindustrylandscape.First,weforecastcontinuedgrowthinfranchisedandchain-operatedoutletsanddeclin-inglevelsofindependentownershipintherestaurantsector.FranchisingremainsavitalformofcooperativeentrepreneurshipintheUSserviceeconomyandisthedominantformofdistributioninthequickservicerestaurantformat.Thoughsomeconsiderfranchisingquasi-entrepreneurial(Ketchenetal.,2011),webelieveitsprominenceinhospitalitysectorspositionsindustryscholarstomakesignificantcontributionstofranchisetheoryinapan-demiccontext.Franchisecontractsgivefranchiseesaccesstonationalandglobaldistributionnetworkswhileprovidingeconomiesofscaleforadvertisingandtechnologyinvestments.Thisscalingofinvestmentshasbecomeincreasinglyvaluableastechnologicalinvestmentsoffercompetitiveadvantageasthesefirmsdeveloparobustdigitalecosystem.Independentoperatorssimplydonothavetheresourcestoinvestintechnologyandmustrelyonoutsourc-ingthisfunctiontothird-partyvendors,includingdeliveryservices.Growthwillcontinueinfranchisedchainsthatcanleveragethebenefitsofchainmanagementwhileharnessingtheentrepreneurialintuitionofoutletowners.Futureresearchisneededtounderstandtheimpactofthecoronaviruspandemicontheperformanceofvaryingrestaurantindustrysegmentsandownershiparrangements.Brandsmayplayanoutsizedroleinmitigatingthenegativeimpactofthepandemic,muchliketheyhavereducedthenegativeimpactsofaproductcrisis(HsuandLawrence,2016).Futureresearchcouldcomparethepre-andpost-pandemicperformanceofvariousorganizationalstructuresandtheiradoptionofnewinnovativewaystoleveragetheirdigitalecosystem.Second,entrepreneurshipwillcontinuetodriveinnovationintheallocationofhumancapitaltohelprestaurantownersreducecosts.Formanyyears,franchisinghasremainedthedominantmodelinhospitalityforindependentcontractors(franchisees)topartnerwithcorpo-GeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

636DigitizationoftheUSrestaurantbusiness625rateentities(franchisors)todelivervaluetoconsumers.Gig-economyplatformssuchasUberandAirbnb,however,arechallengingthisdominance.Inthesenewrelationshipmodels,inde-pendentoperatorsmaysimultaneouslyholdrelationshipswithmultiplepartners(forexample,Lyft,Uber).Gig-economycontractorscaneasilyswitchplatformsandmakeverylittleinvest-mentinfirm-specificassets.Manyrestaurantsutilizegig-economyplatforms,includingfooddeliveryagents,toconnecttotheirconsumers.Weexpectthistrendtocontinue,withwaitstaffandkitchenworkerssimultaneouslycontractedtomultiplerestaurantsusingadigitalhumanresourcesystemtomanageanddistributeworkersmoreefficiently.Thissharingofhumancapital,coupledwithatrendtowardsharedkitchenspaces,willbetterutilizefirms’existingresources.Thesetrendsalsowillresultinseveralinterestingavenuesofinquiry:Whatistherelationshipamongoutsourcedemployees,customersatisfaction,andoverallrestaurantper-formance?Howwillconsumers’perceptionofwhatarestaurantischangewithmorefrequentvirtualexperiences?Willrestaurantbrandsdevelopstrategiesthatleverageamixofghostkitchensandbrick-and-mortarestablishments,muchlikeretailchainsinthedot-comera?Finally,thepandemichasacceleratedtheuseofonlineconsumerselectionandpayment,aswellasthegrowthofvirtualbrandsintherestaurantspace.Contactlessdeliveryonlyfurthercontributestotheerosionofserviceinteractionandthephysicalityoftherestaurantspace.Futureresearchcouldseektounderstandhowthistransformationfromhighlyphysicaltomorevirtualimpactsourcurrentunderstandingofentrepreneurshipinrestaurants(Leeetal.,2016).Humancapitalhasbeenidentifiedasanimportantsourceofcompetitiveadvantageforrestaurantentrepreneurs(Jogaratnam,2017).Itmayplayanevengreaterroleinfutureentre-preneurialventuresasphysicalassetsbecomemorefungible,moreshareable,andlessvitalintheonlineenvironment.Entrepreneurshipinthevirtualspace,includingthedevelopmentofvirtualbrandsorghostkitchens,providesaninterestingtopicforfutureresearch.Theriseofpop-uprestaurantconcepts,thatleverageexistingbrands,highlightsthepotentialforavirtualbrandportfolio.Existingworkonpop-upventureshasfocusedontheiruseasatemporarybusinessmodelintheinitialstagesofestablishingthefirm(Hight,2020).Today’srealityisradicallydifferent,asestablishedfirmspivotwiththisdistributionchanneltocreatenew,revenue-generatingconceptswhenexistingbusinessmodelsfounder.Literatureonbrandextensions(Czellar,2003)andbrandarchitecture(Hsuetal.,2016)mayhelptoinformourunderstandingofhowexistingbrandscanleveragetheirequitytodevelopnew“digital-only”brandedconcepts.Suchbrandedconceptscouldbeincreasinglyinternationalinscope,asmanyofthechangeswithintherestaurantindustryhaveoccurredonaglobalscale.StudyingtheseeffortsalignswithcallsforfutureDBEresearchtoexamineinternationalization(Rongetal.,2018).CONCLUSIONPre-pandemic,mostrestaurantsclassifiedasa“milddigitalentrepreneurship”undertheHulletal.(2007)typology,inwhichanon-digitalproductisdeliveredbyphysicalmeansofdistri-bution,withoperationsconsistingprimarilyofphysicallocationswithtraditionalinteractions.Theglobalpandemictriggeredareconfigurationofthebusinessecosystemwithanaddedemphasisondigitalcomponents,particularlytofacilitatetransactionsandservicesbetweenmultipleexchangepartners.Inlinewithotherindustriesthathavecreateddigitalplatformsthathavebecomebusinessesintheirownright(Airbnbforhomes,UberwithprivatelyownedGeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

637626Handbookondigitalbusinessecosystemscars),therestaurantindustryhasmadeasimilarshiftwithemergenceofdeliverymodelsandanewwaveofthepop-up“digital-only”brands,hostandghostkitchenmodels.Thoughface-to-faceinteractionswillincreaseasbusinessesopenupfollowingmassvaccination,manyoftheseinnovativesolutionswillpersistasbusinesseslooktodigitalbusinessecosys-temstointegrateallcomponentsofthebusiness,andlowercostsandimproveprofitability.Thisnewenvironmentwillfavorlargercompanieswiththeresourcestoinvestinfuturetechnologicalinnovationsthatwilldrivecostsdown.Restaurantslookingtocompeteinthisnewenvironmentwillneedtodeveloptheirowndigitalcapabilitiesoroutsourcetothird-partyvendors.Restaurantownersmustunderstandthatinvestmentindigitalcapabilitiestoincludeprocurement,delivery,humanresourcescheduling,customerrelationshipmanagement,andmarketingwillcontinuetodrivecustomeracquisitionandretention,andoutletprofitability.Ashifttowardslargerrestaurantcompaniesandfurtherconsolidationtofacilitatesuchinvest-mentislikely.Restaurateursmustfocustheireffortsonbuildingtheirdigitalinfrastructure.Artificialintelligenceandroboticswillfuelthenextwaveofdigitalautomationintherestau-rantindustry,requiringfurtherinvestment.REFERENCESAdner,R.,2017.Ecosystemasstructure:Anactionableconstructforstrategy.JournalofManagement43,39–58.Alesch,D.J.,Taylor,C.,Ghanty,A.S.,Nagy,R.A.,1993.Earthquakeriskreductionandsmallbusiness.PresentedattheNationalEarthquakeConference:EarthquakeHazardReductionintheCentralandEasternUnitedStates:ATimeforExaminationandAction,USCentralUnitedStatesEarthquakeConsortium(CUSEC),pp.133–160.Bradley,S.W.,Aldrich,H.,Shepherd,D.A.,Wiklund,J.,2011.Resources,environmentalchange,andsurvival:Asymmetricpathsofyoungindependentandsubsidiaryorganizations.StrategicManagementJournal32,486–509.Brem,A.,Nylund,P.,Viardot,E.,2020.Theimpactofthe2008financialcrisisoninnovation:Adomi-nantdesignperspective.JournalofBusinessResearch110,360–369.Brüderl,J.,Preisendörfer,P.,Ziegler,R.,1992.Survivalchancesofnewlyfoundedbusinessorganiza-tions.AmericanSociologicalReview57(2),227–242.Brünjes,J.,Diez,J.R.,2013.“Recessionpush”and“prosperitypull”entrepreneurshipinaruraldevelop-ingcontext.EntrepreneurshipandRegionalDevelopment25,251–271.Campo,S.,Díaz,A.M.,Yagüe,M.J.,2014.Hotelinnovationandperformanceintimesofcrisis.InternationalJournalofContemporaryHospitalityManagement26,1292–1311.Chen,M.-H.,2011.Theresponseofhotelperformancetointernationaltourismdevelopmentandcrisisevents.InternationalJournalofHospitalityManagement30,200–212.Chen,M.-H.,Jang,S.S.,Kim,W.G.,2007.TheimpactoftheSARSoutbreakonTaiwanesehotelstockperformance:Anevent-studyapproach.InternationalJournalofHospitalityManagement26,200–212.Chen,M.-H.,Kim,W.G.,Kim,H.J.,2005.Theimpactofmacroeconomicandnon-macroeconomicforcesonhotelstockreturns.InternationalJournalofHospitalityManagement24,243–258.Clarysse,B.,Wright,M.,Bruneel,J.,Mahajan,A.,2014.Creatingvalueinecosystems:Crossingthechasmbetweenknowledgeandbusinessecosystems.ResearchPolicy43,1164–1176.Conrad,M.,2021.You’veheardofghostkitchens.Meettheghostfranchises.NewYorkTimes,February25.https://www.nytimes.com/2021/02/25/dining/ghost-kitchen-mrbeast-burger.html.Cowling,M.,Liu,W.,Ledger,A.,2012.SmallbusinessfinancingintheUKbeforeandduringthecurrentfinancialcrisis.InternationalSmallBusinessJournal30,778–800.Cowling,M.,Liu,W.,Ledger,A.,Zhang,N.,2015.Whatreallyhappenstosmallandmedium-sizedenterprisesinaglobaleconomicrecession?UKevidenceonsalesandjobdynamics.InternationalSmallBusinessJournal33,488–513.GeoffreyM.GraybealandBenjaminLawrence-9781839107191DownloadedfromPubFactoryat05/28/202210:26:59AMviaColumbiaUniversityLibrary

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64138.Drivingautomation:anevolvingdigitalbusinessecosystemtaleSaminaHusainandAnaTrigoINTRODUCTIONAutonomoustransportationisnolongerasciencefictionmiragefromthe1962cartoon“TheJetsons”orthe1982TVseriesKnightRider.Whenreminiscingaboutautonomoustransporta-tion,thepastmightbereflecteduponasthe“dreamingepoch”andtherecentpast(since2000)couldbeconsideredthe“doingepoch.”Thecurrentdiscussionbegsanswerstothequestions:“Whenwillitbecomepossibletotravelinacaroperatedwithouthumansupport?”orperhaps“Whenwillitbepossibletotravelincitiesusingflyingcars?”Doingsowilltaketime,butthroughthischapter,thereaderwilldiscoverthatthebricksforthisroadarebeinglaid.Newtechnologies,software,andcom-ponentsarebeingdesignedandoptimizedtoenableautonomoustransportationandarewellunderwaybyseveralcompanies.Already,governmentalinstitutionsarediscussingthefutureofcityinfrastructuresandprojectssuchasMcity(UniversityofMichigan,2020),whichbringtogetherindustry,academia,andgovernmenttocollaborateinareasofresearch,testing,standards,andregulations,plusthedevelopmentandcreationofautonomousproof-of-conceptvehicles.Thischapterdiscussesthecurrentautomotivesupplychainandthepotentialchangesarisingfromthegrowthofautonomousvehicledevelopment.Itoutlinestheimpactofthenewentrantsontheexistingmodel,theroletheexistingtiersplay,andtheroleorrolesthenewentrantsplay.Thechapteralsoreflectsonhowstart-upsandnewentrantsmightbeevolvingthelandscapeoftheautomotiveindustry.Themaingoalofthechapteristoexposethechangesthatthedigitalizationandautomationofthecarmightbringtothetraditionalautomotiveeco-system.Asanintroductiontothechallengingandinnovativeworldofautonomousvehicles,thechapterpresentsthemainconceptsaswellasthecurrentsituationofproductsandservicesdevelopedbyautomotivecompanies.Theworkdevelopedanddiscussedinthischapterfocusesontheautomotiveindustryecosystemevolution,notontheflyingcarsconceptorwhichcompanies(suchasTeslaandUber)arealreadyexploringit.Itisimportanttohighlighttheframeworkofthebusinessecosystem.Intheautomotiveindustry,thesupplychainencompassesabroadnetworkofplayers,suchassuppliersofrawmaterial,components,andthefinalproduct.Italsoincludestheretailagencies,competitors,andcustomers.Itmayalsoextendtoregulatoryandgovernmentalorganizations.Alltheseplayersarepartofthebusinessecosystemandareengagedinbringingthefinalproducttomarket.Aspartoftheresearchdevelopedforthischapter,industryexpertsweresurveyed.Theindustryprofessionalsandsubjectmatterexpertshaverolesinvariousdifferentareasoftheautomotiveindustry,andtheirthoughtsvalidatethesuggestionsandstatementsdiscussedinthischapter.Inaddition,literatureresearchwasconductedtoprovideanoverviewofthe630SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

642Drivingautomation:anevolvingdigitalbusinessecosystemtale631Table38.1Levelsofdrivingautomation,basedonSAEreportLevelRoleofhumandriverHumaneyesHumanhandsRoleofdrivingautomationsystem(DAS)0NodrivingHumandriveriscontinuouslyONONDoesnotperformanyroleautomationexercisinglongitudinalandlateralcontrol1DriverassistanceHumandriveriscontinuouslyONONLateralorlongitudinalcontrolisexercisinglongitudinalorlateralaccomplishedbythesystemcontrol2PartialdrivingHumandriverhastoONTemporarySystemhaslongitudinalandlateralcontrolautomationcontinuouslymonitorthesystemOFFinaspecificusecase.3ConditionaldrivingHumandriverdoesnothavetoONbutTemporarySystemhaslongitudinalandlateralcontrolautomationmonitorthesystematalltimes;relaxedOFFinaspecificusecase.Systemrecognizesmustalwaysbeinapositiontotheperformancelimitsandrequestsdriverresumecontroltoresumecontrolwithinasufficienttimemargin4HighdrivingDriverisnotrequiredduringOFFOFFSystemcancopewithallsituationsautomationdefinedusecaseautomaticallyinadefinedusecase5FulldrivingDoesnotperformanyroleOFFOFFSystemcancopewithallsituationsautomationautomaticallyduringtheentirejourney.NodriverrequiredSource:SAEInternational(2018).historyandcurrentautomotivescene.AlsoincludedaresomeissuesreflectedinongoingeffortsbytheIEEEEuropeanPublicPolicyCommitteeonautonomousvehicles(IEEE,2020).AUTONOMOUSVEHICLESThetermsautonomousvehicle(AV),connectedautonomousvehicle(CAV),intelligent,connected,andautonomousvehicle(ICAV),self-drivingcar,anddriverlesscarshavebeenusedinterchangeably.Forthescopeofthischapter,weuse“AV,”definedasavehiclethatusestechnologiesandcomponentssuchassensors,radars,lightdetectionandranging(lidar),camerasandsoftwaretosafelyoperateandcontrolitself,withoutassistancefromahumandriver.AsdefinedbytheMerriam-Websterdictionary,“automation”isan“automaticallycon-trolledoperationofanapparatus,process,orsystembymechanicalorelectronicdevicesthattaketheplaceofhumanlabor”(Merriam-Webster,2020).Automateddrivingimpliesthatthedriverhassurrenderedtheabilitytodrive(thatis,allappropriatemonitoring,interventions,andactionfunctions)tothevehicle’sautomationsystem.Eventhoughthedrivermaybealertandreadytotakecontrolatanytime,theautomationsystemcontrolsallfunctions.LevelsofDrivingAutomationTheSocietyofAutomotiveEngineers(SAE)definesataxonomyonthelevelsofdrivingauto-mation(SAEInternational,2018).AsshowninTable38.1,theSAEcategorizedthelevelsofAVsfromnodrivingautomation(Level0)tofulldrivingautomation(Level5).SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

643632HandbookondigitalbusinessecosystemsAtLevel0,thesystemdoesnothavethecapabilityofperformingthedynamicdrivingtask(DDT),whichiseffectivelyoperatingavehiclesafelyinon-roadtraffic.ThedriverhastobevigilantofthesurroundingsandperformstheDDT,managingbothlongitudinal(speed)andlateral(steering)functions.AtLevel1,systemcapabilityengageswithpartsoftheDDT,butthedriverisalwaysalertandengaged.Essentiallythedriversupervisesthedriverassistancesystemandcaninterveneimmediatelyifneeded.Thesearedriverassistancefunctionssuchascruisecontrolandlaneassistance.Whenthedrivercanletgoofthelateraltask,inascenariosuchaslaneassistanceincombinationwithcruisecontrol,thentheautomationlevelrisestoLevel2.Anotherexampleisparkingassistance.Level3allowsthedrivertorelaxalertnessandengagementfromtheDDT,whichisonlypossibleinscenariosforwhichthesystemisdesigned,eitherintrafficjamsoronhighways.Thedriverisstillthefinalfallbackandremainsinpositiontoreactwithinaperiodoftime.InLevel4,thesystemismonitoringanddrivinginscenariosforwhichitwasdesigned.Thedriverisnotinafallbackposition.Thisisthecaseforvaletparkingassistanceandtrafficjampilot.Finally,Level5bringsmorecontroltothesystem,suchthattheAVcantravelfrompointAtopointBinafullyautomatedmodeonanyroadtypewithoutadriver,performingsimilarlytoahumandriver.Anexampleisthepotentialrobottaxi.ResilientandstablelongitudinalandlateralfunctionsarenecessarycontrolmechanismsforAVsastheyevolvefromLevel0to5.Tobetterappreciatethetableofcategories,herearesometermstoconsider:●Longitudinalcontrol:regulatesthevehicle’scruisevelocity(gasandbrakepedal;forexampleanti-lockbrakingsystem,ABS,topreventwheelsfromlockingduringbraking,anti-slip,oranti-tractioncontrol).●Lateralcontrol:steersthevehicle’swheelsforpathtracking(unexpectedroadsituation,forexample,mooseonroad,suddenextremereactionwithsteeringtensionorresistanceonsteeringwheel).●Drivingautomationsystem(DAS):relievesthedriverofthetaskofdriving,offersmorecomfort,andincreasessafety.Inanemergency,anadvanceddriver-assistancesystem(ADAS)cansupportthedrivertocontrolthecar.Liabilityforthetaskofdrivingalwaysremainswiththedriver.AutonomousTechnologyTheDefenseAdvancedResearchProjectsAgency(DARPA)GrandChallengein2004isconsideredthetriggerpointforautonomoustechnologydevelopment,appliedtomobilityandtransportation(BurnsandShulgan,2018).TheobjectiveoftheGrandChallengewastostim-ulatethedevelopmentoftechnologiesandfuelinventiveideasforthefirstfullyautonomousgroundvehicles.Itwassoenticingthatitattractedawiderangeofresearchinstitutionsandinitiatedresearchinautonomousdriving.Inthetraditionalautomotivedomain,thecarisatoolthatthehumancanoperatetobetransportedortotransportotherpeopleandgoodsfromonelocationtoanother,bringingvalueaddedtotheenduser.Consideringtheconceptoffulldrivingautomation,thecarwillnolongerbeatooltobeoperatedbyahumanandwillpossiblybeusedasatransportationplatform.Theautonomouscarwillprovideanimportantservicetotheenduser:transportingpeopleandgoodsfromonelocationtoanother.Additionally,theAVcanpotentiallyallowtheSaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

644Drivingautomation:anevolvingdigitalbusinessecosystemtale633incorporationofaserviceslayer,whichcreatesopportunitiesfornon-automotivecompaniestoenterthetransportationindustryspaceandeatasliceofthatmarket’spie.TheAVlandscapeisvast,andthereisawiderangeofcompanieswithproductandsolutionroadmapstoambitiouslyachievefullyautomatedvehicles.Amblard(2020)providesavividpictureoftheorganizationsthatcontributetotheAVsolution,fromthehardwarecomponentstosoftwaresolutions(Amblard,2020).Start-ups,BigTech,andincumbentsarecollaboratinganddevelopingnewsolutionsneededtoadvancefuturetransportation.Thefullyautonomousdriving(automationLevel5)willconsistofseveralcomplexsub-systemsthatareincorporatedintothetraditionalcar.TheAVsolutionhasamainstructurecomposedofthephysicalvehicleandanadditionalcomplexsystemwhichwillreplacethehumandriver(Winneretal.,2018).Whendesigninganautonomoussystemforon-roadtransportation,thereareatleastthreeareastoconsider:strategic(routeandnavigationplanning),tactical(situationassessmentanddecision),andoperational(maneuveringthevehicle).Similarly,autonomousdrivingcanberepresentedinfunctionalareasorblocks:perception,decisionandcontrol,andvehicleplat-formmaneuvering,asshowninFigure38.1.Figure38.1AutonomousdrivingfunctionalblocksToreplacethehumandriverwithanautonomoussystem,theconventionalvehicleneedstobeequippedwithadditionalcomponentsforsensingtheenvironmentaroundthevehicleandforprocessingthecollecteddata.Sensorsthataretypicallyusedincludesonar,radar,lidar,cameras,inertialmeasurementunits(IMUs)andaglobalnavigationsatellitesystem(GNSS),amongothers.Thesesensorswillbethe“eyes”ofthecarandcollectdataaboutthesur-roundings.Remarkableprogresshasbeenmadeinsensorsdevelopment,resultinginadrasticdecreaseincomponentcost.Forexample,itisanticipatedthatthepriceoflidarwilldecreasefromitscurrentvalueofUS$75000(Bejarano,2019).Thenewstart-upIrishasannouncedlidarsforjustUS$1000.TheIrisproductwillbelaunchedinproductionvehiclesin2022(Coldewey,2019).SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

645634HandbookondigitalbusinessecosystemsAnotherimportantsourceofexternaldatacanbeaccessedthroughconnectivity,usingeithervehicle-to-vehicle(V2V)orvehicle-to-everything(V2X)communication.Dataexchangebetweenvehiclesandtheinfrastructurewillenableasaferautomateddrivingexperience.V2VorV2Xareexpectedtobepartoffuturegenerationsofadvanceddriverassistancesystems(ADASs),whicharesystemssuchasnightvision,cruisecontrol,lanedeparturewarning,orautomaticemergencybraking,thatfacilitatedriveractivityandaimtoavoidaccidentscausedbyhumanerror.Inthisaspect,acrucialissueishowtoprocessthevastamountofdata,whichaccordingtoIntelcanreachabout4000GBor4terabytesofdataperdayandperAV(Intel,2016).Sensorfusioncorrespondstothecombinationofdatathatareprovidedfromdifferentsensors.Thedatacollectedfromthecar’ssurroundingsneedstobeprocessedtoperceiveandunderstandtheenvironment.Theessentialprocessingsystemwillconsistofapowerfulhard-wareplatformcombinedwiththenecessarysoftware.Inaddition,acar’sinternalcommunica-tionsystemisrequired,whichcanhandlethehighdataratesaswellasreal-timerequirementsfordatatransfer.Theseelementswillenablethecartoidentifyitspositionontheroadorwithrespecttopotentialobstacles.Sensorscombiningtheadvantagesofthedifferenttypesofsensorswillreducetheuncertaintyaboutthevehicle’ssituation.ThecombinedsensorinputsallowtheAVtoknowwhereitisinrelationtoitssurroundingsandinrelationtootherobjectsorpeople.Thefunctionalblockofdecisionandcontrolisresponsiblefortrajectorygeneration,energymanagement,instancediagnosis,andfaultmanagement.Thelastfunctionalblockoftheautonomousdrivingconcernsvehicleplatformmaneuvering.Thisisthesystemrespon-sibleforthemovementofthevehicle.Maneuveringincludesplatformstabilization,passivesafety,andtrajectoryexecution(acceleration,steering,andbraking).Inautonomousdriving,algorithmsplayacrucialroleineachsystempreviouslymentioned,andconstituteacriticalpartoftheautonomoussystem.Artificialintelligence(AI)playsanimportantroleinADASs,thatis,recognizingtrafficsignalsoravoidingcollisions.Machinelearningwillbefundamentalinlearningfromtrafficscenarios,accidents,orothervehicles.Itshouldbenotedthattheincreaseinprocessingpowerachievedinrecentyearsisafundamentalenablerfortheautonomoustransportationrevolution.CompaniessuchasNvidiaorArmhaveinvestedheavilytoaccelerateandadvancetheirproductsandservicesfortheautonomousindustry(Arm,2020;CurmeiandAutoevolution,2020).ThepursuitofAVsatalllevelsofautonomousdrivingiscertainlychangingtheautomotiveindustryecosystem.Inthefollowingsection,abusinessperspectivewillbepresented.AUTOMOTIVEBUSINESSECOSYSTEMStart-upsandnewentrantsaredisruptingtheautomotivebusinesswithprogressivesolutionsandbusinessmodels.Theirimpactsmaycauseashiftinthetectonicplatesoftheautomotivevaluechain;avaluechainbuiltuponamulti-billiondollarglobalindustry.Asourfocusisontheshiftinthesupplychain,weshoulddefinethenewentrants.Newentrantsarecompaniesthatentertheautomotivemarketfromacompletelydifferentindustry.Forexample,Waymo,Zoox,Apollo,Titan,andTADSim2.0arejustafew.Inaddition,thereisamultitudeofstart-upsworkinginthisspacewithnewandinnovativetechnologies,suchasPony.aicreatingAIsolutions,DeepMapdeliveringahigh-definitionmappingservice,ArgoAIbuildingatech-nologyplatform,andOusterworkingonhigh-resolutionsensors,tonameafew.SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

646Drivingautomation:anevolvingdigitalbusinessecosystemtale635Manyofthenewentrantscomewithbackingfromwell-establishedcompanies(theBigTechs).Tofurtherelaborateonthelistabove:WaymoisbackedbyAlphabet(Google);ZooxisanAmazonacquisition;BaiduworkshandinhandwithApollo;ApplehasitsTitanproject;andTencenthasTADSim2.0.Theyarearmedwithlargepursesanddeeppoolsofresources,enablingdemandingandmission-criticalproductandsolutiondevelopment.Inaddition,globalinvestorshaveheavilyinvestedintoautonomousdriving-relatedcompanies.Investmentbetween2014and2017wasestimatedtobesome$80billionintheareaofAVactivitiesbytheautomotiveindustryandventurecapitalists(Johnston,2020).Todaytheinvestmentnumbersareevenhigherandstillincreasing,andthelandscapeofnewentrantsisalsogrowing.AutomotiveValueChainTheautomotiveindustryvaluechainisanecosystemoftieredsuppliersthatmanufactureanddistributetheirproductstotheoriginalequipmentmanufacturer(OEM)andtothecarbrandandmanufacturer,thatis,GM,Ford,Toyota,VW.Ultimatelytheprocessentailsthetransfor-mationofrawmaterialandhardwareintocomponents,partsandsubsystemsandfinallyintoacompletedproductproducedbytheOEM:acar,atruck,orabus.Thedistributionchannelsandretailoutletsreceivetheproductsfordeliverytothefinalcustomer.Figure38.2representstheautomotivevaluechainasweknowittoday.Source:Henericetal.(2005).Figure38.2AutomotivevaluechainAsdefinedbytheLeibnizCentreforEuropeanEconomicResearch,theOEMormanufacturerisacompanythatmanufacturesand/orassemblesafinalproductandworkswithitssupplierSaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

647636Handbookondigitalbusinessecosystemsnetworktoobtainthepartsandpiecesneeded(Henericetal.,2005).Thesupplierindustryisstructuredinseveralgroupsortiers:●Tier1:acomponentmanufacturerworkingcloselywiththeOEMtodeliverdesign-specificcomplexsystemsandmodules.●Tier2:producesvalue-addingpartsintheminorsubassemblyphase.●Tier3:suppliesrawandengineeredmaterialsandspecialservices.Forthefinalproductstobemadeavailabletotheenduser,alongsideretailforindividualcarsalesisfleetmanagementforcorporatesales,whichprovidesanefficientandcost-effectivepath;thesearebothchannelstomarketforOEMs.Theautomotivevaluechainisnowconfrontedwithenvironmentalprotectionincentivesandregulatoryinstruments.Thesehaveencouragedthedevelopmentofalternativedrivetech-nologyandthereductionofdrivetransportationemissions.Electricenginetechnologyisnotanewrevelation,andelectriccarshavealonghistory.Themodern-dayall-electriccarshavebeencommerciallyavailableforthepasttenyears,andnowmostOEMshaveanelectriccarmodelintheirportfolioofofferings.Self-drivingcars,orAVs,arenotmandatedasofyet,butthebenefitstheycouldbringarestrongmotivationfortheirdevelopment:increasedsafety,reducedtrafficfatalitiesandacci-dents,improvedtrafficflow,convenience,andmostimportantly,accessibletransportationforeveryone.Duetopublicdemand,semi-autonomoussafetyfunctionsandfeaturesarealreadymainstreamformanycarbrands,withupgradesbeingofferedinmodelsrangingfromluxurytomid-priceclasses,enablingLevel1toLevel3asnotedinTable38.1.AutomotiveEcosystemEvolutionInthissubsectionweexploredifferentscenariosinthevaluechainresultingfromnewdevel-opments,andhowthesedevelopmentsimposeanewstructureonthevaluechain.Withrespecttotheproductionofelectriccars,newsuppliersjointheecosystemtodeliverelectricdrivesystems,includingbatteries.Thesesuppliersmayfindthemselvesinoneofthetierpositionswithinthevaluechain.TherelationshipbetweenorthestructureofthetiersandtheOEMmaynotbealteredorthreatenedwiththeadditionoftheelectriccardesignanddevelopment.However,withtheproductionofLevel3to5AVs,therelationshipwillbealtered.FortheproductionofAVs,theecosystemexpandswithaflurryofnewsuppliersforAVhardware,software,applications,connectivityandsensordevices,andanalytics.Similarly,thesesupplierswillfindthemselvesinoneofthetierpositionswithinthevaluechain.FordrivingautomationLevels1and2,thevaluechaintierrelationshipsandpositionmayremainastheyarefortraditionalvehicleproduction.Aswemoveintomoreadvanceddrivingautoma-tion(Levels3to5),thetechnologyandsolutionsneededfortheAVtooperatesafelybecomehighlycomplexandsoftware-driven.TheprevioussectiondiscussedwhatisneededtodevelopanAV;thissectionconsiderswhoisabletodeliveranAV;anAVwithadvancedlevelsofdrivingautomation(Levels3to5).Withtheirknow-how,incumbentssuchasBMW,VW,andthelikearewellpositioned,withmorethan50yearsofcarmanufacturingexperience.AnewmembertotheOEMcircleisTesla,foundedin2003.Inlessthan20years,TeslabecameasuccessfulmemberoftheOEMcircleandisequallywellpositionedwithitsinnovativevehiclesandAVroadmap.TheOEMsSaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

648Drivingautomation:anevolvingdigitalbusinessecosystemtale637tendtohavestrongproductsafetyandtestingcredentials,andwell-establishedrelationshipswiththesupplychain,andcangivethedrivertheultimatedesignanduserexperiencewitharecognizedandtrustedbrand.Thiswell-controlledecosystem,perhapsaclosedsystem,enablesthosecompanies’strengthsindesigningtheidealcaranddrivingexperience.ForbuildinganadvancedlevelAV,thenewentrantsbringahighlevelofskills,agility,andflexibilityindevelopingsoftwareplatforms,toolsandapplicationsforthecriticalsystem-drivingfunctionsthatarenecessary.Inadditiontheyhavein-depthfamiliarityincollectingandprocessinghugeamountsofdata,andidentifyingandunderstandingchanginguserhabits.Thesetraitsenablethenewentrantstomastercomplexcriticalsoftwaresystems,andthesesystemswillbekeytodeliveringahigh-qualityAVuserexperience,ordrivenexperience.Isthereanevolutionaryorrevolutionarychangeintheecosystemoftheautomotiveindus-try?Alookatnewsupplierstotheecosystemdoesnotsuggestabigchangewiththecurrentlevelofdrivingautomation.Thereis,ontheotherhand,apotentialshiftwhenlevelsofdrivingautomationadvanceandbecomefullyautomated.Thisiswherethenewentrantsstarttotakecenterstage.BigTech-supportedfirmshaveextensiveexperiencewithdatacollection,access,use,andprocessing,leadingtousefulinformation.Theyalsohavetheknow-howtobuildtheartificialintelligenceoranalyticaldecision-makingsystemsthatenabletheAVtosafelytakedriveractionsthroughtheautomatedsystem.Whenissuesofcriticaldecision-makingdonotliewiththeeyesandthehandsofthedriverbutinsteadaretransferredtotheautomatedsystem,thenadditionalrobustnewtechnologiessuchasmachinelearning(ML),InternetofThings(IoT),analytics,anddatavisualizationarevital.Inaddition,thesecompanieshavethesoftwareexpertisetoworkwithflexiblesolutionstocontinuouslymaintain,improve,andaddnewfeaturesandservicestotheAVplatform,plustheycanbuildrealisticscenariosandcomprehensivetestingoftheintegratedplatform.Theplatformownerwilldefinethehardware—orinthiscase,thecar—requiredtoruntheAVtechnologyandservice.AsmoreandmorecomplexsoftwareisneededtooperateanAV,thenewentrants,withtheirsoftwareexpertise,couldtakeoverandplayamajorrole.TheycouldeventaketheleadingroleawayfromtheOEMinthevaluechain.Thenewentrantsarenotjustprovidingcomponents,theyarecontrollinganddefiningthefinalproductandservice.Fortheadvancedlevelsofautomation,whereallfunctionsoftheAVaresystem-driven,theAVplatformproviderwilldefinethehardwarethatbestrunstheplatformandcollaboratewithatrustedstrategictier-onepartner,potentiallytheOEM,asillustratedinFigure38.3.Thesoftwareperformance,robustnessandaccuracydemandedforthecriticaldecision-makingplatformsurpassthehardwareperformanceoftheOEM’scar.ThepossibilityofBigTechtakingtheleadinthedesignandsolutiondevelopmentofAVs,coupledwiththedemandsofenvironmentalandsocialbenefits,mayverywellresultinfullyautonomouselectricvehicles.Duetothepotentiallyhighpriceofbatteries,sensors,andcomplexsoftwaresystems,thecostofownershipmaybeprohibitiveforthegeneralmasses.Theconceptofusershipversusownershipbecomesplausibleandmayshifttheretailcustomerrelationshipstofleetsandrideservices.BigTechistakingtheleadandforgingaheadindesigningafullyautonomousvehicle,plusthepublicisdemandingenvironmental,lifestyle,andsocialconsiderations.Presumablythecostofownershipishigh,andtheinterestinownershipislow.Asaresult,thebusinessmodelischangingfromacarownershiptoacarservicesscheme,imposingadditionalchangestothevaluechain.SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

649638HandbookondigitalbusinessecosystemsTheAVdifferentiatorswilldictatecompetitiveadvantages,andthetechnologyandplatformsophisticationwillbecomethefoundationofnewfeatures.Thein-car,ordriving,experiencemustbepositiveandcompellingfortheusers;servicessuchasinfotainment,com-munications,workenvironment,andleisureenvironmentwillbethestickyservicesandkeeptheusercomingbackformore.Figure38.3Apossiblescenarioofthe(r)evolutionintheautomotivevaluechainDigitalApplicationsandTransportationServicesTheAV,asasystemtoreplacethehumandriver,willaddnewscenariostotransportation,engagingpeopletoinventnewandinnovativeservicelayers.TheAVsrepresentanoppor-tunitytochangethecarfromaproducttoaservicefromtheperspectiveofthefinaluser.ThissubsectionwillfocusonservicesanddigitalapplicationsthatcanbeappliedbytheAVindustry,anddifferentscenariosthatAVscanenableforthefinalcustomer.Theadvanceddriver-assistancesystems(ADASs),whichprovideadaptivecruisecontrol,forwardcollisionwarningorbraking,lanedeparturewarning,ortrafficsignalsrecognition,arealreadyinoperationonLevel2andLevel3ofthedrivingautomationclassification.Thesesystemsprovideextracomfortandsafetytothedriverwhileimprovingthedrivingexperience.Withtheevolutionofthesystemstowardthefullyautonomousvehicle,thedriverwillincreas-inglyhavemorefreedomtorelax,andtraveltimecouldbespentonothertasks,fromworkingtoleisureactivities.TheconceptoftheAVin-cabinexperienceforthefutureofmobilityisbeingexploredbycompaniessuchasEyeris(2020).SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

650Drivingautomation:anevolvingdigitalbusinessecosystemtale639Transportationservicesaregainingattentionsincetheyhavethepotentialforgeneratingrevenue;assuch,companiesarepermanentlyworkingonimprovingtheirtransportationservices.Forexample,Uber,Lyft,Grab,orsimilarride-hailingcompaniesworkingontransportationserviceshavebeenlearningabouttheircustomerseverydaybasedondatacollectionthroughtheirapps,andusingdataanalyticstooptimizetheirservicesandimproveusers’loyalty.Thesecompanieshaveanedgethatcouldhelpthembecomeleadersinqualityofexperience(QoE)andqualityofservice(QoS),twokeyperformanceindicators(KPIs)toconsiderforstayingcompetitiveinthechangingdigitalmarket.AIcanbeusedtocustomizetheinfotainmentfeatureintheautonomouscar,includingtheseatpositionormirroradjustments,ortheentertainmenttobeplayed,suchassongs,games,ormovies.Auseroftheservicecouldswitchvehiclesandcontinuetoplaywherethemediawaspausedintheirpreviousride.Theuserbehavior,oroccupantunderstanding,willbeanimportantissuetoconsiderintransportationservices.Infotainmentinstalledinthecurrentcarsisbasicandrigid(withfewfeatures).Inrecentyears,Tesla’sdashboardhasaidedandexposedinfotainmentwithafreshperspective.Potentially,withAVs,in-carinfotainmentcanalsoshifttoasubscription-basedrevenuemodel,suchasSpotifyorNetflixtypeservices,followingtheTeslarevenuemodelofofferingpremiumconnectivitypackages(Tesla,2020).Inadditiontoanalytics,whichencompassesoccupantunderstanding,drivingaid,andmon-itoring,theAVlandscapedefinedbyAmblard(2020)containsanAVapplicationsgroupthatincludesfleetmanagement,goodsdelivery,andshuttleandrobotaxis.Inthefleetmanagementdomain,theAptivandHyundaijointventure,Motional,isoneexampleofcollaborationtoachieveafleetofrobotaxis,addingtestvehiclesintotheLyftnetwork(Motional,2020).AsshownbyAmblard’slandscape(Amblard,2020)andbytheexamplesprovidedinthissub-section,AVsbringnewopportunitiesinseveraldomains.Alongthepathtoachievethefullyautonomousvehicle,newdigitalapplicationsandtransportationservicesmayleadtolifestylechangesandimprovedqualityoflife.SocietalPerspectivesAnticipatingchangeBuildingtheAVisonlythestart.Otherareasthatneedtobetakenintoaccountaretrans-portationinfrastructures,urbandesign,informationandcommunicationtechnology,sensoranddatacollection,andprocessing,tonameafew.Itwillbeessentialtodesignoradaptforthisnewmeansoftransportation.Forexample,fuelstationswillpotentiallybereplacedbyanetworkofbatterychargingpoints.Withtheassertionthatthepublicinterestisgrowingtowardride-hailingorride-sharingser-vices,ownershipmayreduce,andthequantityofvehiclesontheroadswillreduce.However,thenumberofhourstheAVsspendontheroadmaybehigher.Thiswouldresultinlessneedforparkingareasanddriverlicenses,andpotentiallycarinsuranceasweknowitwillbemodified.Theseandothercar-ownership-relatedmatterswouldchange.Publictransportationsystemsrunningtodaymaylookverydifferentoncemulti-userAVs(versusindividualuser)areavailable.Thecityinfrastructureandsurroundingequipmentwillgeneratetremendousamountsofdata.Thisdatawillbeusedtoenableandoptimizesafetransportationandincreasetherelia-bilityofthecompleteinfrastructure.Inaddition,thisconstantdatacollectioncouldbeusedtogaininsightintohumanbehaviorinsurroundingenvironments.Thedatacollectedwillberel-SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

651640Handbookondigitalbusinessecosystemsevanttobuildanaccurateinterpretationoftheareasurroundingwherevehiclesaretraveling.Thesedatawillbeanalyzedand,basedontheanalysisresults,criticaldecisionswillbetakenbytheAVregardingacceleration,brakes,steering,andsoon.Togetherwiththedata,AVtech-nologieswillbeusedtomanageandcontrolthevehicle’sposition,speed,andnearnesstoitssurroundingswithpedestrians,buildings,vehicles,andotheritems.Alongwiththebenefitsofbuildingamechanismforsafedriving,AVsbringchallenges.Suchtechnologiesmeanlackofanonymity.Theyhavetheabilitytocollectenormousvolumesofdata,andthisraisesethicalimplications.Thesechallengesarebeingaddressedbyanumberofregulatorybodies,bothintheUnitedStatesandintheEuropeanUnion,plustheInstituteofElectricalandElectronicsEngineers(IEEE)isworkingonpolicyrecommendations.Aserioustopicisprivacyanddata,wherecriticalelementsondatarepository,ownership,andprotectionmustbeexaminedandsecuresolutionsadvocated.Cybersecurityisanotherfocalpointbecauseoftheneedtocombatweaknessandpreventunauthorizedaccess.Otherareasunderconsiderationarepublicsafetyfordrivers,passengers,andpedestrians,andensuringthatautomateddrivingissafeinalldrivingconditions.Productsafetyisvital,guaranteeingthatAVspasstestspecificationsandlifecyclemanagementwiththehighestscrutiny.Liabilitypracticeonhowtodistinguishdriverresponsibilities,systemresponsibili-ties,andexternalfactordependenciesmustbebetterunderstood.Itisnotonlythetechnology,thevaluechain,andtheresultingbusinessoutlookthatareevolving,butalsothetransforma-tionofthecompletetransportationecosystem.ConsideringtheAVsasdescribedintheprevioussections,thesesolutionscanbringnewcommercialopportunitiesinareassuchasfleetmanagement,goodsdelivery,andshuttlesorrobotaxis.Academia,dataengineers,anddatascientistswillresearchtofillgapsintheautomotiveecosystem.Thiscanbeachievedbyusingbigdata,dataandmobilityanalytics,tounderstandwhoisbuyingAVsandtodevelopcustom-madeapplicationsorservicesthatcanfulfillmarketneeds.OwnershipversusserviceReflectingonthepotentialhighpriceofAVsatLevels4and5,andthepotentialofowningversususing,afuturescenariocanbeimaginedwhichwillhavemorecarusershipthancarownership,wherethereislessinterestinowningacar,andmoreinterestinbeingauserorapassengerofasharedservice.Thenumberofdrivinglicensesisdecreasing,revealingthatyoungpeopleareusingalter-nativetransportation,knownasthe“peakcar”phenomenon,wheretheyarenotcarownersbutserviceuserswhorelyontransportationservicessuchasUberorLyft(ThomopoulosandGivoni,2015).Ontheotherhand,AVmayalsobetterservetheolderpopulationthatisnolongerabletooperateacar,providingthemwithfreedomtomovewhereverandwhenevertheywant.Anotheradvantageofthetransportation-as-a-service(TaaS)ormobility-as-a-service(MaaS)scenarioconcernsvehiclemaintenanceorgastanklevel.Inthisscenario,theserviceuserdoesnothavetoworryabouttheseissues.AVsmayenableconvenienceincar-usingversuscar-owning.UrbanprojectionandecologicalimpactFocusingonurbanfactors,AVscanrevolutionizecityinfrastructures,leavingmorespaceforpedestriansandcycliststoenjoy.Carsharing,robotaxis,orshuttleswillreducetrafficconges-tion.Evenifthemajorityofpeopleopttocontinueowningcars,theAVcanchoosethebestSaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

652Drivingautomation:anevolvingdigitalbusinessecosystemtale641roadtotake,orgivesuggestionssopeoplecanenjoydoingotherthings(working,playing,relaxing)insteadofoperatingthevehicle.Theoptimizationofcarusagecoulddecreasethenumberofvehiclesincirculation,anduserswouldnothavetodealwithissuessuchasparkingthecar.AUnitedKingdomreportbytheRACFoundationestimatesthatthetypicalcarisonthemoveforsixhoursintheweekandisparkedfortheremaining162hours.Theaveragecarisparkedathomeforabout80percentofthetime,andelsewhereabout16.5percentofthetime.Itisonlyinrealuseabout3.5percentofthetime(BatesandLeibling,2012).TheusageofAVwillpossiblydecreasetheecologicalimpactsoftransportation.Onereasonisthetrendtousealternativefuelsolutionsthroughelectricalvehicles.Anotherreasonisthatroutechoiceandoptimizationwillbesupportedbyalgorithms,whichleadstoanotherfactor:potentialreductionintrafficcongestion.Thecar-sharingsolutionsandon-demandtranspor-tationmayalsoinfluencethereductionoftrafficcongestion.Moreover,withthereductionoftrafficcongestion,evenifthecarcontinuestobepoweredbyfuel,thefuelwasteandemissionsmaydecreasewithanAVsolutionanditsroute-optimizedusage.SaferroadsUnlikehumans,anautonomousdriverwillnevergetdistracted,willneverdrive“undertheinfluence,”andwillneverbeemotionallyunstable.Moreover,acomplex-criticalsystemwillmakefasterdecisionsthanpeopleandwilldefinitelyrespectspeedlimitsandothertrafficrules.AVsareunderintensivesupervisionwithrespecttosafety,andcertificationforAVswillcertainlybeevenmoredemandingthanforconventionalvehicles.Furthermore,theauto-motiveindustryalreadyhasastrongsafetyculture,andincumbentsareawareofthesafetychallengesforthenewautonomousparadigm.Highsafetystandardsandreliabilitytestsareperformedonallcarsbuiltbytheincumbents.Incontrast,AVcomplexityduetotheincorpo-ratedsystemwillbeenormous,andautomakerswillhavetoovercomechallengestoguaranteethatsoftwareissafe,andanticipatehowthesystemshouldreacttocriticalsituationsthathavenotbeencontemplated.Tobeacceptedbysociety,theAVmustbesaferthanahuman-drivencar.Thismeansthatsoftwareintheautomotiveindustrycannotbereleasedinbetaversionscontainingbugsorfailuresthatmayresultinanaccidentorfatality.InAVs,thereisnoroomforuncertaintyanderrors.Severalentitiesareworkingonthebestapproachtoregulatingandstandardizingsafetyproceduresandtestingrequirements.AnexampleofanorganizationthatiscriticallystudyingethicsandsafetyofAVsistheIEEE.Gatheringpeoplefromindustry,governmentinstitutions,andacademia,theIEEEaimstoaddvaluetotheAVdiscussionsandprovidethebestguidanceanddirectiontopolicy-makers,suchasitseffortswiththeEuropeanPublicPolicyCommitteeworkinggroups(IEEE,2020).Critical-complexsystemswillbesubjecttomorerigorousregulations,andassuch,autonomouscarmakerswillhavetocontinuouslyandreliablycomplywiththehigh-qualitycriteria.Testscenariosforsimulationshavebeenproduced,andthemainconsiderationtomeasuresafetyisthenumberofmilesdrivenbyanAV.Nevertheless,studiessuchastheoneconductedbyKalraandPaddock,whoresearchedthenumberofmilesandyearsneededtodemonstrateAVreliability,showdifferentresults.Oneoftheconclusionstheypresent—usingafleetof100AVsdriving24hoursaday,365daysayearandatanaverageof25milesperhour—isthatitwouldtakeabout225years,or5billionmiles,todemonstratethattheAVfailurerateislowerthanthehumandriverfailurerate(KalraandPaddock,2016).Inotherwords,AVmanufacturersshouldre-evaluatehowtoeffectivelymeasuresafetyandreliability.SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

653642HandbookondigitalbusinessecosystemsMoreover,severaltestsofAVsarebeingdevelopedinacontrolledenvironment,whichmeansthatsomescenarioswhichareunexpectedandhappeninginreallifearenotincluded.UnderstandinghowtomeasurethesafetyofAVsandhowamanufacturershouldtestthesafetyisanintriguingchallenge.TheassuranceofsafetymustbecomplementedbyothermethodsratherthanthenumberofmilesperformedbyanAV.SafetystandardsforAVsarecriticaltohelpmanufacturersandpeopleacceptthetechnology,andtoreflectonthesafestandmostreliablewaytomitigateaccidents.IndustryperspectivesThebusinessperspectiveofthetransportationindustrycouldbeconfrontedwiththreeareasinthefuture.First,emission-friendlyelectricvehicles,motivatedbyenvironmentalinterests,pushedbyregulatorydemands,andsupportedbygovernmentincentives,areenteringthemainstreamoftheOEMofferings.Second,driving-automation,facilitatingsuchautomationfeaturesassafetyandeaseofdriving,arefindingtheirrouteintheautomotivemarket.Fullyautonomousvehiclesarebeingpursuedwithgreatinterest.Third,thesharedcarservice,fueledbyconsumerinterestinconvenienceandaccessibletransportation,startedwiththelikesoftheUberandLyftservices.MaaShasthepotentialtogrowbeyondthesecurrentsharedcarservices,withpersonalizeddifferentiatingfeaturesandanimprovedqualityofuserexperience.Thesethreedifferentbusinessperspectiveswilldictatethebusinessecosystemevolution.Oursurveyofindustryexperts,inareasrangingfromAVsoftwaresolutionsandinfo-tainmenttoconventionaltier-oneOEMsandautomotivecertification,resultedinopinionsandassertionsthatwerealsosharedbyus.Listedareonlysomeoftheindustryparticipants:KopernikusAutomotiveGmbH,Rohde&SchwarzInternationalGmbHandDQSGmbH.TheshiftinthevaluechainTherewasacommonviewthattheOEMs’rolewillshiftinthevaluechain,andtherewerevariedopinionsontheessenceofthistransition.Thetransitionrangedfromevolutionary,withOEMsgettingstrongerthroughnewpartners/acquisitionsinAVsoftwaresolutions,torevolutionary,withthecompletedemiseoftheOEMs.Softwaredevelopmentversushardwareistippingthescales.Investmentinsoftwaredevel-opmentforcarswilldoubleinthenexttenyears.OEMsaretransformingthemselveswithsoftwarecapabilitiesandknow-how.However,theBigTechsarealreadyinaleadingrolewiththesecharacteristicsandresources,andwillbeaccompaniedbynewmanufacturersandsoftwaresolutionandapplicationssuppliers.ChangesintransportationsystemsPublictransportationwillchange.Largeurbanareaswillhaveincreasedcarsharing,wheretheAVsaresharedbymany,butnotnecessarilyatthesametime.Thiswillalsoleadcityinfrastructuretobeoptimizedanduncongestedroutesdesigned.Thereisastrongopinionthatvehicleownershipwillnotbeeliminated,despitethepotentialhigherpriceofanAV.Therewillremainaninteresttoownone’sownvehicle,andthevehi-cleswillbecomemorecustomizedandpersonalized,within-cabinservicesandapplications.Inotherwords,AVswillbea“myspace”environment.SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

654Drivingautomation:anevolvingdigitalbusinessecosystemtale643Tobethedriverortobedriven?Thedrivingexperience—theexhilarationofthetechnique,speed,andcontrol—willbemoresignificantinvehicleswithLevel1toLevel3capabilities,wherethehumanstillplaysadrivingrole.InLevels4and5,theuserexperiencewilloutweighthevehiclefunctionalityandper-formance.Therelevanceofthein-carexperiencewillbeessential.DrivenexperiencewillbecomekeyforAVswithLevel4and5,wheretheuserisinapersonalactivityspace.Inaddition,generaloutcomesofthedrivenscenarioaresaferroadswithfeweraccidents,andenvironmentalbenefitsduetoreducedtrafficcongestionandoptimalfuelconsumption.AdditionalthoughtsOthercommentscollectedfromthesurveyindicatedtheimportanceof“rulesoftheroad,”andrethinkinghowtobestmanagethesharedspacebetweencars,AVs,pedestrians,andothermovingobjects.Furthermore,itemssuchasdrivinglicenses,insurance,andliabilityallneedtobereassessedwithrespecttodrivers,users,andAVs.Therewillbeademandtobetterunderstand,deliberateon,andharmonizethesetopics.OUTLOOKTherelevanceofthevitalcomplexsoftwareplatformforAVswillbecomethedeterminingfactorinthenewautomotivevaluechain.Datacomingfromeachsensor,camera,lidar,andothercomponentsintheAVprovideaninterpretationofthesurroundings.LocationAtoBinformationandeventualdirection,andpath-drivenbythesystem,arederivedfromsophisticatedmaptoolsavailableonboardtheAV.Softwarefunctionsthattakethecollecteddata,refineit,andthenbuilditintoknowledgewillbecomethecriticalfactorinthefinaldecision-makingmadebytheAI.Thesuppliersofthesoftwarefunctionsareasoftwareecosysteminthemselvesandwillco-evolvetogether.TheautomotivevaluechainwillbeheavilydependentonapredominantlysoftwareecosystemfortheadvancementoftheAVsolutionplatform.Drivenbysoftwaredevelopment,machinelearning,andartificialintelligence,pluscomputeralgorithms,thesewillbetheessentialingredientsinthesolution.Agilityandflexibilitywillbekeyforthefundamentalprocessinsoftwaredevelopment:design,code,test,implement,andmaintain.Inaddition,therequirementfortheautomotiveindustrywillbetocomplywithhighproductqualityandsafetystandards.Thesearenotonlyopportunitiesforthenewentrants,butalsotheirwinningattribute.Thenewentrant,asthesoftwareandplatformowner,musttakecareofthementionedelementsandtheend-to-endsystemresponsibilityandfunctionalaccountabilityoftheAV.Theirrolebecomesmuchmorerelevant,andaleadingone,thantheroleofthecarOEM.TheOEMbecomesavehiclecommodityprovider,andthenewentrantnotonlydeterminesbutbecomesthevehicleexperienceprovider.VehicleswithautomationLevels1and2aresuccessfullyandcommerciallyavailableinthemarkettoday,andbringadditionalsafetyforthedriverandpassenger.Improvementsandadvancementstothesesemi-autonomousfeaturesaredrivingthemarketformore.ThereiscontinuingmarketmotivationandenthusiasmbymultipleOEMsandnewentrantstostrivetowardachievingafullyautonomousvehicle.AVswillbeinevitable;itisonlyamatteroftimebeforeadvanceddrivingautomationwillexistineitheracontrolledenvironment,whichcouldSaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

655644HandbookondigitalbusinessecosystemsbealimitednumberofAVsonpre-assignedroads,orforgeneraloperationalusebyanyoneandeverywhere.Asadvancementsandreadinessformassrollouttakeplaceinthecomingyears,theindustrywillneedto,inparallel,define,design,implement,andmanagevarioustoolsandrulesforAVstoexistsafelyincommunitiesandsociety.Physicalinfrastructuresuchasroadsandhighwayswillneedadaptations;powerchargingstationsandservicestationswillneedtobeadded.ThetelecommunicationinfrastructuresandaccessforV2VorV2Xconnectionsandcommunicationmusthaveahighlevelofrobustnessandredundancy.Technologyimprovementstobatteriesandsensorswillbeanongoingeffort.Publicpolicyandregulationsregardingprivacyandcybersecurity,anddatacollection,man-agement,anduse,willhavetobecarefullydrafted.ThesearesomeofthekeyelementsthatneedtobeestablishedastheAVmatures.Inaddition,thetechnologyandcomponentpricepointswillhavetoreducesothatthecoststructureofafullyautomatedvehicleisnotabarriertoadoption.ThecosttobuildandmaintainAVsmaybehighandcouldmakethepriceofthevehicletoohighfortheaveragecarowner.Itcanbeassumedthatwitheconomyofscaleandtech-nologyprogress,thehighpricetagofAVswillreduce.Nevertheless,ascomparedtocurrentcars,theadditionalsensorswillcontributeheavilytotheoverallcostofanAV.Inaddition,development,testing,andmaintenanceoftheAVcontrolsoftware,alongwithadheringtostrictrequirementsforsafetyandreliability,willremainacostlyendeavor.ItisthereforeafairassumptionthatthecostoftheAVwillbesignificantlyhigherwhencomparedtosimilarnon-AVs.ThecostoftheAVmayalsobringanothershifttotheautomotivevaluechain,asshowninFigure38.3.Ashiftfromownershiptousershipinfluencestheretail-to-customerrelationshiptowardafleet-to-userservice.Whenanalyzingnewtrendsintransportation,therearetrendsincurrentsharedmobilityservicesorride-hailingservicesthatshowthereisgrowinginterestfromGenerationYnottobecarowners,buttorelyonothermeansoftransport(car-sharingsystemsormobilityservicessuchasUber).Inaddition,thereisanincreasinginterestfrompeoplewhostillwanttohavethefreedomoftransportationbutareunabletodrive.Takingthesetrendsintoaccountandaddingtheincreasedcostofcarownershipresultsinascenariowhereprovidersofmobilityasaservice(MaaS)willoperatefleetsofAVcars,whichwillservetheneedsofindividualusers.Suchacollectivefleetofon-demandvehiclescouldutilizethecarduringnearlyallhoursoftheday,insteadofjustafewhoursasisthecasewiththeaveragecarownertoday.Eventuallyfullyautonomousvehicleswillbeavailable,independentofelectricenginesorinternalcombustionengines,andownedvehiclesorshared-ridevehicleswillbemanagedbyafleetservice.EnvironmentalnecessityandapositivebusinesscasewilldictatetheflavororflavorsofAVs.Thebenefitsofzeroaccidents,notrafficjams,mobilityforall,andin-vehicleservices,arecounterbalancedwithchallengesofensuringsafety,socialacceptance,andtrust,aswellasthetechnologyviabilityandthebusinesscasetomakethisareality.AswecontinuetobuildourknowledgeandasAVplatformtechnologymatures,productrefinementwillbringvalueforthebuyerandtheuser,reinforcedwithsafetyandtrust.Therearemanyfacetstomakingawinningbusinesscaseforautonomousvehicles,withorwithoutMaaS.Theopportunityisprimarilyinthehandsofnewentrantstodesignthenewgenerationofvehiclesandleadthevaluechaininnewdirections,providingthecustomerwithultimateuserexperiencesandpremiumin-vehicleservices.SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

656Drivingautomation:anevolvingdigitalbusinessecosystemtale645ThedevelopmentofAVshasadeepandbroadhistory.WeassumeourstartingpointwiththefirstvisionofanAVasexhibitedbackin1939byGeneralMotorsinNewYork,atFuturama.Carshavebeenaroundsincethelate1800s,andtheindustrystartedwithcruisecontrolfunctionsinthe1960s.Sincethentheautomotiveindustryhaslaunchedvariousautomatedfunctionsandcars.Therefore,replacingthehumaneffortwithnoveltechnologiesisnothingnew.Automatingaprocessorataskthatdoesnotrequireahighlevelofintellecttoincreaseproductivityhasbeenanambitiousobjectiveofbusinesses.Today,carswithaninternalcombustionengineorelectricengineareavailablewithsemi-autonomoussafetyfunctionsasupgradepackages.Abroadrangeofbrands,suchasTesla,BMW,Mercedes-Benz,Toyota,andHonda,tonameafew,offerautopilot,self-parking,andautomaticlane-changingfeatures.Fromafuturisticfantasytotoday’sreality,andaveryattainablefuture,theavailabilityoffullAVswillbecomearealityandwillcomeinmanyforms.REFERENCESAmblard,M.(2020)TheLatestEditionoftheAutonomousVehiclesLandscape2020.UrbanMobility.Availableat:https://urbanmobilitycompany.com/content/daily/the-latest-edition-of-the-autonomous-vehicles-landscape-2020(accessed:September1,2020).Arm(2020)AutonomousDrive.Availableat:https://www.arm.com/solutions/automotive/autonomous-car(accessed:October12,2020).Bates,J.andLeibling,D.(2012)SpacedOutPerspectivesonParkingPolicy.RACFoundation.Bejarano,P.(2019)Autonomousity:AutonomousVehiclesandEmergingBusinessModels.Washington,DC:NewDegreePress.Burns,L.D.andShulgan,C.(2018)Autonomy.London:HarperCollinsPublishers.Coldewey,D.(2019)Luminareyesproductionvehicleswith$100MroundandnewIrislidarplatform.TechCrunch.Availableat:https://techcrunch.com/2019/07/11/luminar-eyes-production-vehicles-with-100m-round-and-new-iris-lidar-platform/?guccounter=1(accessed:July20,2020).Curmei,C.andAutoevolution(2020)Nvidia’sDriveAGXOrintopowerautonomouscarssoonerthanexpected.Availableat:https://www.autoevolution.com/news/nvidias-drive-agx-orin-to-power-autonomous-cars-sooner-than-expected-146010.html(accessed:October,122020).Eyeris(2020)DefiningtheIn-CabinExperienceforTheFutureofMobility.Availableat:https://www.eyeris.ai/(accessed:October10,2020).Heneric,O.,Licht,G.andSofka,W.(2005)Europe’sAutomotiveIndustryontheMove.Heidelberg:Physica-Verlag.IEEE(2020)IEEEEuropeanpublicpolicy.Availableat:https://www.ieee.org/about/ieee-europe/index.html(accessed:October20,2020).Intel(2016)Dataisthenewoilinthefutureofautomateddriving.Availableat:https://newsroom.intel.com/editorials/krzanich-the-future-of-automated-driving/#gs.n5rjg7(accessed:October10,2020).Johnston,M.(2020)10BiggestCarCompanies.Investopedia.Availableat:https://www.investopedia.com/articles/company-insights/091516/most-profitable-auto-companies-2016-tm-gm.asp(accessed:October5,2020).Kalra,N.andPaddock,S.M.(2016)Drivingtosafety—howmanymilesofdrivingwouldittaketodemonstrateautonomousvehiclereliability?RANDCorporation.Availableat:https://www.rand.org/pubs/research_reports/RR1478.html.Merriam-Webster(2020)Definitionofautomation.Availableat:https://www.merriam-webster.com/dictionary/automation(accessed:October20,2020).Motional(2020)Motional—youmovetheworldwemoveyou.Availableat:https://motional.com(accessed:October12,2020).SAEInternational(2018)SAEJ3016—taxonomyanddefinitionsfortermsrelatedtodrivingautomationsystemsforon-roadmotorvehicles.SAEInternational,724,pp.1–5.SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

657646HandbookondigitalbusinessecosystemsTesla(2020)Connectivity.Availableat:https://www.tesla.com/support/connectivity(accessed:October10,2020).Thomopoulos,N.andGivoni,M.(2015)Theautonomouscar—ablessingoracurseforthefutureoflowcarbonmobility?Anexplorationoflikelyvs.desirableoutcomes.EuropeanJournalofFuturesResearch.doi:10.1007/s40309-015-0071-z.UniversityofMichigan(2020)Home—MCity.Availableat:https://mcity.umich.edu/(accessed:October30,2020).Winner,H.,Prokop,G.andMaurer,M.(2018)AutomotiveSystemsEngineeringII.doi:10.1007/9783319616070.SaminaHusainandAnaTrigo-9781839107191DownloadedfromPubFactoryat05/28/202210:27:03AMviaColumbiaUniversityLibrary

65839.CasestudyofthecustomeracceptanceofPersonalDataTrustBankinJapan:aquestionnairesurveyMasaharuTsujimotoandSoichiroTanakaINTRODUCTIONThefocusofthischapteristhePersonalDataTrustBank(PDTB)inJapan.PDTBisanewplatform-baseddigitalecosystemthatassumespersonaldatasharingamongorganizationswithindividuals’consent.Arguably,PDTBisanepoch-makingplatformbecauseitcanpromotethecreationofassortedservicesutilizingpersonaldata(forexample,healthman-agementinformation,powerandgasutilizationinformation,medicationhistory,householdinformation,andsettlementinformation).PDTBinJapaniscurrentlyinitsnascentstage.Therearefewempiricalstudiesonwhatkindofservicescustomersarewillingtouseatwhatprice,andonwhatkindofmechanismssupportpersonaldatautilizingplatforms,suchasPDTB.ThisstudyexecutedanonlinequestionnairesurveyandanalysedthetendencyofthepotentialcustomerintentiontousetheservicesthatmayberealizedthroughpersonaldatasharingbyPDTBinJapan.Basedontheresultsoftheanalysis,thisstudyreviewedthemech-anismsdrivingthecustomerintentiontousetheservice.Itfurtherascertainedthreeinterestingfindings.First,customersindicatedarelativelyhighintentiontouseserviceswithahighlypublicnature(forexample,provisionofinformationfordiseasediagnosis,informationforestimationofdiseaseoccurrenceprobability,andinformationforresearchanddevelopmentofpharmaceuticalcompanies)withoutaskingforcompensation.Onthecontrary,theintentiontousetheservicesasadvertisementdistribution,provisionofcoupons,andprovisionofdiscountserviceswaslow.Second,thetrustworthinessofPDTBoperators(forexample,alargefinancialservicescompany)increasescustomerintentiontousetheservice.Third,therelationshipbetweentheamountofmoneyreceivedbycustomersandtheirintentiontousetheserviceincreasedinaninvertedU-shapeandnotlinearly.Themechanismsbehindthesetendenciesareexamined,andtheinsightsfromthisstudywillcontributetothegrowthofpersonaldatasharingplatform-baseddigitalecosystems.PREVIOUSRESEARCHANDMOTIVATIONDigitalbusinessecosystems(DBEs)ofvariousstructuresarebeingimplementedforvariousapplications.Amongthem,aplatform-basedecosystemhasbeenproposedinwhichnewservicesaredevelopedandprovidedbycombiningavarietyofinformationaboutindividuals.PDTB,whichisthesubjectofthisresearch,isanadvancedapproachandanepoch-makinginitiative.647MasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

659648HandbookondigitalbusinessecosystemsInrecentyears,acomprehensivereviewofDBEshasbeenpublished(Senyoetal.,2019),whichpresentsacomprehensiveframeworkofresearchonDBEs,identifiestheresearchgaps,andsuggestsfutureresearchtopics.Basedonthisreview,thisstudyaimstocontributetotheDBEresearchareafromthefollowingthreeaspects.First,regardingthetheoreticalbackground,73outofthe101previousstudies(72.27percent)didnotuseanytheory(Senyoetal.,2019).Inthelistofbackgroundtheories,theperspectiveofsocialacceptanceofDBEsisnotclearlyindicated.Thesocialacceptanceperspectivehasmainlybeenappliedintheenergyresearchfield(GaedeandRowlands,2018;Wolsink,2018;Wüstenhagenetal.,2007;Cousseetal.,2020;Hai,2019;Ponceetal.,2016;Seidletal.,2019).MostoftherelatedresearchisontheanalysisofDBEs,whichhasalreadybeenimplemented.However,thekindsofservicesthatarelikelytobeacceptedintheemergingstageofaDBEandtheprocessesthatareeffectiveinacceleratinguseracceptancehavenotbeenadequatelyexplored.Webelievethatthesocialacceptanceperspectiveisbothpracticallyandacademicallysignificant.Consequently,thecurrentstudyaimstoapplythisconcepttoDBEresearch.Second,weaimtocontributefromtheperspectiveofmethodology.Onlytwooutof101DBEresearcharticles(1.98percent)usedaquestionnairesurvey(Senyoetal.,2019).Theremainingquantitativestudiesadoptedsimulations(20outof101,19.80percent).Third,Senyoetal.intheirreviewpaperstatedthat“thereislimitedknowledgeonDBEplatformdevelopmentchallengesandassociatedsolutions”(Senyoetal.,2019).Onlyafewstudieshaveexaminedplatformevolutionandeffectivemanagement(SutherlandandJarrahi,2018;Tanetal.,2016).Existingresearchhasfocusedonafter-launchmanagement;however,thecurrentstudyconcentratesontheemergingstagesofDBEs.Attheinitialstage,thesupplysideofaDBEneedstorecognisethekindofservicesthatwillbeacceptedbyusers.Usersmaynotbeabletocomprehendtheusefulnessofemergingservices.ThisstudyaimstobeanexploratoryderivationofusefulinsightsintoemergingpersonaldatasharingDBEs.THREEMAINRESEARCHQUESTIONSBasedonthesocialacceptanceperspective,weestablishedthreeresearchquestions(GaedeandRowlands,2018;Wolsink,2018;Wüstenhagenetal.,2007;Cousseetal.,2020;Hai,2019;Ponceetal.,2016,Seidletal.,2019).Thebasicdimensionofsocialacceptanceiseconomicrationalityornormativebehaviour.Theterm“normative”referstotheuseofpersonalinformationbypublicauthoritiesandthemotivationtobecooperativeineffortstogeneratesocialbenefitsthroughpublicservices.Therefore,inthisstudy,wesetRQ1:Whichintentiontouseisstronger:intentiontousebasedoneconomicrationality,oronnormativereasonsinpersonaldatasharingDBEs?Trustisoneofthemostessentialconceptsinsocialacceptance(KalkbrennerandRoosen,2016;Kambojetal.,2018;Liuetal.,2019;Ponceetal.,2016).Particularly,trustfromuserstoplatformprovidershasasignificantimpactonsocialacceptance.Intheemergingstageofper-sonaldatasharing,willthetrustofusersinplatformprovidersaffectsocialacceptance(RQ2)?Anotherbasicconceptofsocialacceptanceisthe“willingnesstopay”(WTP)(KalkbrennerandRoosen,2016;DePelsmackeretal.,2005;Shiroiwaetal.,2010;Stigkaetal.,2014).Apartfromrenewableenergy,theemerging-stagetechnologiesorsystemssuppliersmaywanttoknowtheextenttowhichusersarewillingtopayfortheirproductsbeforetheylaunch.InMasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

660CasestudyofthecustomeracceptanceofPersonalDataTrustBankinJapan649thiscontext,WTPconsiderstherangeanddistributionasvaluableinsights.Inthepresentcase,however,itisabouttherewardforprovidinginformation:willingnesstogain(WTG)andnotWTP.WhatistherangeanddistributionofWTG(RQ3)?ThePDTBsystemallowsuserstocontrolwhethertheirpersonaldataareaccessibletospecificbusinesses.Usersreceivecompensationtoprovidepersonalinformation.ThisdecisiontoprovidepersonaldataatanypriceisreferredtohereastheWTG.CASESELECTION:PERSONALDATATRUSTBANKThisstudyfocusesonthePDTBofJapan.PDTBisadigitalplatformthatwillsoonbelaunchedinJapan.Figure39.1illustratesthePDTBscheme.Figure39.1SchemeofPDTBPDTBisdefinedbytheGovernmentofJapanasasysteminwhichapersonentruststhepro-visionofpersonalinformationtoatrustedentitywiththeconsentoftheperson,topromotethedistributionanduseofpersonaldata(https://www.soumu.go.jp/main_content/000649152.pdf).ThefunctionofPDTBistomanageandprovidepersonaldataunderthedelegationoftheindividual.Therearetwotypesofinformedconsentfromindividuals.Thefirstisthemicro-managementtype:individualsjudgewhethertoprovideconsenttoeachdataprovisionproposalfromeachdatauserbyverifyingwhotakeswhatdataandforwhatpurposes.Thesecondistheentrustmentmanagementtype:individualssetacomprehensivedataprovisionpolicyandentrustPDTBtoassesswhethertoprovideconsenttoeachproposalfromthedatausers.TherearetwotypesofPDTBaccreditationfromtheInformationTechnologyFederation:“normalaccreditation”and“P-accreditation,”bothofwhicharevalidfortwoyears.Table39.1presentsanoutlineofeachaccreditationtype.MasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

661650HandbookondigitalbusinessecosystemsTable39.1TypesofPDTBaccreditationfromtheInformationTechnologyFederationNoTypeOutline1NormalThisistocertifythattheserviceprovidedissafeandsecure,byensuringthattheplanning,operation,accreditationandimplementationsystemsconformtotheaccreditationstandardsandarecontinuouslyreviewed.Intheactivitiesoftheconcernedbusiness,the“managementoperation,”whichaimsatcontinuousimprovementthroughthePDCA(plan,do,check,action)cycle,isexaminedandcertified.2P-accreditationBeforethelaunchofthePDTBservice,itiscertifiedthattheplanning,operation,andimplementationsystemsoftheservicescomplywiththecertificationcriteria.Followingthelaunchoftheservice,itmustbeoperated,implemented,andimprovedtoobtainthenormalaccreditation(P-accreditationisnotrenewable).Table39.2PersonaldatatrustbankscertifiedbyInformationTechnologyFederationinJapan,March2020NoTypeofCompanynameServicenamesDateofaccreditationcertification1NormalDataSignCo.,Ltd.PaspitFebruary26,20202PSumitomoMitsuiTrustBank,“DataTrust”Service(tentativename)June21,2019Ltd.3FelicaPocketMarketingCo.,Ltd.RegionalPromotionPlatform(tentativename)June21,20194J.ScoreCo.,Ltd.Informationservice(provisionalname)December24,20195ChubuElectricPowerCo.,Inc.RegionalPersonalDataTrustBankingFebruary4,2020Services(tentativename)Table39.2listscertifiedPDTBandTable39.3listscompaniesoperatingthePDTBorcon-ductingdemonstrationexperimentswithoutcertification.ThecertifiedPDTBincludesmajortrustbanks,energycompanies,andsmallbusinesses.QUESTIONNAIRESURVEYPROCESSInthepresentstudy,wecollecteddataonWTGforservicesthatmayberealizedthroughpersonaldataprovidedbyPDTBthroughanonlinequestionnairesurvey.ThesurveywasconductedbytheMacromillCorporationandwasconductedfromSeptember1toSeptember3,2020.Macromillisacompanythatconductsonlinesurveysasaservice(https://group.macromill.com/).Macromillhasitsownrespondentpanelof1.3millionpeople.Includingaffiliatedpanels,thecompanyhasapanelof10millionrespondents.Forthisonlinesurvey,wecoordinatedwithMacromillwellinadvance.AninitialscreeningsurveywasconductedtoidentifyrespondentswhoseageandgenderwererepresentativeoftheJapanesepopulation.Respondentstothescreeningsurveywhowereeligibletorespondtothemainsurveywerecommittedtocompletingthemainsurvey.Thesecondroundofthesurveywassubsequentlyconducted,andthedatacollected.Morethan1000responseswerereceiveddespitetheshortresponseperiod.Beforeconductingthesecondstageofthemainquestionnairesurvey,apilottestwascon-ductedwith13participants,andthequestionnairewasreviewedandmodified.Therewere1030validsamples,50percenteachformenandwomen,and206sampleswereallocatedforeverytenyearsofagefrom20to69years.ResidentialareasweredispersedMasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

662CasestudyofthecustomeracceptanceofPersonalDataTrustBankinJapan651Table39.3CompaniesconductingPDTBservicesanddemonstrationexperimentswithoutcertification,March2020NoClassificationCompanynameService/demonstrationnameStartdate1ServiceoperationMydataIntelligenceCorporationMyDataBank“MEY”November20182phaseMitsubishiUFJTrustandBankingDprimeApril2020Corporation3DemonstrationSumitomoMitsuiBankingDemonstrationprojecttoutilisemedicaldatafromIn2018experimentphaseCorporationanindividual’sperspectiveusinginformationtrustfunctions4MisonoTownManagementUseofpersonaldatabasedoninformationtrustAugust2018functionsinareasofcommunitydevelopment(healthcare),sports,andtourism5Hitachi,Ltd.LifesupportserviceexperimentusingindividualSeptember2018IoTdata6JTBCorporationNext-GenerationTravelAgentServicesUtilisingNovember2018InformationTrustFunctions7JapanMedicalAssociationORCARegionalHealthcareInformationTrustFoundationIn2019ControlOrganizationCo.,Ltd.8CyberAgent,Inc.DataForwardFebruary20199SKYPerfectJSATCorporationSKYPerfecTV!personaldatatrustbankJuly201910NTTDataCorporationPersonaldataconsentmanagementservicesutilizingMay2020PersonalDataTrustBanksthroughoutJapan.Therewasnobiasbetweenrespondentswhoweremarriedorunmarried,withorwithoutchildren.Householdandindividualincomewerecomparabletothenation-widedispersion.Therewere78questionsintotal.Thequestionnaireisnotreproducedbecauseoflimitedspace.Thestructureofthequestion-naireisasfollows.Atthebeginningofthesurvey,theschemeofPDTBwasexplainedindetailandcomprehensiblyusingadiagramsimilartoFigure39.1.First,inadditiontothebasicattributes(gender,age,householdincome,andplaceofresidence),weaskedaboutthefollowing:familycomposition,smartphoneownership,socialnetworkservice(SNS)usage,householdaccountbookapplicationusage,healthcareapplicationusage,pointserviceusage,WorldWideWebadvertisementviewingstatus,andidentification(ID)linkageauthenticationusage.Thereafter,weaskedwhetherindividualswereawareofPDTBbeforethesurvey,andwhethertheywouldchoosetouseit.TheintentiontousePDTBwasaskedagainattheendofthesurvey.ThemajorityofthequestionswereaboutwillingnesstouseandWTGfortheservices.Themethodofaskingquestionsabouttheintentiontousetheservicewasasfollows.First,servicenamesanddetailsofserviceswereindicated.Second,therespondentwasaskedtoselectoneoftheoptionsfrom1=wanttouse,to5=donotwanttouse.Thereisalsotheoptiontoselect“Idonotmeettherequirementsforauser.”Table39.4showsthelistofservicesandanaveragevalueof1‒5answers.Finally,weaskedquestionsregardingthelevelofimportancethatshouldbeattachedtoeachofthefollowingfactorswhenselectingPDTB:thenamerec-ognitionoftheoperator,thesizeoftheoperator,whetherornottheoperatoriscertified,thenumberofdatatypes,thenumberofdatausers,thenamerecognitionofthedatauser,whetherMasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

663652HandbookondigitalbusinessecosystemsTable39.4ListofservicesAverageQNo.ServicenameDetailofservicevalue(1‒5)TheserviceestimatesalifestyleofanelderlyresidentbytheamountofelectricServicetomonitortheconsumptionandconfirmshis/hersafetywhenhe/shebehavesdifferentlythanusual.Q11elderlybyasecurity3.01Whenthesafetycannotbeconfirmed,thewatchstaffvisitshis/herhome.Pleasecompanyassumethattheservicefeeis¥500/month.Whenadisasteroccurs,thelocalgovernmentcancapturepeopleinthecitybasedPrehensionofpeopleinonthelocationinformationoftheirsmartphones.ThegovernmentsendsanoticetoQ13needofrescuebyalocalpeopletoconfirmwhethertheyneedtoberescued.Subsequently,thegovernment2.83governmentplacesrescuerequestsforpeopleindangertothepolice,firedepartments,ortheself-defenseforce.Thisserviceisavailablefreeofcharge.UseofinformationHospitalsuseotherhospitals’diagnosis,testresults,andmedicationhistoriesoffromotherhospitalsforQ14patientsforexaminationsandtreatments(surgeryetc.).Afeeispayabletousethis2.85medicalexaminationandservice,forfurtherexaminationsandtreatments.treatmentUseofmedicalhistoriesWhenanindividualisrushedtoahospital,thefiredepartmentusestheindividual’sforemergencytreatmentmedicalhistoriesforemergencytreatmentduringtransport.ThehospitalalsousesQ152.77byfiredepartmentsorthehistoriesforpreparationoftreatment.Tousetheservice,youneedtopayforhospitalstreatment.AlifeinsurancecompanyestimatestheriskofbecomingillbasedontheresultsofPremiumdiscountsonmedicalexaminationsandtheamountofexerciseofinsuredpeople.ThecompanyQ16medicalinsuranceby2.71providesdiscountsonmedicalinsurancepremiumsforpeoplewithlowrisk.Thealifeinsurancecompanyfrequencyofpremiumrevisionisonceayear.PremiumdiscountsonAnon-lifeinsurancecompanyestimatesaccidentriskbasedontheinsuredperson’sautomobileinsurancedrivingcharacteristics,drivingfrequency,anddrivingarea.ThecompanyprovidesQ182.51byanon-lifeinsurancediscountonautomobileinsurancepremiumsforpeoplewithlowrisk.Thefrequencycompanyofpremiumrevisionisonceayear.Basedontheamountofpowerconsumptionfromthesmartmeter,theserviceestimatestherecipient’sprobabilityofstayinghomebytimeanddayoftheweekHomedeliveryserviceanddeliversthepackageatthetimewithahighprobabilityofbeinghome.Thistargetingthetimethatservicereducesthetimeforredistributionapplicationsbyreducingabsentdeliveries.Q202.96individualscanreceiveThisserviceonlypresentstimezoneinformationtodriversfordeliveriesanddoesapackagenotprovidetheprobabilitiesofstayinghome(Deliverydriversarenotawareoftheprobabilityoftherecipientstayinghome,outsidethetimezonetobedelivered).Thisserviceisavailablefreeofcharge.HealthguidancebyAmedicalinsurerprovideshealthguidancetailoredforeachindividualwithamedicalinsurer(healthmetabolicsyndromeoritsreserveusingdataonhis/herweight,exercisestatus,andQ232.96insuranceassociation,dietcontentacquiredfromhealthcareapplication.Thisserviceisavailablefreeofetc.)charge.AdvicefromBasedonexercisehabits,weight,mealcontent,andtheresultsofmedicalalocalgovernmentforQ25examinations,alocalgovernmentprovidesadvicetoindividualswhoaredeemedto2.98preventingtheneedforneednursingcare.Thisserviceisavailablefreeofcharge.long-termcareAlocalgovernmentestimatesthedriver’sdrivingcharacteristicsbasedondrivingProposalbyalocalrecordsanddrivingimagesandproposesthereturnofhis/herdriver’slicensetotheQ27governmenttoreturn2.95elderlywhoappeartohavehigh-riskfortrafficaccidents.Thisserviceisavailabledriver’slicensefreeofcharge.MasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

664CasestudyofthecustomeracceptanceofPersonalDataTrustBankinJapan653AverageQNo.ServicenameDetailofservicevalue(1‒5)Anautomobiledealershipproposesanewautomobilethatsuitsindividuallifestyles,Automobilereplacementestimatedfromthecumulativemileage,elapsedtimefromthedateofpurchase,fuelQ29proposalfromeconomyoftheautomobilemodel,individualdrivingstyle,andfamilycomposition,3.54adealershipasareplacementforcurrentlyownedautomobile.Thisserviceisavailablefreeofcharge.Basedonthedatafromsmartmetersandhealthcareapplications,aswellasdataDistributionofWeboncashlesspaymentsandlocationhistories,anadvertisingcompanyestimatesQ32advertisementsbyan3.84whatyouareinterestedinanddeliversWebadvertisementsthataretailoredtoyouradvertisingcompanyinterests.Thisserviceisavailablefreeofcharge.Withregardtoelderlypeoplelivingalone,asecuritycompanydetectsthepossibilityEstimatedementiaandoftheirwanderingandpurchasingbehaviorthatisabnormalbasedonthelocationQ35alerttohis/herfamilybyhistoriesofmobilephonesandpaymenthistories.Whendementiaissuspected,the3.02asecuritycompanycompanycautionshis/herfamily.Pleaseassumethattheusagefeeforthisserviceis¥500/month.ArealestateagentestimatesthetimingofcontractrenewalforarentalhomebasedonrentpaymentdatestotherealestatecompanyderivedfrombankdebithistoriesProposalofleaseholdorcreditcardpaymenthistories.Toanindividualclosetocontractrenewal,arealQ37propertiesbyarealestate3.47estateagentproposesnewleaseholdpropertiesthatsuittheindividual’sneeds,basedagentonhis/herincome,placeofwork,andfamilystructure.Thisserviceisavailablefreeofcharge.AwelfarecompanyestimateswhatyouareinterestedinbasedondatafromInformationonwelfaresmartmeters,healthcareapplications,anddataoncashlesspaymentsandlocationQ40programsprovidedbyhistories.Thecompanyprovidesguidanceonwelfareprogramstailoredtoyour3.09awelfarecompanyinterests.Serviceusagefeesarepaidbyyourcompany,therefore,youcanusethisservicefreeofcharge.AcookingrecipeapplicationcompanyproposescookingrecipesthatsuittheProposalofrecipesindividual’shealthbasedondailymeals,exerciseconditions,weight,resultstailoredtoindividualsofmedicalcheckups,andinformationonsupermarkets’bargaindealsintheQ423.33byacookingrecipeneighborhoodofresidentialarea.Atthesametime,thecompanyalsopresentsapplicationcompanyinformationonthesaleofproducts.Pleaseassumethattheusagefeeforthisserviceis¥300/month.Arecruitmentagencyintroducessuitablejobstoindividualsbasedontheireducationalbackground(graduationschools,completedcoursesandtheirIntroductionofsuitableperformance),characteristics,conceptofvalues,physicalabilities,etc.ThisserviceQ44jobsbyarecruitment3.15ascertainsthecompanywherepeoplewhohavesimilarcharacteristicstotheagencyindividual,workforlongtimeandmaybesuitablefortheindividual.Thisserviceisavailablefreeofcharge.AdatingapplicationcompanypreferentiallypresentspersonsyoumaybeMatchingservicewithcompatiblewithfromtheperspectiveofpersonality,conceptofvalues,lifestylesandafuturepartnerorloverQ46basedonthefrequencyofdailyexerciseandmealcontent,bedtimes,moneysense,3.50byadatingapplicationandfrequentlyvisitedtownsandlocations.Pleaseassumethattheusagefeeforthiscompanyserviceis¥3,000/month.Anapparelcompany’sAnapparelcompanyestimatesthebodyshapeofindividualbasedontheimageQ48proposalofclothingofindividual’sbodyandsuggestsclothesthatmaysuithim/her.Thisserviceis3.42suitedtothebodyshapeavailablefreeofcharge.MasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

665654HandbookondigitalbusinessecosystemsAverageQNo.ServicenameDetailofservicevalue(1‒5)AtravelagencyanalyzeswhatkindoftraveltheconsumerhasundertakensofarTravelplanproposalby(meansoftransportation,destinations,travelschedules,etc.)basedoncustomer’sQ503.17atravelagencypaymentandlocationhistories.Theagencycreatesandproposestravelplansthecustomermayprefer.Thisserviceisavailablefreeofcharge.Basedontheinformationofmovementobtainedfromtherealestatecompany,DelegationoftheaddressPDTBchangestheaddressregisteredatlocalgovernment,postoffice,banks,creditQ53changeprocedureby3.08cardcompanies,telecommunicationcarriers,insurancecompanies,etc.onbehalfofPDTBtheindividual.Thisserviceisavailablefreeofcharge.Serviceproposalsfromelectricitycompanies/gascompanies/telecomElectricity,gas,telecom,andmovingcompaniesoffertheirservicestonew-homeQ54companies/movingownersbasedonmovinginformationobtainedfromrealestatecompanies.This2.85companieswhenanserviceisavailablefreeofcharge.individualisabouttomovehomeThepoliceprocessyourlocationhistoriesanonymouslyandcombinethedatawithotherresidents’locationhistoriestogeneratedataontheamountofpeopleperareaandtimeinyourneighborhood.Thereafter,thepolicecombinethisdataDesignofanti-crimeQ57withhistoricalcrimesites,weather,locationofstreetlights,andotherdatato3.13patrolroutesbythepolicepredictlocationsandtimezoneswithhighprobabilityofcrime.Thepolicedesignanti-crimepatrolroutesthatfocusonthelocationandtimezoneswherethedataindicateshighprobabilityofcrime.Alifeinsurancecompanycombinesmedicalcheckupresults,hospitaldiagnosticDevelopmentofresults,dataonexercise,sleep,mealcontent,andweightfromhealthcareestimationalgorithmsQ58applicationstoanalyzetherelationshipbetweenexercise,sleep,dietaryhabits,3.30forillnessriskbyalifeandillness.Thecompanyusestheanalysisresulttodevelopillnessriskestimationinsurancecompanyalgorithmsforinsurancepremiumcalculation.DevelopmentofApharmaceuticalcompanycombinesmedicalcheckupresults,hospitaldiagnosticanti-illnesssupplements,results,dataonexercise,sleep,mealcontent,andweightfromhealthcareguidanceappforQ61applicationstoanalyzetherelationshipbetweenexercise,sleep,dietaryhabits,3.20illnesspreventionandillness.Thecompanyusestheanalysisresulttodevelopdiseasepreventionbyapharmaceuticalsupplementsandsmartphoneapplicationstoadviseondiseasepreventionactivities.companyImprovementofAnAIdevelopmentcompanyusespatients’testimagesanddiagnosticresultsdiagnosticAI’saccuracyQ64forimprovementintheaccuracyofAIfordiseasediagnosiswhichenablesearly2.98byanAIdevelopmentdetectionofillnessesandreducestheworkloadofdoctors.companyMasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

666CasestudyofthecustomeracceptanceofPersonalDataTrustBankinJapan655datauserscancontributetothedevelopmentanddeliveryofservicesinthepublicinterest,andthesizeoftheconsideration,andwhethermicro-managementorentrustmentispreferable.RESULTSResearchQuestion1Table39.5Resultsofpairedt-test(RQ1)AverageSamplesizetvaluep-valuePublicservices3.2841030–25.692<0.001Non-publicservices3.7931030Figure39.2ResultsofRQ1RQ1:Whichintentiontouseisstronger,intentiontousebasedoneconomicrationalityoronnormativereasonsinpersonaldatasharingDBEs?Wedefinedpublicservicetorespondents,thatitistheserviceprovider,apublicorganization(police,fire,hospital,andmunicipality)inPDTB.ThepublicservicesscorecomprisesQs13,14,15,25,27,and57.Thenon-publicservicesscorecomprisesQs11,16,18,20,23,29,32,35,37,40,42,44,46,48,50,53,54,and58.Figure39.2showsthedistributionofaveragescoresofintentiontouseforthoseservicesclassifiedaspublic.Thesmallerthenumber,thehighertheintentiontouse.Wefirstcalculatedthearithmeticmeanforpublicservicesandnon-publicservices,andsubsequentlyexecutedthepairedt-testusingSPSSstatisticsversion27.Table39.5indicatestheresultsofthepairedt-tests.MasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

667656HandbookondigitalbusinessecosystemsTable39.6ResultsofRQ2QNo.QuestionAverageTowhatextentdoyouemphasizeon“highnamerecognitionofPDTBoperator”whenchoosingthePDTByouuse?Q682.47※AnyonewhodoesnotwanttousePDTBisalsorequestedtoanswerthisquestion(Thesameappliestosubsequentquestions).Q69Towhatextentdoyouemphasizeon“companysizeofPDTBoperator”whenchoosingthePDTByouuse?2.56Towhatextentdoyouemphasizeon“acquirementofPDTBcertification”whenchoosingthePDTByouuse?Q70(*TheInformationTechnologyFederationofJapangivescertificationtoaPDTBthatimplementsprivacy2.17protectionmeasuresandinformationsecuritymeasuresofinternationalstandards)Q71Towhatextentdoyouemphasizeon“varietyofdatatypesPDTBhandles”whenchoosingthePDTByouuse?2.66Q72Towhatextentdoyouemphasizeon“varietyofdatausersPDTBhandles”whenchoosingthePDTByouuse?2.67Towhatextentdoyouemphasizeon“highnamerecognitionofdatausersPDTBhandles”whenchoosingtheQ732.51PDTByouuse?ResearchQuestion2RQ2:Intheemergingstageofpersonaldatasharing,willthetrustofusersofplatformpro-vidersaffectsocialacceptance?Table39.6presentsthetestresultsofRQ2.RegardingthereliabilityofPDTBoperators,trusttowardtheoperatorscanbebuiltbyelementsoftheoperator’snamerecognition,companysize,acquirementofcertification,varietyofdatatypes,varietyofdatausers,andnamerecog-nitionofdatausers.Asbefore,thelowerthescore,thehighertheimportanceoftheelements.Table39.7indicatestheresultofthepairedt-testbetweenQ70andtheaverageofQs68,69,71,72,and73.Evidently,thereisatendencyforemphasistobeplacedonwhetherthePDTBacquiredcertification.Thisseemstobeanestablishedpractice;however,certificationacquire-mentisvoluntary,andthereareseveralcaseswhereanentityconsideredasalargecorporationwithhighsocialcredibilityoperatesPDTBwithoutcertification.Theresultsofthisstudyindicatethatcertificationismoreimportantcomparedtocompanysizeornamerecognitionandhasastronginfluenceontrustformation.Itwasobservedthatthevarietyofdatatypesanddatauserswererelativelylessimportant.Table39.7Resultofpairedt-test(RQ2)AverageSamplesizetvaluep-valueQ702.1701030–17.363<0.001Q68,Q69,Q71,Q72,Q732.5751030Table39.8Resultofpairedt-test(Q2-2)AverageSamplesizetvaluep-valueQ773.1851030-8.670<0.001Q783.4371030PDTBhastwotypesofauthorizationfordataprovision.Thefirstismicro-management,inwhichanindividualverifieseachsetofdatausers,thepurposeofuse,anddatatype,andgivesMasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

668CasestudyofthecustomeracceptanceofPersonalDataTrustBankinJapan657dataprovisionauthorizationonebyone.Theotherisatrusttypeinwhichanindividualgivesdataprovisionauthorizationtotheunitofroughdatauserandpurposeofuse,andthejudg-mentofwhethereachdataprovisionispossibleisentrustedtothePDTB.Forexample,inthetrusttype,anindividualagreestoprovidedatacomprehensively,withthepurposeofusefortourismservices,andthePDTBprovidesthesedatatouserscorrespondingtotheagreement.InthecasethattourismserviceprovidersAandBrequestdatafortourismservice,datawillbeprovidedtobothcompaniesunderthetrusttype.Weexplainedthisinformationtotherespondentsandaskedtheirintentionstouseforeachtype.Table39.8illustratestheresultsofthepairedt-testofQ77andQ78.Consequently,therewasatendencyforrespondentstochoosethemicro-managementtype.ThisshowsthatuserstendtomanagetheirowndataonebyoneduringthePDTBstart-upphase.Table39.9ResultsofQ76(US$1≈109JPY,March2021)No.OptionsN%1Iwanttouseitevenifthereisnocompensation868.3210JPY/month403.93100JPY/month10410.141000JPY/month25925.1510000JPY/month237236Idon’twanttouseitnomatterhowmuchIgetpaid30429.5Total1030100Figure39.3WTGplotResearchQuestion3RQ3:WhatistherangeanddistributionofWTG?MasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

669658HandbookondigitalbusinessecosystemsThefollowingquestionswereaskedinthequestionnaire:“HowmuchdoyouwanttoreceiveastotalcompensationatleastifyouusePDTB?”TheresultsarepresentedinTable39.9.Therearealsootheroptionssuchas“Iwanttouseitevenifthereisnocompensation,”and“Idon’twanttouseitnomatterhowmuchIgetpaid.”Table39.9showstheresults,andFigure39.3demonstratesthedistributionoftheWTGportion.Generally,morecompensationisbetter.However,excessivecompensationmayraiseconcernsabouttheinappropriateuseofpersonalinformation.DISCUSSIONInthissection,themechanismofestablishmentandsustainablegrowthofPDTB,whichisanemergingdigitalplatform,isdiscussed.Thepotentialusers’responsestoeachserviceprovidedintheemergingstageofaplatform-basedDBEsuchasPDTBisessentialforaDBEtorealizeandgrowsustainably.Thesupplysidetendstoassumethatthedemandsidedoesnotacceptserviceswithouteco-nomicbenefits.Incertaincases,thisistrue;however,ouranalysisrevealsthatindividualsaremorelikelytousehighlypublicservicesevenifadequatecompensationisnotpaidtothem.Whetherthistrendcontinuesevenaftertheplatformisestablishedisuncertain;nevertheless,ithasbeenproventhatpublicservicescanbeaneffectivedrivingforcetopromotedatasharing,atleastatthestart-upstage.Itisalsopossibletocreateatrendinwhichuserswhotaketheinitiativeinusingpublicservices,orwhoprovidepersonalinformationforsuchservices,becomeleadusersandthedemandsideleads,therebyenhancingtheDBE(UrbanandHippel,1988).Thisisbecausetheeffectofpublicservicesissufficientlypredictableinadvanceandeasytoenvisage.TrustisanimportantconceptintheformationandgrowthofaDBE.Therefore,thequestionarisesofthebestwayforanoperatortobuildtrust,especiallywhentheyhavenorecord.Whenweexaminedthefactorsleadingtotheformationoftrust,theoperatorbeingalargecompanyoracompanywithrelativelyhighnamerecognition,andcertification,wefoundthepossibilitythatcertificationleadstotheformationoftrust.InPDTB,whichistheobjectofthisstudy,certificationacquisitionisoptional.Thissuggeststhatusersmaydistinguishbetweentrustinexistingbusinessesandnewbusinesses,implyingthatexistingbusinesseswillnotnecessarilybeabletomaintaintheirtrust,especiallyinthecreationofecosystemsusingrecenttechnol-ogies.Certification,onthecontrary,istransparentandwillhaveapositiveimpactwhentheDBEislaunched.Relatingtotrust,itwasobservedthatthemicro-managementtype,whichisthemanage-mentmethodinwhichusersmanagetheirowndataonebyone,isclearlypreferredtothetrusttype;inotherwords,themanagementmethodinwhichoperatorsmanagetheirusers’data.Althoughtheexistingmajortrustbanksareoperators,theystillneedexperienceinbuildingtrustinnewtechnologiesandservices,anduserstendtochoosetomanagetheirowndata,evenifittakestimeandrequirescumbersomeoperations.PDTBwillpayforthedataprovided.Thehighertheamountofcompensationgained,themoretheusersarewillingtoprovidedata.However,theactualresultsindicateadifferenttendency.UsersmaybewaryofsharingtheirpersonalinformationcollectedonPDTB,andtheymaynotwanttobepaidtoomuchforit.ItisinterestingtonotethatWTGhasaninvertedU-shapeddistribution,althoughtheexactpricevariesgreatlydependingontheservice.TheMasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

670CasestudyofthecustomeracceptanceofPersonalDataTrustBankinJapan659priceoftheinverseU-shapedinflectionpointisdifferentforeachservice.ItisassumedthatthenumberofDBEssuchasPDTB,whereindividualspayfortheprovisionofdata,willincreaseworldwideinthefuture.Webelieveitishighlylikelythatthisshapewillbeobservedinsuchcases.CONCLUSIONANDIMPLICATIONSThisstudyfocusesontheperceptionofsocialacceptanceinemergingdigitalplatformecosys-tems.Therearethreemainquestionstobeanswered.ThefirstRQwas,“Whichintentiontouseisstronger:intentiontousebasedoneconomicrationality,oronnormativereasonsinper-sonaldatasharingDBEs?”Thedatafromthisstudyindicatedthatthelatterismoreinfluential.Thisisprobablybecauseitisdifficultforuserstojudgeeconomicrationalityinadvanceattheplatformlaunchstage,anditismorepersuasivetoshowthattheplatformcontributestogen-eratingpublicbenefitsfrompublicservices.Inotherwords,theprovisionofpublicservicesattheinitialstageoftheplatform,whichisamajorcomponentoftheDBE,maycontributetotheestablishmentoftheplatform.ThesecondRQwas“Intheemergingstageofpersonaldatasharing,willthetrustofusersinplatformprovidersaffectsocialacceptance?”Thedatafromthisstudyindicatedthatthepresenceorabsenceofcertificationhadarelativelystrongeffect.InthecaseofPDTB,theacquisitionofthecertificationisoptional.Insomecases,largecorporationsandtrustbanks,whichalreadyhaveagreaterleveloftrustinsociety,donotobtaincertification.However,ithasbeensuggestedthattrustinexistingbusinessesdoesnotnecessarilycorrespondtothetrustinnewDBEsandplatforms.Again,thissuggeststhatpublicattributescanhelptolaunchtheplatform.RegardingthethirdRQ,“WhatistherangeanddistributionofWTG?”,thisstudyindi-catedaninvertedU-shapeddistribution.Thissuggeststhatexcessivecompensationfortheprovisionofpersonalinformationmaycausecaution.Inthefuture,thecontextinwhichindi-vidualsprovideinformationtotheplatformwillexpand.Advancedservicessuchasmedicalinformationandpurchasehistoryhavebeenrealized,andbylinkingthemtogether,agreatersocio-economicvaluewillbecreated.Inthiscontext,users’responsetocompensationmaybeaninverseUshape,andfromapracticalperspective,findingtheamountofmoneythattheuserperceivesasmaximumutilityisanimportantmanagementissue.Theinsightsindicatedinthisstudywillincreasethesuccessprobabilityofdigitaldatainte-grationplatform-baseddigitalbusinessecosystems,whichwillbeexpandedinthefuturetogeneratesocialvalue.Here,themechanismofestablishmentandsustainablegrowthofPDTB,anemergingdigitalplatform,isdiscussed.Theresponseofpotentialuserstotheservicesprovidedintheemergingstageofaplatform-basedDBE,suchasPDTB,isimportantforDBErealizationandgrowthtobesustainable.Thesupplysidewilltendtoconsiderthatitisnotacceptablewithouttheeconomicbenefitsofthedemandside.Insomecases,thisistrue;however,ouranalysisindicatesthatusersaremorelikelytousehighlypublicserviceseveniftheyarenotpaid-fororsufficient.Whetherthistrendwillcontinueevenaftertheplatformisestablishedisuncertain.Nevertheless,ithasbeenproventhathighlypublicservicescanbeaneffectivedrivingforcetopromotedatacol-laboration,atleastatthestart-upstage.Itisalsopossibletocreateatrendinwhichuserswhotaketheinitiativeinusingsuchhighlypublicservices,orwhoprovidepersonalinformationMasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

671660Handbookondigitalbusinessecosystemsforsuchservices,becomeleadusersandthedemandsideleads,therebyenhancingtheDBE(UrbanandHippel,1988).Thisisprobablybecauseeconomicrationalityisdifficulttojudgeinadvance,andaleadtimeisrequireduntilitcanberealizedusingservices,whereastheeffectofservicesofapublicnatureissufficientlypredictableinadvanceandeasytoenvisage.Anexceptiontothisisthereductionininsurancepremiumsassociatedwithservicessuchashealthpromotion,whichmaybebecausethecompensationisexpectedtocomefrominsurancecompaniesratherthanfromPDTB.Relatingtotrust,itwasfoundthatbetweenthemicro-managementtype(thatis,themanagementmethodinwhichusersmanagetheirowndata)andthetrusttype(thatis,themanagementmethodinwhichoperatorsmanagetheirusers’data),usersclearlypreferredthemicro-managementtype.Althoughtheexistingmajortrustbanksareoperators,theystillneedexperienceinbuildingtrustinnewtechnologiesandservices,anduserstendtochoosetomanagetheirowndata,evenifittakestimeandrequiresacumbersomeoperation.AlthoughPDTBhasanaccreditationsystem,manybusinessentitiesstarttheirbusinesseswithoutbeingaccredited.Thefindingsofthisstudysuggestthatpublicaccreditationhasastronginfluenceontheintentiontousetheservice.WTGisastrangeterm;however,moreplatformsmaypayforitinsteadofprovidingper-sonalinformation.Inthiscase,thehighertheamountobtained,thebetteritis;however,theactualresultvariedfromthisnotion.Usersmaybewaryoftheuseoftheirpersonalinforma-tioncollectedontheplatform,andtheymaynotwanttopayexcessivelyforit.ItisinterestingtonotethatWTGhasaninvertedU-shapeddistribution,althoughtheexactpricevariesgreatlydependingontheservice.REFERENCESCousse,J.,Wüstenhagen,R.andSchneider,N.(2020).Mixedfeelingsonwindenergy:AffectiveimageryandlocalconcerndrivingsocialacceptanceinSwitzerland.EnergyResearchandSocialScience,70,101676.DePelsmacker,P.,Driesen,L.andRayp,G.(2005).Doconsumerscareaboutethics?Willingnesstopayforfair-tradecoffee.JournalofConsumerAffairs,39,363‒385.Gaede,J.andRowlands,I.H.(2018).Visualizingsocialacceptanceresearch.EnergyResearchandSocialScience,40,142‒158.Hai,M.A.(2019).Rethinkingthesocialacceptanceofsolarenergy:Exploring“statesofwillingness”inFinland.EnergyResearchandSocialScience,51,96‒106.Kalkbrenner,B.J.andRoosen,J.(2016).Citizens’willingnesstoparticipateinlocalrenewableenergyprojects:TheroleofcommunityandtrustinGermany.EnergyResearchandSocialScience,13,60‒70.Kamboj,S.,Sarmah,B.,Gupta,S.andDwivedi,Y.(2018).Examiningbrandingco-creationinbrandcommunitiesonsocialmedia:ApplyingtheparadigmofStimulus‒Organism‒Response.InternationalJournalofInformationManagement,39,169‒185.Liu,L.,Bouman,T.,Perlaviciute,G.andSteg,L.(2019).EffectsoftrustandpublicparticipationontheacceptabilityofrenewableenergyprojectsintheNetherlandsandChina.EnergyResearchandSocialScience,53,137‒144.Ponce,P.,Polasko,K.andMolina,A.(2016).Enduserperceptionstowardsmartgridtechnology:Acceptance,adoption,risks,andtrust.RenewableandSustainableEnergyReviews,60,587‒598.Seidl,R.,VonWirth,T.andKrütli,P.(2019).SocialacceptanceofdistributedenergysystemsinSwiss,German,andAustrianenergytransitions,German.EnergyResearchandSocialScience,54,117‒128.MasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

672CasestudyofthecustomeracceptanceofPersonalDataTrustBankinJapan661Senyo,P.K.,Liu,K.andEffah,J.(2019).Digitalbusinessecosystem:Literaturereviewandaframeworkforfutureresearch.InternationalJournalofInformationManagement,47,52‒64.Shiroiwa,T.,Sung,Y.K.,Fukuda,T.,Lang,H.C.,Bae,S.C.andTsutani,K.(2010).Internationalsurveyonwillingness-to-pay(WTP)foroneadditionalQALYgained:Whatisthethresholdofcosteffective-ness?HealthEconomics,19,422‒437.Stigka,E.K.,Paravantis,J.A.andMihalakakou,G.K.(2014).Socialacceptanceofrenewableenergysources:Areviewofcontingentvaluationapplications.RenewableandSustainableEnergyReviews,32,100‒106.Sutherland,W.andJarrahi,M.H.(2018).Thesharingeconomyanddigitalplatforms:Areviewandresearchagenda.InternationalJournalofInformationManagement,43,328‒341.Tan,F.T.C.,Pan,S.andLiu,J.(2016).TowardsaSelf-OrganizingDigitalBusinessEcosystem:ExaminingIT-EnabledBoundarySpanningPracticeofChina’sLeEco.Dublin:ICIS.Urban,G.L.andvonHippel,E.V.(1988).Leaduseranalysesforthedevelopmentofnewindustrialproducts.ManagementScience,34,569‒582.Wolsink,M.(2018).Socialacceptancerevisited:Gaps,questionabletrends,andanauspiciousperspec-tive.EnergyResearchandSocialScience,46,287‒295.Wüstenhagen,R.,Wolsink,M.andBürer,M.J.(2007).Socialacceptanceofrenewableenergyinnova-tion:Anintroductiontotheconcept.EnergyPolicy,35,2683‒2691.MasaharuTsujimotoandSoichiroTanaka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:06AMviaColumbiaUniversityLibrary

67340.PotentialsofdigitalbusinessecosystemsinthehealthcaremarketFranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMecklINTRODUCTIONTheGermanhealthcaresystemfacesnumerouschallengesduetomulti-morbidity,anagingsociety,andmassiveinvestmentbacklogs(Deitersetal.,2018).Moreover,theGermanhealth-caremarketcannotsatisfythegrowingdemandfordigitizationandsuffersmassivelyfromaninnovation-inhibitingstructure(Hufnagletal.,2019).Digitaltechnologiesandadigitaltransformationofthehealthcaremarketpromisenumerouspotentialstocopewiththeconflictbetweenlessavailableresourcesandincreaseddemands(Agarwaletal.,2010).Withthesmartintegrationofsystemcomponentsandstakeholders,andthemindfulconsiderationofusersandpatients,digitalizationcanbeutilizedtocreatevalueinthehealthcaremarket(Frowetal.,2016).Inrecentyears,therelevanceofecosystemsineconomicresearchhasincreasedsignifi-cantly(Tsujimotoetal.,2018).Ecosystemsarereferredtoasconceptsofnewvaluecreationapproaches(Frowetal.,2016).Theformerlycompany-centeredvaluechainisincreasinglyavalue-creatingnetworkofdifferentpartners(GackstatterandLemaire,2019).Thisleadstoadisintegrationoftheclassicone-dimensionalvaluechainandthedevelopmentofdecentral-izedcross-companynetworks(Wuetal.,2019).Thehealthcaremarketisalsocharacterizedbyaparticularlyhighvalueofmultilateralinterdependenciesbetweentheactors(Huthetal.,2017),aswellasbyservicesthataregeneratedthroughinteractionwiththepatient(PittaandLaric,2004;Serbanatietal.,2011).Forthisreason,theadvancementofdigitalizationtoimprovethequalityofcarerequiresthattheactorsrethinkthecurrentsystem(Frowetal.,2016).Sensortechnologyandprocessingdatacansupportdiseaseprevention(DunnandHazzard,2019).Intheprocessofdiagnosis,digitaltoolssuchaschatbotscanofferpatientsanimmediateinitialassessmentandonlineconsultationscanbeusedtodiscussacuteprob-lemsormakeremotediagnoses(Hehneretal.,2018).Analyticsandmachine-basedlearningsupporttheevaluationofmedicalimagesorlaboratorydataaswellasthediscoveryofcorre-lations.Theaccuracyoftheresultscanbecontinuouslyimproved,sothatsignificantlylargeramountsofdatacanbeprocessedortakenintoaccountthanispossibleforindividualdoctors(Hasselgrenetal.,2020).Overall,digitaltechnologiescouldlinkthemostlyindependentlyactingstagesofthevaluechainorsectorsandthusoptimizedataexchangeandcoordinationwiththeinvolvementofpatients(Soganietal.,2020).Anincreasingserviceorientationduetodigitalizationisalsoevidentinthefactthat(digital)serviceoffersareoftenintegratedintoproductsandreflectchangingcustomerwishes(Subramaniametal.,2019).Duetotheenormousincreaseinthemarketvolumeofdigitaloffersincombinationwiththecurrentlyverylowdegreeofdigitalizationandhighhealthcarespending,capital-strongtech-nologygroupssuchasGoogleandApplehavealreadystartedtoenterthehealthcaremarket662FranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

674Potentialsofdigitalbusinessecosystemsinthehealthcaremarket663(Choueirietal.,2019).Inordertoactivelyshapethistransformationandtosurviveinthefaceofincreasingcompetitivepressure,itisoftenrequired(Wuetal.,2019)that“evenestablishedstakeholders...increasinglythinkintermsofecosystems”(Choueirietal.,2019,p.21).Thecriticismofanisolatedconsiderationoftheabove-mentioneddevelopmentstowardsserviceorientation,digitalization,andnetworkorientationiscounteredbydigitalecosystems(Senn,2017).AsAdner(2017)states,anecosystem-basedapproachishighlyimportant.Digitaleco-systemsareseenasapromisingstrategicoptiontosurvivedisruptivechangeandtoundergoasuccessfuldigitaltransformation(Hessetal.,2016).Nevertheless,digitalecosystemshavesofarhadalmostnorelevanceinresearchregardingthehealthcaremarket(Serbanatietal.,2011).Consequently,itisuncertainwhatbenefitsthehealthcaremarketmissesouton,andtowhichhurdlesthislackofconsiderationshouldbeattributed.Takingupthisresearchgap,thischapterposesthefollowingresearchquestion:Whatpotentialcouldadigitalhealthcareecosystem(DHE)raiseintheGermanhealthcaremarket?Toanswerthisquestion,weconductedinterviewswithexpertswithintheGermanhealthcaresector.Theremainderofthechapterisstructuredasfollows.Firstly,weintroducetherelevantworkregardingDHEsandtheGermancontextofthestudy.Wethenprovideanoverviewoftheconductedstudy,theresults,andadiscussion.Finally,weoutlinesomelimitationsandillustratepathsforfurtherresearch.RELEVANTWORKDigitalBusinessEcosystemsintheHealthcareMarketMoore(1993,1996)transferstheconceptofthe(biological)ecosystemmetaphoricallyasaso-calledbusinessecosystemtotheeconomiccontext,thusprovidinganimportantimpetusthatistakenupinvariousdisciplinesbyavarietyofnames(Aarikka-StenroosandRitala,2017;Adner,2017;GackstatterandLemaire,2019;Tsujimotoetal.,2018).Themembersofanecosystemdependonthesurvivaloftheoverallsystem,withthelatteralsodependingonthesurvivaloftheindividualactors(IansitiandLevien,2004).Theconceptisextendedbyacommongoalorientation,which,accordingtoMoore(1993),consistsofthegenerationofinnovationsandcustomerorientationand,accordingtoGackstatterandLemaire(2019),thecreationofservicesthattheindividualcompaniescouldnotprovideinisolation.Dependingonthediscipline,manydifferenttermsareusedandclassificationsmade:PilinkienéandMaciulis(2014)discussso-calleddigital,innovation,entrepreneurship,andindustrialecosystems,inadditiontobusinessecosystems.Otherpublicationsidentifythemainresearchstrandintheareaofknowledgeecosystems(ScaringellaandRadziwon,2018).Overall,thetermsarerarelyclearlyseparatedandareoftenusedsynonymouslyintheliterature.Todistinguishthedifferentecosystemresearchstreamswefocusondigitalbusinessecosystems(DBEs)inthefollowingstudy.Comparedtotraditionalbusinessecosystems,DBEsoffernewformsofvaluecreation(Senyoetal.,2019).Especiallyinthehealthcaresector,“thecurrenttrendindigitalsolutions…istomovefromfragmentedservicestoprogressivelymoreintegratedservicesprovidedbymultiplestakeholdersthroughtechnologicalecosystemplatforms”(Aarikka-StenroosandRitala,2017;Marcos-Pablosetal.,2019,p.838)FranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

675664HandbookondigitalbusinessecosystemsTheterm“digitalecosystem”isunderstoodasa“dynamicandsynergeticcomplex...con-sistingofinterconnected,interactingandmutuallydependentdigitalspecies”(Masak,2009,p.213).Togethertheyactasafunctionalunitononeplatform(HadzicandChang,2010).Althoughtheactorsworktogether,theyalsoacttomaximizetheirownbenefit(Senyoetal.,2019).Inlinewiththesedefinitions,thepresentstudyunderstandsadigitalecosystemasasocio-technicalsystemofinterdependentactorswhointeractbasedonadigitalplatformandcontributeheterogeneousresourcestothejointcreationofvalue.Thus,thedigitalplatformrepresentsthebasisoftheecosystem,whichenablestheintegra-tionofresourcesandisthereforefundamentalforthecreationofvalueintheecosystem(Senn,2017;Thomasetal.,2014).Atthesametime,theplatformactsasamediatorintheactorinteraction,wherethevalueoftheplatformfortheparticipantsincreaseswiththenumberofusers(Adner,2017;GawerandCusumano,2014;Senn,2017).Hence,theplatformrepresentsahighlynetworkedinfrastructurewithamany-to-manyarchitecture,whichcreatesamultifac-etedmarketbylinkingtheplayers(Masak,2009;Thomasetal.,2014).Unlikeintheclassicvaluechain,valueisnotcreatedlinearly,butonallsidesoftheplatform(EisenmannandvanAlstyne,2006).Thisso-calledvalueco-creationdescribestheinteractiveandcooperativecreationofvaluebyecosystemactors(Ceccagnolietal.,2012).Thesimultaneousexistenceofcooperativeandcompetitiverelationships(coopetition)intheecosystemfurthercreatesafieldoftensionthatcanhaveapotentialpositiveimpactontheabilitytoinnovate,strengthenknowledge(share,create,acquire),andimprovebusinesssuccess(financialsuccess,quality,competitiveadvantages,andsoon),andontherelationshipbetweenthepartners(trust,com-mitment,goalorientation,andsoon)(GawerandCusumano,2014).Diversecompetenciesandclosecooperationfacilitatelearningeffectsforthemembers(Gulatietal.,2000),whichhaveapositiveeffectonproductivityand(international)competitiveness(ChangandWest,2006).Thisinturnoffersmembersprotectionthroughresilience(IansitiandLevien,2004).Therefore,theecosystemcanbedescribedasdynamicandresponsive(ElorantaandTurunen,2016).Furthercharacteristicsaresymbioticrelationshipsandahighdegreeofdiversity,aswellasnetworkeffects(GawerandCusumano,2014)andsynergyeffects(CusumanoandGawer,2002;IansitiandLevien,2004).Keyfeaturesofdigitalecosystemsarethusthenetworkstructureandthejointcreationofvalue(Tsujimotoetal.,2018).Hence,aDHEisdefinedas:anetworkofdigitalhealthcommunitiesconsistingofinterconnected,interrelatedandinterdependentdigitalhealthspecies,includinghealthcarestakeholders,healthcareinstitutionsanddigitalhealthcaredevicessituatedinadigitalhealthenvironment,whoadoptthebest-demonstratedpracticesthathavebeenproventobesuccessful,andimplementationofthosepracticesthroughtheuseofinformationandcommunicationtechnologiestomonitorandimprovethewellbeingandhealthofpatients(Iyawaetal.,2016,p.249)Thehealthcaremarketisdistinguishedby“person-relatedservices”(SchölkopfandPressel,2017,p.198).Theterm“service”refersbothtotheproductionofhealth,especiallyintheformoftreatment,andtotheservicesassociatedwiththis,suchastheorganizationofthetimespentinthewaitingareaofadoctor’spractice(PittaandLaric,2004).Thevaluecreatedinthehealthcaremarketisprimarilymeasuredbytheextenttowhichcustomersorpatientsbenefitfromatransaction(PittaandLaric,2004).Currently,thereisademandtoreplacetheinput-basedviewofaquantitativelevelofcare(keyfigures;forexample,densityofhospitalbeds)withthatofmoreoutput-basedtreatmentresults(SchölkopfandPressel,2017).TheFranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

676Potentialsofdigitalbusinessecosystemsinthehealthcaremarket665value-basedhealthcare(VBH)approachaccordingtoPorter(2006)tiesinwiththis,accordingtowhichvalueorbenefitinthehealthcaremarketresultsfromtherelationshipbetweenthequalityoftheoutcomes(forthepatient)andthecostsincurredintheprovisionofcare.Thisvalueisaggregatedacrosstheentiretreatmentchainandthusencompassesbothdifferentvaluecreationstagesanddifferentsectors,suchashospitals,rehabilitationcenters,andoutpatientfacilities(Galetsietal.,2020).Theresultsrefertothesubjectivequalityofserviceperceivedbytheindividualpatient,whichdependsonindividualperceptionsandpreferences(Porter,2006).Ingeneral,inthehealthcaremarkettheterm“quality”refersnotonlytothepatients’perceptions,butalsototheextenttowhichrequirementsaremetandcompliancewithlegalrequirementsorprofessionalstandardsisdemonstrated(Galetsietal.,2020).Nevertheless,customer-centricityplaysthemostcentralroleindeterminingvalue(Dupontetal.,2017).Thisspecialorientationtowardspatientsresultsinbenefit-orientedcompetitioninboththetreatmentandtheinsurancemarket,inwhichthesuccessoftheindividualplayersistobereconciledwiththebenefitscreatedforthepatient(Frowetal.,2016).AccordingtoDupontetal.(2017),thehealthcaremarketshouldthereforedevelopintoapartnershipbetweenserviceprovidersandpatients.Inthiscontext,Benisetal.(2021)evenrefertotheumbrellaterm“onedigitalhealth”(p.1)asafuturehealthecosystem.Thus,thepresentstudyaimstoseparatevaluecreationfromvaluedeliveryandvaluecapture(Teece,2018),andfocusesontheformerasthecreationofvalueforcustomers(Teece,2010),specifically,patientsinthehealthcaresector(Galetsietal.,2020;Serbanatietal.,2011).TheGermanHealthcareMarketTheGermanhealthcaremarketisdividedintothreesub-areasthatcanbepresentedasanonionmodel.Theso-calledprimaryhealthcaremarketformsthecoreareaandreferstotheprovisionof,forexample,outpatientandinpatientservicesandmedication(BMWi,2019).Itislargelyfinancedbystatutoryhealthinsurance(SHI)andprivatehealthinsurance(PHI),includingnursingcareinsurance,andisbased,similarlytoFrance,Austria,andJapan,onasocialinsur-ancesystemwithincome-relatedcontributionsandindependentbenefitproviders(BMWi,2019;SchölkopfandPressel,2017).Asasecondlayerofthemodel,intermediateserviceandsupplierindustriessupplythefirsthealthcaremarket,suchasthemedicaltechnologyandphar-maceuticalindustriesorconsultingfirms.Finally,thethirdhealthcaremarketor“extendedareaofthehealthcaremarket”(p.21)comprisesallprivatelyfinancedservicesandgoodsrelatedtohealth,suchasover-the-countermedicalproductsorwellnessoffers(BMG,2019).Henkeetal.(2011)distinguishsixgroupsofactors.First,patients,insuredpersons,orcustomers.Thesecondgroupconsistsofserviceproviders.Relevantsubgroupsaredoctorsandpsychotherapists,institutionsforoutpatientandinpatientcare,andrepresentativesofotherhealthcareprofessionsorpharmacies.SHIprovidersarethethirdgroup,includingprivateandstatutoryhealthinsurances(Henkeetal.,2011).InGermany,about90percentofthepopulationbelongstotheSHI,and10percentareprivatelyfullyinsured(SchölkopfandPressel,2017).Intermediateproviders,market,andotherserviceproviders(especiallyinthesecondhealthcaremarket)representthefourthgroup.Thefifthcategoryconsistsofgovernmentandpoliticswithlegislationandadministration.Finally,otherinstitutionssuchasinstitutesofresearch,development,education,andtrainingconstituteasixthgroupofactors(Henkeetal.,2011).Thehealthcaremarketisthuscharacterizedbyawiderangeofinterde-pendentactors,someofwhichpursuedivergentinterests(Basole,2009).ThethreecentralFranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

677666Handbookondigitalbusinessecosystemsgroupsoftheinsured,serviceproviders,andfundingagencies(especiallyhealthinsurancecompanies)operateinafieldoftensionthatincludesmarketcompetition,andthusformthefocusofthepresentstudy.Thereareasymmetriesininformationtransfer,whichmakenegotiationsandthebalancingofinterestsbetweentheinvolvedpartiesmoredifficult(Henkeetal.,2011).Forexample,therearedifferentinterestsbetweenassociationsinoutpatientsectors(forexample,KBV,KassenärztlicheBundesvereinigung;KBZV,KassenzahnärztlicheBundesvereinigung;HÄVG,DeutscheHausärztlicheVertragsgemeinschaft)andinpatientsectors(forexample,DKG,DeutscheKrankenhausgesellschaft),orbetweenstatutoryandprivate,orlargeandsmallhealthinsurers(Bernnatetal.,2016).Theprimarygoalsofpatientsaretohaveself-determinationregardingformsoftreatment,tobefullyinformedaboutthediseaseandtreatmentsideeffects,toenjoyahighlevelofdataprivacyandsecurity,tobediagnosedinatime-andlocation-flexiblemanner,andtokeeppersonalcoststoaminimum.Healthinsurancecompanieswouldliketoseethedevelopmentofacomprehensivedatapooltosupportdecision-making(forexample,individualizationoftheservicecatalog),anevidence-basedcost‒benefitanalysistosupportdecisionsaboutnewmethodsandservices,andtheoptimizationofcarecosts,forexamplebyincreasingthetransparencyoftreatmentcosts.Serviceprovidersdemandmorefreedominmedicalcareandtheretentionofprovenmethodswithoutcostrestrictions,anincreaseinthequalityofcare,andanimprovementintheirownefficiencyanduseoftelemedicineservices,providedthattherearenofinancialdisadvantages.Inthetreatmentmarket,serviceproviderscompeteforpatients.Sincepatientsarefreetochoosewhichserviceprovidertheyconsult,qualitydifferencesareenormouslydecisiveinthechoiceofserviceprovider.Ontheotherhand,non-transparentinformationmighthaveadistortingeffectintheselectionoftheserviceprovider(CasselandJakobs,2015).Pricesarelesstakenintoaccountduetothedisparitybetweenbeneficiaryandpayer(Blenketal.,2016).Inaddition,thereisaclassicprincipal‒agentrelationshipbetweentheserviceproviderandthepatient(Eurichetal.,2003):theformerhasaninformationadvantageduetoanexpertknowledgeofthediseaseandtreatmentandcouldexploitthisinformationgaptomaximizetheirownincome(Häckl,2010).Theservicemarketinvolvescompetitionfortheconclusionofcontractsbetweenserviceprovidersandhealthinsurers.Third,theinsurancemarketischaracterizedbythecompetitionamonghealthinsurersformembers(Blenketal.,2016).Moreover,politicaldecisionsaffectboththerelationshipsandinteractionsofthethreegroupsofactors.Forexample,thedecisiononwhetherandunderwhatconditionspotentialcross-datasourceanalysesshouldbeallowedtoincreasetheunderstandingofdiseasecause‒effectrelationshipsandmorepatient-centeredtherapeuticapproachesismadeatthepoliticallevel,andthentheimplementationofthedecisionispassedontomarketparticipants(Bernnatetal.,2016).Thedesignoftheseregulationsinfluencestheinnovation-friendlinessofthesystemandgivesrisetoanareaoftension.Ononehand,innovation-friendlyregulationsandframeworkconditionsshouldensurepatientaccesstomeaningfulandusefulinnovations,andpromotemedicalprogress.Ontheotherhand,theaimistopreventrecognizablyineffective,harmful,oruneconomicalinnovationsfrombeingappliedtopatientsattheexpenseoftheSHIsystem(Henkeetal.,2011).Figure40.1showstheinteractionandrelationshipsoftheGermanhealthcaresectorplayers.Comparedtoothersectors,thedigitalizationofthehealthcaremarketinGermany(espe-ciallywhenlookingatthefirsthealthcaremarket)hasnotyetprogressedveryfar,andinsomecasesitiscriticallyperceivedasathreat(Pfannstieletal.,2018).Networkingbetweentheplayersis(completely)lacking,andthe(digital)exchangeofinformationanddatahassofarFranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

678Potentialsofdigitalbusinessecosystemsinthehealthcaremarket667beenvirtuallyimpossible.Patientsperceivethestatusofdigitalizationinthehealthcaresectorasoutdated,criticizingprocessesasbureaucraticandlengthy,withoutmentioningthelackofinsightandcontrolovertheirowndata(Gerhards,2019).Meanwhile,digitaltechnologiesrevealenormouspotentialforthismarket(Hehneretal.,2018)asacomparisonwithothercountriesdemonstrates.Figure40.1Sub-marketsandobjectivesoftheplayersinthefirsthealthcaremarkeInarecentstudybytheBertelsmannStiftung(2018)onthedigitizationofthehealthcareindustry,Germanyranks16thoutof17Europeancountries.GermanyisbelowaverageintermsofbothstrategicorientationandactualimplementationoftheDHE:already,13ofthe17countriessurveyedhaveadigitizationstrategyforthehealthcareindustry.Alignmentwithanoverallnationaldigitizationstrategyalsoprovestobeadrivingforce.Inthis,Denmarkisonestepahead.Inlinewiththestrategy,Canadaisalsodevelopinganinvestmentplanthatprovidesfortheallocationoffundstoregionstoimplementdigitizationprojects.Germany,ontheotherhand,currentlyhasnoactualstrategy.Likewise,allcountriesexceptGermanyandSpainhaveanationalinstitutionwithcoordinatingcompetenceandprojectsupervision.Inthedevelopmentandintroductionofahealthinfrastructure,anexclusivelytop-downapproachhassofarprovedtobelesspromising,astheexamplesofEnglandandAustraliaillustrate.Theirpreviouslydetailedoverallarchitecture,includingallsolutions,wererarelyimplementedandthenecessaryadjustmentsseldommade.Instead,region-basedapproachessuchasthoseinCanadaorBelgiumprovedtobemoresuccessful(Wachter,2016).Canada’sdigitizationstrategysetsuniformoverarchinggoalsandstandards,forexampleoninteroperability,andiscoordinatedatnationallevel,withtheactualimplementationtakingplaceregionally.TheFranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

679668Handbookondigitalbusinessecosystemse-health.brusselsinitiativeattemptstodevelopanecosystemwiththehelpofdatahubsandthroughcooperationbetweenpoliticalandprivatesectoractors.Promotinginnovationattheregionallevelandultimatelytheavailabilityofdigitalsolutionsforpatientsandtheuseofhealthdataaresetgoals(e-health.brussels,2016).Austriaisimplementingamiddlecoursebetweencentralizedplanningandindividualsolutions.GermanyiscurrentlyproceedinginasimilarwaytoEnglandandAustralia.Inaddition,acomparisonofcountriesshowsthatthereisextensiveactualuseofdigitalofferingswheretheseareavailable,although,asmentioned,littlehasbeenrealizedinGermanytodate.InEstonia,forexample,75percentofprescrip-tionsareelectronic.Strongpoliticalsupportisanotherimportantdriver.Portugal’sdigitalhealthauthorityispromotingtherapidimplementationofprojects.InSpain,thecommitmentoftheMinisterofHealthisseenascrucialforthesuccessfulimplementationofdigitizationinitiatives.Acceptancebythevariousstakeholdersisalsoastronginfluencingfactor,whichcanhavebothnegativeandpositiveeffects.IntheNetherlands,legalactionhashinderedtheintroductionoftheelectronicpatientfile(ePA).InDenmark,bycontrast,manystakeholderswerealreadyintegratedduringthedevelopmentphase,resultinginstrongpublicsupport.InGermany,thecentralplayerswereinvolvedataverylatestage.Incontrasttopreviousexam-ples,andduetotheverydifferentstructureofhealthcare,privatesectorinitiativesdominateintheUnitedStatesofAmerica(USA).OneexampleistheofferofanePAcreatedbyApple.Thisisbasedontheexpansionofanalreadyexistinghealthcareappandthecreationofaninterfacefortheuseofanestablishedstandard(Schwan,2018).Whilemorethan75partnerssuchashospitals,doctors,andinsurerswerealreadyinvolvedinthetestphase,theapplicationcannowbeusedbyallemployeesintheUSA(Muoio,2019).Thus,Appletiespatientstoitsowncompany,andatthesametimeofferseconomicpotentialtoserviceproviders(Apple,2019).InitiativesintheprivatesectorarealsodiscernibleinGermany.Ottonova,forexample,isthefirstpurelydigital(private)healthinsuranceaimingtofundamentallychangetheinsur-anceindustrybymakingservicesavailableexclusivelyviaapps.Overall,Germanyislaggingfarbehindininternationalcomparison.Inparticular,thereiscurrentlyalackofanoverarchingstrategy,politicalleadership,astrongnationalinstitution,acceptanceofadigitalizedhealth-careindustry,andpragmaticsystematicimplementation.METHODOLOGYANDRESULTSThedatacollectionwasbasedonsemi-structuredexpertinterviews(Misoch,2019).Thesemi-structuredsurveyischaracterizedbyanorientationtowardsapreviouslydevelopedguideline.Expertsarepersons“whopossessaformofspecializedspecialknowledgethatgoeshandinhandwiththeprofessionalroleandformsofcompetence-relatedinstitutionalization”(Misoch,2019,p.127).TheexpertsinterviewedinthisstudyhavemorethantenyearsofprofessionalexperienceintheGermanhealthcaremarketandareactiveintheconsultingand/orstrategyenvironment.Fortheanalysisoftheexpertinterviews,themethodofintegrativecontentanalysiswasused,whichlinksqualitativeanalysisaspectswithquantifyingevaluationsteps(Früh,2017).Integrativecontentanalysisis“anempiricalmethodforthesystematicandintersubjectivecomprehensibledescriptionofthecontentandformalcharacteristicsofmes-sages,usuallywiththeaimofinterpretativeinferencetoexternalcircumstancesbasedonthismethod”(Früh,2017,p.127).Incontrasttoanindividualcaseanalysis,theaimistoidentifysupra-individual,commonaspectsandrepresentativestatements(Mayring,2019).FranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

680Potentialsofdigitalbusinessecosystemsinthehealthcaremarket669Throughtheintegrativecontentanalysisofthefiveexpertinterviews,threecategorieswithregardtopotentialsusingaDHEcouldbederived.Theresultscanbedividedintoimprove-mentinqualityofcare,reductionofcosts,andinnovativeness.ImprovementinQualityofCareTheanalysisoftheexpertinterviewsconductedclearlyhighlightedthecategoryofimprove-mentinqualityofcare.With68mentionsinallfiveinterviews,thequalityofcareandsat-isfactionofcustomers’needsrepresentsamassivepotentialthroughDHEsidentifiedbytheexperts.Themostfrequentlycitedpotentials(statedbyallinterviewees)werethoserelatingtothestateofhealthachieved(20mentions)andtotheprocessofrecovery(35mentions).Theimprovementintheachievedstateofhealthwasjustifiedontheonehandbythegreaterindi-vidualizationoftreatmentbytheDHE.Potentialwasalsoseenintheavailabilityofdata.Inthiscontext,thedatabasejointlycreatedbythememberswasemphasized,whichinturnopensupawiderangeofpossibilities,inthecomprehensiveavailabilityofapatient’shealthdataortransparency,whichenablescomparabilityandthuspromoteshighquality.“Personalized,individualizedmedicine…ismoreeffective,whichmeans[theyhave)abetterchanceofhealing,andthisisencouragedbydigitalecosystemsanddigitalnetworking”(Interview1,L.100‒103).“Onthesubjectofdruginteractions,wecouldavoidmanycomplicationsanddeaths”(Interview2,L.304‒305).Furthermore,aDHEcanpromotesectoralbreak-upandthuscareintegration,enablingmoreintensivecooperationandaholisticviewofthetreatmentcase,whichincreasesthequalityofoutcomes.“Inthehealthcaresystem,thesectordistinctionbetweenoutpatientandinpatientcareiswhathindersusmost”(Interview4,L.80‒81).Intheinterviews,therewasabroadagreementthatthepatienttodaywantstobeinvolvedintheprocessofrecoveryandtohaveanactivepartinthedecision-makingprocess.ThroughtheDHEplatform,patientscanaccessinformationandoffersandhavetheirowndataattheirdisposal.Inaddition,theexpertsspokeoffastertreatmentandimprovedpatientperception,astheprocessbecomessimpler,moremanageable,andeasiertounderstand.Theabilityofalgorithmstosupportdecision-makingisalsomentionedseveraltimesasapotentialofaDHEintherecoveryprocess:Thetransferofpatientdata,oftreatmentdata,of,forexample,resultsofdiagnosesorimagingetc.viadigitalsystems,whichonlythepatientcanaccessorwhereatleastthepatientmustallowaccess,iswhereIseethegreatestpotential.(Interview4,L.7579)ItisclassicalBusinessIntelligence(BI)whenIcanusedataanalyticsinstrumentstomakeprospec-tivedeductionsfromlargedatasetsregardingearlyindicatorsfordiseasesandthelikeinordertoreallyensureasignificantimprovementincare.(Interview3,L.119‒122)FourexpertsalsoexplainedthepositiveeffectsofaDHEonthesustainabilityofthehealthstatus(sevenmentions).Theseariseinparticularthroughtheusabilityofhealthdata;forexample,forriskidentificationandpromotionofpatientuse.Itwasconfirmedthatdiseasescouldoftenbeavoidedoratleastreduced:Forme,thisistheclassicusecase:YoucanseefromthepatientdataorthecourseoftreatmentonthebasisofBigDatathatthereisanincreasedrisk.(Interview3,L126‒128)FranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

681670HandbookondigitalbusinessecosystemsTheissueofdigitalecosystemsistheissueofhealthsystems.Thereisnoquestionaboutthatatall.Thedigitalnetworkingamongeachother,thepossibilitiesofcollaboration,datasynchronization,etc.willspeedupmanythingsincredibly,willsimplymakemanythingsstandard.(Interview2,L.293‒296)ReductionofCostsInfourofthefiveinterviews,thepossibilityofrealizingcostsavingsandefficiencyincreasesthroughaDHEwasdirectlymentioned.However,twoexpertsputtheirstatementsintoper-spectiveandsaidthatsavingsareover-compensatedbyincreasedresearchandinnovationexpenditure(Interview1,L.60),investmentindigitization(Interview3,L.135‒136),andanincreaseinpersonnelexpenses(Interview1,L.117).Inadditiontothedirectmentions,cost-savingaspectswerealsomentioned,andthusinfouroutoffiveinterviewsareductionincostsatthecarelevelwasmentioned,andinthreeinterviewsareductionintheneedforresources.“IfIcandiagnoseearlier,candiagnosebetter,thenIsavemyselftheoneorotherdoubleexaminationorcomplication”(Interview1,L.60‒62).Costreductionsatthehealthcarelevelwerejustified,forexample,byavoidingduplicateexaminations,drugintolerancesordruginteractions,aswellasbypreventiveactionsmadepossiblebyearlydetection.Again,theindividualizationoftreatmentplaysarole.“Theexchangeofinformationofallkindsismuchfaster”(Interview4,L.188).Data-baseddecisionsupportcanleadtocost-cuttingresourcesavings,whichspeedsuptheprocessbutalsoreduceserrors.Thenetworkingoftheactorscanalsofreeupcapacitiesbyincreasingefficiency.InnovativenessTheinterviewsclearlyshowthattheexpertsalsoseepotentialforincreasinginnovationinthehealthcaremarketandwithregardtotheindividualcontributorsthroughaDHE.Ontheonehand,aDHEcanencouragethehealthcaremarkettocreatenewservices,andontheotherhand,itcouldsupporttransparencyandincreasetheavailabilityofservicesinrealtime.“Thebeautyofanecosystemis,ofcourse,thatitmakesoffersmoretransparentorevencreatesnewoffers”(Interview2,L.49‒50).Intheinterviews,agenerationofinnovationsusingtheDHEwasmentionedasapotentialinthisrespect,wherebytheplatformcanserveasatechnologicalbasisfordigitalsolutions.ThepossibilitiesofaggregatingdataintheDHEwerealsoemphasizedasaprerequisiteforthedevelopmentofinnovationswhichcanalsobeusedbyresearch:Thattherearemanyinnovationoptionsifyoumakethisdataavailabletothepublicoratleastmakeitavailableinaregulatedwayviacertainaccesspoints.(Interview2,L.166‒168)Theresults,themedicaldatacouldthenbeentered,sothatahealthinsurancecompanycanfilterouttheinformationrequiredforthedistributionoftherespectiveremunerationtotheindividualserviceprovidersdirectlywiththehelpofcorrespondingalgorithms.(Interview2,L.96‒102)Theexpertsmentionthattheclassicwayofincludingnewoffersinaservicecatalogueisverycomplexandtime-consuming,andaDHEcouldacceleratethis.Theconclusionofselectivecontractsasanalternativetothisapprovalprocessisalsoconsideredtobearealisticpossibil-itywhereaDHEcouldbebeneficial.TheplatformcanalsoserveasachannelforprovidingFranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

682Potentialsofdigitalbusinessecosystemsinthehealthcaremarket671solutionsandthespecificordiverseknowledgeandskillsofecosystemmemberscanfacilitatetheinnovationprocess.Similarly,aDHEcancontributetoaspeediertestingofinnovations:Iftheecosystemcanbeusedtodothis,innovationscandefinitelybemadeavailablefaster.(Interview5,L.155‒157)DISCUSSIONANDIMPLICATIONSFromtheexpertinterviews,clearpotentialofaDHEforthehealthcaremarketcouldbederivedinthethreecategoriesofimprovementinqualityofcare,reductionofcosts,andinnovativeness.Aboveall,theexpertscitedthecategoryofimprovementinqualityofcareasastrongargumentforthedigitalizationofthehealthcaresystem.Adevelopmenttowardsper-sonalizedmedicineisconsideredtobefarmoreeffectiveinpromotingpatienthealth(Henkeetal.,2011).ThecontributionofallmemberstotheDHEcancreateacommonandaccessibledatabasethattheactorscouldnotbuildupindividually(Gerhards,2019).AccordingtoFigure40.1,severalconclusionscanbedrawnforeachofthemarketrelationshipsbetweentheplayers.Inthetreatmentmarket,thetrendtowardstheabove-mentionedpatientfocusisparticularlyevidentinthefactthatpatientsincreasinglydemandtobeincludedintreatmentdecisions(Dupontetal.,2017).PatientsaspartoftheDHEcancontributetheirowndata,whichcancompletethepictureoftheirhealthstatusandbehelpfulinthedecision-makingprocess(Gerhards,2019).Digitalsolutionsenablecooperationbetweenoutpatientandinpatientcare;areasthattraditionallyoperateseparately.TheintroductionofaDHEcouldlinkthepartiesinvolvedmorecloselyontheplatform,therebyenablingthesilostructuretobedisrupted,andthuscontributetointegrativecarefromtheentiretreatmentchain(Hehneretal.,2018;Kornsteinetal.,2018).Inaddition,patientsinformthemselvesindependentlyviadigitalmediainordertobeabletoparticipateinthedecision-makingprocess,sothatprocessesandstruc-turesare(shouldbe)alignedinfavorofthepatient(Frowetal.,2016).Patientinvolvementcanhavemanypositiveeffectsonrecoveryandhealththroughknowledge,understanding,andcommitment(DongandHussain,2011).Thus,informedpatientsaremorelikelytobeinvolvedinbothdiagnosisandtherapy(Dupontetal.,2017).Intheaverageeightminutesavailabletoaphysicianforpatientcontact,however,comprehensiveinformationfromthepatientcannotreliablybeprovided(Hippetal.,2018).ADHEcouldprovidepatientswithaccesstoallrelevantinformation,therebycounteractingthecurrentuntrustworthinessofdifferentsourcesandtreatingpatientsasequalpartners(Dupontetal.,2017).Thehithertopredominantlybilateralcommunication,forexample,betweenpatientanddoctor,doctoranddoctor,orpatientandpharmacist,hasbecomeamultilateralinteractionprocessofmanyactors(VincenzaCiasulloetal.,2017).Thepatientcontributesviatheplatformandbecomesadecision-makerandparticipantintheprocessofserviceprovision(Shegogetal.,2020).Further,theplatformandprovisionofservicesenablestheDHEtomeetpatientneedsatanytimeandtomobilizeaccesstoservicesanddata,whichisalsoconducivetopatientsatisfactionattheprocesslevel(Batraetal.,2019;VincenzaCiasulloetal.,2017).Inthisway,theactorscanalsospecializeorfocusontheircorecompetenciesandcontinuouslyimprovethem,whichleadstoqualityimprovements(PorterandLee,2013).FranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

683672HandbookondigitalbusinessecosystemsThedescribeduseofhealthdataoftheDHEalsooffersmanifoldpotentialsontheleveloftherecoveryprocessintheservicemarket.AI-baseddecisionsupportnotonlyacceleratesthediagnosticprocessoftheserviceproviders(Shegogetal.,2020),butcanalsoreducetreatmenterrors(Closeetal.,2019),whichoffersadvantagesespeciallytoinexperiencedphysicians.Aextrapolationofineffectivenessorcomplications,forexample,bymeansofpredictivealgo-rithms,alsoenablestheearlyinitiationofpreventivemeasures(Batraetal.,2019;Serbanatietal.,2011).ThecirculationandconsolidationofheterogeneoushealthdataandthecreationofinteroperabilitycantakeplaceinrealtimethroughtheDHEplatform(Kornsteinetal.,2018).Inaddition,thedataintheDHEandtheuseofdigitaltechnologiesofferpotentialforsustain-inghealth;forexample,intheearlyidentificationofrisksandcomplications(Korolov,2018).KnowledgebuildinginDHEscanalsocontributetoareductionofnegativelateorlong-termconsequences(DongandHussain,2011).Patientinformationalsoplaysadecisiveroleinthesustainabilityofhealth,asinformedpatientsaremorelikelytoparticipateinmaintainingtheirownwell-beingandpreventingpossiblesecondarydiseases(Dupontetal.,2017;Frowetal.,2016;Shegogetal.,2020).Moreover,theuseofthedatabuiltupbytheDHEalsoplaysasupportingroleinthegenerationofinnovationsintheservicemarket,since,forexample,needsareeasiertoidentify(Iyawaetal.,2016).Inresearch,thedatacanbeusedtoworkmorequicklyandwithdeeperinsightsintoactualinterrelationships,whichopensupopportunitiestoachievebreakthroughsindiseasesforwhichthereiscurrentlyonlypartialornocure(SlawomirskiandOderkirk,2017).Intheprocessofaccessinginnovativedigitalsolutions,theDHEcouldbeusedasthebasisforefficientservicedelivery,withtheDHEprovidingaconsistentexperienceforusers(Gerhards,2019).Forinnovators,italsoprovidesadigitalenvironmentcharacterizedbyscalabilityandflexibility,whichallowsforhighdynamicsandadaptability(Serbanatietal.,2011;VincenzaCiasulloetal.,2017).Inadditiontoapotentialincreaseinthequalityofcare,anothercategorywasidentifiedintheexpertinterviews:reductionofcosts.Thus,theexpertsattributehighpotentialtoaDHEwithregardtotherealizationofcostsavingsandincreasesinefficiencyintheinsurancemarket.Inprinciple,theveryhighcosts,whicharepredictedtocontinuerisinginthefuture,representamajorchallengefortheplayersinthehealthcaremarket.Theprevalenceofchronicdiseases,especiallybehavior-induceddiseasessuchasdiabetesorvarioustypesofcancer,thatcouldbeminimizedinmanycaseswiththehelpofdigitaltechnologiesorbehavioralchanges,isincreasing(Closeetal.,2019).Itiscalculatedthatmorethan25percentofdeathsinOrganisationforEconomicCo-operationandDevelopment(OECD)countriescouldbeavertedbyearlypreventionandintervention(OECD,2019).Likewise,thesustainabilityofhealthisanimportantdriverforreducinghealthcarecosts(PorterandLee,2013).Asdescribedabove,aDHEcanbeusedtopromoteinformationforpatients,whocanthenplayanactiverolealongtheentirevaluechain.Participationinandresponsibilityforone’sownhealth,sensitizationtoriskfactors,preventionappropriatetothepatient’slivingenvironment,andpromotionofahealthylifestyle,canleadtotheavoidanceofdiseaseandtreatments,andthusreducecosts(Batraetal.,2019).TheDHEcanfacilitatethenetworkingoftheactorsandhenceamoreefficientcirculationofhealthdata.Consequently,theoftenredundantperformanceofexaminationsduetohighfragmentationofcarecanbeavoided,whichmeansacostreduc-tionthroughdemandreduction(PorterandLee,2013).Digitallysupportedmethodsfortheanalysisofcorrelationsaswellaspredictiveanalyticsmethodscanrevealriskssuchasdruginteractionsorintolerances(Frowetal.,2016).Thisenablesthetimelyinitiationofpreventivemeasuresandcanthussaveexpensivefollow-uptreatments(Frowetal.,2016).Inaddition,FranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

684Potentialsofdigitalbusinessecosystemsinthehealthcaremarket673thedescribedindividualizationoftreatmentsupportedbyaDHEcontributestoareductionofthecostsinthebillionsincurredbyverygeneral,oftenineffectiveprocedures(Christensenetal.,2014).Theuseofdigitaltechnologiesalsooffersawiderangeofpotentialsforincreasingefficiency.Forexample,doctorscurrentlyspendabout27percentoftheirtimeincontactwithpatients,whiletheyspendalmost50percentonadministrativetasks,providinginformationtomanystakeholders(Lee,2016).Theoretically,thisadministrativeburden(processingpatientdata,creatingreferrals,andsoon)canbegreatlyreducedbyautomationordigitalsolutions(Kornsteinetal.,2018).IntheDHE,networkinganduniform(forexample,processorinfor-mationtechnology)standardscanpromotetheefficiencyoftheexchangeprocessandreplacelargelypaper-baseddocumentation.Bynetworkedactors,bidirectional(doctor‒patientordoctor‒doctor)communicationbecomesasimplifiedprocessofprovidinginformationviatheplatform,fromwhichotheractorsactivelyobtaintherequireddata(Lee,2016).Theaggregationandevaluationofdatacanalsoprovidedigitalsupportforroutinetasksrelatedtodiagnosis,forexample,artificialintelligence(AI)-basedevaluationofradiologicalimagescancontributetoafasterassessment(Galetsietal.,2020;Soganietal.,2020).Informationasymmetriescanalsobereducedbytheinformationtransparencyontheplatform(Iyawaetal.,2016).Theintegrationofcareandspecializationoftheactorsenableslearningeffectsandeconomiesofscale(Kornsteinetal.,2018;PorterandLee,2013).Likewise,themostcost-efficientfacilitiescanbeselectedforroutineexaminations,offeringcostreductionsforpayers(PorterandLee,2013).Theclosecooperationandseamlesstransitionofthepatientbetweenthevaluecreationstagesisalsokeytolowprocess-relatedcosts,forexample,intermsoftimespentbyusers(Kornsteinetal.,2018).Afurtherpotentialforreducingcostsliesinthedetectionofunnecessaryexaminationsortreatmentsthatdonotbenefitpatientsbutgen-eratecosts.Currently,physicians(especiallythosewhoworkwithprivatelyinsuredpatients)arefinanciallyincentivizedtorecommendorperformmedicallyunnecessaryservices.IntheDHE,suchbehaviorcouldbedetectedbydataanalysis,toidentifyabuseorfraud(Closeetal.,2019).Toconclude,theindividualactorsinthehealthcaremarketcanonlybeconnectedviaadigitalplatform,creatingaDBEintheend.Inthisway,theexpansionoftheecosystemtoadigitalleveloffersmanynewapproachestovaluecreationbylinkingindividualplayersinthehealthcaresectorwhilereducingasymmetricinformationtransferofdifferentactors.Duetotheincreasingrelevanceofdigitalinnovations,suchashealthapps,theinsurancemarketdemandsarethinkingfromtheclassicaloutput-centeredinnovationprocesstoaservice-basedapproach,whichfocusesonbenefittothepatient(Frowetal.,2016;VincenzaCiasulloetal.,2017).Theanalysisoftheexpertinterviewsclearlyshowedtheneedandoppor-tunitiesforinnovationinthehealthcaresystemthroughtheintroductionofaDHE.Start-upsaswellasgloballyoperatingtechnologycompanies,areincreasinglypushingintothemarket(Soganietal.,2020)and,incompetitionwithSHI-financedofferings,offersolutionsthatdirectlyrespondtotheneedsandwishesofpatients(Christensenetal.,2014).Moreover,dig-itizationisgivingrisetothedemandforaholisticviewofhealthinsteadofafocusonillness.However,therearenumeroushurdlesinthehighlyregulatedhealthcaremarket,especiallyduetolengthy,expensive,andnon-transparentapprovalprocedures.Thecharacteristicsofdigitalecosystemssuchasdiversity,jointdevelopmentoftheactors,andvalueco-creationasaprocessofvaluecreation,arefundamentallyconditionsconducivetoinnovation(Wuetal.,2019).Forexample,theinvolvementofdifferentactorsintheinnovationprocessenablesaccesstoalargenumberofknowledgesources(Iyawaetal.,2016).Here,too,thepatientasamemberoftheDHEplaysacentralrole,astheyinspirethetargeteddevelopmentofFranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

685674Handbookondigitalbusinessecosystemsinnovations(VincenzaCiasulloetal.,2017).Thereisalsopotentialforthefuturethroughtheintegrationofcompanieswithspecificknow-how,forexamplethroughinterfaces,intotheDHE(DongandHussain,2011).Overall,tokeepthehealthcaresysteminGermanystableandtoremaininternationallycom-petitive,itisindispensabletofirstpushaheadquicklywithdigitalization.Asalltheexpertshavenoted,lengthyprocessesandcomplexregulationsinGermanyaremajorobstacles.Therefore,flexibleandfastprocessesthatallowagilityandearlytestphasesshouldbeintro-ducedforasuccessfuldigitaltransformation.Asanextstep,thegovernmentneedstoopenupthecollectionanduseofdata.Thisrequiresinvestmentsinasecureinfrastructure,politicalapproval,opendiscussion,andtheeducationofthepopulationondataprotectionissues.Thetechnologicalframeworkshouldberegulatedbythestate,definingclearandbindingregula-tionsregardingthemisuseofhealthdata.Second,savingsduetocostreductionfreeupcapaci-tiesforquality-enhancinginnovations,andbalancechallengessuchasincreasingcostpressureorlaborshortagesinthemarket.Therefore,congruenceamongthemembersoftheDHEplaysadecisiverole.Third,theentiretreatmentchainmustultimatelybepatient-centeredinordertoensuresustainablevaluecreation.Ergo,patientsmustalwaysbeinvolvedintheDHE.CONCLUSION,LIMITATIONS,ANDFURTHERRESEARCHThischapterprovidesfirstfindingsregardingthepotentialofDHEsforthehealthcaremarketinGermany.Accordingtotheresults,aDHEcouldintegratethecurrenthighlyfragmentedsystemofactorsoperatingseparatelyfromeachotherandamendthelackofcomprehensivedigitaldocumentation,andthusfundamentallychangethesystem.Theanalysisoftheinter-viewsrevealedthatexpertsseegreatpotentialsinthefieldsofimprovementinqualityofcare,reductionofcosts,andinnovativeness.Inparticular,aDHEcouldmakedatausableandlinkallparticipantsincluding,especially,thepatientsinthevalue-addedprocessandthegenerationofandaccesstoinnovativedigitalservices.Inthisway,therapyaswellastreatmentprocessescanbeindividualizedandimproved.Moreover,newofferswouldbeavailabletopatientsmorequickly.Inordertomaxi-mizethebenefitsforpatients,aDHEcouldbeanimportantdriverinthedigitaltransformationofthehealthcaremarket(Hessetal.,2016).However,thereisahighdegreeofdependenceontheactionsofpoliticalinterests,particularlyinGermany.Theinterplaybetweenregulationandafreemarketeconomy(NiemannandBurghardt,2016)inthehealthcaremarketmeansthatnotalleconomicrelationshipsandtheoreticalpossibilitiescanbeappliedunrestrictedlytothepresentmarketcontext.Moreover,thereremainprivacyconcernsregardingtheusageofthisdata.Cyber-attacksaswellasthetransparentusageofdatastillchallengetheimple-mentationofanethical,trustworthy,data-andprivacy-securedDHE(ElSaddiketal.,2020;HabibzadehandSoyata,2020).Inthischapter,weinvestigatedthepotentialsofDHEsintheGermanhealthcaremarket.Despitethehighrelevanceofservicequalityandinnovationinthehealthcaremarket,verylittleresearchregardingDHEshasbeenpublishedsofar.Duetothenatureofourresearch,thisstudyissubjecttoseverallimitations.ThestudywasconductedwithfiveexpertsintheGermanhealthcaremarket.Therefore,theresultscannotbegeneralized.Qualitativeresearchusingexpertinterviewsinherentlyincludesahighdegreeofsubjectiveinfluencebytheresearchersandtheinterviewees.SincehealthcaremarketsaregenerallysubjecttoahighFranziskaGötz,CarolineReelitz,ChristophBuck,TorstenEymann,andReinhardMeckl-9781839107191DownloadedfromPubFactoryat05/28/202210:27:09AMviaColumbiaUniversityLibrary

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69141.Digitaltwinsinrealestate:drivingvaluethroughoutthebuildinglifecycleAdrianToschkaINTRODUCTIONSincethe1990s,theconstructionandrealestateindustrieshavefacedmajorchallenges:scheduledelaysoflargeprojects,budgetoverruns,andevendeclininglaborproductivityinsomemarkets(Agarwaletal.,2016;OECD,2019).Atthesametime,littleattentionhasbeenpaidtoenvironmentalimpacts,suchasconstructionwasteorexcessiveresourceconsumption(Azisetal.,2012).Therefore,fundamentalchangeisneededtoensureasustainableandefficientsupplyofbuildings.Anopportunitytoenableandacceleratethesechangesliesinthedigitizationofprocesses.Acomparisonofthedigitizationstatusofvariousindustriesshowsthattheconstructionindustryisoneoftheleastdigitized,whiletherealestateindustry,inparticular,achievesamediumrankinginthiscomparison(Agarwaletal.,2016).Solvingtheproblemsoftheconstructionsectorandadvancingdigitizationcannotbedrivenbyonemarketplayeralone.Rather,manydifferentstakeholdersmustinteractinabusinessecosys-tem.Digitaltwins(DTs)ofbuildingscanprovideplatformsforthispurpose.Consequently,a“socio-technicalenvironmentofindividuals,organizationsanddigitaltechnologieswithcollaborativeandcompetitiverelationships”(Senyoetal.,2019,p.53)iscreated,whichisalsodefinedasadigitalbusinessecosystem(DBE).Thedevelopmentofintelligentbuildings,mainlydrivenbytheintegrationofconnectedsensors,allowsnewbusinessmodelstobedevelopedandcallsfornewstakeholderstoentertheconstructionandrealestatesectorwithinnovativeconcepts.Thischapter,therefore,attemptstoanswerthequestionofwhatpotentialaDTmayhaveinthephasesofthebuildinglifecycle,andwhichnewstakeholdersthismayencouragetocreateaDBE.ResearchaboutfullintegrationofDTsintheconstructionandrealestateindustryisscarce.Mostscientificpublicationsonthesubjectcaneitherbefoundinresearchareassuchaspro-ductionengineering,automaticcontrol,ormanufacturing(Jonesetal.,2020),orfocusingonspecificpartsofaDTintheconstructionsector,suchasthegenerationofadigitalrepresenta-tionofabuildingusingprocessessuchasbuildinginformationmodeling(BIM),oritsusageinspecificmanagementareasofrealestate,suchasfacilitymanagement.Thischapter,therefore,seekstoputtheconceptofaDTintoabroadercontextthroughacasestudy,andinparticular,toshowhowadigitalbuildingtwincanincreasethevalueofabuildingduringitslifecyclebylinkingconventionalconstructionandrealestatestakeholderswithnewstakeholdersinthissectorthroughaDBE.InthefollowingsectionDBEsandDTsaredefinedanddifferentlevelsofdataintegrationaredistinguished.Additionally,aliteraturereviewofDTapplicationsinindustrysectorsotherthanconstructionandrealestateshowsexistingbenefitsandchallenges.AdescriptionofthemethodologyisfollowedbyaconceptualcasestudyabouttheapplicationoftheDTincon-680AdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

692Digitaltwinsinrealestate681structionandrealestate,itsassociatedopportunitiesandchallengesforvalueenhancement,anditsintegrationintoaDBE.LITERATUREREVIEW:DIGITALBUSINESSECOSYSTEMS,VALUE,ANDDIGITALTWINSDigitalBusinessEcosystemsandTheirValueCreationPotentialDBEsarebasedonbusinessecosystems,whichMoore(1993,p.76)definedassystemsinwhich“companiescoevolvecapabilitiesaroundanewinnovation:theyworkcooperativelyandcompetitivelytosupportnewproducts,satisfycustomerneeds,andeventuallyincorporatethenextroundofinnovations.”DBEsextendthisideabygivingmoreimportancetodigitaltechnology(Senyoetal.,2019).So,ontheonehand,DBEsareeconomiccollectivesofbothindividualsandorganizationsthatareactingoutsidetheirtraditionalindustryperspectives(Moore,1993).Ontheotherhand,DBEsformatechnologyinfrastructuretoconnectdigitalservicesinavirtualenvironment(Nachiraetal.,2007).Therefore,Senyoetal.(2019,p.53)defineaDBE“asasocio-technicalenvironmentofindividuals,organizationsanddigitaltechnologieswithcollaborativeandcompetitiverelationshipstoco-createvaluethroughshareddigitalplatforms.”Thecreationofvalueisessential,becauseacompany’scompetitiveadvantagedependsonitsabilitytocreatemorevaluethanitscompetitors(Porter,1985).Thisaddedvaluearisesduetotheexistenceofasymmetriesbetweencompetingcompanies(BrandenburgerandStuart,1996),withfirmsattemptingtocreateasymmetries,forexamplebyintroducinginnovationstothemarketfasterthancompetitorsdo.However,aspecificinno-vationoftendoesnotsucceedinisolation,butratherreliesoncomplementaryinnovationsinthecompany’senvironment.Theseexternalchangesrequireinnovationsonthepartofotheractorsandembedthefocalcompanyinanecosystemofinterdependentinnovations,whichcreatescoherentcustomersolutions(Adner,2006).AccordingtoKapoor(2018,p.6),oneshouldconsiderdifferentlevelsininnovationecosystems:•“activitiesthatmakeupthedifferentoffers,•theactorswhoundertakethoseactivitiesandproducethoseoffers,•andthetechnologyandproductionarchitecturesthatconnectoffersandactorsrespectively.”Inparticular,technologyarchitectureplaysakeyroleinDBEs,asittransmitsandconnectsservicesandinformationanddistributes“allthedigital‘objects’withintheinfrastructure”(Nachiraetal.,2007,p.9).DigitalobjectscanbepresentedwithintheconceptoftheDT,whichhasthepotentialtoprovideadigitalinfrastructureandthusservesasthebasisofanefficientDBE.TheDigitalTwinConceptTheDTconceptisattributabletoMichaelGrieves,who,alongwithJohnVickersfromtheNationalAeronauticsandSpaceAdministration(NASA),presentedhisconceptualidealforproductlifecyclemanagement(PLM)torepresentativesofdifferentindustrysectorsattheUniversityofMichiganin2002.Theidealincluded“alltheelementsoftheDigitalTwin:realspace,virtualspace,thelinkfordataflowfromrealspacetovirtualspace,thelinkforAdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

693682Handbookondigitalbusinessecosystemsinformationflowfromvirtualspacetorealspaceandvirtualsub-spaces”(Grieves,2016,p.1).AccordingtoKritzingeretal.(2018),DTsarecommonlyunderstoodasdigitalcounterpartstophysicalobjects.GrievesandVickers(2017)definedtheDTconceptasacollectionofvirtualinformationconstructsthatfullyandaccuratelydescribeaphysicalproductfromthemicrotothemacrolevel.WiththereferencetoPLM,Grievesindicatedthathisaimwastocreateadynamicobjectthatconnectsthevirtualandrealsystemsandthatchangesoverthelifecycleofthesystem,whichiswhytheinitialconceptwaslaterexpandedwiththeintroductionoftheDTprototype,DTinstance,DTaggregate,andDTenvironment.TheDTprototypevirtuallydescribesaprototypeproductandcontainsalltheinformationneededtoproduceaphysicaltwin,includingtherequirements,afullyannotatedthree-dimensional(3D)model,andthematerialspecifications.TheDTinstancedescribesacorrespondingphysicalproductthatremainslinkedtoanindividualDTthroughouttheproduct’slife.TheDTfunctionsasanapplicationspacewithinwhichtooperateusingtheDT.ThereasonsforusingaDTincludebehaviorandperformancepredictionsofphysicalproductsandinformationinterrogation.ThecurrentsystemstatesofindividualDTinstancescanbeassessed;suchas,forexample,byanalyzingthefuelamount,geographicallocation,orstructurestressofproductsormachines(GrievesandVickers,2017).DifferentsolutionsandideasofDTsexistacrossdifferentindus-tries,whichhasledtoadiverseandincompleteunderstandingoftheconcept(Leeetal.,2013;Rosenetal.,2015;Taoetal.,2018).LevelofDataIntegrationThelevelofdataintegrationdistinguishesbetweentheterms“digitalmodel,”“digitalshadow,”and“digitaltwin.”Thesetermsareoftenusedsynonymously,whichhadledtomisconceptionsaboutDTs(Fulleretal.,2020).However,adistinctionbetweenthetermsisessential,becausesomephysicalobjectsareonlymanuallyconnectedwiththeirdigitalcoun-terparts,whileothersarefullyintegratedwithautomaticdataexchange.Inadigitalmodel,thedatabetweenphysicalanddigitalobjectsismanuallyexchanged.Whilethedevelopmentofsuchmodelsmakesuseofdigitaldatafromexistingphysicalsystems,changingthephysicalobjectdoesnotaffectthedigitalobjectduetothelackofautomaticdataintegration.Incon-trast,indigitalshadows,thereisautomateddataflowbetweenthephysicalanddigitalobjects.Automateddataexchangeisone-wayonly;therefore,changesinthephysicalobjectcausechangesinthedigitalobject,butnottheotherwayaround.AsshowninFigure41.1,inthefinaldevelopmentstage,theDT,dataflowisfullyintegratedinbothdirectionsbetweenthephysicalanddigitalobject.Asachangeinonetypeofobjectautomaticallyleadstoachangeintheothertypeofobject,thedigitalobjectcanactasacontrollinginstanceofthephysicalobject(Kritzingeretal.,2018).Further,accordingtoGrieves(2015),dataclosestheloopbetweenthephysicalobjectinrealspaceandthevirtualobjectinvirtualspace.However,theaimshouldalwaysbetodevelopanefficienttwo-wayconnectionbetweentheobjectssothatbothobjectscanbeworkedwithsimultaneously.AdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

694Digitaltwinsinrealestate683Source:BasedonKritzingeretal.(2018,p.1017).Figure41.1LevelsofdataintegrationAPPLICATIONSOFTHEDIGITALTWINININDUSTRIESOTHERTHANCONSTRUCTIONANDREALESTATEThissectionfocusesbrieflyondifferentapplicationsofDTsinindustriesotherthanconstruc-tionandrealestate—namelymanufacturing,healthcare,andtheautomotiveindustry—todiscussspecificpotentialsandchallengesintheoperationofDTs.Thisillustrationinturnservesasthebasisofthecasestudyinthischapter.Inmanufacturing,akeychallengeistointegratetheprocessingofhighvolumesofdata,whicharegeneratedduringtheproductlifecycle,intomodernproductionlines(Bazazetal.,2019).Differentcommunicationprotocolsandformatsfurthercomplicateinformationexchangebetweendifferentlevelsandstagesofproduction(Botkinaetal.,2018).ADTmakesitpossibletoprocesslargeamountsofdata,simulatingandoptimizingtheproductionsystem.Toincreasecompetitiveness,productivity,andefficiencyoverthewholeproductlifecycle,theDTintegratesallmanufacturingprocesses,includingthedirectlyupstreamanddownstreamactivities,suchasproductdesign,productuse,andmaintenance(Kritzingeretal.,2018;Taoetal.,2018).TheDTmakesitpossibletobuildavirtualmodelofaphysicalproductinaninterpretedworld(thatis,avirtualworld)intheproductdesignphase.Thevirtualmodelreflectsboththedesigners’expectationsandtheconstraintsofthephysicalworldinthedesignprocess,enablingthemodeltobeiterativelyoptimizedandexpectationstobeadjusted(QiandTao,2018).Theoptimizedproductdesignisinput,forthelayoutplanningofafactory,byincludingallgeometricalandphysicalmodelsofequipment,tools,andmaterials,aswellasallbehaviors,rules,andenvironmentalconstraints,tosimulateandevaluatedifferentmanufac-turingstrategies.So,theproductionprocesscanbesimulatedinavirtualfactoryorworkshopforitsreal-timemonitoringandadjustmentthroughvirtual‒physicaliterations(QiandTao,2018).Aftermanufacturingthephysicalproduct,thevirtualmodeltakesoveritsownlifetimeusagemonitoring.Anobservingsystem,suchasasensorsystem,isdeployedonthephysicalproducttorecordusagedata(forexample,location,condition,andperformance).Theusagemonitoringenablesmaintenanceneedandrepaircoststobeforecast,andcanthereforepredicttheremainingusefullifeofaproduct(Tuegeletal.,2011).AdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

695684HandbookondigitalbusinessecosystemsInhealthcare,DTsplaymajorrolesinmanaginghospitalsandmedicalequipment,aswellasinmanagingpatienthealth.Differentmeasures,suchasbedplanning,staffschedules,andsurgicaloperations,canbesimulatedinavirtualenvironmentbeforechangesareimplementedinphysicalunits(Liuetal.,2019).Dataonpatients’geneticandphysicalconstitution,life-style,andeatinghabitscanbegeneratedandprocessed(Bruynseelsetal.,2018).Medicalinstrumentsandequipmentandwearablesensorscanbeconnectedtorealpeople,whenusingaDT,tomonitorhealth.Datacollectedbytheseunits,suchasheartrate,bloodpressure,andbloodglucose,aretransmittedtoavirtualmodelofthepatient.Thisvirtualmodelalsocontainsthepatient’sotherinformation,suchasage,sex,geneticinformation,andhealthrecord.Afterprocessingthesedata,theDTcanofferreal-timemonitoringandcrisiswarnings,diagnosediseases,andprovidereminderstotakemedication.Thesehealthmeasurescanbetransferredtoandsimulatedonthevirtualmodelbeforethephysicalpatientorhealthstaffisinformed(Liuetal.,2019).Further,theappropriatenessofthedecisionforthespecifichealthmeasurecanbeevaluated(Anguloetal.,2019).Whileinnovationssuchaselectro-mobility,autonomousdriving,newsafetysystems,andvehiclenetworkingcharacterizeallsectorsoftheautomotiveindustry,theDTconceptallowsinnovationstobecombinedandfurtherdeveloped.DTsofvehiclesprocessdata,suchasreal-timesensordatafrominstalledmodules,environmentaldata(forexample,roadandtrafficdata)(Damjanovic-Behrendt,2018),andpersonaldatafromdrivers(HealeyandPicard,2000).Sensorsonvehiclesandtheirassetsconsistentlytransferdatatothevirtualvehicle,whichsimulatesprognosticsforcriticalautomotivecomponents(forexample,safetysystem,engine,exhaustaftertreatment,orbrakepadwear)toimprovevehiclehealthmanagement(Magargleetal.,2017).Traditionaldiagnosticandmaintenancemethodsaretime-consumingduetotheirneedforextensivemodeling.Newdata-drivenapproachesfacilitatemaintenanceplanningandfaultdetection,combiningdataacquiredonboardwithdatafromaggregatedoff-boarddatabases,suchasvehiclestatisticsandmaintenancerecords(Prytz,2014).Combiningoff-boarddatabaseswithonboarddatafromvirtualvehiclesfacilitatesthereal-timemonitoringandsystemdiagnosticsofphysicalvehicles(Magargleetal.,2017).Onauser-focusedlevel,sensorscanalsorecordthedriver’sphysicalfunctions.Neurologicaldiagnostics,aswellasrespirationandskinconductancemeasurements,monitorthedriver’sautonomicnervoussystem,whichenablestheirstresslevelwhiledrivingtobeevaluated(HealeyandPicard,2000).METHODOLOGYSinceresearchthattakesaholisticviewoftheintegrationoftheDTintothebuildingsectorisrare,thischapteraimstoconceptualizethisintegrationbyusingthecasestudymethod.Astherearedifferentopinionsaboutthemeaningandutilityofcasestudies,thisshouldfirstbeclarified.ThischapterfollowsthedefinitionofGerring(2004),whodefinedthecasestudy“asanintensivestudyofasingleunitforthepurposeofunderstandingalargerclassof(similar)units”(Gerring,2004,p.342).Casestudiesareidealformanytypesofinvestigations,becauseoftheirdistinctivecharacteristics,andbecausetheycanalsobeusedincombinationwithothermethods(Tellis,1997).Therefore,theliteraturereviewisusedasabasisfordevelopingthecasestudy.ExistingresearchonpartsofthedigitaltwinwillbelinkedtoproduceaconceptoftheDTwithregardtothelifecycleofabuilding.ThelinksareintendedtohighlighttheextentAdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

696Digitaltwinsinrealestate685towhichdifferentstakeholdersneedtocollaborateacrossadigitalenvironmentinorderfortheconceptofDTstosucceedanddevelopitsfullvalueproposition.THEDIGITALTRANSFORMATIONOFBUILDINGSInrecentdecades,buildingshaveundergoneahighdegreeofdigitalizationandnolongerconsistonlyofbricksandmortar.Intelligent/smart1buildingsarethefoundationforthedevelopmentofdigitalbuildingtwins.Thissectionfirstdescribesthisevolution.Then,thedifferentpotentialsofDTsthatarerealizedinsectorsotherthanthebuiltenvironmentwillbetransferredtothelifecycleofbuildings.IntelligentBuildingsTheconceptofintelligentbuildings(IBs)orsmartbuildingscanbetracedbacktotheearly1980s.Theterm“intelligentbuilding”wascoinedbytheUnitedTechnologyBuildingsSystems(UTBS)Corporationin1981(Sinopoli,2010).Later,theconceptbecamearealitywiththeinaugurationoftheCityPlaceBuildinginHartford,Connecticut,whereUTBSwasresponsibleformonitoringandjointlyoperatingusedequipment,suchasairconditioning,elevators,andemergencyresponseequipment(SoandChan,1999).InanarticleintheNewYorkTimes,Prial(1984,p.16)definedIBsas“anewgenerationofofficebuildingsthatseemalmosttothinkforthemselves…amarriageoftwotechnologies–old-fashionedbuildingsmanagementandtelecommunication.Anintelligentbuildinghasacomputerforabrainandafiber-optic-cablenervesystem.”Reijulaetal.(2011,p.225)arguedthatIBmustbeableto:•sensetheinteractionbetweenusersandspace,•processthisinformationandunderstandthecontextdata,•reactinawaythatadjuststousers’needsandenhancestheirendeavorsintheenvironment,•beactiveandautonomous(showself-initiatedfunctionality)and•beomnipresent.ThemainfeatureofIBsistheuseoftheInternetofThings(IoT);throughthis,objectsinrealestateoperationscanexchangedatawithouthuman-to-humanorhuman-to-computerinteraction.AccordingtoSinopoli,anIBgenerallyconsistsofseveralcomponents,including“systemintegration,advancedbuildingmanagementtools,extensiveautomationandsensors,energymanagement,enterprisedatamanagement,dataanalytics,softwareapplicationsandtheleveragingandincorporationofIT”(Sinopoli,2016,p.30).Hardebusch(2019)describedintelligentofficepropertiesthathavecomprehensiveequipmentwithsensorswhichcan,forexample,anonymouslyrecordthepresenceofusersandtheirbehavior.Thisdatacansub-sequentlybefurtherprocessedwiththehelpofartificialintelligence(AI).Balietal.(2018)describedanintelligentbuildingsystemwithanautomaticinteractionofallbuildingtrades.Thebasisforthisisbuildingautomation,whichconsistsofthreecomponents:●Technicalbuildingmanagementtomonitoroperate,historicize,andvisualizetheentireautomationprocess.●Roomautomationtoautomate,forexample,sunprotection,lighting,andairconditioning.AdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

697686Handbookondigitalbusinessecosystems●Systemautomationtomonitor,control,regulate,andoptimizetheprimarysystems(forexample,heating,cooling,ventilation,andairconditioning).Therefore,itistheintensiveuseoftechnicalcomponents,suchassensorsandactuators,auto-mation,management,andoperatingdevices,aswellasdatainterfaceunits,thatcharacterizeIBs.Inadditiontoautomatingbuildings,theIoThasamajorimpactonsystemarchitecture.EachbuildingcomponentcanbereachedfromoutsidetheIoTenvironmentviaaninternetprotocoladdress,canbesuppliedwithpowerusingPoweroverEthernet,andcantransmitandintegrategenerateddataintothenetwork(Balietal.,2018).Theautomatedbuildingcomponentsarecombinedinabuildingautomationsystemorbuildingmanagementsystem;computerizedsystemsthatmonitorandcontrolenergyandsecuritymanagementandbuildingoperations.Thesesystemsmakeitpossibletoautomaticallycontrolandmonitorbuildingfunctionssuchasheating,ventilation,airconditioning,electricity,lighting,firesafety,andsecurity(AtkinandBrooks,2009).TheDigitalTwinintheBuildingLifeCycleStych(2019,p.85)definesadigitalbuildingtwinasavirtualcopythat“shouldideallybeaby-productoftheexistingprocessesofdesign,procurement,constructionandoperations.”Inaddition,Ridley(2019)describedDTsaspre-existingvirtualmodelsthatareenrichedbystaticandlivedata.Inasimilarvein,Lammers(2018)definedadigitalbuildingtwinas“adynamicvirtualrepresentationofaphysicalasset.”Thefollowingfoursectionswillidentifyusecasesfordigitalbuildingtwinsindifferentbuildinglifecyclephases.PlanninganddesignTheplanninganddesignphaselaysthefoundationforconstructingthephysicalbuildinganditsvirtualrepresentation,whichislaterusedintheDTconcept.Computer-aideddesign(CAD)applicationsareusedtocreateathree-dimensionalmodelofthebuildinginthedesignphase.Thebuildinginformationmodeling(BIM)approachtoarchitecturaldesignisanalternativemethodthatdiffersradicallyfromCAD.Thedifferenceliesinthefactthat,inCAD,singlelinesofvaryingthicknessaredrawn,whileinBIM,wholebuildingcomponentsareaddedandintegrated.UsingCADforthedesignandplanningphaseproducesrepresentationalplansthatcanbeusedtoconstructabuilding;however,BIMmodelsoffergreaterversatility(Berwald,2008).DesignfeaturesandtheabilitytoprovidewalkthroughanimationsaretheprimaryfactorsthatdeterminethescopeofBIM(Huhntetal.,2010).AsstatedbyBargstädt(2015),thisinformationdiffersfromthatwhichisexpectedbyconstructioncompaniesinrelationtothebuildingprocess.Berwald(2008)outlinedthedifferentexemplaryfeaturesofbothBIMandCAD,notingthatBIMofferstheoptiontoaddcomponentsformechanicalsystems,whichenablesenergyanalysestobeconductedthatmakeitpossibletochangethelevelofenergyusedbyaphysicalbuildinginlightofvariousmodificationstothemodeltobequantified.Consequently,analysesincludingthermalandairflowmovementsimulations,aswellasstudiesonelectriclightinganddaylighting,canbeconductedwithBIM.TheavailabilityofschedulingfunctionsinBIMalsopresentsafurtheropportunity.Forexample,itispossibletoconductanearlycostcalculationforabuildingprojectusingthematerialquantityinformationgeneratedbyBIM.Huhntetal.(2010)andFeineetal.(2016)AdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

698Digitaltwinsinrealestate687showedthataddingadatamodeltoatraditionalCADtoanimatetheconstructionprocessduringtheplanningphaseimprovesconstructionefficiencyinpractice.Inaddition,theabilitytolinkdifferentdimensionsandfunctionsthroughBIMcomplementsthegenerativedesign;aprogramming-basedapproachthatgeneratesdifferentbuildingsolu-tionsbychangingtheconstraintsandrequirements.Generativedesignprogramsarebecomingincreasinglypopularamongarchitectsbecausethecomplexalgorithmstheyfacilitatecangenerategeometrythatwouldbechallengingtocreatemanually.Suchprogramsaregenerallybasedonvisualprogrammingsystemsthatenablearchitectstoconvenientlywritescripts.ThesesystemsinteractautomaticallywithBIMsoftware,sotheresultscanbevisualizedwithdifferentperspectives(FerreiraandLeitão,2015)andmultiplevariantscanbeassessed.Theapproachalsointegratesenergysimulationtodetermineoptimalcombinationsofvaluesforagivenvariableofabuildinganditssurroundings(TouloupakiandTheodosiou,2017).Bycombiningthevirtualbuilding,asaresultoftheBIMprocess,withageographicinformationsystem(GIS),theeffectofthebuildingonitssurroundingsandtheassociatedconstraintscanbeverified.DatafromtheGISconsistsofdifferentinformationsuchasmapdata,terraindata,andcitymodeldata.TheseamlessintegrationofGISdataandBIMdataintoageovirtualthree-dimensionalenvironmentofathree-dimensionalviewerensurestheinteroperabilityoftheinformation.Thethree-dimensionalviewerenablesuserstoanalyzebuildingcharacteristics,alongwithvisualizedinformationfromtheenvironment(DöllnerandHagedorn,2007).BIMnotonlyfacilitatestheworkofbuildingdesignersandarchitects,butitisalsoapar-adigmthatimprovescollaborationindesignandconstruction,asitwasoriginallyintendedtofacilitatetheeffectiveexchangeofinformationbetweenseparatesilos(Bradleyetal.,2016).FollowingtheintroductionoftheIndustryFoundationClasses(IFC)2specification,moreintegratedmethodsforsharingdesigndatahaveevolvedandhavebeenadoptedacrosstheindustry(Bojeetal.,2020).Thedifferentusecasesforthedesignandplanningphaseofabuildingshowthattheknowledgeoftraditionalstakeholders,suchasarchitectsandstruc-turalengineers,isstillneeded.Inaddition,severalprovidersofsoftwaresolutionsforBIM,physicalsimulation,generativedesign,andGIS,andpersonnelwhocanoperateandadjustthesoftware,arenecessaryfordevelopingaDTforallphasesofabuilding’slifecycle.ConstructionandcommissioningIngeneral,projectstakeholderssuchasowners,engineers,andcontractorshavediscipline-specificgoalsandconstraints,witheachstakeholdernegotiatingtobestadvancetheirowninterests,whichdonotalwaysfavortheoverallbuildingvalue.Anintegratedtarget-value-drivenapproachcanlinkdiscipline-specifictargetsandmaximizekeyaspectsofthedesignandlifecycleofabuildingtoresolveconflictinginterestsbetweenprojectstakeholders(Fruchteretal.,2015).Thisrequiresthatgoals,information,andknowledgebeefficientlysharedandprocessedbetweentheprojectparticipants.Thissection,therefore,usestheexampleofconstructiontimedelaystoshowwhatpotentialDToffersforcollabora-tionbetweenprojectparticipantsandhowthatpotentialcanbeleveragedtoincreasevalue.Accordingtoananalysisofvariousstudiesconductedover15years,thereasonsforconstruc-tiondelaysincludethefollowing(Sanni-Anibireetal.,2020,p.1):•Poorplanningofresourcesandestimation/scheduling,•Poorsiteorganizationandcoordinationbetweenvariousparties,AdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

699688Handbookondigitalbusinessecosystems•Slowdeliveryofmaterials,•Contractor'sfinancialdifficulties,and•Delayinapprovingcompletedwork.InthesamewayasaDTcanprovidetheplanningforamanufacturingfacility,DTscantakeovertheplanningofconstructionsiteproceduresandlogisticsbyprovidingalldataonmate-rials,theirvolumes,andtheconstructionprocess.Historicaldataofpastconstructionprojectsorphysicalenvironmentaldatacontinuouslyenrichthesiteplanningprocess.Thisfacilitatesautomaticsynchronizationofthedeliveryofmaterials,optimaluseofmachines,andsimula-tionoftheallocationofconstructionsitestaff.Creatingavirtualconstructionsiteplatformthatprovidesallthecontactinformationforindividualconstructioncompaniesandtradesimprovesthecoordinationofthevariouspartiesinvolvedontheconstructionsite.Varioustechnologiesareavailabletodigitallytracktheconstructionprogress,includingthree-dimensionalterrestriallaserscanning(TLS),two-dimensionalimaging,photogram-metry,globalnavigationsatellitesystems,andultra-wideband(UWB)orradiofrequencyidentification(Boschéetal.,2014).Manyresearchersconsiderthree-dimensionalTLSthebestsolutionforcapturingthree-dimensionalinformationfromaconstructionproject(Brilakisetal.,2010;Cheoketal.,2000;Jaselskisetal.,2005;StoneandCheok,2001).TheTLSsystemproducesadensesetofthree-dimensionalpointmeasurementsfromaconstructedfacility,whichsubsequentlygeneratesahighlyaccuraterepresentationofthephysicalobject(Jaselskisetal.,2005).Buildinginformationmodelingtoolscanmodeltheas-builtdatafromthescanningprocessandintegratethemintoasingledatastructure(Sacksetal.,2018).Thegeneratedas-builtmodelcansubsequentlybecomparedwiththeas-plannedmodeltorevealanydiscrepanciesresultingfromconstructionchangesinthefield(Boschéetal.,2014).Thiscomparisonofthephysicalbuildingunderconstructionanditsvirtualmodelalsomeansthatconstructionerrorscanbedetectedearlyon,whichreducesoreliminatestheneedforexpen-sivereworking(Evansetal.,2019).TLSisnotonlyusefulforcomparingtheas-builtstatuswiththeas-plannedmodelduringorshortlyafterconstruction,butcanalsobeusedtoscanexistingbuildingstoproduceavirtualas-builtmodel.Inadditiontoconsistentlycomparingthestateoftheas-builtstatuswiththevirtualmodel,sensorsorcamerascantrackon-siteworkersaswellasthephysicalconditionsonsite,whichmeansthatbothworkersandconstructionmanagerscanreceivealertsonsafetyissues,suchashazardousareas,oremergencysituationresponseinstructions(Evansetal.,2019).Constructionsitemanagersshouldalsobeawarethatsitesdonotexistinisolationandshouldthereforebeconsideredfromtheperspectiveoftheirsurroundings(forexample,thecitydistrictlevel).TheDTenablestheimmediateenvironment,suchascitytraffic,pollution,orsocialevents,tobecaptured,andfacilitatesrapidchangeandadaptions(Bojeetal.,2020)totheconstructionprocess.Theavailabilityofanaccurateas-builtBIMmodelcanenhanceboththeconstructionandusephasesofabuilding.Duringconstruction,itcanimprovedatamanagementandincreasetheaccuracyoftheconstructionexecution(Brilakisetal.,2010).Theabilitytocreateavirtualmodelofabuildingatanypointinabuilding’slifealsoenablesadigitalbuildingtwintobeestablished.However,thedevelopmentoftheconceptatanearlystageofthebuilding’slifecycleismosteffective,asthiscapturestime-seriesdatatoyielddeeperinsights(Evansetal.,2019).AdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

700Digitaltwinsinrealestate689OperationandmaintenanceNieetal.(2019)dividetheevolutionofbuildingmanagementstrategyintofourphases.Areactivestrategy,whichisapassiveresponsetotherequirementsofbuildingusers,isfollowedbyanIoT-drivenreal-timestrategy.TheintegrationofIoTtechnologyispartoftheevolutionofbuildingstoIBs,asdescribedearlier.IoTandrelatedreal-timedatafromthephysicalspacearenecessarytodrivetheimplementationofaDTtopursueapredictivestrategyinathirdevolutionaryphase.Physicaldata,suchasindoortemperature,coolingwatertemperature,andvideomonitoringdata,makeitpossibletopredictthebehaviorandstateoffacilitiesandhumanresources.ThesupplementationofAItotheDTenablestheimplementa-tionofaproactivestrategyinthefourthevolutionaryphase.However,forallofthistohappen,itisnecessarytohavenotonlyphysicalspacedata,butalsodatafromthevirtualbuilding.Duringtheusephase,BIMmakesitpossibletointegrateoperationandmaintenanceschedulesintoadigitalmodel,whichenablesfacilitymanagerstolocateandmaintaintheircomponentsefficiently(Boschéetal.,2014).LinkingdatafromthevirtualBIMmodelwiththatfromabuilding’sfacilitymanagementsystem(FMS)supportsautomaticschedulingofmaintenanceworkordersandenhancesdecision-making.AfterbidirectionaltransferofdatabetweentheBIMmodelandtheFMS,thevisualizationofworkorderinformationidentifiesbuildingcomponentsthathavefailed.ExtractinginformationonfailedcomponentsfromtheBIMmodelsubsequentlyenablesasuboptimalmaintenancepathintheBIMmodeltobecalculated,andthealgorithm-ledscheduleformaintenanceworkorderstobegenerated(Chenetal.,2018).CombiningBIMandtheIoTwithintheDTcansignificantlyimprovetheeffi-ciencyoffacilitymaintenancemanagement(FMM).Basedonthisobservation,Chengetal.(2020)developedadata-drivenmaintenanceplanningframeworkthatintegratesBIMandtheIoTintoFMM.Thisframeworkaimstohelpmachine-learningalgorithmspredictthefutureconditionoftechnicalbuildingcomponentstoextendtheirlifetime.AfurtheradvantageoftheDTisrevealedwhendamagetobuildingcomponentsoccurs.Intheabsenceofanon-sitemaintenanceexpert,thecoexistenceofthevirtualmodelevenallowsaremoteexperttoguideacolleaguethroughthephysicalbuildingwithmixedrealitysmartglasses.Thisallowstheexperttocomparethevirtualmodelwiththephysicalbuildingandactappropriatelytorepairthedamage.Thisreducesthedowntimeofthedamagedcomponentsandminimizesuserdisruption.AfurtheruseofDTisinreal-timelocationsystems(RTLSs),whichinvolvetechnologiessuchasUWB(Schroeer,2018),wirelesslocalareanetworks(Schrooyenetal.,2006),andclosed-circuittelevision(CCTV)(Lietal.,2008).Usersinteractinaphysicalbuilding(forexample,inofficebuildings),whichgeneratesuserinformationthatcanbefurtherprocessedinthevirtualmodelofthebuilding.Thisreal-timedataprovidesinsightsintomovementpat-ternsandtheuseofofficeworkplaces.Itispossibletoplanandsimulaterenovationmeasuresusingthevirtualmodel,whichalsoenablesthepredictionoffuturespacerequirements.TheDTcanalsoincorporatedataongeneralbusinessoreconomicdevelopmentsintotheanalysis.Ingeneral,theoperationandmaintenancephaseofabuildinggenerateshugeamountsofdatadaily.Atthesametime,inaccuratemanualinputsandcomplex,non-intuitivedatasetsmakeitdifficultforbuildingmanagerstomakeuseoftheinformation.Therefore,virtualBIMmodelsmayfirstbetransformedintoadatawarehouse,wherebydataminingmethodscanfindusefulinformationamongthedatasets.Researchhasshownthatclusteranalysiscaniden-tifydirectrelationshipsbetweenrecords,outlierdetectioncanrevealimproperdata,andanimprovedpatternminingalgorithmcandetectlogiclinksbetweenrecords(Pengetal.,2017).AdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

701690HandbookondigitalbusinessecosystemsRefurbishmentanddemolitionDuringtheplanningphaseofabuildingtheDTcanrealizeenergysimulations.However,theDThasfurtheradvantagesinrelationtoexistingbuildingsandtheirrenovationmeasures.Theinformationonthetechnicalbuildingequipmentandmaterialsstoredinthevirtualmodelmakesitpossiblefordifferentrenovationscenariostobesimulatedinadvance.Theseareenrichedbymeasured,historicaldataregardingthephysicalenvironmentofthebuilding.Kaewunruenetal.(2019)showedthatdifferentoptionsforconvertingabuildingtoanetzeroenergybuildingcouldbevisualizedusingthisprocedure,promotingthecooperationofstakeholdersandaccuratelypredictingcostsandtechnicaldifficulties.Digitaltwinsalsoenrichinteriorrefurbishmentmeasuresbyprovidingdataontheusagephase.Forexample,storedofficespaceoccupancydatacanbeusedtoobtaininformationonusers’activityprofiles.ThisdatacanbeprocessedbytheDTofanofficebuildingandlinkedwithdataaboutthecompany,thewidereconomy,andcurrentmarkettrends,suchasflexibleworking.Futureofficespacerequirements,quality,andtechnicalequipmentcansubsequentlybederivedfromthesedatatooptimizetheresultsofarefurbishmentproject.Thecontinuousstorageofallinformationonmaterialsusedinthebuildingmakesitpossibletoplanwhichcomponentscanberecycledbeforethebuildingisdemolished.Thestorageofthisinformationovertheentirelifecycleofthebuildingisparticularlyrelevantforobjectsbuiltaccordingtothecradle-to-cradle(C2C)approach.AccordingtotheC2Cdesign,allbuildingmaterialscanbereused(McDonoughandBraungart,2003),whichmakesitallthemoreimportanttostoreinformationonthecompositionofindividualbuildingcomponentssothattheyarenotwastedduringdemolition.Theseamlessavailabilityofinformationonbuildingmaterials,energyconsumption,andwasteflowsduringthebuilding’slifetimealsoensuresthatanongoinglifecycleassessment(LCA)canbeconducted.AnefficientLCAinturnallowsinsightsfromtheC2Capproachtobegainedtofurtherimprovetheapproach.DISCUSSIONThecasestudyofdeployingaDTforawholebuilding’slifecycleshowsthatiftheconceptofDTsisimplementedinthesenseofaDBE,inwhichvalueiscreatedthroughcollaborativerelationshipsbetweenindividuals,organizations,anddigitaltechnologiesonshareddigitalplatforms,theconstructionandrealestateindustrymightovercomedifferentchallenges.TheDT,asaplatformforaDBE,willprovidevaluebyconstructingmoreefficientbuildingswithincreasedsustainability:●Highersocialvalueduetobetteradaptationtobuildingusersandtheirneeds.●Improvedeconomicvalueduetonewbusinesscasesandbetterbuildingperformance.●Higherecologicalvalueduetosuperiorunderstandingofresourceconsumptionanditssimulationandtrackingovertheentirelifecycleofthebuilding.Figure41.2summarizestheaddedvalueofadigitalbuildingtwin,whichwasidentifiedinthecasestudy.Asthefigureillustrates,thephysicalbuildingisconnectedtothedigitalbuildingwithanautomateddataflowduringallphasesofthebuilding’slifecycle.Thisdataconnec-tionmakesitpossibletodevelopaDTinthefirstplace.Ontheonehand,thisdataexchangeenablestheoptimizationofalllifecyclephasesofthebuilding;andontheotherhand,abetterlinkageofthedifferentlifecyclestagesinordertoreduceinterfaceproblems.AdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

702Digitaltwinsinrealestate691Figure41.2Digitalbuildingtwin’svaluethroughoutthebuildinglifecycleTheimprovementandlinkageprocessrequiresthatnewstakeholdersprovidethenecessaryservicesforthispurpose.Conventionalstakeholders,suchasarchitects,constructioncompa-nies,andfacilitymanagers,arelinkedwithinthedigitalbuildingtwinwithnewstakeholders,suchassoftwareprovidersforBIM,GIS,orRTLS,ordataanalysts.TheconventionalandnewAdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

703692HandbookondigitalbusinessecosystemsstakeholdersneedamutualunderstandingoftheirworkprocessandahighlevelofwillingnesstocollaboratesothattheirservicesreachtheirfullpotentialintheDTandthedataflowdoesnotbeomestagnated.CONCLUSIONANDFUTUREWORKThecasestudyofthischaptershowedthatineachphaseofthebuildinglifecycle,somecom-ponentsofadigitalbuildingtwinareapplied,andthesecomponentsneedtobeofferedbynewstakeholdersoftheindustry.Furthermore,itwasdemonstratedthatconventionalstakeholdersdonotbecomeobsolete,butarethinkingoftheindustryneverthelessbecomesnecessary.DespitethemanyadvantagesofDTs,thereisariskthatthistechnologywillnotbeabletofullydevelopitspotentialintheconstructionandrealestateindustries,astheseindustriesarestillamongtheleastdigitized(Gandhietal.,2016;OECD,2018).ThelowlevelofdigitizationinconstructionandrealestateimpliesthatthenecessarypreconditionsfortheestablishmentofDTsmaybelacking.Forexample,aslongasstakeholdersstoretheirdatainsilosanddonotmakeittransparentlyavailabletootherstakeholders,itwillbechallengingtodevelopnewcomponentsofthedigitalbuildingtwin.Inaddition,aDTneedsacommondigitalplatformonwhichallstakeholdersoftheDBEcancollaboratewiththeirdata.AssomebiginformationtechnologycompaniescurrentlydevelopsolutionsfordeployingDTs,differentplatformsfromdifferentproviderswillbeavailableinthefuture.Thus,inadditiontothetaskofsharingtheappropriatebuildingdataamongthemselves,theexistenceofmultiplepotentialDTplat-formscreatesthechallengeofensuringthatallstakeholders’componentsarecompatiblewithallplatforms.Themethodologyofacasestudyispredominantlyconceptualinthischapter,soempiri-calresearchintheuseofdigitalbuildingtwinsisneeded.InitialattemptstouseDTintheconstructionindustryshouldproducequantitativedatasamplesthatcanbeusedinfurtherresearch.ImplementationoftheconceptwillalsoleadtofurtherinsightsintohowDTdrivesDBEdevelopment.However,effortstoconductresearchinthisarearequirethattheresearchteamhasinterdisciplinaryknowledge,forexample,notonlyfromtheconstructionandrealestatesector,butalsofrombusinessadministrationorcomputerscience.NOTES1.Theuseoftheterms“intelligent”or“smart”canbecontroversial(e.g.Ghaffarianhoseinietal.,2016).Thisiswhytheyareusedinterchangeablyhere.2.TheIndustryFoundationClasses(IFC)datamodelisanopenfileformatthatfacilitatesinterop-erabilityinthearchitecture,engineering,andconstruction(AEC)industry.Itisacommonlyusedformatforcollaborationonprojectsbasedonbuildinginformationmodeling(BIM).REFERENCESAdner,R.(2006).Matchyourinnovationstrategytoyourinnovationecosystem.HarvardBusinessReview,84,pp.98–107.AdrianToschka-9781839107191DownloadedfromPubFactoryat05/28/202210:27:13AMviaColumbiaUniversityLibrary

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70842.Developingbigdataanalyticscapabilityinafocalfirmofadigitalbusinessecosystem:thecaseoftheNorwegianswinebreedingindustryVictoriaKonovalenkoSlettliINTRODUCTIONThepurposeofthischapteristocontributetotheknowledgeaboutbigdataanalytics(BDA)capabilitybuildinginthecontextofdigitalbusinessecosystem(DBE).Inabroadsense,DBEreferstothe“sociotechnicalnetworkofindividuals,organizationsandtechnologiesthatcollectivelyco-createvalue”(Senyoetal.,2019).TheinterrelationbetweenthetermsBDAandDBEcanbeexplainedinthefollowingway:adigitalbusinessecosystemisamultilayersocialnetworkwhichis“createdandsupportedbythenumerousactors,theircontinuousdatagenerationalongwiththeirinteractionsandinterrelations”(Pappasetal.,2018)thatfocusonvaluecreation(AdnerandKapoor,2010;Tsujimotoetal.,2018).Bigdatareferstolargeamountsofvarieddatathatcanbecollectedandmanaged.Theusefulnessofbigdatacanbeextractedbycapturingandanalysingtheunderlyingpatternsinthedata(Georgeetal.,2014).BDArevolvesaroundthreemainelements:thedataitself,analyticsappliedtothedata,andpresentationofresultsinawaythatallowsthecreationofbusinessvalue(GantzandReinsel,2012).SeveraldefinitionsofBDAhighlighttheimportanceofanalyticalmethodsforthedevelopmentofartificialandbusinessintelligence,wheretheobjectiveisimprovedorganiza-tionalperformance(Kwonetal.,2014;Mülleretal.,2016).Theresearchliteraturerecognizesthatbigdataprojectsaresuccessfulnotonlyduetothedataitselfandtheanalyticaltoolsusedtoprocessit(thatis,resourcesandmethods)butalsoduetosomeotheraspects,suchascapabilities.Inparticular,thenotionofBDAcapabilitywasproposed,whichisbroadlydefinedasthe“abilityofafirmtoprovideinsightsusingdataman-agement,infrastructure,andtalenttotransformbusinessintoacompetitiveforce”(e.g.Akteretal.,2016).BDAcapabilityisstrategy-drivenandsupportedbythemechanismswhichhelptoachievecompetitiveadvantage(LaValleetal.,2011).SomedefinitionsofBDAcapabilitiesfocusontheprocessesthatmustbeputintoplaceinordertoleveragebigdata(Mikalefetal.,2018).Forexample,accordingtoGarmakietal.(2016),BDAcapabilityentailsafirm’sabilitytomobilizeanddeployBDAresourceseffectively,utilizeBDAresources,andalignBDAplanningwithfirmstrategytogaincompetitiveadvantageandenhancefirmperformance.OtherdefinitionsofBDAcapabilityhighlighttheinvestmentofrequiredresourcesandtheiralignmentwiththeorganizationalstrategy(XuandKim,2014).Here,theperspectivesofinfrastructures,skills,execution,andrelationshipareimportantfortheunderstandingoftheconcept.Inthissense,theconceptofBDAcapabilitystretchesbeyondsolelyfocusingonbigdataresources,toincludeotherrelatedandrelevantorganizationalresourcesthatareimportantforrealizingfullstrategicpotential(Mikalefetal.,2018).697VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

709698HandbookondigitalbusinessecosystemsAccordingtoTanetal.(2020),organizationsneedtomapandprofiletheircapabiliesbeforeenteringaDBE,inordertogetinsightintohowthesecapabilitiesassistinvaluecreation.IntheDBE,valueisco-createdtogetherwithotherorganizations,anditiscrucialtounderstandhowthesecollaborationscanaffectexistingcapabilities.ItisallthemoreimportantwhenspeakingaboutBDAcapability.ItissuggestedthattheempiricalresearchbuildingonthenotionofBDAcapabilityhasbeenparticularlyinterestedinthetypesofresourcesandresourcepickingforcapabilitybuilding.However,littleisknownaboutmanagementprocessesthatleadtothedevelopmentofBDAcapability(Mikalefetal.,2018).Therefore,thischapterseekstoanswerthefollowingquestion:HowisbusinessdataanalyticscapabilitybuiltinafocalfirmoperatingwithinaDBEandhowareresourcesmanagedintheBDAcapability-buildingprocess?ThisquestionisapproachedthroughacasestudyofaNorwegiangenetictechnologicalswinebreedingcompanywhichisfunctioningasafocalfirmintheswinebreedingDBE.ThestudysetsaparticularfocusontheprocessesofstructuringandbundlingresourcestobuildBDAcapabilities.DIGITALBUSINESSECOSYSTEM(DBE)TheDBErestsontwomajorpillars:digitalecosystemandbusinessecosystem.Abusinessecosystemisaneconomiccommunityofinterrelatingactorsproducinggoodsandservices(Moore,1993),whileadigitalecosystemisavirtualrealitycharacterizedbydigitalartefactsincludingsoftware,hardware,andcongruentprocesses.Combiningthesetwoconcepts,Senyoetal.(2019)defineaDBEasanopen“socio-technicalenvironmentofindividuals,organizationsanddigitaltechnologies”whichinteracttoco-createvaluethroughshareddigitalplatforms.TheDBEdrawsonthesynergybetweendifferententitiestoproduceinnovativeservicesandproductsandthuscreatevaluebyjoiningresourcesandefforts.Anumberofauthorsincludebothhumanandnon-humanactorsinaDBE(JärviandKortelainen,2017).Thehumanactorsrefertobusinessactorssuchascommercialandstateorganizations,sup-pliers,buyers,customers,sellers,non-governmentalorganizations,policy-makers,andsoon.Thedigitalactorsconstitutethenon-humangroup,andincludecomputers,software,businessmodels,andapplications.ScholarshighlightanumberofbenefitswhichaDBEbringstoitsmembers.Vargasetal.(2016)suggestthataDBEenablesinformationandknowledgesharingwhichmayleadtotimelyresponsetomarketdemands,andcostefficiency.ThisgrantsDBEmembersacom-petitiveadvantageinthemarket(KochandWindsperger,2017).Next,aDBEenhancesbusiness-to-businesscooperationandopeninnovationbeyondorganizationallimits.Inaddition,organizationswithintheDBEcanenjoytrustandlegitimacythatcharacterizethewholeecosystem,accessthecommunalresources,andexchangeandenhancetheircapabilities(Immonenetal.,2016).Senyoetal.(2018)namefourmajorDBEcharacterisics:platform,symbiosis,co-evolution,andself-organization.Aplatformdenotesabunchoftools,innovations,andservicesthattheentitieswithinDBEcanusetocooperate,improveperformance,andinnovate.Symbiosisisinterdependencebetweenmembers,processes,andtechnologieswhichresultsinstrongersynergybetweentheDBEentities.Co-evolutionistheabilityofaDBEtocollectivelydevelopwithitsentitiesovertime.Finally,self-organizingreferstotheabilityofDBEstolearnfromtheirenvironmentanddulyreact.VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

710Developingbigdataanalyticscapabilityinafocalfirmofadigitalbusinessecosystem699AccordingtoTanetal.(2020),organizations—beforejoiningaDBE—shouldexploreandunderstandtheircapabilities.Thesecapabilitiescanbeofdifferenttypes:dynamic,network,collaboration,strategy,anddigital.ObtainingunderstandingaboutcapabilitiesisimportantfortheapprehensionoftheaimoftheDBEformationaswellasitsgovernance.CapabilitiesoftheDBEpartnersco-evolveovertime(GraçaandCamarinha-Matos,2017).Thishappenswhenanumberofvariouscapabilitiesareneededtoachieveacertainlevelofperformancethatisbeyondthecapabilityofasingleorganization.Dynamiccapabilitiesincludetheleveloforganizationalagility,fluidity,andadaptabilityinaDBE.NetworkandcollaborationcapabilitiesrefertoinformationexchangebetweenDBEmembers.StrategycapabilitiesrefertoaligninginnovationstrategiesoftheDBEpartnersthroughco-vision,co-design,andco-creation.Finally,digitalcapabilitiesdenoteorganiza-tionalabilitytoefficientlyemployexistingtechnologies.Tanetal.(2020)suggestthatorganizationsneedtoinvesttimetomaptheircapabilitiesstatus(forexample,businessanddigitalcapabilities),andtounderstandtheconnectionbetweenthesecapabilitiesandvaluecreation.BIGDATAANALYTICS:RESOURCESVSCAPABILITIESAccordingtotheresource-basedview(RBV)ofthefirm,inordertosustaincompeti-tiveadvantage,firmsshouldpossessresourcesthatarevaluable,rare,inimitable,andnon-substitutional(Barney,1991).Further,theRBVdistinguishesbetweenresourcepickingandcapabilitybuilding.Resourcepickingreferstoidentifyingandacquiringresourcesthatareofstrategicvalueforthecompany.Capabilitybuildingisaboutorchestrationandman-agementoftheseresourcestotransformthemintostrategicallyimportantassets(Makadok,2001).Inotherwords,capabilityisacapacityofafirmtointegrate,deploy,andutilizefirms’resourcesinastrategicway,andincombinationwithotherorganizationalprocesses(AmitandSchoemaker,1993;Makadok,2001).Theresourcescannotcreatevaluebythemselves;theyneedtobedeployedorleveragedstrategically.Capabilitiescanbeunderstoodashigh-levelroutinesconsistingoflearnedbehavioursthatarehighlypatternedandrepetitious,andpartlybelongingtotacitknowledge(Winter,2003).Organizationalcapabilitiescannotbepurchased;theymustbeintentionallybuiltbyprovidinginteractionsbetweenacompany’sresourcesandcompetences(Grant,1996;Teeceetal.,1997).Thecapability-buildingprocesscanstartonlyafterthefirmhasacquiredthenecessaryresources,anditdependsuponthetypeofresourcesthefirmhasaccumulated.IntheprocessofdevelopmentofBDAcapability,themainresourceisthe(big)dataitself.AccordingtotheRBVinthedigitalcontext,thebigdataresource,com-binedwithorganizationalresources,becomesasourceofcompetitiveadvantage.Mikalef(2019)namesthefollowingsixmajorcomponents,orpillars,ofBDAcapability:data,technology,people,culture,learning,andBDgovernance.Thesecomponentscanbeclassifiedaccordingtooneofthemostwell-knowntypologiesofresourcesdevelopedbyGrant(1991).Accordingtothistypology,threecategoriesofresourcesexist:(1)tangibleresources(forexample,financialandphysicalresources);(2)humanskills(forexample,employees’knowledgeandskills);and(3)intangibleresources(forexample,organizationalcultureandorganizationallearning).InthecontextofdevelopingBDAcapability,theresourcecategoriesareasfollows.Tangibleresourcesconcerninfrastructure,informationsystems,anddata.Dataqualityisseenasacriticalresourceandcanbeevaluatedintermsofcompleteness,VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

711700Handbookondigitalbusinessecosystemsaccuracy,format,timeliness,reliability,andperceivedvalue(Renetal.,2017).Inadditiontobigdataasacoreresource,firmsalsoneedtopossessinfrastructure,softwareandinformationsystemsforstoringandprocessingdata.Intangibleresourcesinthedigitalcontextinclude,forexample,data-drivencultureandgov-ernance.Intangibleresourcesrefertoconnections,structures,androlesdevelopedtomanageresources(Mikalefetal.,2018).BDAgovernanceisaboutcontrolandrulesforcarryingoutrespectivetasks,andincludescoordinationandmonitoringactivity,alignmentofbusinesswithinformationtechnology(IT),assessmentandvalidationofthebigdatasolutions,businessvisionandplanning,policyandrulestructures(ibid.).Forfirmswhoseactivityisbasedonbigdata,data-drivenculturebecomesanimportantsuccessfactor.Data-drivencultureimpliesthatorganizationalmembersatalllevelsmakedecisionsbasedoninformationobtainedfromdata(GuptaandGeorge,2016).Thepreconditionforachievingdata-drivencultureincludeinvestmentsmadeintheBDAinfrastructure,supportoftopmanagement,andlearningattitudeinthecompany.Finally,humanskillsrefertodataanalyticsknowledgeandmanagerialskills(Mikalefetal.,2018).Thesecanbefurtherdividedintoseveralcategories.Thefirstonereferstotechnicalknowledge,includingdatabasemanagement,dataretrieval,programmingknowledge,andcloudservicemanagement.Thesecondcategoryiscalledbusinessknowledge,whichrelatestodecision-making,strategicforesightfortheuseofbigdata,andapplicationofinsights.Thethirdcategoryisrelationalknowledge,whichincludescommunicationandcollaborationskillsbetweenemployees.Thefinalcategoryisbusinessanalyticsknowledge,includingmathemati-calmodelling,simulationandscenariodevelopment,andinteractivedatavisualization.ThesecoreresourcesarerequiredtodevelopBDAcapabilityinanorganization.Thefol-lowingsectiondescribesthekeyaspectsofdevelopingBDAcapability.MANAGINGRESOURCESTOBUILDBDACAPABILITYTheresourceorchestrationperspectiveaddressesmanagerialactionswhichhelptotransformresourcesintocapabilities,andthestepstoeffectivelystructure,bundle,andleveragethem(Sirmonetal.,2007).Structuringinvolvesacquiring,accumulating,anddivestingresourcesinthecompany.Acquiringreferstopurchasingresourcesfromthestrategicfactormarkets.Theseresourcesmayhaveatangibleorintangiblecharacter.Accumulatingisaboutinternaldevelopmentofresources.Accumulatingisimportantbecausestrategicfactormarketscannotalwaysprovidefirmswiththenecessaryresources.Atthesametime,internaldevelopmentmayhelptoprotectresourcesfromimitation.Accumulatingisconnectedtoorganizationallearningduringwhichthetacitknowledgeisdeveloped.Divestingresourcesreferstoshed-dingoforganizationalresourceswhichareeitherexcessordonotcontributetomaintainingacompetitiveadvantage.Bundlingreferstointegratingresourcestomouldcapabilities.Resourceswithinthecompanyareintegrated(thatis,bundled)tocreatecapabilities,whereeachcapabilityrepre-sentsa“uniquecombinationofresources”allowingactionstobetakenthatareintendedtocreatevalue(Sirmonetal.,2007).Differentmodesofbundlingprocessesleadtoevolvementofspecificcapabilities.Thisphasehasthreesub-processes:stabilizing,enriching,andpio-neering.Stabilizingmeansmakingminorimprovementstoexistingcapabilities.Enrichingexpandscurrentcapabilities.CapabilitiescanbeenrichedbylearningnewskillsorbyaddingVictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

712Developingbigdataanalyticscapabilityinafocalfirmofadigitalbusinessecosystem701acomplementaryresourcetothecurrentbundle.Pioneeringistheprocessofcreatingnewcapabilities;itisunique,andrequiresexploratorylearning.Thethirdprocess,leveraging,involvesprocessestomakeuseofthefirm’scapabilitiesandtakeadvantageofthemarketopportunities.Leveragingincludes:mobilizing,whichprovidesaplantoformcapabilityconfigurations;coordinating,whichinvolvesintegratingsuchconfigurations;anddeploying,wherearesourceadvantageormarketopportunityisusedtomakeuseofcapabilityconfigurations.Actionswithintheprocessofleveragingcanoccursequentially,simultaneously,oreveninreversedirections.Mobilizingmaybenefitseveralleveragingstrategiessuchasresourceadvantagestrategy,exploitingmarketopportunities,andcreatingentrepreneurialopportunities.Effectivecoordinationofcapabilitiesmakesuseofinternalnetworksfacilitatingcommunicationflowsandresultinginsharingofexplicitandtacitknowledge,allowingthecapabilitiestobegatheredintoeffectivebundles.Successfuldeploymentofresourcesdependsuponmanagerialtacitknowledgeandskillsinbuildingandusingrelationalcapitaltointegratemultiplecapabilitiesandusingorganizationalroutinestodeploytheseconfigurations.Meanwhile,resourcemanagementhasgenerallyreceivedsomeattentionintheresearchliterature,whilerelativelyfewerstudieshaveaddressedassetorchestration(Sirmonetal.,2007).Littleisknownabouttheprocessesandstructureswhichareimportantfororchestratingtheresourcesintofirmcapabilities,particularlyinrelationtoBDA(Mikalefetal.,2018).ItissuggestedthatcompanieswithsimilarresourcesmayexertvariouslevelsofBDAcapabilities,anddevelopthemindifferentways(ibid.).Therefore,theempiricalpartofthischapterwillfocusonthecapability-buildingprocess,withaparticularfocusonresourcestructuringandbundling.RESEARCHMETHODOLOGYThischapterdrawsonaqualitativestudyofaNorwegianbreedingcompanydealingwithresearchanddevelopment(R&D)inswinegenetics,whichisalsoafocalorganizationwithinaDBE.Thecasecompany,“NorthPig”(apseudonym),wasestablishedin1958andistheworld’ssecond-largestgenetictechnologicalcompanydealingwithswinebreeding.NorthPigisjointlyownedbyapproximately3000Norwegianswinefarmers.Thecompanycountsaround70employeesincludingresearch,technical,administrative,andmarketingpersonnel,andpossessesmorethan30yearsofexperienceinusingbigdatainitsR&Donswinebreed-ing.NorthPighasnocompetitorsinthenationalmarket,asitcompetesinternationally.MajorsourcesofincomeforNorthPigincludesalesofhigh-qualityswinesemenandliveanimalsinbothnationalandinternationalmarkets,provisionofcoursesforpigfarmers,andprofitsfromthedaughtercompany(30percentownership)operatingintheinternationalmarket.Additionally,thecompanyreceivesfinancialresourcesforitsR&Dfromnationalresearchfunds.Thedatacollectionmethodsincludedsemi-structuredindividualinterviewswithNorthPigrepresentativeswhichwereconductedin2019,partlyonthecompany’spremisesandpartlyviatelephone.Intotal,fivecompanymembersparticipatedintheinterviewsincludingthreemaleandtwofemaleparticipants:(1)NorthPigchiefexecutiveofficer(CEO);(2)ageneticsresearcherandswinebreedingfarmowner(thispersonplaysadoublerole,representingbothVictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

713702HandbookondigitalbusinessecosystemsanemployeeofNorthPigandanindependentfarmerwithinaDBE);(3)ageneticsresearcher;(4)afieldtestingmanager;and(5)aseniorsystemdeveloper.FourofthefiveinterviewswererecordedandtranscribedfollowingGDPRpolicy;thefifthinterviewwasfollowedbytakingnotes.Theinterviewslastedonaveragearoundonehourandthequestionswereformulatedtogaininsightintothemanagementperspectiveontheuseofbigdata.Asubstantialdifferencebetweentherespondentsintermsoftheirtasksandresponsi-bilityareasallowedforvariousemergentthemesinthecourseoftheinterviews,sheddinglightontheuseandmanagementofbigdatafromdifferentangles.Inaddition,thestudyemployssecondarydataobtainedviaavailableandrelevantmediapublications,thecompany’smagazine“Swine,”andthewebsite.Inthisway,theresearchvalidityissecuredthroughtriangulationofdata(Johnson,1997).THECASEOFTHENORWEGIANSWINEBREEDINGDBEInthischapter,NorthPigispresentedasafocalcompanyofaswinebreedingecosystem.InthecontextoftheDBE,NorthPigreceivesbreedinginformationintheformofbigdatafromthepigbreedingfarms,processesthisdata,andemploysitinswinegeneticsR&Dtodeveloplivestockofexcellentquality.TodescribethenatureoftheconnectionsbetweenthefocalcompanyandthefarmswithinthisDBE,oneshouldlookatthestructureofswineproductioninNorway,whichcanbepre-sentedasabreedingpyramid(seeFigure42.1).Thetopofthepyramidisoccupiedbythepigbreedingfarms:40developmentfarmsand50reproductionfarms.Figure42.1TheswinebreedingpyramidPigdevelopmentbreedingfarmslocatedattheverytopofthebreedingpyramidareconcernedwiththebreedingoftwopurepigbreeds:NorwegianCountryPigandDuroc.ThesefarmsregistervariouspigcharacteristicsinIngris,thenationaldatabasesoftwareforregisteringandVictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

714Developingbigdataanalyticscapabilityinafocalfirmofadigitalbusinessecosystem703controlofswineproduction,togetherwithothersoftwaretoolswhichdeliverbigdataonswinegenetics,tobefurtherprocessedbyNorthPig.Thefarmsreportonsucheventsasanimalsbeingcovered,farrowing,andweaning.Pigdevelopmentfarmsareresponsibleforthemajor-ityofthebreedingprocessforthetwopurepigbreeds.BreedinggoalsforDurocincludefourgroupsofqualities:production,slaughterquality,meatquality,andstrength/health.ThelistofbreedingqualitiesforNorwegianCountryPigisamplifiedbyaddinglittersize,reproduction,andmotheringqualities.Breedingofpureracesiscarriedoutinsmallbreedingpopulations.Thus,forexample,some30+developmentfarmsbreedNorwegianCountryPigswithatotalpopulationof2100sowsand50eliteboars,whileonlyaroundeightfarmsarebreedingDurocswith700sowsand50eliteboars.ItisNorthPigitselfthatchooseswhichfarmsaretobeincludedinthelistofpigdevelopmentbreedingfarms,andthesizeoftheswinepopulationbasedoncertaincharacteristicsregisteredinIngris,anditisresponsibleforthecontractsandagreementswiththesefarms.Pigdevelopmentfarmsaretheonlyfarmswhichsupply(sell)boarsforNorthPig’sownboartestingstationDelta.AtDelta,of3500annuallytestedboarsofbothbreeds,only100areselectedtobefurtherusedforreproductionpurposesatNorthPig’ssemenproductionstationAlfa.TheboarsthatarenotchosenforsemenproductionatAlfawillbeeithersoldtotheslaughterhouse(iftheyarelowquality)orexportedtointernationalmarkets(iftheyarehighquality).ThesemenproducedbytheboarsatAlfastationissoldtonationalandinternationalswinefarms,anditisoneofthemajorincomesourcesforNorthPig.Further,pigdevelopmentfarmssellNorwegianCountryPigsowstothepigreproductionfarmsforfurtherpighybridproduction.Pigreproductionbreedingfarmsoccupythesecondstageinthebreedingpyramid.Thesefarmspurchase“second-bestquality”NorwegianCountryPigsowsfromthedevelopmentfarmsandcrossbreedthemwithYorkshirebreedsemen.TheresultofthiscrossbreedisahybridsowknownasTN70,ananimalwithverygoodandrobustmotherqualitieswhichiswidelyusedinnationalandinternationalswineproduction.TN70isfurthersoldtothelivestockfarmslocatedatthelowerlevelsofthebreedingpyramid.Asinthecaseofthepigdevelopmentfarms,pigreproductionfarmscarryoutmeasurementandregistrationofswinecharacteristicsfurtheremployedbyNorthPiginitsprocessingofbigdataonswinegenetics.Theporkproductionfarmsatthebottomofthebreedingpyramidareofthreetypes:pigletfarms,combination,andslaughterpigfarms.ThesefarmsuseTN70hybridsowsinseminatedwithDuroc,Hampshire,orNorwegianCountryPigsementoproduceoffspringforfurthergrowthandconsumption.Thefarmscanbedistinguishedaccordingtotheiroperationtype.Combinationfarmsproducepigletsandfeedthemupuntiltheyarereadyforslaughter.Pigletfarmsproducepigletswhicharefurthersoldtoslaughterpigfarms.Slaughterpigfarmspur-chasepigletstofeedthemup;thesefarmsarethebiggest,andaccountforthelargestvolumesofporkproducedinNorway.Theissueofswinebreedingraisessomeurgentmattersofethicalandsustainableanimalfarming,bothnationallyandworldwide.BothNorwegianporkconsumersandproducersareconcernedwiththegoodanimalwelfare,andbelievethat“farmanimalsinNorwayhaveabetterlifethanfarmanimalsraisedinothercountries”(Skarstadetal.,2007).Theanimalwelfareregulationsarestrict,andsethighrequirementsonthemaximumnumberofanimalsonafarm,theconditionsinwhichanimalsarekeptandtransported,animalhealthandtreat-ment,andsoon.Forinstance,commonfarmsareallowednomorethan150sowspertimeperiod,whichsetslimitsforrelativelysmall-scaleproduction.Theseregulationsareacon-VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

715704Handbookondigitalbusinessecosystemssciousnationalstrategyforachieveninghigh-qualityfoodproductionandobtainingacom-petitivepositionintheglobalizedandindustrializedworldagriculture.ThemattersofanimalwelfareinNorwayareundercontrolofthenationalstatebodyknownasNorwegianFoodSafetyAuthority(NFSA),alsoknownasMattilsynet(seeMattilsynet,n.d.).TheNFSAcon-trolswhetherthefarmersarefollowingthenationalregulations,initiatespreventivemeasures,andmonitorssituationsofcontagiousanimalsicknesses.Thus,forinstance,in2021‒2022theNFSAplanstocarryoutacountry-widemonitoringcampagnonpigwelfare,wherearound600farmswillbeinspected(Mattilsynet).ThecheckpointsareannouncedforthefarmersontheNFSAwebsiteandamongothersinclude:controloftheroutinesforhandling,treating,andpreventinganimalinjuryandsickness;waterandfoodsupply;veterinarydocuments;spaceperanimalforeating,movingaround,andresting;andavailabilityofnest-buildingmaterialsbeforefarrowing.Allinall,theNFSAplaysanimportantcontrolandregulatingroleintheswinebreedingecosystem.Tosumup,thecoreoftheswinebreedingecosystemcomprizestwotypesofpigbreedingfarmsandthreetypesofporkproductionfarms.However,itisthedevelopmentandreproduc-tionpigbreedingfarms,togetherwithNorthPig,thatmakeupthecaseDBE,wherethemajorconnectionbetweenthemrestsonthesupplyofliveanimalsandbigdataonswinegeneticstobefurtheremployedforbreedingpurposes.BDACAPABILITYBUILDINGINTHEFOCALFIRMOFTHESWINEBREEDINGDBE:MANAGINGRESOURCESTHROUGHSTRUCTURINGANDBUNDLINGPROCESSESThissectionaddressesBDAcapabilitybuildinginNorthPigwherethemajorresourcefocus—bigdata—iscombinedwithorganizationalroutinestoachievecompetitiveadvantage.Thefirstsubsectionprovidesadetaileddiscussionofthestructuringcomponentofbigdatamanagementtotransformitintoastrategicallymeaningfulassetwhichiscrucialforthedevel-opmentofanimalswithtopcharacteristics.Thesecondsubsectionincludessomeexamplesofthebundlingprocessbywhichcapabilitiesareformed.StructuringtheBigDataResourcePortfolioCapabilitybuildingbeginswithstructuringthebigdataresourceportfolio,andincludesacquiringbigdatafromthepigbreedingfarms,accumulatingbigdataatNorthPig’sowntestingstations,anddivestingdatasourceswhicharenotcapableofsupplyingreliabledata.Thesesubprocessesarediscussedinmoredetailbelow.AcquiringbigdataresourcesAcquiringbigdataresourcesreferstoobtainingbreedingdatafromthepigdevelopmentandpigreproductionbreedingfarms.Acquisitionofresourcesisperhapsthemostdemandingofallthreestructuringsubprocesses.Ithasmanyaspectswhichrequiremanagerialattention,support,andfollow-up,anditpresentscertainchallenges.Firstofall,tobequalifiedasabreedingfarm,thecriteriawhichNorthPighasestablishedshouldbesatisfied:havingahighlevelofproduction,registeringaccuratebreedinginforma-tionintherelevantdatabases/software,havingapassionforthebreedingworkandbeingusedVictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

716Developingbigdataanalyticscapabilityinafocalfirmofadigitalbusinessecosystem705toit,andbeingphysicallylocatedwithinareasonabledistancefromNorthPig’sDeltatestingstation.Accurateregisteringofbreedinginformationwasmentionedasbothacriticalfactorforobtaininghigh-qualitybigdataandamajorchallengeforNorthPig:Weworkalotwiththedataonhybridanimals,andwehavealotofprojectsinthisarea.Weareworkingtomakeuseofasmuchdataaspossiblebecausethereareenormousamountsofdataoutthere.Thechallengeistogetgoodenoughdataregistration.Knowingthatthey[farmers]dowhattheyshoulddo—thisisalsoachallenge.Andastheybegintodowhattheyshould—thattheyalsodoitproperly—thatthedataqualityisgoodenough.Someofthemdoitinaslipshodmanner,andweusealotofresourcestofollowupdataqualityinourbreedingfarms.Wehaveverygoodprogramswhichidentifydeviatingdata…Wehaveseenbothintendedandunintendedcheating—forexample,inweightregistering.They[farms]mayhaveemployeeswhodon’tseetheimportanceofwhenoneisweighing[apiglet]atthreeweeksofage,andwriting3.4kgor3.5kg—thatthismakesadifference.Butitmeansalot.Wemusthaveprecisedataoneachanimal.Dataqualityissomethingweusetoomanyresourceson.(Fieldtestingmanager)Tosecuredataquality,dataqualitycontrolisimplementedatboththelevelofacquiringbreed-ingdatafromthefarmsandthelevelofprocessingdatabytheresearchers:Wespendagreatdealoftimeonthis.Wehavecreatedtoolsandsoftwareforourbreedingfarmswhichwouldhelpthemtosupplyhigh-qualitydata.Forexample,whentheyhaveregisteredinIngrisalitterthatisfinishedwithweaning,theycangototheprogramstocheckiftheyhavemadeamistakeinthelitterregistration,ifthelitterhasbeenapprovedorifthereissomedeviation.Thedatashouldberegisteredforeachanimal:weightofthepigletandamountofdugsatthreeweeksofage,therightdateisveryimportant.Thismustbeweighedandcountedatproperintervalsafterbirth.Inaddition,theyarerequiredtoregisterallrelocations...Alldeathincidentsshouldberegisteredwiththecorrectdateandthecauseofdeath…Preciseregisteringismorevaluablethangold,andthisisaconstantchallengeforus.(Fieldtestingmanager)Inordertosecurehigh-qualitydatafromthebreedingfarms,NorthPigemployssixbreedingconsultantswhovisitthefarmsonaverageonceeverysevenweeks.Theconsultantsprovideadviceonbreedingandgetdatabymeasuringandevaluatingallsowsonthefarms.Theyalsocheckdataqualitydeliveredbythefarms.Thisconsultancyworkisimportantbecauseofthedifferentdigitalliteracylevelsamongthefarmers.ManyofthemprefertonotedataonlittersintheirlogbooksandthentransferittoIngris;inthissense,theyhaveakindof“paperbackup.”Somefarmersusetabletpersonalcomputers(PCs)developedbyIngristoregisterinformationdirectlyonthesite,andsomeregistrationscanalsobedoneviatelephoneapplications.Olderfarmersinparticularcanencounterdifficultieswhileregisteringdatainthesoftware,whichcanbeinEnglish,andgenerallyisnewtothem.EventhoughNorthPigprovidesbreedingfarmswithaspeciallydevelopedapplication,itcanbechallengingandtime-consumingforthefarmerstograspit.MotivationofthebreedingfarmsissupportedbyeconomicincentivesprovidedbyNorthPig.EconomiccyclesintheswineindustryinNorwayarefluctuatingtoalargedegree,suggestingbigchallengesforfarmersattimes.However,accordingtoNorthPig,thebreedingfarmsexperiencemuchmoreeconomicstabilityandprotectioninrecessionyearsthanotherfarms,duetothecompensationtheyreceivefromNorthPig.Moreover,NorthPigprovidesfinancialincentiveswhichareproportionaltotheperformanceofthebreedingfarms.ExpectationmanagementisoneofthetasksNorthPigisfacedwith.Thefarmers(natu-rally)lookforwardtocompensationfortheextraworktheyneedtodoinconnectionwithVictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

717706Handbookondigitalbusinessecosystemstheregistrationofbreedinginformation.Theyalsoexpecttobeinvolvedinbreedingworkbeyondmerelydeliveringbreedingdata,asmanyofthemaresincerelyinterestedinbreeding.Further,thefarmersarewaitingforNorthPigtodevelopefficientandeasy-to-usetoolssothatregisteringbreedingdatatakeslittletimeandispracticalandeffective.Thedataregistrationrequirementsareconstantlyincreasing,andthereforethecompanyshouldfindabalancedsolutionsothatfarmersarenotoverwhelmedbytheamountofextratimerequiredfordataregistration.Finally,farmersexpecttechnicalsupportfromthecompanyduetothevaryingdegreesofdigitalliteracymentionedabove.Tomeettheseexpectations,NorthPignotonlyusesitsbreedingconsultants,butalsofacili-tateseventsforthebreedingfarmers.First,thecompanyusesitsowntrainingunittoorganizecoursesondifferenttopicssuchasraisingpigletsandslaughterpigs,andfarmoperationman-agement.Second,NorthPigarrangesanannualpigbreedingconferenceofferingsocialandprofessionaleventsandrewardsforthebestbreedingfarms.Besides,thecompanyseesvalueinarrangingmeetingsfor3–4breedingfarmersatatimewheretheyfeelmorefreetosharetheirexperiencesandobtainbetterfollow-upfromNorthPig.Tosummarize,acquiringbigdataresourcesfromexternalparties(breedingfarms)requiresmajormanagementeffortsconnectedtobigdataqualitycontrol,motivationsystemsandeconomicincentivesforbreedingfarms,facilitatingtechnicalsupportfordataregistration,expectationmanagement,andarrangingtraining,consultancy,andeventsforthefarmers.AccumulatingbigdataresourcesAccumulationofbigdatatakesplaceprimarilyatNorthPig’sowntestingstationsDeltaandAlfa.Thesestationsproducedifferenttypesofbigdatawhichisaccumulatedas“rawdata”inthedatabaseinthecloudsolution“pigcloud,”tobefurtherextractedandprocessedbythecompany’sgeneticsresearchers.Differenttypesofbigdataarecollectedwiththehelpofvarioustechnologicalsolutions.Thissectionprovidessomeexamplesofbigdataaccumulation.BoartestingstationDeltaisanimportantassetforobtainingbigdataforbreedingofseveraltypes,includingcomputedtomography(CT)dataandforagedata.Foragedataiscollectedthroughautomaticmeasurementsofboars’eatinghabitsandeffects.Whenhungry,aboarapproachesafeederandfindsitselfinanautomatic“weighingcell”whichmeasureseacheatingincident,theanimal’sweightchange,theamountoffoodeaten,andthetimetakentoeat.Forageisamajorcostforfarmers—onewhichisconstantlyincreasing—andthereforethepurposeofgatheringthistypeofdataistofindwaystominimizethiscostwhilemaximizingtheweightoftheanimal.CTdataisobtainedthroughscanningeachboarthatcomestotheDeltatestingstation.Thismethodpermitsthestudyofanimals’characteristicswhilekeepingthemaliveandusingthemforbreedinginsteadofstudyingslaughteredanimals:Wereceivebetween1000and1200CTpicturesfor3000animalsperyear.Andwehavedonesoduringthelast11years.Sonowwehaveallthesepicturesoftheanimalsandmuch,muchdata…Thepicturesareprocessedautomaticallyandthisrequiresveryhighexpertise.(Geneticsresearcherandpigbreedingfarmowner)TheCTpicturesallowthegatheringofdatareferringtodifferentqualitiesandcharacteristicsofananimal,suchassizeofmusclesandbones,percentageofmeatandbacon,propensitytodiseaseinjoints,andsoon.VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

718Developingbigdataanalyticscapabilityinafocalfirmofadigitalbusinessecosystem707Bigdataforbreedingpurposesisalsogatheredwiththehelpofa3Dcamera:Currently,wehaveabigprojectfinancedbytheNorwegianResearchCouncilwhichaimstomakeuseoftheinformationcomingfromthe3Dcamera,andtoconvertittomeasuresthatcanberegis-teredforeachanimal…whichcansaysomethingabouttheanimal’shealth,resilienceandbehaviour.The3Dcameracanmonitorapigstywithmanypigs.Itmakesitpossibletotrackapiginthepigstyandgetindividualcharacteristicsonsleepingtime,eatingtimeandothersimilarmeasures.Soherewearetalkingabouttransformingcomplexdatatoscalarvalueswhichrepresentsomethinginterestingabouttheanimal.(Geneticsresearcher)Finally,semenproductionstationAlfa,ownedbyNorthPig,suppliesdataonthesemenqualityofallboarslocatedthere.TheseboarsproducesemenforthewholeswineindustryinNorway,andfarmsintheinternationalmarket,andthereforedataofthiskindisimportanttosecuresemenofthehighestqualityandvolume.DivestingbigdataresourcesThestudydidnotsuggestmuchevidenceofsheddingresources.However,oneexampleofthisprocessisavailable:itconcernsterminatingcontractswithbreedingfarmsthatprovidedfalsedata.Accordingtothefieldtestingmanager,somebreedingfarmshadtobedismissedbecauseofshoddyregistrationofpigdatawhich,asmentionedbefore,iscrucialforswinebreeding.BundlingResources:FormingtheBDACapabilitiesBundlingreferstotheprocessthroughwhichthefirm’sbigdataresourcesareintegratedwithothertypesofresourcestocreateBDAcapabilities.Resourcebundlingmayrangefromsmallcombinationsofresourcestointegrationof“chunksofbusinesses”andmayencompassdiffer-entprocesses,dependingonwhetherthegoalisincrementalordramaticchange.Theresultsofthisstudysuggestthatitmaybedifficulttocategorizeallbundlingprocessesinto“pure”subprocessesduetotheircomplexity,theinterplayoftechnologicalandhumancomponents,andtheinterdisciplinarynatureofbusinessprocesseswheregeneticsresearchersandITspe-cialistsworktogethertoimprovebreedingresultsbyusingbigdataandartificialintelligence.However,someexamplesofsubprocesseswithinbundlingprocessareprovidedbelow.StabilizingprocessStabilizingconcernsincrementalimprovementsinexistingcapabilities.Inthepresentcaseanexampleofstabilizingisprocessingbigdatafromanunstructuredtoastructuredform.Structuredbigdata—incomparisonwithunstructureddata—providesresearcherswithnumer-ouspossibilitiesforadvancinggeneticsresearch.Sometypesofbigdataarewellstructuredrightfromthemomentofregistrationinthesystem:Whenthepigis100daysold,youmaybe,forexample,interestedinitsweight.Soyoujustcheckthevaluewhichcorrespondswiththe100thdayofthepig’slife.Thisisasimpletypeofdatawhichisverywellstructured.(Geneticsresearcher)However,othertypesofbigdatathatareimportantforadvancingbreedingareobtainedinanunstructuredform:VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

719708HandbookondigitalbusinessecosystemsWeworkalotwithbigdatawhichisnotstructured.SoI’mworkingalotwithelaboratingsolutionsthatcanstructuredatainawaythatreducesthesizeofmydatasetandextractsdatawhichisimportantfortheanimal.Togetridofthe“noise”,andworkwithwhatisessentialinthedataset.(Geneticsresearcher)Theprocessofstructuringdataiscomplex.Itconsistsofseveralstages,includingprogram-minganduseofmachinelearningalgorithms,andrequirescooperationwithspecialistsfromtheITdepartment:WeareveryclosewiththeITdepartment.Theyhelpustobuilddatabases,savetherawdataandmakeautomaticprocessesthatmakeuseoftherawdata.(Geneticsresearcher).ProcessingCTpicturesisanexampleoftransformingunstructureddataintostructured:WhenitcomestoCTdata,itismuchlessstructured…Therefore,wehavehadabigresearchprojectovermanyyears,thepurposeofwhichwastodistinguishsegmentsandmakeautomaticmeasurementsofthemeatqualityofaliveanimal.Wehavedevelopedownalgorithmswhichcoulddistinguish[ontheCTscan]theheadortheneckofthepig,andweigheachmeatpieceinthedata.Wehavedonealotofdevelopmentandinnovativeworkwhichcanbeusedformanyotherthings…Inthisway,wehavemovedfromacompletelyunstructuredpicturewhichrepresentsthewholepigtoasinglemeasurewhichrepresents,forexample,theweightofthehampart.(Geneticsresearcher)Metaphorically,theunstructuredCTdatacanbecomparedwithageographicalrepresentationonamap.Onehasanideaofhowcontinentsandseaslook,butcannotindicatethepositionofapoint,measuredistances,orproduceothergeographicalcalculationsuntilonehasappliedthescalebarandgeographicalcoordinatesoflatitudeandlongitude.ConnectingpixelsontheCTpicturestoparticularpartsoftheanimal(meat/bones)andassigningthemscalarvaluesmadethistypeofbigdatamoremeaningfulandapplicableforthegeneticsresearch.TheresultofthedatastructuringprocesscanbearelationdatabasewithtablesshowingpigphenotypesandtheirfeaturesfromtheprocessedrawCTdata.Inthisway,structureddataisnotanendgoal,butameansforcarryingoutbreedingresearchwithafocusonparticularanimalqualities.EnrichingprocessTheenrichingprocessoccursthroughaddingacomplementaryresourcetotheexistingresourcebundle.OneexampleofanenrichingprocesswasthepurchaseofaCTscannertotakeCTpicturesofthepigslocatedinthetestingstation.NorthPigistheworld’sfirstandonlycompanytoemployaCTscannerasakeytoolfortestingboars:In2008weboughtandbegantouseaCTscannerlikethosewhichareusedinhospitals.Nobodyelsewasdoingsomethingsimilar.Isawthepotentialinit.Weuseditforscanningpigs.Itwasabiginvestment—veryinnovative,butwithahighlevelofrisk.(NorthPigCEO)Thisstrategicmoveofthecompanygranteditarichsourceofbigdataonbreedingandadefi-nitestrategiccompetitiveadvantage.AnotherexampleoftheenrichingprocessreferstotheuseofaGooglepartnerforthestorage,configuration,andsetupofNorthPig’sbigdatainthecloudsolutions.Analternativetousingcloudsolutionswouldbetostorebigdatainthecompany’son-premisesservers,VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

720Developingbigdataanalyticscapabilityinafocalfirmofadigitalbusinessecosystem709whichisquitecostly.TheGooglepartnerprovidesbothassistanceandadviceontheuseofcloudsolutionsatacostwhichislowercomparedtoon-premisesstorageofdata.PioneeringprocessApioneeringprocessisusuallyunique,premisedonexploratorylearning,andcombinescrea-tivityandanexpansiveknowledgebasetocreatenewcapabilities.Anexampleofapioneeringprocessreferstothedevelopmentandenhancementofthegeneticbreedingselectionvalue(GBSV)whichisaresultofmulti-stagecooperativeworkinvolvinggeneticsresearchers,ITspecialists,andfarmers.Figure42.2presentsasimplifiedillustrationofthisprocess.TheGBSVisanindicatorcalculatedfrommanydifferentmeasurementswhichshows,amongothers,thequalityofthepiggenes,therelationshipbetweenpigs’growthandforagecon-sumption,andthepercentageofmeat(versusfat).GBSViscalculatedforeachanimal.ItcanbestatedthatthemajorgoalofNorthPig’sR&DeffortsistheconstantincreaseoftheGBSV.Figure42.2SimplifiedprocessoftheGBSVestimationTheprocessofenhancingtheGBSVispossibletoaccomplishonlythroughtheinterrelatedeffortsofdifferentexpertgroups.Thus,R&Dstaffarechargedwithdefiningandsuggestingqualities,properties,orcharacteristicsoftheanimalswhichcontributetoabetterunderstand-ingandmoreprecisecalculationoftheGBSV:Tocarryoutbreedingoneneedsaminimumof1000animalsinonegeneration(timespanforonepiggenerationisaroundoneyear),andpreferablyoveraperiodoftime.Soyouneeddifferentgenera-tionsandseveralthousandanimals…Wehavemultipleregistrationsforeachanimal.Forexample,howmanypigletsareborn,howbigthemusclesare,howgoodthesowiswithherpiglets…Thereareseveralhundredqualitiesonecanchoosefrom.Exterioraloneincorporates30characteristics.Asaresearcher,Iworkwiththedatainthedatabase,andI’mtryingtofindanddefinethosequal-itieswhichIbelieveareimportantforthepigtobebetter,whichcanbeavalueinthewholegeneticbreedingvaluechain.(Geneticsresearcherandpigbreedingfarmowner)VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

721710HandbookondigitalbusinessecosystemsTheITexpertsinthecompanyincludeIToperatorsanddevelopers.Theyareresponsibleforthemaintenanceanddevelopmentofthesoftware(databases,scripts/programs)andhardware(numerousmachines),makingitpossibletoperformthecomplexbreedingvaluecalculations.Further,theyassisttheR&Dstafftomakechangesandimprovementsinthebreedingvalueandprocess.WhentherearetechnicalissueswiththeGBSVcalculation(calculationstopsordelays),theITdepartmentisresponsibleforsolvingthem.TheITexpertsarealsoresponsiblefortransferringtheresultsoftheGBSVcalculationtootherinformationsystemsanddatabasestoprovidethefarmerswiththeupdateddataonGBSV.Finally,thebreedingfarmerschecktheupdatedGBSVfortheirsowsandboars,whichgivesthemabasisfordecision-makingandselectionofanimalsforfurtherbreedingorculling.Furthermore,employeesatDeltatestingstationcanselectthebestboarsforfurtherbreedingandexport.DISCUSSIONThisstudyputsaparticularfocusontheprocessesfacilitatingstructuringandintegratingresourcesfortheBDAcapabilitybuilding.Thefindingssuggestthatthecompany’smajoreffortsintheprocessofstructuringconcernedacquiringresourcesfromexternalbreedingfarmsandaccumulatingresourcesattheinternaltestingstations.Managingtheseprocessesrequiresdifferentfocusandactions.Theprocessofacquiringbigdataresourceswasgreatlyaffectedbyhumanfactors(includingmotivation,competitioninstinct,anddigitalliteracy)whichdeterminedthebigdataquality.Therefore,tobesuccessful,acquiringbigdataresourcesrequiredappropriatemanagerialactionsconnectedtoexpectationmanagement,eco-nomicincentives,andsocializing.Theprocessofaccumulatingbigdataresourcesinternallywasmoredependentonthetechnologicalcomponent,sinceregistrationofbigdatawasmostlycarriedoutautomaticallybymachines.Here,themajormanagerialfocuswasturnedtowardscostlyinvestmentsinthetechnologyandrisksassociatedwiththis.Thetwoprocessesofstructuringbigdataresourcesbroughtdifferentchallenges.Inthecaseofexternalacquisitionofbigdata,thechallengewasconnectedtosecuringhigh-qualitydatawithouterrors.Inthecaseofinternalaccumulationofdata,thefrequentchallengewasunstructureddatawhichrequiredcoordinatedeffortsbydifferentexpertstoconvertitintoastructuredformtobeusable.Thisprocesswasdescribedasastabilizingbundlingprocess.Finally,theexampleofthepioneeringprocessofcreatingnewBDAcapabilitywasacomplexmulti-stagehumantechnologicalprocessrequiringtheparticipationofallentitieswithinagivenDBE(asshowninFigure42.2).Theobservationsabovesuggestsomeimportantmanagerialimplications.First,BDAcapabilitybuildingisamulti-stagecomplexprocesswhichrequiresmanagerialknowledgeofasocialandtechnologicalcharacter.Second,duetothecomplexityoftheBDAcapabilitybuilding,managersneedtochooseandemployappropriatemechanismsforthecoordinationofdataandinformationflowsandactions.ThisconcernscoordinationwithintheDBEfocalorganizationandacrosstheconstellationofDBEmembers.ThestudysuggeststhatthespecificcontextisveryimportantforunderstandingtheprocessofBDAcapabilitybuilding.Inthiscase,understandingthenatureoftherelationshipandinterconnectionbetweentheentitiesoftheDBEwasacrucialstartingpointforgettinginsightintotheBDAcapabilitybuildingofthefocalfirm.VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

722Developingbigdataanalyticscapabilityinafocalfirmofadigitalbusinessecosystem711CONCLUSIONUsingthecaseofagenetictechnologicalswinebreedingcompany,thischapterhasprovidedempiricalevidenceofhowBDAcapabilityisbuiltinthefocalfirmofaswinebreedingDBE.WhileemployingthetheoreticalframeworkofmanagingresourcesforcapabilitybuildingelaboratedbySirmonetal.(2007),thestudypaidparticularattentiontothetwoprocessescon-nectedtobigdataresourceorchestrationandmanagement:thoseofstructuringandbundling.BydescribingandanalyzingtheprocessesbywhichresourcesoftheDBEmembersaretrans-formedintothedistinctBDAcapability,thestudycontributestothescarceknowledgeinthisarea.Moreover,thestudysuggeststhatintheDBEcontext,BDAcapabilitybuildingresultsfrommobilizingtwotypesofexistingcapabilities:collaborationbetweenDBEmembers,andtheirdigitalskillsandassets.TheBDAcapabilitybuildinginthefocalfirmoftheDBEisthusdependentonthewillingnessofotherDBEmemberstocooperate,andtheirabilitytosupplyhigh-qualitybigdataforthecommonbenefitandvaluecreationwithintheDBE.Thisstudypossessescertainlimitations.First,itaddressesonlytwoofthreeresourcemanagementprocessesdescribedintheframeworkofSirmonetal.(2017).Second,thestudydoesnotprovideadescriptionofallthebundlingmanagementprocessestakingplaceintheorganization(whichwouldbeaveryextensivetask),butrathersuggestssomeexamplesofthoseprocesses.TakingintoaccounttheselimitationsandthefactthatfirmswithcomparableresourcesmayexercisedifferentlevelsofBDAcapabilitiesanddevelopthemindissimilarways,furtherresearchonBDAcapabilitybuildinginvariousDBEcontextsisrequired.Thus,futurestudiescanmakeinquiriesintohowBDAcapabilitybuildingmayaddvaluetotherestofthecompaniesintheDBE.Additionally,thesubjectareawouldbenefitfromstudieswhichprovideamoreexplicitlinkbetweenBDAcapabilitybuildingandvaluecreationwithinafocalfirm.Bothin-depthandcomparativestudiesareencouraged,toobtainamoreprofoundinsightinthisarea.REFERENCESAdner,R.andKapoor,R.(2010)Valuecreationininnovationecosystems:Howthestructureoftechnologicalinterdependenceaffectsfirmperformanceinnewtechnologygenerations.StrategicManagementJournal,31(3),pp.306–333.Akter,S.,Wamba,S.F.,Gunasekaran,A.,Dubey,R.andChilde,S.J.(2016)Howtoimprovefirmper-formanceusingbigdataanalyticscapabilityandbusinessstrategyalignment?InternationalJournalofProductionEconomics,182,pp.113–131.Amit,R.andSchoemaker,P.J.(1993)Strategicassetsandorganizationalrent.StrategicManagementJournal,14(1),pp.33–46.Barney,J.(1991)Firmresourcesandsustainedcompetitiveadvantage.JournalofManagement,17(1),pp.99–120.Gantz,J.andReinsel,D.(2012)Thedigitaluniversein2020:Bigdata,biggerdigitalshadows,andbiggestgrowthinthefareast.IDCiView:IDCAnalyzethefuture,2007(2012),pp.1–16.Garmaki,M.,Boughzala,I.andWamba,S.F.(2016)Theeffectofbigdataanalyticscapabilityonfirmperformance.In:Proceedingsof20thPacificAsiaConferenceonInformationSystemsPACIS.George,G.,Haas,M.R.andPentland,A.(2014)Bigdataandmanagement.AcademyofManagementJournal,57(2),pp.321–326.Graça,P.andCamarinha-Matos,L.M.(2017)Performanceindicatorsforcollaborativebusinessecosystems—Literaturereviewandtrends.TechnologicalForecastingandSocialChange,116,pp.237–255.VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

723712HandbookondigitalbusinessecosystemsGrant,R.M.(1991)Theresource-basedtheoryofcompetitiveadvantage:Implicationsforstrategyfor-mulation.CaliforniaManagementReview,33(3),pp.114–135.Grant,R.M.(1996)Prosperingindynamically-competitiveenvironments:Organizationalcapabilityasknowledgeintegration.OrganizationScience,7(4),pp.375–387.Gupta,M.andGeorge,J.F.(2016)Towardthedevelopmentofabigdataanalyticscapability.InformationandManagement,53(8),pp.1049–1064.Immonen,A.,Ovaska,E.,Kalaoja,J.andPakkala,D.(2016)Aservicerequirementsengineeringmethodforadigitalserviceecosystem.ServiceOrientedComputingandApplications,10(2),pp.151–172.Johnson,B.R.(1997)Examiningthevalitystructureofqualitativeresearch.Education,118(2),pp.282–292.Järvi,K.andKortelainen,S.(2017)Takingstockofempiricalresearchonbusinessecosystems:Alitera-turereview.InternationalJournalofBusinessandSystemsResearch,11(3),pp.215–228.Koch,T.andWindsperger,J.(2017)Seeingthroughthenetwork:Competitiveadvantageinthedigitaleconomy.JournalofOrganizationDesign,6(1),pp.1–30.Kwon,O.,Lee,N.andShin,B.(2014)Dataqualitymanagement,datausageexperienceandacquisitionintentionofbigdataanalytics.InternationalJournalofInformationManagement,34(3),pp.387–394.LaValle,S.,Lesser,E.,Shockley,R.,Hopkins,M.S.andKruschwitz,N.(2011)Bigdata,analyticsandthepathfrominsightstovalue.MITSloanManagementReview,52(2),pp.21–32.Makadok,R.(2001)Towardasynthesisoftheresource‐basedanddynamic‐capabilityviewsofrentcreation.StrategicManagementJournal,22(5),pp.387–401.Mattilsynet(n.d.)Availableat:https://www.mattilsynet.no/dyr_og_dyrehold/produksjonsdyr/svin/(accessedMarch15.,2021).Mikalef,P.(2019)Bigdataandapplication.In:J.S.PedersenandA.Wilkinson(eds),BigData:Promise,ApplicationandPitfalls.Cheltenham,UKandNorthampton,MA,USA:EdwardElgarPublishing,pp.49–68.Mikalef,P.,Pappas,I.O.,Krogstie,J.andGiannakos,M.(2018)Bigdataanalyticscapabilities:Asys-tematicliteraturereviewandresearchagenda.InformationSystemsande-BusinessManagement,16(3),pp.547–578.Moore,J.F.(1993)Predatorsandprey:Anewecologyofcompetition.HarvardBusinessReview,71(3),pp.75–86.Müller,O.,Junglas,I.,Brocke,J.v.andDebortoli,S.(2016)Utilizingbigdataanalyticsforinformationsystemsresearch:challenges,promisesandguidelines.EuropeanJournalofInformationSystems,25(4),pp.289–302.Pappas,I.O.,Mikalef,P.,Giannakos,M.N.,Krogstie,J.andLekakos,G.(2018)Bigdataandbusinessanalyticsecosystems:Pavingthewaytowardsdigitaltransformationandsustainablesocieties.InformationSystemsande-BusinessManagement,16,pp.479–491.Ren,S.,FossoWamba,S.,Akter,S.,Dubey,R.andChilde,S.J.(2017)Modellingqualitydynamics,businessvalueandfirmperformanceinabigdataanalyticsenvironment.InternationalJournalofProductionResearch,55(17),pp.5011–5026.Senyo,P.K.,Liu,K.andEffah,J.(2018)Aframeworkforassessingthesocialimpactofinterde-pendenciesindigitalbusinessecosystems.inK.Liu,K.Nakata,W.LiandC.Baranauskas(eds),Digitalization,InnovationandTransformation.Reading:Springer,pp.125–135.Senyo,P.K.,Liu,K.andEffah,J.(2019)Digitalbusinessecosystem:Literaturereviewandaframeworkforfutureresearch.InternationalJournalofInformationManagement,47,pp.52–64.Sirmon,D.G.,Hitt,M.A.andIreland,R.D.(2007)Managingfirmresourcesindynamicenvironmentstocreatevalue:Lookinginsidetheblackbox.AcademyofManagementReview,32(1),pp.273–292.Skarstad,G.Å.,Terragni,L.andTorjusen,H.(2007)AnimalwelfareaccordingtoNorwegianconsumersandproducers:Definitionsandimplications.InternationalJournalofSociologyofAgricultureandFood,15(3),pp.74–90.Tan,C.,Dhakal,S.andGhale,B.(2020)Conceptualizingcapabilitiesandvalueco-creationinadigitalbusinessecosystem(DBE):Asystematicliteraturereview.JournalofInformationSystemsEngineeringandManagement,5(1),em0112.https://doi.org/10.29333/jisem/7826.Teece,D.J.,Pisano,G.andShuen,A.(1997)Dynamiccapabilitiesandstrategicmanagement.StrategicManagementJournal,18(7),pp.509–533.VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

724Developingbigdataanalyticscapabilityinafocalfirmofadigitalbusinessecosystem713Tsujimoto,M.,Kajikawa,Y.,Tomita,J.andMatsumoto,Y.(2018)Areviewoftheecosystemconcept—Towardscoherentecosystemdesign.TechnologicalForecastingandSocialChange,136,pp.49–58.Vargas,A.,Cuenca,L.,Boza,A.,Sacala,I.andMoisescu,M.(2016)Towardsthedevelopmentoftheframeworkforintersensingenterprisearchitecture.JournalofIntelligentManufacturing,27(1),pp.55–72.Winter,S.G.(2003)Understandingdynamiccapabilities.StrategicManagementJournal,24(10),pp.991–995.Xu,P.andKim,J.(2014)Achievingdynamiccapabilitieswithbusinessintelligence.PaperpresentedtothePacificAsiaConferenceonInformationSystemsPACIS.VictoriaKonovalenkoSlettli-9781839107191DownloadedfromPubFactoryat05/28/202210:27:16AMviaColumbiaUniversityLibrary

72543.EvolvinginternaldigitalbusinessecosystemsfororderfulfillmentJuliaFeldtandHenningKontnyINTRODUCTIONInrecentyears,consumershavestartedtoordertheirgoodswithhighfrequencyandlowvolumes,whichhasnaturallyrequiredsellerstoadjustoperationsinresponse.Theneedtodelivergoodswithintwodayshasimpactedmultipleprocesseswithinwarehouses,particularlytheorder-pickingprocess(deKosteretal.,2007).Duetothehighnumberoftime-consumingmanualactivitiesintheprocessofgoodspicking,companieshavestartedtoimplementnewtechnologiestoincreasetheproductivityoforderfulfillment(Battinietal.,2015).Theinitialorder-pickingprocessisbasedonthe“person-to-goods”principle,meaningthatapersoniswalkingthroughawarehousewhilelookingforashelfonwhichtheneededproductisstored;thisprocessisexceptionallytime-consumingandthusinefficient.Accordingtoseveralstudies(deKosteretal.,2007),about50percentofawarehouseworker’stimeisspentwalking;about20percentisspentsearching;whileonlyabout15percentofthetimeisspentpickingtheproduct.Anextremehumanresourcesdeficitisexpectedinthenextdecade:by2030,theexpectedshortageofworkersinGermanywillbeabout10million,inCanadaabout2.3million,andinChinaabout24.5millionworkers.Hence,the“classic”approachtoorderfulfillmenthasnofutureformostcompanies(BCG,2014).Additionally,thegrowthofe-commerce—AmazonalonegrewfromUS$24.51billiontoUS$280.52billionfrom2009to2019(Statista,2020)—demandsthemaximalutilizationofavailablestoragecapacity,whichisnotusedtoitsfullextentina“classic”layoutduetothelargeamountofspacebetweenracks.Thus,identifyingnewapproachestogoodsstorageiscrucialtofulfillinggrowingordervolumes.Initially,order-pickingprocessesweresupportedbyenterpriseresourceplanning(ERP)software.Unfortunatelythisisnotthebestsolution,forthefollowingreasons:●Itisbasedonpredictiveplanninganddoesnotconsiderreal-timedata.●Theschedulehasnofeasibilitycheck.●ERPsystemsarebasedonmaterialrequirementsplanning(MRP)logic,whichdoesnotconsidercapacityconstraints,thuscreatingtimeissuesontheshopfloor(AricaandPowell,2014).TheweaknessesofERPsystemstypicallyledtoahighnumberofcorrectionsoftheinitialplans,whichrequiredthesupportofExcelspreadsheets(WagnerandKontny,2017),slowingdownoperationsunnecessarily.Fortheabovereasons,itisnotonlythe“classic”order-pickingprocessthatneedstobeadaptedtomarketdemands:thewholeinternalecosystemoforderfulfillmentrequirestrans-formation.Inordertoanalyzethistransformationcausedbyautomatedwarehousesystems,westartwiththeliteraturereviewonecosystemsandindispensablerequirementsofautomated714JuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

726Evolvinginternaldigitalbusinessecosystemsfororderfulfillment715systemssuchasreal-timedataandreactivescheduling.Then,wederivetheresearchquestionandprovideinformationonthetwomostcommonwarehousetechnologiesapplyingcasestudymethodology.Followingthat,wepresenttheframework,includingcomparisonof“classic”wayoforder-picking,toanautomatedalternative,aswellasatablecontainingtheresultsofthestudy.Finally,discussionofthefindingsandaconclusionareprovidedattheendofthechapter.LITERATUREREVIEWInternalDigitalBusinessEcosystemsAdigitalecosystem,similarlytothenaturalecosystem,consistsof“distributed,adaptiveandopensocio-technicalsystems”whichshowmutualdependence.Theyareself-adaptable,decentralized,andscalable(Krogstie,2012).Scientistsunderlinetheimportanceofhighlyadaptabledigitalecosystemsforthesurvivalofthecompaniesunderdemandingmarketcon-ditions(Boysenetal.,2017;Schaffnit,2020).Thefirstmentionoftheterm“digitalbusinessecosystems”canbetracedto2002,whenNachiraetal.(2007)useditinaEuropeanUnionprojecttodescribeacollaborationbetweensmallandmedium-sizedcompanies.Sincethenithasbeenusedintwoways:●todescribeinterconnectionbetweencompanies(Baumann,2019;PilinkienėandMačiulis,2014;Francoetal.,2010;BriscoeandDeWilde,2009;Tanetal.,2020;Krauseetal.,2009;BetzandJung,2021);and●todefineadecentralizednetworkofagentsinthecontextofaninternalecosystem(Schultisetal.,2014;BoleyandChang,2007;Schaffnit,2020).ConsideringthefactthatbigglobalcompaniessuchasLufthansaTechnikGroup,whichprovidesservicestoover800business-to-businesscustomersworldwidethroughover30sub-sidiariesandemploysover20000employees(vomBrockeandMendling,2018),areatleastasbigandascomplexasanetworkofsmallcompanies,theresearchpresentedinthischapterisfocusingoninternaldigitalbusinessecosystems.ForthisreasononeofthemostfittingdefinitionsforuseinthissectionwascoinedbyKrauseetal.(2009),whodefinedadigitalecosystemas“aninteractivesystemestablishedbetweenasetofactiveagentsandanenvironmentwithinwhichtheyengageincommonactivities.”AsimilardefinitionwasprovidedbyBetzandJung(2021),who,afterdescribingseveraltermsconcerningbusinessecosystems,defineditas“adynamicstructureofdifferentinterdependentyetautonomousactors,whocoordinatetheircomplementaryactivitiestowardsasharedpurposetoco-createvalue.”Usingthelogicfromotherresearchers(Schultisetal.,2014;BoleyandChang,2007),ininternaldigitalbusinessecosystems,thoseactorsoragentsare“internalorganizationalunits,”suchasindividualsordepartments.MattSchaffnit(2020)proposedtodivideanecosystematthecompanylevelintodif-ferent“structuralcomponents,”suchaspeople,devices,applications,processes,andothercategories.ForthepurposeofevaluatingtheimpactofnewtechnologiesoninternaldigitalJuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

727716Handbookondigitalbusinessecosystemsecosystems,theauthorsofthissectionwillapplysimilarlogic,andanalyzethechangesonthefollowinglevels:●software;●hardware;●people;●underlyingprocesses;●theentireecosystem.Tounderstandhowthenewdevelopmentsinorderfulfillmentcaninfluencetheinternaldigitalecosystems,theinitialorder-pickingprocesswillbecomparedwithtwoofthelatesttechnol-ogies:unmannedvehicles(CarryPicks)andautomatedstoragesystems(basedonacasestudyofAutoStore).TheImportanceofReal-TimeDataandReactiveSchedulingtotheRobustness,Velocity,andFlexibilityofanInternalEcosystemInitially,datacollectionwasmanuallydriven,inthebestcasethroughawarehouseworkerscanningabarcodeontheshopfloor.Theprocessingofdatainrealtimeisessentialfortherobustnessoftheoperations,sinceitenablesactivitymonitoringandfastreactionstounex-pectedevents(Monostori,2018).Real-timedatagatheringcanbedefinedas“thecapabilityofobtainingtherequiredinformationattherequiredtimefromintendedobjects,devicesorpeople…tomonitorthetrackedentitiesandhaverapidandefficientresponsiveness”(AricaandPowell,2014).Dallasegaetal.(2017)illustratehowimportantreal-timedataisforfeasibleoperationsplanningandcontrol,arguingthata“staticMasterSchedule”resultsinineffectivepushsystems,whichdonotconsiderreal-timesituations,thusleadingtounnecessarilyhighlevelsofstocksandnon-valueactivities.Theyarguethatreal-timedatanotonlyhelpstoacceleratethereactiontounplannedevents,butalsocanleadtoastockreductionofupto30percent(asdemonstratedintheirusecase).Otherresearchersemphasizetheimportanceofreal-timedatafordifferenttypesofoperations,forexample,forvirtualreality(UrbinaCoronadoetal.,2018;Kutinetal.,2018),automatedproduction(DaehnandTaub,2018),anddirectdigitalmanufacturing(Chenetal.,2015),thusconfirmingthesignificanceofthereal-timedataforalltypesofoperations.Theyconcludethatitisimpossibletoimplementnewtechnologiesfororder-pickingwithoutreal-timedatafromtheshopfloor.Anotherindispensablerequirementofautomatedsystemsisreactivescheduling,whichshouldreplacetherigidcentralizedpredictiveplanning(Foersteretal.,2019).Theresearchersarguethatduetothehighnumberofstock-keepingunits(SKUs),processes,andobjects(thatis,automatedmobilerobots),reactiveschedulingproducesbetterresults,especiallyunderconditionswithhigherambivalence.Inthecaseofanorder-pickingprocess,reactivesched-ulingallowscustomerorderstobeusedinrealtimefortheautomatedgenerationofpickingordersand,incasesofdisturbances,tore-planpickingordersaccordingly,thusincreasingtheflexibilityoftheentireecosystem.Toinvestigatethepossibilityofincreasingtherobustness,velocity,andflexibilityofaninternalecosystemafterapplicationofautomatedstoragesystemsorunmannedvehicles,theauthorsappliedthecasestudymethodologydescribedbelow.JuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

728Evolvinginternaldigitalbusinessecosystemsfororderfulfillment717CASESTUDYOFTWOTECHNOLOGIESFORDIGITALWAREHOUSEECOSYSTEMSMethodologyThecasestudyenablesananalysisof"acontemporaryphenomenonwithinitsreal-lifecontext"(Shahin,2015,p.2).AccordingtoBoeretal.(2015),caseresearchcanbeveryeffec-tiveintheareaofoperationsresearch,especiallyinthedesignoforiginaltheory.Hearguesthatrecentrapiddevelopmentsintechnologydemandfield-basedresearchmethods,ratherthanatheoreticalapproach.Otherresearchers(KetokiviandChoi,2014)pointoutthatseveral“breakthroughconceptsandtheories”(thatis,leanproductionandservitization)emergedfromcasestudies.Thecasestudypresentedbelowwasdesignedaccordingto“Guidelinesforconductingandreportingcasestudyresearchinsoftwareengineering”(RunesonandHöst,2009),whichaccentuatestheimportanceofthismethodfortheinvestigationofcomplexissues,especiallythoseinvolvinghumansininteractionwithtechnology.ThesetupofthecasestudyincludesthesubsequentstepsasproposedbyPerryetal.(2004):1.Aclearlystatedresearchquestion.2.Systematicdatacollectionandanalysistoanswertheresearchquestion.Theresearchquestionwasdefinedasfollows:“Howcannewtechnologiesbeappliedinorderfulfillmentandhowcantheyimpactexistingecosystems?”Althoughthereareover50warehouseautomationcompaniesonthemarket(RoboticsBusinessReview,2020),theauthorschosetofocusontwowidespreadtechnologies:CarryPickandAutoStore.Thedecisionwasmadebasedontheavailabilityofthedataneededforthecase.Usingthelogicdescribedabove,theecosystemsoftheCarryPickandAutoStorecanbedividedinto:●hardware:(mobile)racks,automatedmobilerobots,workstationsforworkers;●softwareforautonomoussteering,includinginterfacestoexistingsoftware;●pickingprocesses;●workers.(Swisslog,2020a).Thesubsectionsthatfollowprovideinformationontheracks,robots,andworkstationsusedintheCarryPickandAutoStoresystems,aswellasthesoftwareneededfortheirfunctioning.CarryPickCarryPickisasystemfororder-picking,which,duetoitshighscalability,canbeappliedinwarehousesofdifferentsizes.Usingautomatedmobilerobots(AMRs)tocarrytherackswithproductstotheworkers,itreducesthewalkingandsearchingtime,thusapplyingtheprincipleof“goods-to-person”andsavingupto70percentofworkingtime(Swisslog,2020a;Boysenetal.,2017).Additionally,thesystemischaracterizedbyhighscalability,andatanypointintimeitcanbeextendedbyadditionalAMRsandorextraracksforgoodsstorage.AccordingtooneoftheJuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

729718Handbookondigitalbusinessecosystemssystemproviders(Swisslog,2020b),theCarryPickcanincreaseawarehouse’sefficiencybyupto300percent.Figure43.1demonstratesthemaindifferencesbetween“classic”order-pickingandtheCarryPicksystem.Sinceworkersdonotneedtovisittheareawithracksonadailybasis,thestorageareadoesnotrequireheating,light,orventilation,thusleadingtosignificantenergysavings(Swisslog,2020a).Narrowergangwaysandracks,broughttotheworker,allowtheavailablewarehousespaceandhumanpowertobeusedmoreefficiently.Insomecases,workersavoidwalkingabout10milesperday(D’Andrea,2012),whichremarkablyimprovestheworkingconditions.Figure43.1Comparisonof“classic”order-pickingandCarryPickAutoStoreAlthoughtheAutoStoreoperatesona“goods-to-person”logic,itsoverallstructureisdifferentfromCarryPick.UnlikethemovableCarryPickracks,theAutoStoreusesastationaryware-house,wherethegoodsareplacedinbinsatupto24differentlevels.Eachbincanbefilledeitherwithasingleproductorhaveupto36separatecompartments,withatotalweightofupto30kg(AutoStoreSystem,2020).AsshowninFigure43.2,thebinsaretransportedbyrobotsthat,unlikeCarryPick,can“dive”intothestoragesysteminordertobringtherequiredgoodstotheworkingstation,movingataspeedofapproximately13km/handdeliveringthebinfromanycornerofthewarehousesystemwithintwominutes(Swisslog,2019).Workerswillpickupthedeliveredgoodsata“conveyorport”withtheadditionalsupportofweightcontrolandpick-to-lightsystems.Becausewalkingareasareunnecessary,theAutoStorerepresentsthemostefficientmeansofstorage.Incombinationwithahighnumberoflevels,itenablestheexpensivewarehousespacetobeusedinthebestpossibleway.Theonlydownsideofthesystemisthelimitationofthestoredproductstothemeasurementsofabin(649x449x425mm)andweightof30kg(AutoStoreSystem,2020).Sincemostproductsorderedonlinearelow-weightandlow-volume,AutoStorecanbeappliedinthatJuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

730Evolvinginternaldigitalbusinessecosystemsfororderfulfillment719area.LargerorheaviergoodscanbehandledwithCarryPick,thusallowingdesignofafullyautomatedwarehouseusingthecombinationofbothtechnologies.Figure43.2AutoStoresystem:viewfromdifferentanglesTheSoftwarebehindtheAutomatedStorageSystemsThesuppliersoftheautomatedstoragesystemsprovidedifferentsoftwaresolutionstosupportthem,oneofwhichisSynQfromSwisslog.ThroughtheinterfacestoaWMSorERPsystem,SynQreceivesinformationaboutcustomerordersandusesittosteerreal-timeoperations.Thesoftwarehasdifferentuserinterfaces,dependingontheuser’srole;thatis,pickerswillseetheirorders,whileacontrollerisprovidedwithathree-dimensional(3D)visualizationofallprocesses.AsoftwaremodulesuchasAutoStoreDirectorintegratestheAutoStoreintoalreadyexistingintralogistics,andcanoperateindependentlyorbasedoncurrentWMS/ERPsoftwarethroughAPIs.Thesoftwareisversatile,allowingcustomizedconfigurationofbins,racks,andpickstations,basedontheircurrentapplication(Swisslog,2019).Controloverthecurrentstateofoperationsisprovidedby3Dvisualizationcombinedwithadashboarddisplayinguser-definedKPIs.Themostinterestingfeatureofthesoftwareisitssupportofemergingtechnologiessuchasitem-pickingrobots(Swisslog,2019),thusensuringthatthesoftwaresolutionispreparedforemergingtrends.RESULTSTheframeworkinFigure43.3presentsthestepsintheorder-pickingprocesswiththerelatedinformationtrchnology(IT)systemoritsabsence.Thesystemsontheleft-handsidedescribe“classic”order-picking,whereastheright-handsidedemonstratestheITsupportaftertheimplementationofthenewtechnologies.Topreventunnecessaryoverloadoftheframeworkwithinformation,twofurtherpartsofanecosystem—workersandhardware—wereomitted,sincetheyweredescribedindetailineachcasestudyintheprevioussubsection.Moreover,thehardwareandworkersremainthesameduringeachprocessstep,soincludingthemintheframeworkwouldresultintherepetitionofthesameinformationoverandoveragain.JuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

731720HandbookondigitalbusinessecosystemsFigure43.3ITsupportoftheorder-pickingprocesspriortoandaftertheimplementationofnewtechnologiesAsshownintheframeworkabove,newtechnologiesdonotchangethewaythecustomerordersenterthesystemofacompany:thisprocessstilltakesplaceintheERPsystem.Thereasonforthisarehighlystandardizedmodules,whichallowcustomerdatatobesaved,andtheimportanceofcustomerordersforotherprocessesbesidesorderfulfillment(e.g.,book-keeping)(Asprion,2013).AfteracustomerorderisavailableinanITsystem,theplanningdepartmentmustproduceschedulesforthewarehouseworkers.Initially,therewasnoITsupportforthisprocess,whichledtotheplanningandconfirmationofgoodsavailabilityinExcelspreadsheets.PickingordersreceiveevenlessITsupportsincetheywereprintedout,showingapickinglistforeachpersonthatcouldnotbereplannedduringtheworkingtime,resultinginahighlyinflexibleprocess.Logically,automatedroboticsystemscannotactundersuchcircumstancessincerobotscannotJuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

732Evolvinginternaldigitalbusinessecosystemsfororderfulfillment721Table43.1Characteristicsofdifferentorder-pickingtypesPartofinternalTypesoforderpicking/ClassicorderpickingCarryPickAuto-StoreecosystemcharacteristicsProcessesOrderpickingperson-to-goodsgoods-to-persongoods-to-personProcessesOrder-lead-timedayshourshoursProcessesPlanningprocesspredictivereactivereactiveProcessesDecisionmakingdaysreal-timereal-timeSoftwareLevelofautomationlowhighhighHardwareSpaceutilizationlowmediumveryhighPeopleHumanResourceshighlowlowEcosystemVelocityverylowmediumhighEcosystemFlexibilityverylowhighhighEcosystemScalabilityverylowhighmediumEcosystemRobustnessmediumhighhighreadlistsorworkwithExcel.Thisrestrictionledtotheimplementationofwarehousemanage-mentsystems(WMSs),whichallowautomatizationofavailabilitychecks,capacityplanning,andgenerationofpickingordersbasedonqueuelogic(Bodden-Streubühr,2017).Incasesofdisturbancessuchasaworker’sunplannedabsence,feedbackinitiallywascollectedmanuallybyworkersandthencommunicatedtothesupervisor,whowouldreactbychangingtheinitialschedule.InthecaseofCarryPickandAutoStore,anyshortfallsofAMRsorotherdisturbancesarecollectedinrealtimebysystemsoftware,andreactionssuchasreplanningofcapacityaretriggeredimmediately(Swisslog,2019).Furthermore,real-timefeedbackonthestatusofthepickedgoods,whichwasimpossiblewithoutfittingsoftware(inERPthestatusofthepickedgoodsisavailablethenextdayafterpicking)isnotonlyavailable,butalsopreventsdisturbancesinorderfulfillmentsuchasapickingorderongoodsthatarealreadypickedforanothercustomer.Despitethehigheffectivenessofthenewtechnologies,theyalsohavesomeessentialrequirementsfortheavailabilityofcorrectinternaldata,whicharedescribedbelowinthe“Limitations”section.Toanalyzetheimpactofnewtechnologiesoninternalecosystems,themainchangeswereevaluatedonthelevelofecosystemcomponents(thatis,processes,people)aswellasontheleveloftheentireecosystem(seeTable43.1).ProcessesOrder-pickingconcepts.Theinitial“person-to-goods”conceptistime-consumingandisknownforlowproductivity(deKosteretal.,2007);thus,itmustbereplacedbytheconceptof“goods-to-person,”supportingtheworkerswithautomatedsolutionsandsavingthemasmuchas10milesofwalking(D’Andrea,2012;D’Souzaetal.,2020).Orderlead-timeisdictatedbycustomerexpectations,whichhavechangeddrasticallyinrecentyears(Battinietal.,2015).Today’scustomersexpecttheirproductstobedeliveredwithintwodays,andsincetheorderedgoodswillspendmostofthistimeonadeliverytruck,warehouseprocessesshouldbefinishedwithinhours(Feldtetal.,2019).Atthebeginningofe-commerce,theplanningprocesseshadapredictivecharacterandwereprimarilyperformedusingExcelspreadsheets.However,duetothehighinaccuracyofthedata,operationscannotusepredictiveplanningforreal-timeprocesssteering.Therefore,theJuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

733722Handbookondigitalbusinessecosystemsplanningprocessesfortheoperationsaremostlyreactive,thatis,basedonrealcustomerordersasopposedtopredictedcustomerdemand(FeldtandKontny,2020).Reactiveprocesssteeringwasenabledbyreal-timedecision-making,whichiscrucialforfastreactiontotheprocesschanges(forexample,abigcustomerorder,orunavailableworkersorrobots).Furtherdetailsontheimportanceofcorrectreal-timedataareprovidedinthesectionbelow.SoftwareSoftwaresupportofallprocessstepsisoneofthemostessentialpartsofthewarehouseeco-system,sinceitallowstheimportantcharacteristicsdescribedabove—velocity,flexibility,scalability,androbustnessthroughreactiveplanningwithreal-timedecisions—tobeachieved(Monostorietal.,2016;D’Souzaetal.,2020).Italsorepresentsthemostalteredpartoftheecosystemaftertheimplementationofnewtechnologies.HardwareSystems,suchasCarryPickorAutoStore,arehighlyefficientatsavingtheexpensivestoragespaceprovidingquickreturnsoninvestment(Swisslog,2020b),thusincreasingtheutilizationofwarehousespace.Still,sometraditionalcompanieshesitatetoimplementthesesystems,sinceitwouldrequirere-planningofexistingwarehousespaceunderconsiderationofdifferentoperationalareas(someforrobotsonlyandothersforhumans),whichinturnwouldleadtoprocessandsoftwarechanges.AutoStorecanbebuilttoagreaterheightthanCarryPick(5.4mcomparedto2.5m)andcontainsnogangways,thusprovidingmaximumpossiblespaceutilization(AutoStoreSystem,2020;Swisslog,2020a).PeopleAsstatedabove,inthenextdecademanydevelopedcountrieswillbeconfrontedwithavastdeficitintheworkforce(BCG,2014),whichincombinationwithe-commercegrowth,isexpectedtodrivetheapplicationofautonomoussystemsinwarehouselogistics.ImpactontheEntireInternalEcosystemVelocityoforder-pickingisessentialforshortorderlead-time.Throughthechangeoftheorderpickingconceptandbyaddingrobotsandsoftwaresupportforworkers,itispossibletoshortentheorder-pickingprocessby70percent(deKosteretal.,2007;Swisslog,2020b).AutoStorehasagreatervelocitythanCarryPickduetotheshorterrouteandhigherspeedoftherobotwithabincomparedtotherobotwitharack.FlexibilityishighforbothCarryPickandAutoStore,sincebothsystemsoperatebasedonsimilarlogicandsoftwaresupport,allowingthemtoadapttothecurrentcustomerorders.Inthe“classic”order-pickingprocess,flexibilityisverylowbecausetheinformationaboutchangesisnotavailableinrealtime,anddecisionsonreplanningaremademanually,whichsignificantlyslowsthesystem’sreactiontoanydisturbances(Monostori,2018).Scalabilityofasystemisessentialintimesoffastgrowth(Monostorietal.,2016).Bothsystemsallowadditionalracksorrobotstobeaddedifneeded.Still,CarryPickhashigherJuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

734Evolvinginternaldigitalbusinessecosystemsfororderfulfillment723scalabilitysinceitislesscomplicatedtoaddrackstoavailablespacethantobuildthemintoanexistingAutoStorecube.Robustnessdescribesasystem’sabilitytoreactfasttooccurringdisturbances(StrickerandLanza,2014).Thistermwasadoptedfrombiology,where“robustnessisapropertythatallowsasystemtomaintainitsfunctionsagainstinternalandexternalperturbations”(Monostori,2018).Accordingly,thetechnologieswithhighrobustnessdemonstrateaconstantlevelofoperationsagainstvariousdisturbances.SinceboththeCarryPickandAutoStorecanautomat-icallyreacttorobots’orworker’sdropoutsbyre-planningthepickingorderstowardavailableresources,theydemonstrateahighlevelofrobustnessunderdifferentcircumstances.DISCUSSIONContributiontoResearchandPracticeThecasestudiesandframeworkpresentedinthischaptercontributetothetopicsofinternaldigitalecosystemsandautomatedstoragesystemsbyprovidingtwocasestudiesofnewtechnologiesinorder-pickingprocessesandcomparingthemtothe“classic”approach.Thecombinationofreal-timedataandreactivescheduling,appliedinnewertechnologies,changestheinitialinternalecosystem,makingitmorerobusttounanticipatedchanges,moreflexible,andfaster,whileatthesametimeallowingittoscaleintoabiggersystemifneeded.Forpractitionersthestudyprovidesanoverviewofoptionsavailablefortheconfigura-tionofwarehouseecosystems.Consideringtheupcomingtrendsandissues,especiallyine-commerce,manycompaniesoperatinginthisareamaywishtoreconsidertheircurrentinternalecosystems.LimitationsWhiletheCarryPickandAutoStoresystemsoffervariousbenefits,theystillhaveafewlimi-tationsthatneedtobetakenintoconsiderationpriortoimplementation.AlthoughAutoStorehasthemostspace-efficientstoragesystem,itcanonlybeusedforsmall-volumeproducts(AutoStoreSystem,2020).Thismeansthatformostcompanies,itcanonlybeusedinadditiontootherstoragesystems,suchasCarryPick.Therestrictionsonproductvolumeandweight(600kg,2.5mheight)enablethissystemtobeusedformostoftheproducts.Still,somecompanies,forexampleretailersthatsellgardenfurnitureormattressesonline,willnotbeabletouseeitheroftheabovesystemsfortheiroper-ations.Forthatreason,priortoinvestinginanyofthestoragesystemsdescribed,companiesshouldperformathoroughanalysisofthesystem’sabilitytohandletheirspecificproductsaswellase-commercetrendsintheirparticularmarkettodeterminewhichtechnologiesarethemostsustainableandeffectivefortheiruse.CONCLUSIONTheframeworkandcasestudiespresentedinthischapterprovideacriticaloverviewoforder-pickingprocessesintimesofhighvolatilityandfastgrowth.NewtechnologiescanJuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

735724Handbookondigitalbusinessecosystemssupportthegrowthine-commerceorderswhileusingtheexistingwarehousecapacitiesmoreefficiently.Theycanalsodeliverasolutiontotheexpectedshortageofworkersinthecomingyears.Still,evenefficientautomatedtechnologieshavetheirrestrictionsaswellasrequirementsforimplementation,allofwhichshouldbetakenintoconsideration.Beforeacquiringcost-intensivetechnologies,acompanyshouldperformadetailedanalysisofitsresources,andproductsanddefineitsstrategyforthenextseveralyears.Onlyafterthatwoulditbepossibletodefineandbuildthemostappropriateecosystem.Despitethenumerouschangesinthedigitalecosystemsassociatedwiththeimplementationofautomatedwarehousesystems,theoveralladvantagesoutweightheweaknesses.Globalplayercompanies,suchasLufthansa,havealreadytestednewtechnologiesinonelocation(Hamburg),whichresultedintheirimplementationatnumerouswarehousesaroundtheworld(Lufthansa,2018;LufthansaGroup,2015).Othercompanies,especiallythosewithahigh-volumeofsmall-andmid-sizedproducts,canusethepresentedresultstotesttheauto-matedstoragesystemsintheirwarehouseecosystems.REFERENCESArica,E.andPowell,D.J.,2014.AframeworkforICT-enabledreal-timeproductionplanningandcontrol.AdvancesinManufacturing,2(2),pp.158–164.https://doi.org/10.1007/s40436-014-0070-5.Asprion,P.M.,2013.FunktionstrennunginERP-Systemen.Wiesbaden:SpringerFachmedienWiesbaden.https://doi.org/10.1007/978-3-658-00037-0.AutoStoreSystem,2020.Technicaldataonbins.Availableat:https://autostoresystem.com/de/bins/(accessedMay27,2020).Battini,D.,Calzavara,M.,Persona,A.andSgarbossa,F.,2015.Acomparativeanalysisofdifferentpaperlesspickingsystems.IndustrialManagementandDataSystems,115(3),pp.483–503.https://doi.org/10.1108/IMDS-10-2014-0314.Baumann,Sabine,2019.Wheretofromhere?Conceptualizingoperatingstrategiesforplatformsandbusiness-ecosystemsinsmartmanufacturing.Proceedingsofthe50thDSIConference“TransformingDecisionSciencesthroughEmergingTechnologies.”NewOrleans,pp.1453‒1463.BCG,2014.TheGlobalWorkforceCrisis:$10TrillionatRisk.Availableat:https://www.bcg.com/publications/2014/people-organization-human-resources-global-workforce-crisis.aspx.Betz,C.andJung,R.,2021.ConceptualizingandAnalyzingBusinessEcosystemServiceOfferings.HawaiiInternationalConferenceonSystemSciences.https://doi.org/10.24251/HICSS.2021.740.Bodden-Streubühr,M.,2017.Warehouse-Management-SystemeimSpannungsfeldvonIndustrie4.0.In:B.Vogel-Heuser,T.BauernhanslandM.tenHompel(eds),HandbuchIndustrie4.0Bd.3:Logistik.BerlinandHeidelberg:SpringerBerlinHeidelberg,pp.233–245.https://doi.org/10.1007/978-3-662-53251-5_17.Boer,H.,Holweg,M.,Kilduff,M.,Pagell,M.,Schmenner,R.andVoss,C.,2015.Makingameaningfulcontributiontotheory.InternationalJournalofOperationsandProductionManagement,35(9),pp.1231–1252.https://doi.org/10.1108/IJOPM-03-2015-0119.Boley,H.andChang,E.,2007.Digitalecosystems:principlesandsemantics.In:ProceedingsoftheinauguralIEEEinternationaldigitalecosystemsandtechnologiesconference(DEST)2007,pp.398–403.https://doi.org/10.1109/DEST.2007.372005.Boysen,N.,Briskorn,D.andEmde,S.,2017.Parts-to-pickerbasedorderprocessinginarack-movingmobilerobotsenvironment.EuropeanJournalofOperationalResearch,262(2),pp.550–562.https://doi.org/10.1016/j.ejor.2017.03.053.Briscoe,G.andDeWilde,P.,2009.Computingofapplieddigitalecosystems.In:ProceedingsoftheInternationalConferenceonManagementofEmergentDigitalEcoSystems—MEDES’09.Lyon:ACMPress.https://doi.org/10.1145/1643823.1643830.JuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

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737726HandbookondigitalbusinessecosystemsPerry,D.E.,Sim,S.E.andEasterbrook,S.M.,2004.Casestudiesforsoftwareengineers.In:SoftwareEngineering,2004.ICSE2004.Proceedings.26thInternationalConferenceon.IEEE.pp.736–738.Availableat:http://ieeexplore.ieee.org/xpls/abs_all.jsp?arnumber=1317512.Pilinkienė,V.andMačiulis,P.,2014.Comparisonofdifferentecosystemanalogies:themaineconomicdeterminantsandlevelsofimpact.Procedia—SocialandBehavioralSciences,156,pp.365–370.https://doi.org/10.1016/j.sbspro.2014.11.204.RoboticsBusinessReview,2020.WarehouseAutomationCompanies—TheTop50for2020AccordingtoLogisticsIQ.RoboticsBusinessReview.Availableat:https://www.roboticsbusinessreview.com/research/the-top-50-warehouse-automation-companies-2020/.Runeson,P.andHöst,M.,2009.Guidelinesforconductingandreportingcasestudyresearchinsoftwareengineering.EmpiricalSoftwareEngineering,14(2),pp.131–164.https://doi.org/10.1007/s10664-008-9102-8.Schaffnit,M.,2020.Digitalecosystems.In:S.GatziuGrivas(ed.),DigitalBusinessDevelopment.BerlinandHeidelberg:Springer,pp.53–71.https://doi.org/10.1007/978-3-662-59807-8_4.Schultis,K.-B.,Elsner,C.andLohmann,D.,2014.Architecturechallengesforinternalsoftwareeco-systems:alarge-scaleindustrycasestudy.In:Proceedingsofthe22ndACMSIGSOFTInternationalSymposiumonFoundationsofSoftwareEngineering.HongKongChina:ACM,pp.542–552.https://doi.org/10.1145/2635868.2635876.Shahin,M.,2015.ArchitectingforDevOpsandContinuousDeployment.ACMPress.https://doi.org/10.1145/2811681.2824996.Statista,2020.eCommerceReport2020.Availableat:https://www.statista.com/study/42335/ecommerce-report/.Stricker,N.andLanza,G.,2014.Theconceptofrobustnessinproductionsystemsanditscorrelationtodisturbances.ProcediaCIRP,19,pp.87–92.https://doi.org/10.1016/j.procir.2014.04.078.Swisslog,2019.MakingAutoStoreworkforyou.Availableat:https://www.mmh.com/article/making_autostore_work_for_you.Swisslog,2020a.CarryPick:flexibles,modularesKommissioniersystem.Availableat:https://www.swisslog.com/de-de/produkte-systeme-l%C3%B6sungen/automatisierte-lagertechnik-lagersysteme-lagerlogistik/boxes-cartons-small-parts-items/carrypick-automatisches-lager-und-kommissionier-system.Swisslog,2020b.WhitePapermobileroboticsweb.Availableat:https://www.swisslog.com/de-de/search-results-page?q=carrypick.Tan,C.,Dhakal,S.andGhale,B.,2020.Conceptualisingcapabilitiesandvalueco-creationinadigitalbusinessecosystem(DBE):asystematicliteraturereview.JournalofInformationSystemsEngineeringandManagement,5(1).https://doi.org/10.29333/jisem/7826.UrbinaCoronado,P.D.,Lynn,R.,Louhichi,W.,Parto,M.,Wescoat,E.andKurfess,T.,2018.Partdataintegrationintheshopfloordigitaltwin:mobileandcloudtechnologiestoenableamanufacturingexecutionsystem.JournalofManufacturingSystems.https://doi.org/10.1016/j.jmsy.2018.02.002.Wagner,J.andKontny,H.,2017.Usecaseofself-organizingadaptivesupplychain.epubli.https://doi.org/10.15480/882.1471.JuliaFeldtandHenningKontny-9781839107191DownloadedfromPubFactoryat05/28/202210:27:18AMviaColumbiaUniversityLibrary

73844.Digitalecosystemsinmanufacturing:emergingmodelsforIndustry4.0GiovannaCulotINTRODUCTIONEmergingdigitaltechnologiesareexpectedtohaveprofoundimpactsacrossmanufacturingindustries.Productionandrelatedactivitiesarebeingremoldedinthelightofdifferentreturnstoscaleoftechnology,highercapital-to-laborratios,andincreasingflexibilityofmachineryandequipment(Welleretal.,2015;LaPlumeetal.,2016;Yunetal.,2016).Transactionandcoordinationcostsaredecliningasaconsequenceoflowerinformationasymmetriesandfallingasset-specificityofinvestments(BowlesandLu,2014;Ben-Dayaetal.,2019).Profitsareshiftingassmartproductsopenthedoorstonewcompetitorsfromtheserviceandthedigitalsectors(PorterandHeppelmann,2014,2015;Rongetal.,2015).Despitethepopularpressbeingrepletewithexamplesoftechnology-driventransformationsandstart-upsuccessstories,thecurrentunderstandingisstillclouded.Overall,technologyadoptionismostlylimitedtocompany-basedsolutionsthatdonotfullycaptureopportuni-tiesrelatedtobroadervaluenetworkconnectivity(OECD,2017;WorldEconomicForum,2019).Bythesametoken,revolutionarybusinessmodelinnovationsaremostlyatapilotstage,leavingthebulkofmanufacturingincumbentsrelativelyunaffected(BughinandvanZeebroeck,2017;Wekingetal.,2020).Thekeyissuetodayforbothacademicsandpractitionersisthustounderstandwhetherandhowexamplesandsuccessstoriesrepresentastructuralshiftinmanufacturing,andwhetherthisshiftcanbereadthroughthelensesofcurrentmanagerialtheoriesandapproaches.Apos-sibleanalyticalperspectivetothisissueispresentedinthischapter,drawingfromarecentDelphi-basedscenarioanalysis(Culotetal.,2020b)andrelatedstudies(Culotetal.,2020a;Culotetal.,2019).Theanalysisofaseriesofillustrativecasestudiesexplicatesreal-lifeexamplesofemergingpatterns.Therestofthechapterisstructuredasfollows.First,thecurrentunderstandingontheIndustry4.0phenomenonanditstechnologicalenablersisoutlined,followedbyabriefintro-ductiontotherelevantacademicdebate.Resultsarepresentedintwosections:oneshowstherelevance—asperceivedbyapanelofexperts—ofemergingevolutionarytrajectoriesforthefutureofmanufacturing,theotherelaboratesonongoinguncertaintiestoformulatescenariosformanufacturingconfiguration.Theconclusionspresentthecontributionsandimplicationsoftheresearch.INDUSTRY4.0:TECHNOLOGIESANDIMPACTAnewindustrialrevolution—mostlydescribedbytheterm“Industry4.0”—hasbeenunfold-ingforafewyearsnow(Lasietal.,2014;Liaoetal.,2017;Ghombakhloo,2018).Although727GiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

739728Handbookondigitalbusinessecosystemsseveralstudieshaveattemptedtodefinethephenomenon(e.g.,Nosalskaetal.,2019;FatorachianandKazemi,2018;Xuetal.,2018),thereisstilllimitedacademicagreementonitsconceptualization(Culotetal.,2020a).Notwithstandingthevariousdefinitionsprovidedbytheliterature,threecharacteristicsdescribethephenomenonatlarge.First,Industry4.0representsabroadsocio-technicalparadigmshift(Dalenogareetal.,2018;MarianiandBorghi,2019),suchthattechnologicaladvancementsarejustonesideoftheequation,theotheronereferringtoconcurrentsocialchangesintermsofconsumerhabitsandworkorganization.Second,thisshiftisnottriggeredbyasinglebreakthroughtechnology,butcomprisesaseriesofdifferent“techingredients”whicharestillevolvingintonewsolutionsbyconvergenceandmutualcombination(Yooetal.,2012;OECD,2017).Third,andrelatedtothis,thesesolutionsfindapplicationacrossmanufacturingandserviceindustriesaswellasinthepublicadministration,blurringthelinebetweeneconomicsectors(Kagermann,2015;EvansandAnnunziata,2012).Underthispremise,itisstillimportanttodefinethescopeofthereasoningillustratedinthischapterbyclassifyingIndustry4.0enablingtechnologiesandmanufacturing-specificappli-cations.Chiarelloetal.(2018)identifiedmorethan1000individualtechnologiesreferringto30differentdisciplinaryfields.Thesetechnologiescanbebroadlysubsumedundertwomaintrends(Culotetal.,2020a).Oneisrelatedtodigitalization,duetoimprovedcomputingper-formances,miniaturization,andfallingcostofhardwarecomponents(EvansandAnnunziata,2012).Theotherreferstoconnectivityopportunities,exemplifiedbytheintroductionofthenewInternetProtocolIPv6aswellasbysubstantialinvestmentsinconnectivityinfrastructure(Kagermannetal.,2013).Consideringtheintersectionsbetweenthesetwotrends,fourmainclustersareidentified,asillustratedinFigure44.1.Theseclustersrefertotechnologiesthat:1.supportprocessdigitalization(physical/digitalinterfacetechnologies);2.easeonlineoper-ationswithinandacrosscompanyboundaries(networktechnologies);3.provideadvancedanalyticsandsimulations(dataprocessingtechnologies);and4.makeproductmanufacturingmoreefficientandflexible(physical/digitalprocesstechnologies).Theinterdependencyamongthesebasetechnologiesisatthebasisofdifferentfront-endtechnologies.Inthisrespect,thestudyofFranketal.(2019)conceptualizesandtestsamodeldefiningfourmainareasrelevantformanufacturing:●smartfactoryforimprovinginternaloperationsactivities;●smartworkingtoprovidedigitalsupporttofactoryandmaintenanceoperators;●smartsupplychainbasedoncustomer‒suppliersystemintegrationandcollaborativeplatforms;and●smartproductasconnectedproductscanbemonitoredremotelyanddeliveradvanceddigitalservicestothecustomer.Asiseasilyimagined,thepresenceofbothproductandprocessinnovationpresentsaseriesofopportunitiesformanufacturingcompaniestoinnovatetheirbusinessmodelandreshapetheirproductionfootprintandsourcingdecisions.Researchershavebeguntoinvestigateemergingtrends,butstudiesinthisareaaremostlycharacterizedbyafragmentationoftopicsandtech-nologicalinterest.Overall,thecurrentacademicdebatehasdevelopedinthefollowingresearchstreams.First,theimpactoftechnologiesonthemanufacturingbusinessmodels,referringinparticulartotheInternetofThings(IoT)drivingproductservitization(PorterandHeppelmann,2014;Boehmeretal.,2020).Thischangeinthevaluepropositionofmanufacturersrequires,inturn,GiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

740Digitalecosystemsinmanufacturing:emergingmodelsforIndustry4.0729newcapabilitiesintechnologyanddata-relatedactivities(Rongetal.,2015;Subramaniametal.,2019;Rymaszewskaetal.,2017).Source:AdaptedfromCulotetal.(2020a).Figure44.1KeytechnologicalenablersSecond,possiblereconfigurationsofproductionandrelatedoperations.Ontheonehand,growingautomationopportunitieshavebeenlinkedtothereshoringphenomenon,thatis,thedecisiontobringbackhome,ortonearercountries,productionactivitiesoffshoredearlier(Fratocchi,2018;Ancaranietal.,2019;Dachsetal.,2019).Ontheotherhand,additivemanufacturingtechnologies(AMTs)coupledwithgrowingconnectivityanddata-sharingopportunitiesseemtopavethewaytonewformsofsmall-batchproduction,includinglocallydistributedmanufacturingandat-homeproduction(Jiangetal.,2017;HannibalandKnight,2018;BirtchnellandUrry,2013;Halassietal.,2019).Third,system-levelimplications;meaningtheimpactofemergingconfigurationtrajectories—atbothcompetitiveandoperationsmanagementlevels—onthebroadmanufac-turingenvironment.Severalinterpretativeframeworkshavebeenusedinthissense,includingtheconceptsofindustry,ecosystem,andvaluechain(VC).Thedynamicshighlightedinthesestudiesrefertoaredefinitionofindustryboundariestowardscross-industryecosystems(PorterandHeppelman,2014;Welleretal.,2015);concentrationdynamicsandnewbarrierstoentryinrelationtodataandtechnologies(Welleretal.,2015;Vendrell-Herreroetal.,2017);andaredistributionofvaluetowardsservicesanddata-relatedactivities,orrathertowardspro-duction(Durachetal.,2017;Jiaetal.,2017;RehnbergandPonte,2018).Fewstudieshaveconsideredinsteadsystem-levelimpactsonmanufacturingoftheincreasingprevalenceofGiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

741730Handbookondigitalbusinessecosystemsplatform-basedbusinessmodels,notwithstandingtheirpotentiallydisruptiveeffects(Gawer,2014;McIntyreandSrinivisan,2017).Manyunsolvedquestionsremainwithineachresearchstream,asfewhypotheseshavebeentestedthroughextensiveempiricalstudies.Moreover,theimpactofIndustry4.0hasrarelybeenconsideredinthelightofthelong-debatedinterdependenciesbetweenfirms’competi-tiveandoperationsstrategies.Bythesametoken,itisimportanttokeepinmindthatfirms’individualconfigurationdecisionsareembeddedinthesystemoftheirbusinessrelations.Theresearchquestion(RQ)addressedinthischapteristhusthefollowing:RQ1:HowwillmanufacturingVCsevolveinthecontextofIndustry4.0EVOLUTIONARYTRAJECTORIESINMANUFACTURING:INSIGHTSFROMTHEEXPERTSTUDYTheresearchquestionwasinvestigatedthroughaDelphi-basedscenarioanalysis,whoseresultsarethoroughlydiscussedinCulotetal.(2020b)andfurtherelaboratedinthischapterbydevelopingofaseriesofillustrativecasestudies.Figure44.2MaininsightsfromtheDelphistudyWithoutgoingintothedetailsofthefuturestateprojectionsincludedintheDelphiques-tionnaire,theresultsaresummarizedinFigure44.2.Eachofthefourmatrixesdescribetherelevanceofthefuturestate(verticalaxis)andthelevelofuncertaintyinthepaneljudgement(horizontalaxis;“uncertain”areprojectionsthatdidnotreachagreementinatleastoneindustrysub-panel).Forthesakeofclarity,resultsarepresentedaccordingtofourkeydimen-sionsofmanufacturingvaluecreationinthecontextofIndustry4.0:productionofphysicalGiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

742Digitalecosystemsinmanufacturing:emergingmodelsforIndustry4.0731products,provisionofservicesalsorelatedto/substitutingtheseproducts,controlofsalesanddistributionchannels,managementoftechnologiesanddataflows.IntermsoftheimpactofIndustry4.0onproductsandproductionprocesses,confirmedtrendsrefertoAMTsrapidlyovercomingthecurrentlimitationsintermsofapplicabilityandcost-effectivenessinlarge-scalemanufacturingoperations.Sustainabilityisalsoexpectedtogainrelevanceandresultsconfirmacademicinvestigationssuggestinganintimaterelation-shipbetweenIndustry4.0andcirculareconomypractices(Aufderheide,MontagandSteven,Chapter29inthisHandbook).Newmaterialsareprojectedtobeutilizedinthislogicagainsttheprospectofnaturalresourcesbecomingincreasinglyscarceatagloballevel.Intermsofgeographiesofproduction,regionalizationofsupplychainsappearstobeincreasinglyrele-vant,eventhoughtheglobalizationprocessisprojectedtodrivefurtherlocalspecialization,andthebroadlydiscussedreshoringphenomenonseemsoveralllimitedtocertainindustriesormarketsegments.Bythesametoken,resultssuggestthatsmall-scaleproductionmodels—thatis,redistributedmanufacturing,point-of-sale,andat-homeproduction—mightapplyonlyincasesoflimitedproductcomplexityandvolatiledemand.Overall,therearedoubtsthatthelowertransactioncostsimpliedbyemergingtechnologieswillmitigateongoingconsolida-tiontrendsinmaterialsupply,intermediategoods,andfinalproductmanufacturing.Finally,althoughithasbeenreportedthatdigitalplayersaredevelopingofferingsinmanufacturingincumbents’space(developingtechnologyandproducts),thisseemslimitedtoareaswhereproductioniseasilyoutsourced.Uncertaintyprevailswithrespecttomanufacturing-relatedservices.Doubtsrefertotheopportunityformanufacturerstodevelopsmartproductofferings,lesslikelyinindustrieswithlowtechnologicalintensity.Theentranceofdigitalplayersasdirectcompetitorsintheservicespaceisrelatedtotheindustryattractivenessinthenewtechnologicalcontext.Severalexpertsinthepanelraiseddoubtsastothecustomers’willingnesstopayfordigitalservices,espe-ciallyintheconsumersegment.Fewdoubtswereexpressedintermsoftechnologyloweringthebarrierstoentry,andenablingthedecentralizationofservices,includingthoserelatedtoproductandsoftwaredesign.Salesanddistributionchannelsappearinsteadasacontestedterritorybetweenmanufac-turers,traditionalretailers,anddistributors,andever-growingdigitalplatforms.Theongoingconcentrationdynamicsdrivenbyscaleadvantagesandwinner-takes-alleffectsofdigitalplatformsmightinfactbesloweddowninthepresenceofhighproductcomplexity.Theincreasingprevalenceofplatformsposessignificantlimitationsinmanufacturers’disinter-mediationefforts,especiallywheneveradirectgatewaytothecustomerisnotgrantedbythedevelopmentofsmartproducts.TheroleofpublicadministrationsasecosystemorchestratorsseemsrelevantonlyinrelationtomobilitysolutionsandtheIoT.Finally,eventhoughmanyimplicationsarestillunclear,dataandtechnologymanagementareprojectedtotakeonawholenewrhythminthecontextofIndustry4.0.Ontheonehand,data-drivendecision-makingisexpectedtodrivesignificantperformanceimprovementsintermsofprocessefficiency.Smartproductsandmasscustomizationwillincreasinglydemanddatatobesharedacrossorganizationalboundaries,alsogeneratingmonetizationopportuni-ties.Ontheotherhand,muchdataseemtorepresentasourceofcompetitiveadvantageurgingmanufacturestodevelopdatamanagementandanalyticscapabilities.Concentrationdynam-icsmighttakeplace,assmallplayerstypicallylacktheresourcestoinvestinincreasinglycomplexsolutions.LargecompaniesarealsoexpectedtoinvestinproprietaryIndustry4.0technologies,furtherexacerbatingthedivide.GiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

743732HandbookondigitalbusinessecosystemsOnbalance,thefactthatthepaneldidnotreachconsensusforseveralprojections(right-handsideofthematrixesinFigure44.2)shouldnotcomeasasurprise.Manyevolutionarytrajec-toriesareinfluencedbyfar-reachingtechnologicalandsocietaldevelopmentsthatmaybeconflictinginsomeareas.Moreover,newproductsandtechnologiesmeanthatmanufacturersinmanyindustriesareconfrontedwithborn-digitalcompanieswhosestrategiesareinturnrapidlyevolving,requiringmanufacturerstoadaptquickly.Inthefaceoftheseuncertainties—impossibletosolveforthemoment—itisbettertothinkaboutavailableoptions,orscenarios;someoftheseareillustratedinthefollowingsection.EMERGINGMODELSOFDIGITALECOSYSTEMSINMANUFACTURINGConsistentlywiththeliteratureonscenarioplanning(VanNottenetal.,2003;Bishopetal.,2007),themaindriversbehindtheexperts’uncertaintieswereanalyzedfortheirimpactonthefuture-stateprojectionsassessedintheDelphistudy.Theanswersprovidedbytheexpertswerecodedonebyoneandclustered.Fourkeyareasofuncertaintyemerged.First,howwilldemandevolve?Twotrendsappearedascontroversialfromthepanelassessment.Oneisrelatedtodemandvolatilityandcustomization/personalizationofphysicalproducts(customization);theothertoproductservitizationandnon-ownershipmodels(serviti-zation).Masscustomizationhasbeenbroadlydiscussedintheliterature(Fogliattoetal.,2012;Suzićetal.,2018);however,evidencesuggestsdemandtobestillratherstandardizedformanyproductcategories,andmanufacturingmostlymanagedaccordingtomassproductionlogics.Servitizationtrendshavealsobeenattractingsignificantinterest(BainesandLightfoot,2014;Storyetal.,2017),butrecentfailuresofservitizedapproachescastdoubtsontheviabilityoftheapproach(FinancialTimes,2019).Thesetwodemandcharacteristicsshouldnotbeseenasconceptualalternatives(SousaanddaSilveira,2019),eventhoughwithphysicalproductsbeing“sharedratherthanowned,therewillbenoneedtocustomize”(Expertcomment).Second,towhatextentdatawillbesharedbetweenorganizations?Inter-organizationaldatasharinghasbeenrelatedwithimprovementsinbothefficiencyandinnovation(Kagermannetal.,2013;EvansandAnnunziata,2012;Liaoetal.,2017).Policy-makersareworkingonlegalissuesrelatedtoaccesstoandtransferofnon-personalmachine-generateddata,dataliability,aswellasportability,interoperability,andstandards(EuropeanCommission,2020).Notwithstanding“cross-industrysynergiesanddata-specificscaleadvantages,datawillberetainedatthecompanylevelasasourceofcompetitiveadvantage”(Expertcomment).Third,willnewflexibleproductiontechnologies(AMTs,flexiblerobotics)beapplicable?Thelimitedapplicabilityandcost-effectivenessofAMTsandotheradvancedproductiontech-nologiesformassproductionoftenclashesagainstwidelyreportedenthusiasmsabouttheirdisruptivepotential(LaPlumeetal.,2016;Durachetal.,2017;Baumersetal.,2016,2017).Theseconcernswereechoedinseveralexperts’commentsand,overall,itseemslikelythatthescopeofthesetechnologieswilldiffersignificantlyacrossmanufacturingindustries.Fourth,towhatextentwillsmartproductsbeadopted?Currenttechnologicalandlegalissuesrelatedtosmartproductsarebeingamplyaddressedbytechnologyprovidersandlegis-lators(Atzorietal.,2010,2017).However,non-durableconsumergoodsmightseealimitedspread,asinthecaseofsmartproductsavailableintheapparelandfootwearindustryjustinGiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

744Digitalecosystemsinmanufacturing:emergingmodelsforIndustry4.0733thesportsegment(BertolaandTeunissen,2018).Eveninmorehigh-techindustries,theremightbesignificantdifferencesamongcountries(Cavazzaetal.,2019).Theformulationofpossiblescenariosstartsfromtheassumptionofextremefuturestatesofthesedrivers.Thefirstdiscriminantisademandevolution,whereby—consistentlywiththeanswersoftheexperts—Ipositedthattherewillbeincreasingtrendstowardsmasscustomi-zationandservitization.Astotheotherdrivers,extreme“yes”or“no”optionswereassumed.Startingfromhere,thischaptercomplementstheoriginalresearchwithaseriesofillustrativecasesidentifiedinotheracademicarticlesorinthebusinesspressthatfit—atleastinpart—thenarrativesoutlinedinthescenarios.Althoughscenariosarebasedonextremefuturestatesoftheirunderlyingdrivers,thecasescorroboratethepresenceofcontext-specificelementsinIndustry4.0andpresentareasonedrepertoireofpossiblevariations.ModelsforMassCustomizationAhighlyfragmenteddemandrequiresinternaloperationsandsupplychainconfigurationtobereshapedinordertopursuehigherflexibilityandadaptability,speedingupproductionwithoutcompromisingoncostandquality.PossiblemodelsaredescribedinFigure44.3.Source:AdaptedfromCulotetal.(2020b).Figure44.3ScenariosformasscustomizationInthefirsttwoscenarios—productioncommoditizationandend-to-endVCtransparency—highlevelsofinter-organizationaldatasharingarepositedtoincreaseoutsourcingduetoadecreaseintransactioncosts(Coarse,1937;Williamson,1987).Onthisbasis,twodifferentmodelsmayemerge,dependingontheapplicabilityofnewproductiontechnologies.Inthehypothesisofproductioncommoditization,digitalfilescanbetransferredtofullyauto-matedthree-dimensional(3D)printerslocatedintheproximityoftheproductpoint-of-sale/point-ofuse.ThelowassetspecificityofAMTsenablesprintingfacilitiestoservemultipleclients.Clientscanscoutthebestprintingofferonlinethroughdigitalplatforms,generatingGiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

745734Handbookondigitalbusinessecosystemsstrongpricepressures.Thepursuitofefficiencyleadsinturntoconsolidationdynamicsofcentralizedoperatorscoordinatingbroadnetworksoflocalized3Dprintingandlogisticsfacilities.Asproductionmarginsdecreasefurther,manufacturersmightfocusonhigher-valueactivities,suchasresearchanddevelopment,design,andcustomermanagement.Someearlyexamplesofthismaybeseeninnewbusinessmodelsofferingmanufacturingcapabilitiesondemand.Xometry,forexample,providesamarketplaceformanufacturingcapacityusingownproductionfacilitiesaswellasanetworkofover5000vettedmanufac-turingpartnersinvariouslocations(McKinseyGlobalInstitute,2019).Similarly,thecaseofUnitedParcelService(UPS)printingservices(UPS,2016):3DprintersareinstalledinUPSstoresacrosstheUnitedStates(US)tohandlesmallerorders,whereasindustrial3Dprintersoperateinacentrallogisticcentertoprocessmorecomplexorders.Clientsincludemajorplayersintheautomotive,healthcare,machinery,equipment,andaerospaceindustries.Thedriversformanufacturerstoleveragesimilaron-demandservicesaremainlyrelatedtoinventoryoptimizationandlowercapitalexpenditures.ComparedwiththescenariobasedontheDelphistudy,margincontractionandplayers’concentrationareyettobeseen,giventheearlystagesofthesemodels.Thesecondscenario,end-to-endvaluechaintransparency,isverydifferent.Thelackofflexibleproductiontechnologiestriggersspecialization.Focalcompaniescaneasilyoutsourceduetohighsystemintegration:suppliersprovidevisibilityontheircapacityandtheprogressofwork;focalcompaniessharedemand-relatedinformationandoptimizetheallocationofproductiondependingontimeandgeography.Specializationenablessupplierstomaintainarelativelyhighbargainingpowerandcapturesomeoftheextraprofitrelatedtocustomization.Trendstowardsthismodelarecurrentlymirroredinthegrowingadoptionofcommercialsoft-waresolutionsthatsynchronizeandautomatetheflowofinformationbetweenfocalcompaniesandtheirsuppliers,includingpurchaseorderprocessing,releaseprocessing,supplier-managedinventory,andprocessvisibility.Forexample,FlextronicsInternational(Flex)—anAmericanSingaporean-domiciledmultinationalelectronicscontractmanufacturer—hasimplementedatechnologyplatformsolutionfromSAPSupplyNetworkCollaboration(SNC)whereorder-relatedinformationissharedwithselectedsuppliers,planningdataarecompared,andtheorderisallocatedutilizingdynamicreplenishmentcapabilities.Theneedformorecoordi-nationistackledinsteadwithanecosystemapproachbytheOpenManufacturingPlatformini-tiatives(OpenManufacturingPlatform,2020).Foundedin2019byMicrosoftandtheGermanautomotivegroupBMW,theconsortiumencompassesmanufacturingcompanies,technologysolutionproviders,andsystemsintegrators.Theaimoftheinitiativeistoenabledatasharingandcollaborationacrossteamsandorganizations.Itbringslegacyandproprietarysystemstothecloudbymeansofopenstandardsandtechnologies.Overall,eventhoughtheOpenManufacturingPlatformhasonlybeguntoworkinthisdirection,itsvisionseemsconsistentwiththedynamicspresentedintheend-to-endvaluechaintransparencyscenario.Thetworemaining“customization”scenariosarebasedonlimiteddatasharing.Thissupportsinternalizationdecisionsforhigh-valueproductsegments:data-relatedtransactioncostsmakeitinconvenientforfocalcompaniestocoordinatesupplierswithinveryshorttimeintervals,whicharerequiredforcustomization.Inthein-houseproductionscenario,theavailabilityofAMTsandotherflexibleproductiontechnologiesenablesfocalcompaniestointernalizeproductioncost-effectively.ThecaseofRedCollarGroup,analyzedinMacCarthyetal.(2016),clearlyillustratesthisdynamic.RedCollarisaChineseclothingmanufacturerthathasadoptedacustomer-to-manufacturer(C2M)GiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

746Digitalecosystemsinmanufacturing:emergingmodelsforIndustry4.0735approach.TheuseofanInternet-basedplatformallowsparticipationinproductdesign.Asiswellknown,apparelistraditionallyalabor-intensiveindustry;however,RedCollarwasabletouseradio-frequencyidentification(RFID)andotherinformationtechnologytoautomatemanufacturingoperationsandlogisticsflowsfromrawmaterialstofinishedproducts.Inthisway,thecompanyincreaseditsflexibilitywhileremainingcompetitiveintermsofproductioncosts.TheapplicationofAMTsisatthebasisofthestrategydevelopedbyDaimlerBuses,thecommercialvehiclebranchoftheGermanautomaker,foritssparepartsbusiness.InJanuary2020thecompanyannouncedthatsparepartssuppliedbyexternalproviderswouldbepro-ducedin-housevia3Dprinting,thusreducingtheleadtimetoafewdaysasopposedtoseveralmonths(DaimlerGlobalMediaSite,2020).Thelastscenarioreferstoin-housetechnologydevelopmentunderthehypothesisthat—shouldflexibleproductiontechnologiesnotbeavailable—focalmanufacturersmayinvestintechnologydevelopment.Thebenefitsrelatetoareductionofthelabor-intensityofproductionprocessesandlocalizationinproximitytothecustomer.Inthisrespect,therehasbeenexten-sivetalksabouttheopportunityforapparelbrandstocollaboratewithtechnologycompaniestodevelop(proprietary)innovativeautomationsolutions(McKinsey&Company,2018).Well-knownexamplesaretheinvestmentofthemultinationalretailcorporationWalmartinSoftWearAutomation,atechnologicalproviderfocusedonsewingautomation;andProjectF.L.X.(future-ledexecution)launchedbytheAmericanclothingcompanyLevi’storeplacethemanualchemical-intensivetechniquescurrentlyusedinthejeansfinishingprocess.Bothexamplesbringaboutseveralopportunitiesformasscustomization,includingin-storeproduc-tionandreshoring.AnotherexampleisConformis,aUS-basedmedicaltechnologycompany,whosebusi-nessmodelisnolongerbasedonsellingimplants,butonofferingatechnology(iFitImage-to-Implant)thatallowssurgeonsto3Dprintjointreplacementimplantsindividuallysizedandshapedtosuiteachpatient’sbody.ModelsforManufacturingServitizationManufacturingcompaniesarefacingunprecedentedopportunitiesandthreatsrelatedtoservitization(BainesandLightfoot,2014;Barretetal.,2015;Storyetal.,2017)andtheemergenceofdigitalplatforms(Gawer,2014;McIntyreandSrinivasan,2017;Broekhuizenetal.,2021).Newpartners,competitors,andrelationsarebroughtintothepicture;Figure44.4providesananalyticalperspectiveintopossiblemodels.Theplatform-basedrenting/leasingandenhancedrenting/leasingscenariosarebasedonthehypothesisofalimitedapplicabilityofsmartproducts.Inplatform-basedrenting/leasing,theassumptionofdataflowsbetweenproduct/serviceprovidersandusersleadstotheemergenceofsharingeconomypractices,wherebydigitalplatformsintermediatebetweenthetwoparties.AnobviousexampleisUber’smatchingservicebetweenindependentdriversandcustomers.Otherexamplesfollowingasimilarlogicareone-sidedplatforms—thatis,connectingonesingleclassofusers—forproductsharing.ThisisthecaseofDrexcodeandBabyquip,digitalplatformsfortherentalofdesignerdressesandbabygear,respectively.Thesecompanieshavejuststartedtheirbusinessoperations.Inthecasethatsharingeconomytrendswillbecomeprevalentinthefuture,theseplatformsmightendupconnectingmorekindofusers,suchasGiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

747736Handbookondigitalbusinessecosystemsshopsandmanufacturers.Theimpactonmanufacturingcompaniesofthismodelisessentiallyrelatedtothelossofcontrolofsaleschannels.Source:AdaptedfromCulotetal.(2020b).Figure44.4ScenariosformanufacturingservitizationThescenariodescribedinenhancedrenting/leasingappearsoverallasthelessinnovativemodel:manufacturersrent/lease(notconnected)productsand,leveragingontheirrelationshipwiththecustomer,growthroughadditionalservices.Thecurrentapproachincarleasingmovesalongtheselines,withautomakersbuildingjointventureswithfinancialinstitution(forexample,FCABank).Apotentialgamechangerinthisrespectistheapplicationofbigdataanalyticstechniquesforbettercustomerprofiling,whichwouldenablemanufacturersandtheirpartnerstodevelopmorepersonalizedserviceoffering.Theopensmartecosystemsscenarioandthein-housesmartservitizationscenariopositahighpenetrationofsmartproducts.Inthefirstcase,dataaresharedbetweenbusinesspart-ners,who—basedontheirspecialization—offeradiverseportfolioofcomplementaryprod-uctsandservicestotheircustomers.Thesecondmodelisbasedonthehypothesisthatdataarekeptwithinorganizationsasasourceofcompetitiveadvantage.Thesetwoscenariosarebasedonanall-or-nothingapproachtodatasharing.Realityisobvi-ouslynotsoclear-cut.Actualexamplessuggestthatcompaniesaremorewillingtosharedataforservicesweaklyrelatedtotheircorecapabilities(forexample,Technogym),inresponsetoindustry-widerequestsfromthecustomer(forexample,Agrirouter),andtoleveragenetworkeffectsinoperatingcentralplatforms(forexample,SiemensMindSphere).Inanalyzingthesecases,forthesakeofcompleteness,itshouldbenotedthatcentraldatasovereigntylieswiththecustomer,whoshouldauthorizeanyformofdatatransferorsharingwiththirdparties.Technogym,anItaliandesignerofgymequipment,hasdevelopedinrecentyearsanintegratedofferingtosupplementconnectedequipmentwithfitness-relateddigitalappsandcontents.Asthecompanygathersrelevantamountsofindividual-levelbiometricandsportactivitydata,datasharingopportunitieshaveemergedwithinsurancecompanies,whocanGiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

748Digitalecosystemsinmanufacturing:emergingmodelsforIndustry4.0737adjustpremiumstocustomers’lifestyle.Similaropportunitiesinvolvehospitalsforremotehealthmonitoring.Severalpartnershipshavealreadybeenannounced,pointingtotheriseofaheterogeneousecosystembasedonplayers’specialization.ThecaseofAgrirouterisunderpinnedbyadifferentlogic.Foundedin2016bytenagricul-turaltechnologycompanies,Agrirouterisaweb-baseddataexchangeplatformthatenablesfarmersandcontractorstoaccessandsharedataofmachinesandagriculturalsoftwareprod-uctsfromdifferentmanufacturersandsuppliers.Asmanyfarmingcompanieshavemixedfleets,thereweregrowingrequestsforsmootherdataautomation.Theconsortiumprovidedanindustry-wideresponse,leavingmanufacturerstocompetenotondataownership,butonthequalityofhardwareandsoftwaresolutions.Finally,SiemensMindSphereisacloud-basedIoTplatformlaunchedbytheGermanindus-trialconglomeratetoenableitsclientstostoreindustrialoperationaldataandaccessthemthroughdigitalapplications.ThebusinessmodelofMindSphereisstronglybasedoncreatingnetworkeffectswithecosystemparticipants:theplatformisequippedwithopenapplicationprogramminginterfaces(APIs)anddevelopmenttoolsthatallowotherequipmentproviders,manufacturers,andtechnologyvendorstointegratecustom-madesolutions.Itispossiblefortheparticipantsinthisecosystemtosharedataontheplatformandcreatecollaborations.Alowerpropensitytosharedataisatthebasisofthein-housesmartservitizationscenario.Overall,thisseemsrelatedtoopportunitiesforthefocalcompanytousedatatoleveragecomplementaritiesinproduction(forexample,Caterpillar)andinconsumption(forexample,GoogleNest),aswellasinnovation-relateddynamics(forexample,Tesla).ThedigitalizationeffortsofCaterpillar(Cat),aleadingAmericanmanufacturerofconstructionequipment,arebroadlyorientedtowardsreinforcingandextendingtraditionalsourcesofvaluecreation,asanalyzedinSubramaniametal.(2019).AmongCat’sportfolioofdigitalsolutions,thelaunchin2016ofthenewversionofVisionLink,atelematicssystemthatprovidesinformationbasedondatafrommachinesensorsandcontrolsystems,isexemplaryofthisstrategy.ThesystemisintegratedwithCatProductLinkhardware,whichisstandardonmostCatequipmentandcanbeusedtoretrofitbothCatmachinesandmachinesfromothermanufacturers.Theaccesstoothermanufacturers’datathroughVisionLink,ratherthanthroughadataconsortium,addeddramaticallytoCat’sanditsdealers’understandingoftheusageofcompetitivemachinesoperatingincustomers’fleets,creatingpositivesynergiesforproductionandmaintenanceservices(Stewart,2016).ComplementaritiesinconsumptionareinsteadpartofGoogleNest’sapproach.Nest,foundedin2010byformerAppleengineersandacquiredbythetechgiantGooglein2014,marketsaseriesofsmarthomeproducts,includingthermostats,speakers,displays,andsecuritysystems.Aftertheacquisition,Nestwasasubsidiaryofthenewholdingcompany,Alphabet.ItwasmergedintoGoogle’shardwaredivisiononlyin2018,discontinuingNest’sownsoftwaresolutionsinfavorofGoogle’sAssistant.Asreportedbythepress(StattandBohn,2019),therationaleofthismoveliesinthefactthatinasmarthomeenvironmentthecustomervaluesnotthesingledevice/featurebutthecohesivenessofthesystem.ThatrequiredGoogletorethinkitsapproachtoproductdevelopmentatasystemlevel:thevariousdevicestalkingtoeachothercaninfactbuildanaggregatepictureofhumanbehaviortofurtherenableservicepersonalization.TheexampleofTeslahighlightsotherreasonsfornotdatasharing.Asatechnology-drivendisruptor,thecompanybuiltitssuccessthrougharchitectural—hardwareandsoftware—innovation(FurrandDyer,2020).Teslacars,throughinternalandexternalsensors,haveGiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

749738Handbookondigitalbusinessecosystemsbeencollectingmoreinformationthanmostotherconnectedvehicles,whichprovidesacom-petitiveedgeintheracetowardsthedevelopmentoffullyautonomousdriving.Forthetimebeingthesedataareunlikelytobeshared.Observersbelieve,however,thatinafuturewhenautonomousdrivingisfullydeveloped,Teslacarswillshareinformationwithcarsfromothermanufacturers,aswellasothersystemssuchastrafficcamerasandroad-basedsensors(Marr,2018).CONCLUSIONSANDIMPLICATIONSThischapterprovidesanoverviewonthepossibleimpactofemergingtechnologiesincludedintheIndustry4.0paradigm,consideringnewbusinessmodels,possiblereconfigurationsofproductionandrelatedoperations,andsystem-levelimplications.Severaldynamicsseemtounfoldunevenlyacrossindustriesandmarketsegments.Commonelementsrefertotwomainareas:sustainability—thatis,scarcityofnaturalresources,circulareconomypractices,newmaterials—andincreasingrelevanceofdatainbusinessoperationsinbothinter-andintra-organizationalsettings.Inthisrespect,however,manyaspectsarestillunclearinrelationtowhatdatawillbesharedandwhatcapabilitieswillbeinternalized/externalized.Theeightscenariosprovideaninitialanswertothisissue,offeringaparsimoniousanalyticalperspectiveintoapparentlycontradictoryevolutionarydynamics.Onthisbasis,theillustrativecasestudiesofferfurtherinsightsprovidingreal-lifeexamples.Overall,thecasesshowthattechnologiesmightberelatedtotheemergenceofdigitalecosystemsinvolvingmanufacturingcompanies,serviceandtechnologyproviders,inofferingsolutionstothecustomersthatarehardlycapturedbytoday’sdefinitionofindustriesandsectors.Digitalsolutionsmightallownon-manufacturingplayers(logisticproviders,retailers,technologydevelopers)toentertheproductionspace,dramaticallyreshapingtheboundariesofwhatweunderstandas“manufacturing”today.Similarly,manufacturersdevelopingdigitalservicesandplatformsareincreasinglyshiftingtheirvaluepropositiontowardsnewareas.Thescopeofmanufacturingecosystemsseemstodependonafewdrivers:whatdataaresharedwithwhom,andthespreadofnewproductandprocesstechnologies.Real-lifeexamplesshowthattrendstowardshigherverticalintegrationareequallypresentinbothpro-ductionandservices,inthepresenceofhigh-valuecomplementaritiesandfirst-moveradvan-tages.Theseinternalizationtrends,coupledwithconsolidationdynamicsanddata-relatedadvantages—skillsandcapabilities,access,andamount—castdoubtsontheemergenceofdigitalecosystemsinmanymanufacturingindustries/segments.Startingfromtheseconsider-ations,thescenariosandillustrativecasescanprovideausefultoolformanagersinstrategicplanningexercises.Bydefinition,scenariosarebuilttostretchrealitytoitslimits.However,ascompaniesfocusinwardsandexperimentthroughshortinnovationcyclesinlightofthemany(technological)uncertainties,abig-pictureapproachoveralongerplanninghorizoncanproveusefulinanticipatingrisksandopportunitiescomingfrombusinessmodelsinnovationandoperationsreconfiguration.Thisisallthemorerelevantinlightofsomesignificantinvestmentsbylargemultinationalsnotpayingoffasexpected,asinthecaseofGE’sPredixplatform,andthefailureofBMWandDaimler’sjointventureinsharedmobility(FinancialTimes,2018,2019).Toconclude,afurtherelementtoconsideristhe“newnormal”aftertheCOVID-19pan-demic.Accordingtomanyobservers,thehealthemergencyhasonlyacceleratedstructuralGiovannaCulot-9781839107191DownloadedfromPubFactoryat05/28/202210:27:21AMviaColumbiaUniversityLibrary

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754IndexAagaard,A.551,559customer-to-customer(C2C)Abanazir,C.584recommendations351–2,360,361AbbasNaqvi,M.H.146providers357–8,360AboutCorporateFinance(ACF)84,86Ali,S.W.111absorptivecapacity40–46AlJazeeraMediaNetwork576ACFseeAboutCorporateFinance(ACF)Alkhatib,A.443acquisition27,28,30–33alliances25,27–30,32,33ofbigdataresources700,704–6All3MediaInternational86–7Acs,Z.J.113,121,147alternativedrivetechnology636actor-networktheory(ANT)428AltspaceVR572Adams,R.510Alvesson,M.99adaptations26–7Amazon31,69–71ADASsseeadvanceddriver-assistancesystemsAlexaFund126(ADASs)Amblard,M.633,639additivemanufacturingtechnologies(AMTs)AmericanJournalismProject(AJP)555729,731–5Amit,R.96,127Adidas539AMRsseeautomatedmobilerobots(AMRs)Adner,R.52,196,295,414,418,477,582,598,Anand,B.N.127618,663Angerer,M.112advanceddigitaltechnologiesforsustainableANTseeactor-networktheory(ANT)development511–12APIsseeapplicationprogramminginterfacesadvanceddriver-assistancesystems(ADASs)(APIs)634,638Apple25,28–9,32aerospaceindustry377applicationprogramminginterfaces(APIs)68,affordances426–8,431,432,434,435180,218,397,540,737Africa145,152applicationserviceproviding(ASP)approach332Afsarmanesh,H.271ArchpruAkaka,M.599agglomerationfactors255,257,259,260,262,Arianee376–7,382263artifacts432forITclusters254artificialintelligence(AI)424,511,518,519,634formediaandcreativeclusters252–4decisionsupport672agileapproaches309digitalplatforms434Agrawal,A.K.194,197,199artificialintelligence(AI)-poweredrobots424–6,Agrirouter736,737433–5Ahmed,W.A.H.5affordancesfor426–8,431,432,434,435Airbnb182,203,623constitutiveentanglementfor426–8,431,AJPseeAmericanJournalismProject(AJP)435Akaka,M.A.198,272imbricationfor427–9,431,433–5Åkesson,M.197,198sociomaterialityin430–33Alcayaga,A.476ASPapproachseeapplicationserviceprovidingAl-Debei,M.237(ASP)approachalgorithmicsearchandrecommendationasymmetricencryption393negativewelfareeffects355–60asymmetries666,673,681positivewelfareeffects353–5audiovisualproduction411,413algorithmicsearchandrecommenderservicesAufderheide,V.L.6(SRSs)5,349–57,359–62augmentedreality(AR)250business-to-customer(B2C)Aulkemeier,F.219recommendations351–2automateddataexchange682automateddriving631743SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

755744Handbookondigitalbusinessecosystemsautomatedexecution400Betz,C.715automatedmobilerobots(AMRs)717,721Bhattacharyya,S.101automatedstoragesystems714,719,724bias/biasingautomation631–2,685–6searchandrecommendationservices(SRSs)automotivebusinessecosystem535,634–5357–9digitalapplicationsandtransportationstrategies361services638–9bigdata349,390,512,697,707evolution636–8resourcesindustryperspectives642–3accumulationof700,706–7,710societalperspectivesacquiring700,704–6,710anticipatingchange639–40acquisitionof700,704–6ownershipversusservice640bundling700,707,708,710,711saferroads641–2divestingof700,705,707valuechain635–6portfolio704automotiveindustry377,534–5,540–41structuringof700,704,710automotivesupplychain466,630bigdataanalytics(BDA)697–9automotivevaluechain635–6capabilitybuilding704–11autonomousdriving633,634,684researchmethodology701–11autonomoustechnology632–4resourcesmanagement700–711autonomoustransportation630resourcesversuscapabilities699–700autonomousvehicles(AV)630–34,645swinebreedingdigitalbusinessecosystemsAutoStore717–19,721–3(DBEs)AVseeautonomousvehicles(AV)BDAcapabilitybuildingin704–11Avison,D.237Norwegiancase702–4Azevedo,A.280BigTechs637,642BIMseebuildinginformationmodeling(BIM)Bähr,K.4Biocca,F.568Bailenson,J.568biologicalecosystem234,271,329,663Bailey,D.559biomimicry1,492,506Baines,T.S.533Birkner,S.4Bali,M.685Bisson,G.414bankingindustry536–7Blockbuster25,31Barricelli,B.568blockchain405–19Bartik,A.W.271consortium367–8,370–71,374,375,377–83Baştuğ,E.568analysisof377–80Bauer,F.131development371–3Baumann,S.3,138examplesof375–7Baum,J.A.C.128keyconsiderationswhenforming/B2Bseebusiness-to-business(B2B)joining373–5B2B2Cseebusiness-to-business-to-consumerroleof368(B2B2C)increativeindustries405,407–12,414,BBCVRHub575417–19B2Cseebusiness-to-consumer(B2C)ecosystems6,405–9,416BDAseebigdataanalytics(BDA)advantagesanddisadvantages407Becker,H.569community-driven411–12Beckmann,M.100copyrightprotection413beginning-of-life(BOL)482,483culturalvalues411behavioraleconomics354,363entrepreneurship406benchmarking507fundraising413–14tool500innovation409andutilityanalysis499–500interdependencerisks414–15Bendapudi,N.601,602newunitsofvalue415–17Benis,A.665qualitativemethodology409–10Bertschy,M.585rightsmanagement412–13BestBuy29,32,33transaction412SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

756Index745typologyof411indigitalbusinessecosystem219networks369intraditionalbusinessecosystem218resilience389–92,394,397,400–402businessecosystems(BEs)1,11,82,126,startups413144–54,195,218,328–30,389,424,technology367–8,374–7,380–83,387–8,549–52,561,617,618397–401,512indigitaljournalismseedigitaljournalismadvantages392–4businessexit31defined392businessmodels150,232–4,242,244,246,developingnewbusinessmodels373327–9,332,335,339–41,549,551–2,559,developmentandadoption371–2560,661anddigitalsupplychain394–5consultingcontent240governanceconsiderations374design95–8,102,103interoperability373innovation126knowledgeandexpertise373anditstransformationsinconsulting236–8non-centralizedarchitectureof418ofMindSphere737overview368–70scholarship96participationconsiderations374–5business-to-business(B2B)103,177,185,187,regulatoryandstandardsissues372189,623technicalconsiderations374business-to-business-to-consumer(B2B2C)traditionalversusdigitalsupplychains623–4388–92business-to-consumer(B2C)621–3blockchain-basedsupplychainsystem(B-SCS)business-to-customer(B2C)103,117,412blendingwithdigitalbusinessecosystemsrecommendations351–2,360(DBEs)395–7inJapanesecompany397–9Cabiddu,F.600“BlockchainLab”397CADapplicationsseecomputer-aideddesignBoer,H.717(CAD)applicationsBogren,M.154Camarinha-Matos,L.M.271Bönisch,J.296CambridgeAnalyticacase360Böttcher,T.218Canetta,L.280“bottleneckstrategies”72capabilitybuilding699,701,704–11bottom-upecosystems110,295Carayannis,E.G.114Boudreau,K.J.43CarryPicksystem716–19,721–3Brandt,F.100“CathedralofCounterStrike”603Brawley,A.M.445CatProductLinkhardware737Breidbach,C.F.161,271Cavallo,A.617Bricka,T.M.6C2Capproachseecradle-to-cradle(C2C)Bricken,W.568approachBriscoe,G.566,567“CC-finder”tool75Brodie,R.J.161CCTVseeclosed-circuittelevision(CCTV)Brynjolfsson,E.460Chandler,J.599B-SCSseeblockchain-basedsupplychainsystemCheng,J.C.P.689(B-SCS)Chesbrough,H.130,135,138Buck,C.6,7Chesbrough,H.W.130Budzinski,O.5Chiarello,F.728buildinginformationmodeling(BIM)680,686–9,choicevs.determinism64–6692Christensen,C.232buildingscircularbusinessecosystemdigitaltransformationofseedigitaldigitization460–61transformation:ofbuildingsine-mobilitysector466–8“bullwhipeffect”397,462circulardesignprinciple459bundlingbigdataresources700,707,708,710,circulareconomy(CE)461,463,464,466,467,711469,470,480Buschow,C.5indigitalbusinessecosystems459–60businessactorscircularparticipation516,521–3SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

757746Handbookondigitalbusinessecosystemscircularproduct-serviceecosystems(CPSS)480basiccharacteristicsof179–80circularresourcemanagement460–61e-commerce187circunomics,caseof466–8emergenceanddesignof178Clancy,H.380market-basedliteratureon179classicvaluechain542,664rapidgrowthpotentialof182classification178,179,183,188–90supply-sidenetworkeffectsof181closed-circuittelevision(CCTV)689valuecreationlogicsof183,186–9cloud-basedplatform465,737consumer-to-consumer(C2C)177cloudcomputingecosystem327–33,338,341consumptionbubble355–6cloudservicelayers327contentcreators201–2clusters728Cooper,H.M.332digital250coopetition195regional252,254coordinatedserviceinnovation171–2research251–2Copeland,M.554,560CNNVRplatform573copyrightprotectionblockchainecosystems413Coase,R.88corecompetenciesindigitalbusinessecosystemCockayne,D.599496,497co-creation,value161–6,168,170–74,194–204,corporateecosystem81,89206–8,271,411,457,458,461–5,468–70,corporateventurecapital(CVC)130–38476,482,483,498,514,542,576,cost-effectivenetworking241596–603,605–6,609,664,673costreductionsathealthcare670codingdecisions410COVID-19pandemic292,302,391,440,445,collaboration493,497,499,500,504,506,507,616,624511,513–15,523cradle-to-cradle(C2C)approach690collaborativeoperation400creativecluster,agglomerationfactorsfor252–4collectivebargaining447,450creativeindustriesCollins,G.553blockchainin405,407–12,414,417–19Colombo,M.G.97entrepreneurs413community-drivenblockchainecosystems411–12newunitsofvaluein415–16competence-relatedinstitutionalization668crisisresponsecompetitiveadvantage51,54,55entrepreneurshipand616–17competitivedynamics74hospitalityand615–16competitiveness69,74,171–2cross-bordercollaborativeinvestigationsincompetitivenessframework(“CC-framework”)journalism292–5,301,30269,74activitiesandlinks299–300competitivestrategies68actors297–8competitivevideogaming582,588emergenceof295–6complementaryinnovation182,188,681keystoneorganizations298–9complementaryservices33,538objectivesandmotivationsof296–7computedtomography(CT)data706summaryof300–301computer-aideddesign(CAD)applications686cross-industryapplications375connectivityplatforms185,187,189crossreality(XR)250,252,254–5consensusmechanism368,392cross-subjecttransactions393consolidation80,81,88crowdsourcing149,240Constantinides,P.460Culot,G.730Constantin,J.A.600culturalvalues411constitutiveentanglement426–8,431,435Cunningham,G.598consulting246,247customer-centricity275businessmodel236–45customerco-creation197competence244customerinteraction198,207anddigitaltransformation232–4customerroles194–5platform-basedbusinessmodelsin238–40cases,integrationof199–200platformeffectsin235–6data204consumerInternet-of-Thingsplatforms(CIoTPs)physicalresources202–3177skills201–2SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

758Index747time200–201servicelogicand164–5indigitalbusinessecosystemsdesignscienceresearch(DSR)162,213,214,customerco-creationin197224,270,273customersin196–7Dess,G.G.127integrationofresourcesbycustomersDHEseedigitalhealthcareecosystem(DHE)198–9Dickers,J.574interactionbetweenco-creatingdigitalagecustomersandfocalfirmsin198entrepreneurialambiguitiesin98–9customer-to-customer(C2C)recommendationsinnovationandentrepreneurshipin42–5351–2,360,361recommendationsin352–3customer-to-manufacturer(C2M)734digitalbusinessecosystems(DBEs)1,1–8,CVCSeecorporateventurecapital(CVC)11–23,40,42,44,45,50,63,64,126,130,cybersecurity640,644133,139,144–54,161–2,163–5,177,179,181,183,184,187–9,194–5,246,TheDaily360571250,269,271–2,293,293–5,294–302,Dallasega,P.716300–302,349,350,361,361–2,370,DARPAseeDefenseAdvancedResearchProjects380–81,387,389–90,393–7,399–401,Agency(DARPA)424–6,430,434,434–5,439,446,448,dataanalyticsandrelatedtechnologies(DAT)450,457,458,459–60,463,464,466–70,510–11,516–23476,477–9,486,492–6,499–500,506–7,data-basedpricediscrimination353510–13,516,523,530,531,543,564,565,data567,569,576,577,596,597,606,697–9economics350actorsin69–73quality699,705automotiveindustry534–5“datalake”465bankingandfinanceindustry536–7Davidsson,P.616blockchain-basedsupplychainblendingwithDBEsseedigitalbusinessecosystems(DBEs)395–7DCVseedynamiccapabilityview(DCV)caseofNorwegianswinebreeding702–4DDTseedynamicdrivingtask(DDT)challengesof498decision-makingprocesses308–18,320–22,characteristicsof531–3517–19,669co-creatingcustomersandfocalfirmsin198DefenseAdvancedResearchProjectsAgencycomparingwithdifferentindustries533–4(DARPA)632customerco-creationin197deicingrobots431–2customersin196–7Delgado,M.112defining195–6Delina,R.566inhealthcaremarket663–5delivery-basedrestaurant620–21insuranceindustry537–8delivery-onlymodel620,623integrationofresourcesbycustomersinDeliveryServicePartnerProgram72198–9Delphistudy341,727,730,732,734andmedia566–7,570–71Dencker,J.C.98objectivesof499Dentoni,D.151ofonlinefooddelivery514–15deReuver,M.162,234,567propertiesof496–8designknowledge162,165,172–4research251,293designprinciplesfordigitalengagementroleof40platforms161–2sportinggoodsindustry538–9achievingmutualgrowth170strategictensionsin67–9attractandbindactors169–70sustainability493–9,507,513digitalbusinessecosystemsand163–4developmentandapplicationofenactorsformechanisms172500–506fosteringinteractionandvalueco-creationvalueappropriation128170–71valuecreation128,681improvingcompetitivenessbycoordinateddigitalbusinessmodel/modeling95,98,100,102,serviceinnovation171–2118,150,531,551,560methodology165–8macrolevel101–2SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

759748Handbookondigitalbusinessecosystemsmesolevel101attractandbindactors169–70microlevel100–101digitalbusinessecosystemsand163–4digitalenactorsformechanisms172applications638fosteringinteractionandvalueco-creationclusters250170–71competence244improvingcompetitivenessbycoordinatedconvergence50serviceinnovation171–2disruption238methodology165–8disruptors413servicelogicand164–5domain67,72digitalhealthcareecosystem(DHE)663–4,667,economy235,250,354,360,598669–75entrepreneurship95,97–9,101,102,113,digitalization50,143,150,171,173,236,269,143,146,147,151,153,617–18270,272,273,279,307–12,315–21,662,environment461674era87,88,101,126,149,480ofbusinessecosystems196,199evolution237–8ofhealthcaremarketinGermany666identity376andinnovativeness606informationgoods179–80ofpersonalservices(PS)270–71infrastructure(ecosystem)389process46innovation7,510,512,513,582,588,589,projectsinproduction308–9591,592empiricalstudy312literacy101limitations311marketplaces185–7,189,214,224,238literaturereview311maturity272,275–6recommendationsforaction318–21model682,689results312,316–17networks81–2,460searchstrategy311news6,134,135,549–53,556,557,selectionanddataextraction311–12559–661set-upandstructuraldata312,315–16proximity122digitaljournalism293revolution(digitalconvergence)50activitiesandlinks299–300start-up109–10,112,114,115,118,121actors297–8warehouseecosystems717–19cross-bordercollaborativeinvestigationsworkplatforms446295–6seealsoeSportskeystoneorganizationsof298–9digitalconsultingecosystembusinessmodelneworganizationalformsin294digitaltransformation232–4objectivesandmotivationsof296–7fundamentalsofplatformeconomicssummaryof300–301digitalplatformsandecosystems234–5digitaljournalisticecosystems302platformeffectsinconsulting235–6digitallydrivenorganization389platform-basedbusinessmodels238–40digitallyenabledinvestmentplatforms149serviceprovider240DigitalPartnersecosystem538transformations236–8digitalplatformecosystem(DPE)51–4,87,90,valuearchitectureandvaluenetwork241–5367,370–71,380–81,461valuefinance245digitalplatforms40,161–3,177,189,212–16,valueproposition240–41218,220,227,236,239–46,370,460,467,digitalecosystems(DEs)29,31,33,52,367,368,532,534,664,692,731370–71,380,381,393,617,663,664,715,intheageofdigitization42–3724andassociatedecosystems234–5dynamiccapabilities60developmentof213emergingmodelsof732–3rapidgrowthin34manufacturingservitization735–8digitalsupplychains367,389–90masscustomization733–5blockchainand394–5digitalengagementplatforms,designprinciplesdigitaltechnologies40–43,146,149,152,196,for161–2207,370,459–60,524,549,586,667,673achievingmutualgrowth170anddigitaltransformation662SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

760Index749infrastructure482positivewelfareeffects353–5forsustainabledevelopment511–12economicprecarityinplatformwork444–6digitaltransformation3,4,13,17,45,161,economicrationality660232–4,246,387,389,394,537,541economicsofmutuality(EoM)458ofbuildingseconomyasecosystem11constructionandcommissioning657–88ecosystems11,25,73,298,405–19,530,549digitaltwininbuildinglifecycle686actors589intelligentbuildings(IBs)685–6adaptation26–9,31,33–4operationandmaintenance689ofAutoStore718–19planninganddesignphase686–7blockchainseeblockchain:ecosystemsrefurbishmentanddemolition690ofCarryPicksystem717–18digitaltechnologiesand662community-drivenblockchain411–12digitaltwins(DTs)ofbuildings680–84,686,690dataandmethods592digitization294,459,461,530,533,537–8digitalplatformsand234–5automotiveindustry533dynamicsandtrends591bankingandfinanceindustry536ineconomicresearch662customerbehaviorand530esportsand597–8asenablerforcircularbusinessecosystemsfundraising413–14460–61geographic553insuranceindustry537–8human550sportinggoodsindustry538–9integration592discardedend-of-life(EOL)modules475interdependencerisks414–15Disney29–30,32mapping329TheDisplaced571orchestration462–4distributeddenial-of-service(DDoS)attack390organizationsas80–81distributedledgertechnology(DLT)392,469expedientmetaphor81–2diversecompetencies532,664mergerandacquisition(M&A)activitydivestingbigdataresources700,70782–7dominantroleclusters330–31fromorganzationalconfigurationtodominantvaluecreationlogics181–2ecosystem87–90Döring,N.258perspectiveforbusinesses550–51doubts731platform550downscalingeffect,COVID-19pandemic445research561Doyle,G.4rightsmanagement412–13DrugSupplyChainSecurityAct372SixDragons416“dualityoftechnology”view426structure295,532,540,582duediligence(DD)139transaction412Dunn,B.33Edvardsson,B.197,198Dupont,D.665EEAseeEnterpriseEthereumAlliance(EEA)Dutot,V.150e-(electronic)commerce220–24dynamiccapabilities51,54–60,699EETprogramseeentrepreneurshipeducationanddefined54–5training(EET)programasdriversofplatform-basedecosystemsEisenhardt,K.M.7255–9eLancingplatforms442dynamiccapabilityview(DCV)51,54,55electricandhybridelectricvehicles(E&HEVs)dynamicdrivingtask(DDT)632466dynamicefficiency252,253electricenginetechnology636electronicsportsseeeSportseBay203electronicwaste(e-waste)524Echeverri,P.599Elia,G.112echochambers355Ellis,S.R.568e-commerceecosystem212–14,216,217,221emergingdigitalecosystems732–3economiceffectsofalgorithmicsearchandmanufacturingservitization735–8recommendationmasscustomization733–5negativewelfareeffects355–60emergingdigitaltechnologies727SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

761750Handbookondigitalbusinessecosystemse-mobilitysector,circularbusinessecosystemin“eSports:ANaturalLaboratoryforManagement466–8Research?”592Empiremagazine573Etgar,M.207end-of-life(EOL)482,484EthereumEnterpriseAlliance(EEA)372,375end-to-endvaluechaintransparency734EuropeanUnion’sGeneralDataProtectionengagementplatform(EP)161–2,174Regulation407digitalbusinessecosystemsand163–4Eymann,T.7servicelogicand164–5enrichingprocess700–701,708–9Facebook32,553–4EnterpriseEthereumAlliance(EEA)372,375facilitymaintenancemanagement(FMM)689enterpriseresourceplanning(ERP)software714facilitymanagementsystem(FMS)689entrepreneurialambiguities94–5,98–9,103fastcasualrestaurants620entrepreneurialecosystems21,143Fayard,D.121research111Feld,B.114entrepreneurialeducation146–7Feldt,J.7enablers151–2femaleentrepreneurship147–8,150,151,153,entrepreneurialpurpose95,96,99,100,102,103154entrepreneurship40,94,97,406,614,615,624–5challengesofandcrisisresponse616–17accesstofinance144–5digital95,97–9,101,102,113,143,146,entrepreneurialeducation146–7147,151,153socio-culturalchallenges147indigitalage42–5technologicalandinfrastructuralanddigitalenvironment617–18challenges145–6ecosystem109–11,114,119entrepreneurialeducationenablers151–2ecosystemsforstart-upsuccess109–10financeenablers148–9contextualfactors115–20innovativeness143–4researchdesign113–15international149–50sampledescription115socio-culturalenablers152–3theoreticalperspectives110–13technological/infrastructureenablers149–51femaleseefemaleentrepreneurshipFierro,J.J.C.129,130,137formalmoduleof151Figueiredo,B.600genderequalityin152film405,408–18paradigms113filterbubbles355research109,113,150financeenablers148–9entrepreneurshipeducationandtraining(EET)financeindustry536–7,541–2program146FinCENFiles292EoMseeeconomicsofmutuality(EoM)Finkelstein,S.132,139ERPsoftwareseeenterpriseresourceplanningFinTech71–2,536,541(ERP)softwareFleder,D.353ESLONECologne2019603–5,609Fleming,P.447eSports582–3FlextronicsInternational(Flex)734ecosystem596–600Floerecke,S.5,330–31,338activities591FMMseefacilitymaintenancemanagementactors589–90(FMM)architectures591FMSseefacilitymanagementsystem(FMS)componentsof589–91Fodor,M.253dataandmethods592FoodandDrugAdministration(FDA)372dynamicsandtrends591Ford,C.M.112industry7,587–94PLseefourth-partylogistics(4PL)integration592FourthIndustrialRevolution439managementresearch585–7fourth-partylogistics(4PL)241ESLONECologne2019,casestudy603–5,franchising624609Frank,A.G.728phenomenonof583–5FranklinJunction623–4serviceecosystem598–603,605Fraser,P.273,275SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

762Index751Fressnapf213–14,221–4GoogleShopping358Friedman,G.444Gordon,S.R.616Frizzo-Barker,J.407Götz,F.6,7Frontlineseries572governance182,370–72,374–7,380Frosch,R.A.11“grandtheory”ofstrategicmanagement64Fueglistaller,U.113Grant,R.M.699fullserviceprovider240–41Graybeal,G.M.7full-serviceupscalerestaurants618–19Greff,T.235fundraisingecosystems413–14Gregor,S.172Funk,D.597GRIseeGlobalReportingInitiative(GRI)Fyrberg,A.599Grieves,M.681–2Grilli,L.97Gackstatter,S.663Grönroos,C.198,206Gaenssle,S.5Gruber,M.98Gallopoulos,N.E.11Guardian572Garmaki,M.697Guerrero,R.5Gassmann,H.551Gulati,R.128,129GBSVseegeneticbreedingselectionvalueGunsberg,D.280(GBSV)Gupta,N.449G-Dlogicseegoods-dominantlogic(G-Dlogic)Gupta,R.586GDPRseeGeneralDataProtectionRegulationsGustafsson,A.599(GDPR)genderequality147Haapasalo,H.196,206inentrepreneurship152Hagiu,A.43GeneralDataProtectionRegulations(GDPR)372Hair,N.150“generativesensing”59Hamari,J.587geneticbreedingselectionvalue(GBSV)709–10Hamel,G.496geographicecosystems6,553Hamit,F.568George,G.46Hannah,D.P.72GermanFederalAssociationoftheDigitalHardebusch,C.685Economy(BVDW)114Hasenpusch,T.C.138GermanyHawley,A.H.11,550automotiveindustry534,541healthcareindustry375–6financeindustry541healthcaremarket7,662–8,670–75healthcaremarket662,663,665–8,675digitalbusinessecosystems(DBEs)in663–5originalequipmentmanufacturers(OEMs)Healy,J.450535,540Hedlund,D.P.599regionalITclusters254Heft,A.295,299,300XRindustry255,258,261Hein,A.234,245,370Gerring,J.684Heinen,E.310Ghezzi,A.617Helfat,C.E.52,58ghostkitchens618,620,623,625,626Henke,K.-D.665Gibson,J.J.427Hevner,A.R.165Giessen–Amsterdammodel113,114highservercapacity486gig-economy447Hilbolling,S.72contractors625Hillman,A.J.66platforms625Hohstadt,T.568“gigworkerbill”442Höjer,M.512Gioia,D.A.139Holling,C.S.391GlobalBatteryAlliance467Hölzle,K.7GlobalReportingInitiative(GRI)457home-basedonlineentrepreneurs150Gollhardt,T.280home-basedonlineventures152goods-dominantlogic(G-Dlogic)272horizontalintegration243,501GoogleNest737Horneber,C.4GoogleOpinionRewards200Horst,S.O.100SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

763752HandbookondigitalbusinessecosystemsHosanagar,K.353intangibleresources699–700hospitality615–16,624integrateddigitalbusinessecosystem214,215,Houck,S.556–7,561220,223,224Hrebiniak,L.G.65integratedIIoTPs186,188–90Huberman,A.M.166integration127–39Hughes,L.407“integrationalDD”139Hull,C.E.617,625integrationofdigitalstart-ups133–5humancapital110,117,121,619,620,625integrativecontentanalysis668humanskills699–700intellectualproperty(IP)85,136,232,374,378Hyperledger395intellectualpropertyrights(IPRs)84,412,413hyperscalers185–6,188–90intelligentbuildings(IBs)685–6interdisciplinary1–3,8,12,22,23IaaSlayer184,186,190internaldevelopment26–30,32,33,700Iansiti,M.11,82,531internaldigitalbusinessecosystems714–16IBsseeintelligentbuildings(IBs)internalplatformmodel573–4,576ICOsseeinitialcoinofferings(ICOs)InternationalIntegratedReportingCouncil(IIRC)ICTSeeinformationandcommunication457technology(ICT)internationalization,mergersandacquisitionIdealogmagazine573(M&A)86–7IFCseeIndustryFoundationClasses(IFC)InternationalLabourOrganizationIIRCseeInternationalIntegratedReportingrecommendation449Council(IIRC)InternationalOrganizationforStandardizationimbrication426–9,431,433–5(ISO)372implementationmodels570–77interneteconomics354independents80,81,83–9InternetofThings(IoT)19,177,212,390,510,industrialinternet401512,685,686,689,728industrialInternet-of-Thingsplatforms(IIoTPs)interoperability373,376,498,672177–9,183,184,186–90Ionity492,498,500classificationof188–9IoTseeInternetofThings(IoT)identificationanddescriptionof183–4IPSeeintellectualproperty(IP)valuecreationlogicsof186IPRsseeintellectualpropertyrights(IPRs)Industry4.0177,307,315,730–31,738Isenberg,D.111,114,121technologiesandimpact727–30Iskamto,D.100industrychallenges533–8ISOseeInternationalOrganizationforIndustryFoundationClasses(IFC)687,692Standardization(ISO)informationandcommunicationtechnology(ICT)Israeli,A.A.6152,110,145,513informationJacobides,M.G.47,418,477,550,553,561,582,asymmetries351,468,673598management498Jacquet,L.418informationtechnology(IT)52,327,374Jain,R.111andglobalization143James,O.604informatization402Jansen,S.280infrastructureenablers149–51Japanesecaseexamples397–9,401initialcoinofferings(ICOs)406Järventie-Thesleff,R.564innovation143,147,150–51,153,154,182,Jarzabkowski,J.605405,406,408,409,413–14,417–19,499,Jeglinsky,V.5670–71,684,739Johnston,W.566indigitalage42–5Joyce,W.F.65ecosystem405,406,409,417,586,681Julien,P.-A.616platforms217–18,222Jung,R.715InstituteofElectricalandElectronicsEngineersJupowicz-Ginalska,A.7(IEEE)640–41Jüriado,R.599insuranceindustry542InsurTechs537Kaewunruen,S.690SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

764Index753Kalra,N.641Lehner,F.5,338Kansheba,J.M.P.121Lehner,J.M.4Kapoor,R.414,418,549,550,552,553,559,Lemaire,A.663589Leonardi,P.M.429,433Katz,L.F.444Leone,R.601,602Keast,D.568leveragingprocess701Kenney,M.439Levien,R.11,82,531Khan,L.M.43Levy,M.568Khanna,T.127lifecycleassessment(LCA)690KIFsseeknowledge-intensiveservicefirmslifecyclemanagement(PLM)681–4,686–8,690,(KIFs)693King,D.R.3,131Likertscale258,259Kithae,P.P.145Li,L.128Klimmer,M.234limited-servicerestaurant621Klünder,T.6Limnios,E.M.101Knackstedt,R.333Lindstädt-Dreusicke,N.5knowledge-intensiveservicefirms(KIFs)99Lingens,B.618Kodak25,31Lippman,S.A.98Koenigstorfer,J.606literaturereview11,12,21,293,295,298–9,302,Köhn,A.113332–3,340Kolyperas,D.599Liu,Q.139Komorowski,M.253Li,W.143Konietzko,J.483locationdecisions250,251,254,255,262Kontny,H.7logisticsindustry376Kostovska,I.6,82,88,89,296,549,550Lohrenz,L.4Kotler,P.551Longhi,R.R.568Krause,P.J.715Lore,M.30Kraus,S.146,149Loy,J.510Krco,S.549,551LSAsseeleanstartupapproaches(LSAs)Kretschmer,T.52,53,57,361–3,370,371Lumpkin,G.T.127Kritzinger,W.682Lusch,R.F.164,196,197,272,598–603,606Kroiß,A.112luxuryindustry376–7Krueger,A.B.444Krüger,U.295,296MM&Aseemergersandacquisition(M&A)Kuckertz,A.616MaaSseemobility-as-a-service(MaaS)Kuhns,B.558McAdam,M.153Kukalis,S.254,262McAfee,A.460Kullik,O.7MacCarthy,B.L.5,734Küng,L.82,549McCauley,B.585,597Kunz,R.E.7Maciulis,P.663MacKenzie,I.350Lakhani,K.R.130McMillon,D.32Lammers,M.686macro-levelperspective96,101–3,109,110,114,Lappi,T.196,206118,122LaramieLive552,557–9MacromillCorporation650Larsson,R.132,139Mafimisebi,O.P.4Lasch,F.254Maglio,P.P.271last-milelogistics514–15,517managementcompetence244Lattemann,C.4,5,270,280mappingstudy22,23Lawrence,B.7analysisandfindingsof15–21LCAseelifecycleassessment(LCA)designof12–15leanstartupapproaches(LSAs)617–18March,J.26LeBlanc,G.254Markusen,A.252,263Lee,N.112Masak,D.532Leerhoff,M.3,8masscustomization731–5SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

765754HandbookondigitalbusinessecosystemsMatch.com623Mosch,P.4,178Matopoulos,A.195MozillaFirefox201–2Mattilsynet704MR-CMconnectivityplatforms187maturitymodels(MMs)5,270,272–3,275MROBlockchainAlliance377refinementof277–8Muff,K.100stagesandcharacteristics275–6,278–9multiple-casestudymethod569validationof277–80cooperativemodel570–73Matuschewski,A.254internalplatformmodel573–4Matzler,K.131partnership-platformmodel574–6Maurya,A.617virtualrealityimplementationinmediaandMa,Y.513digitalbusinessecosystems(DBEs),Mazzarol,T.101570–71Meckl,R.6,7multi-sidedmarkets213–18,439–41,446–7,450media351,356,405,407,409–12,414,418,564multi-sidedplatforms68digitalbusinessecosystems(DBEs)andMunoz,P.100566–7,570–71economics349–50N26(FinTechs)536–7virtualreality(VR)and567–8Nachira,F.271,387,566,715mediamorphosis564,568Nambisan,S.L.196,601,617Mediledgerconsortium376,380Nantel,J.354Mele,C.602NationalAeronauticsandSpaceAdministrationMercateo187(NASA)572,681mergersandacquisition(M&A)82–3,130–32,naturalsymbiosis499540navigatingdigitalwaters94–6internationalization86–7businessmodels96–8,100–102scale,diversification,andriskmanagemententrepreneurialambiguitiesindigitalage83–598–9verticalintegration85–6NBCNews572mesolevelperspective95,100–103,109,110,“NCConsortium”399121negativewelfareeffects,ofalgorithmicsearchmeta-study327–8,332–3,340–41355–60MFIsseemicrofinanceinstitutions(MFIs)Nenonen,S.602Michalke,S.4,5“netcode”591microfinanceinstitutions(MFIs)145Netflix25,30,31micro-levelperspective95,100–101,103,109,networkcollaboration461,464–7,699,734110,113,121networking260–64micro-management656–8,660neurologicaldiagnostics684middle-of-life(MOL)482–4neworganizationalforms292–4,297Mikalef,P.699newsecosystems303“milddigitalentrepreneurship”617,625“next-generationcompetition”55Miles,M.B.166NFSAseeNorwegianFoodSafetyAuthorityMinshall,T.138(NFSA)MMsseematuritymodels(MMs)NFTsseenon-fungibletokens(NFTs)MOBIseeMobilityOpenBlockchainInitiativeNie,J.689(MOBI)Nissen,V.5,237mobility-as-a-service(MaaS)640,642,644non-focalfirms250,251,262–4MobilityOpenBlockchainInitiative(MOBI)377,non-fungibletokens(NFTs)405,415380,382(non-)localnetworkfactors260–62Mogulfilmecosystem416,418Normann,R.497,602Möller,K.586NorthPig701–9monopolization356–7NorwegianFoodSafetyAuthority(NFSA)704Montag,L.6NorwegianResearchCouncil707Moore,J.F.1,11,126,195,271,329,387,463,Norwegianswinebreeding698,702–4,711477,479,493,498,531,550,566,663,Nsengimana,S.145,152681NYTMagazine571SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

766Index755Obermaier,R.4,178Pérez,L.129,130,137obstacles308–18,320–22Perry,D.E.717OCCRPseeOrganizedCrimeandCorruptionPershina,R.6ReportingProject(OCCRP)personaldata-sharingplatform-baseddigitalOEMseeoriginalequipmentmanufacturerecosystems647,648,655,656,659(OEM)PersonalDataTrustBank(PDTB)7,647–51,OilCityNews552,555–7655–60Ojasalo,J.164personalservices(PS)269,279,280Ojasalo,K.164digitalbusinessecosystems(DBEs)273,Ojo,N.M.E.4275,277–8onlinedigitalplatforms42digitalizationof270–71onto-epistemology6,427–31,433,434firms287–8ontology427–8Peter,P.6opencollaboration72Petersen,K.11,12openinnovation72petroleumindustry511OpenManufacturingPlatforminitiatives734Pfeffer,J.66opensmartecosystems736pharmaindustry376operandresources198–9,600,604Pharmaledgerconsortium375–6,378operantresources198–9,600–601,604PHIseeprivatehealthinsurance(PHI)order-picking714–23Phillips,M.A.592O’ReillyC.,26photovoltaic(PV)organizationalambidexterity26market475,476organizationalcapabilities55,699panel482–7organizationallearning26–8,32,34Picard,R.553,560organizationalsustainablecapabilities511,Pigneur,Y.100,236,333519–21Pilinkiené,V.663organizationofclusterdimension275Pinho,N.599OrganizedCrimeandCorruptionReportingplatformeconomy41,50–53,55–9,439–41,Project(OCCRP)298443–6,448,450originalequipmentmanufacturer(OEM)377,platformecosystems25,41,370–71,550,586,467,635–7,642,643647Orlikowski,W.J.428platformization42–5Osterwalder,A.100,236,333platformoperators485–6Osterwalder–Pigneurbusinessmodelapproachplatforms2–7,11,12,19,21,22113,114platformwork439–43,447–50out-of-clustergroup259–60economicprecarityin444–6ownershipversusservice640platformworkerOzcan,K.196,197employmentstatus441–3skilldevelopment443–4PaaSsolutions184Plé,L.199P-accreditation649PLMseeproductlifecyclemanagement(PLM)PaCEmodelseePassauCloudComputingPolishHBO573Ecosystem(PaCE)modelPolyientGamesPaddock,S.M.641ecosystem416partnerrelationshipmanagement520–21GovernanceToken416partnership-platformmodel574–7pop-up621–3,625,626PassauCloudComputingEcosystem(PaCE)Porter,M.E.66,236,252,665model5,327–8,330,341positivedirectnetworkeffects235passivecustomerdataintegration204positiveindirectnetworkeffects235Pattinson,H.566positivewelfareeffects,ofalgorithmicsearchPBSseePublicBroadcastingService(PBS)353–5PDTBseePersonalDataTrustBank(PDTB)potentialcustomerintentiontouse647Pedraza-Ramirez,I.585PoWseeproof-of-work(PoW)Peffers,K.214Prahalad,C.K.496,497Peltoniemi,M.567predictivemaintenance484,689SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

767756HandbookondigitalbusinessecosystemsPrewett,K.W.415reportingstandards457–8privacy359–60researchanddevelopment(R&D)27,28policy486researchprivatehealthinsurance(PHI)665design332–3processinnovation151implications32–3product-centricapproach533limitationsandopportunities33–4productinnovation151methodology12production307–12,315–18,320–22researchquestions(RQs)109–10,293,405productlifecyclemanagement(PLM)681resilienceissues,indigitalsupplychains390–92productmanagement521resiliencethinking391product-serviceecosystem(PSE)479resource-basedview(RBV)55,699product-serviceproviders483–4resourceintegration194–9,207,599,600–602,product-servicesystems(PSSs)465,475604,605professionalvideogaming587resourcesmanagement700–11projects308–12,315–22restaurantbusinessinUS614–15,618–21stakeholders687delivery-basedrestaurant620–21proof-of-work(PoW)392fastcasualrestaurants620PSseepersonalservices(PS)full-servicecasual/familydiningvenues619PSSsseeproduct-servicesystems(PSSs)full-serviceupscalerestaurants618–19PublicBroadcastingService(PBS)572modelcomponentspublicEthereumplatform375business-to-business(B2B)623Pury,C.L.S.445business-to-business-to-consumer(B2B2C)623–4qualitativeanalysis668business-to-consumer(B2C)621–3qualitativeapproach409,609restaurants617,624–5qualitativemethodology410returnoninvestment(ROI)233qualitativeresearch409–10,674RFIDseeradio-frequencyidentification(RFID)qualityofcare,improvementin669–70Riasanow,T.531quantitativecross-sectionalanalysis330Richter,N.111–12quantitativeresearch609Ridley,J.686questionnairesurveyprocess650–51,655Rietveld,J.567quick-servicerestaurants619–20Riggins,S.558,560rightsmanagementecosystems412–13Ritala,P.214,592radio-frequencyidentification(RFID)735Ritchie,B.W.615Rahman,Z.194,197,199Ritzrau,W.6Ramaswamy,V.196,197,497rivalryvs.cooperation66–7Ramirez,R.497robots,artificialintelligence(AI)-powered424–7,Raubitschek,R.S.52,58433–5reactiveprocesssteering722affordancesfor426–8,431,432,434,435real-timedatagathering716constitutiveentanglementfor426–8,431,real-timelocationsystems(RTLSs)689435real-worldcases4,195,199–204,207imbricationfor427–9,431,433–5Reboud,S.101sociomaterialityin430–33recommendations309,318–22,332,333Robra-Bissantz,S.4,280recommendationservices350–53robustness716,722,723RedCollarGroup734Romanelli,M.513“redqueen”theory64–5Rosemann,M.6Reelitz,C.7Rose,R.7refurbishmentanddemolition690Roth,A.7regionalclusters252Rothaermel,F.T.128regressionanalysis262Rothschild,M.11Reichel,A.615Roundy,P.T.121Reijula,J.685RTLSsseereal-timelocationsystems(RTLSs)Reisinger,S.4Rumelt,R.P.98Reitman,J.G.583,584,598SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

768Index757SaaSseeSoftwareasaService(SaaS)service-dominantlogic(S-Dlogic)196,198,206,SAEseeSocietyofAutomotiveEngineers(SAE)272,586,596–9,605saferroads641–2valueco-creationinserviceecosystemsSahl,J.C.111–12598–600Salam,A.510serviceecosystems164–5,196,586,596,597,Salancik,G.R.66605–6,609SánchezLaws,A.L.568eSports598–603,605sandbox408–9,416service(s)Santiago,S.B.280logic162–5,173,174SAPHybrisInstance222providers484–5,666SAPSupplyNetworkCollaboration(SNC)734withahighpublicnature647Sarasvathy,S.D.94,616virtualization246SASBseeSustainabilityAccountingStandardservice-systemapproach597Board(SASB)servitization533,535–8,728,732,733,735–8scalability50,372,374,498,717,722–3Shane,S.127scaleeffects356–7Shepherd,D.A.109,113Scaraboto,D.600SHIseestatutoryhealthinsurance(SHI)scenario732–8Siemon,D.4,5Schaffnit,M.715Simon,H.94Schatsky,D.370Singh,P.J.5Schildhauer,T.112Siringi,E.M.148,149Schilling,M.A.567Sirmon,D.G.711Scholz,T.M.583–4,587–9,598Sissing,A.604Schreyögg,G.310SISSwimsuitApp573Schroeder,A.N.6SixDragonsecosystem416Schultz,C.P.6Sjöblom,M.587Schumacher,N.4Skålén,P.599Schumpeter,J.A.113,121,128Slaughter,M.P.100Schütte,R.4Slettli,V.K.7Schwab,K.439SLRsseesystematicliteraturereviews(SLRs)Schwarzkopf,C.112smallandmedium-sizedenterprises(SMEs)46,Schweer,D.111–12128,239,567SCMseesupplychainmanagement(SCM)smartbuildings685–6Scott,S.V.428smartcapital131Scott,W.R.601smart-circularproduct-serviceecosystemsSCPSEsseesmart-circularproduct-service(SCPSEs)6,475–7,480–83,485,486ecosystems(SCPSEs)circularproduct-serviceecosystems480SDBMCsseesuccess-drivingbusinessmodeldigitalbusinessecosystems477–9characteristics(SDBMCs)forphotovoltaic(PV)panels482–6S-Dlogicseeservice-dominantlogic(S-Dlogic)businessmodel482–3searchalgorithms351platformoperators485–6Sears25,31product-serviceproviders483–4seizing54,56,58,59serviceproviders484–5entrepreneurialopportunities96–8product-serviceecosystems479Selonke,J.234smartproduct-serviceecosystems480semi-structuredexpertinterviews132–3,533smart-circularPSS(SCPSS)481,482,486semi-structuredsurvey668smartcontract369–70Senecal,S.354algorithm392–3sensing54,56,58,59SMEsseesmallandmedium-sizedenterprisessensors633,684(SMEs)fusion634SNSsseesocialnetworkingsites(SNSs)technology662socialacceptance644,648,659Senyo,P.K.163,196,271,370,387,448,477,socialnetworkingsites(SNSs)152532,565–7,648,681,698SocietyofAutomotiveEngineers(SAE)631service-basedbusinessmodels475SocietyofProfessionalJournalists553SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

769758Handbookondigitalbusinessecosystemssocio-culturalenablers152–3Subramaniam,M.126,737sociomateriality428–9,434–5subscriptionvideo-on-demand(SVoD)servicesinAI-poweredrobots430–3385ofintangiblerobot435success-drivingbusinessmodelcharacteristicsinorganizationalresearch426(SDBMCs)328,332,333,335SoftwareasaService(SaaS)5,185,327–8,successfactors328,332–5,339–40330–33,335,338–41Suhr,M.5softwaredevelopmentkits(SDKs)218Sullivan,D.M.112softwareecosystem643super-indies80,81,83–9Sokół,K.7supplierservices219SolarCoininitiative512supplychainmanagement(SCM)387,388Spigel,B.4,114applications368–9,372,381sportinggoodsindustry538–9,542–3supplychains367–78,380–83,393–4,630,634,SportsIllustrated:Swimsuit(SIS)573637Spotify354architecture394–7,401stabilizingprocess700,707–8,710digital367,389–90Stafford,G.615blockchainand394–5Stanford,J.447integration127Stanley,J.566,567resilience391,401,402start-ups126–39services219ecosystem110traditional388–9,393,401entrepreneurshipperformance115–20supply-sidenetworkeffects181,188success110,111,113,121,727Sussan,F.147statutoryhealthinsurance(SHI)665sustainability3,5,6,500–507,510–16,520–24,Stein,V.587731Steven,M.6demands510Storbacka,K.602indigitalbusinessecosystems493–9strategicmanagement3–5,63–6,73–5challengesof498strategictensions63–4,73–5objectivesof499choicevs.determinism64–6propertiesof496–8indigitalbusinessecosystems67–9reportingstandards457–8rivalryvs.cooperation66–7SustainabilityAccountingStandardBoardstrategy(SASB)457capabilities699sustainabledevelopment510ofclusterdimension275advanceddigitaltechnologiesfor511–12andoperationalcapacityplanning520sustainabledigitalbusinessecosystemsstructuralflexibilityofecosystems52circularbusinessecosystems460–61structurationmodeloftechnology426circulareconomyindigitalbusiness“structure–conduct–performanceparadigm”64ecosystems459–60structuringbigdataresources700,710economicsofmutuality458structuringplatform-centereddigitalbusinessnetwork-leveltransformationecosystems214–16ecosystemorchestration462–4additionalbusinessactorsin219valueco-creation461–2businessactors218sustainabilityreportingstandards457–8businessprocess,application,andvaluebalancing458–9infrastructurelayer219–20SVoDservicesseesubscriptionvideo-on-demandinnovationplatform217–18(SVoD)servicesreseller216swinebreeding698,701–11strategylayer216symbiosis370,698traditionalbusinessecosystem,businesssymbioticreporting457,464–70actorsin218SynQ719transactionplatform216–17systematicliteraturereviews(SLRs)12Stuart,T.E.129systemautomation686Sturmer,A.3system-levelarchitecture550Stych,M.686SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

770Index759TaaSseetransportation-as-a-service(TaaS)traditionaloriginalequipmentmanufacturersTaiwanSemiconductorManufacturingCompany(OEMs)534(TSMC)52traditionalprofitandloss(P&L)458takeovers80,81,87,90traditionalretailers212Tanaka,S.7traditionalsupplychains388–9,393,401Tan,C.698–9transactionecosystems412tangibleresources699–700transactionplatforms213,216–17,219,221–2,Tasioulis,S.418224Taylor,N.583,597transactionverificationfunctionality407TEArateseetotalentrepreneurialactivity(TEA)transdisciplinarityofdigitalbusinessecosystemsrate(DBEs)3technologicalecosystem215,400,586transforming(reconfiguring)54–6,58,59technological/infrastructureenablers149–51transportationtechnologicalintensity533,535–9services639technology(ies)426systems642–3adoption393,727transportation-as-a-service(TaaS)640ofclusterdimension275trust648,658competence244Tse,A.C.615fordigitalwarehouseecosystems,casestudyTSMCseeTaiwanSemiconductorManufacturing717–19Company(TSMC)providers371Tsujimoto,M.7Teece,D.J.50,51,54–5,57,59,531,586Tushman,M.26Teichert,M.7Twitter553,554,559Teichert,R.275,278–80telecomcompanies435uncertainty731telecommunicationinfrastructures644Unger,J.M.111televisionproduction,caseof80–81UnitedKingdom(UK)EconomicandSocialexpedientmetaphor81–2ResearchCouncil80,81mergerandacquisition(M&A)activity82–3UnitedNationsCentreforTradeFacilitationandinternationalization86–7ElectronicBusiness(UN/CEFACT)376scale,diversification,andriskUnitedNations(UN)SustainableDevelopmentmanagement83–5Goals465verticalintegration85–6UnitedParcelService(UPS)printingservices734fromorganzationalconfigurationtoUnitedStates(US)ecosystem87–90CensusBureau553Telkmann,V.5DepartmentofLabor442thematiccontentanalysis410DrugSupplyChainSecurityAct(DSCSA)thematicgroupofadoptionrisk415376,382Thomas,L.D.W.212FoodandDrugAdministration(FDA)372“threatofcompetitiveinnovation”58restaurantbusiness614–15,618–23three-dimensionalterrestriallaserscanning(TLS)UnitedTechnologyBuildingsSystems(UTBS)688Corporation685Time575urbanization534Tiwana,A.217urbanprojectionandecologicalimpact640–41top-downapproach110UTBSCorporationseeUnitedTechnologyToschka,A.7BuildingsSystems(UTBS)Corporationtotalentrepreneurialactivity(TEA)rate143TradeLensconsortium376,380valuetraditionalbusinessecosystem214,218,221,appropriation127–30,132,135–9222,227architecture237,241–5traditionaldiagnosticandmaintenancemethodsbalancing458–9684capture128,130,135,136,138traditionalecosystems3,25,26,28,31,33,213ofdigitalbusinessecosystem219traditionalmediaproductionchain564,570finance237,245network237,241–5SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

771760Handbookondigitalbusinessecosystemsproposition237,240–41vomBrocke,J.165andvaluecreation127–8vonFriedrichs,Y.154ValueBalancingAlliance458VOSviewer494value-basedhealthcare(VBH)approach665VPPsseevirtualpowerplants(VPPs)valuechain,shiftin642VRLovecraftCountry:Sanctum572valueco-creation161–6,168,170–74,194–204,VRtuallyThere574206–8,271,411,457,458,461–5,468–70,Vuori,E.567476,482,483,498,514,542,576,596–603,605–6,609,664,673Wajcman,J.146valuecreation50,127–32,134–9,292,530–33,Wald,A.E.121535,538–43,601WalkingNewYork571logics179,190Walmart30–31,33basiccharacteristics179–80WaltDisney26ofCIoTPs183,187–9Wang,J.615dominant181–2warehousemanagementsystems(WMSs)721ofIIoTPtypes183,186–9WashingtonPost573–4supporting180–81Watson,R.T.273,332throughstart-upintegration126–7Wattpad201–2academiccontribution137–8web-basedsurvey340inalliances,partnerships,andopenWebster,J.273,332innovation129–30Web2.0technologies139researchdesignandresults132–7Weifenbach,M.4valueand127–8WelcometoYourCellpublication572andvalueappropriation128,130–32Werth,D.235ValveSoftware603West,J.130VanBrocke,J.332WFCFsseewomen-focusedcapitalfundsVanHorne,C.150(WFCFs)Vargas,A.698White,J.101Vargo,S.L.164,196–8,272,598–603,606willingnesstogain(WTG)649–51,659,660VBHapproachseevalue-basedhealthcare(VBH)willingnesstopay(WTP)648–9approachWillZhao,W.G.6Venkataraman,S.127Winkelmann,A.333venturecapital(VC)120–22Winkler,H.5investors109,110,115,118–20,122WMSsseewarehousemanagementsystemsverticalintegration243(WMSs)mergersandacquisition(M&A)85–6women-focusedcapitalfunds(WFCFs)149Vickers,J.681,682Wood,A.J.445Vink,J.280Woratschek,H.599virtualization233WorldEconomicForum514virtualmodel683,684,688,690WTGseewillingnesstogain(WTG)virtualpowerplants(VPPs)203WTPseewillingnesstopay(WTP)virtualprocess233,236Wulfert,T.4virtualreality(VR)250,255,564–5Wu,Q.442media567–8Wynne,B.432digitalbusinessecosystems(DBEs)andWyoFile552,554–5,560566–7Wyoming(WY)552–7,559–61methodology569–70multiple-casestudyanalysisXerox499cooperativemodel570–73Xie,C.196internalplatformmodel573–4Xometry734mediaanddigitalbusinessecosystemsXRseecrossreality(XR)(DBEs)570–71partnership-platformmodel574–6Yang,Y.6researchquestions568–9Yin,R.K.214Voima,P.198,206Yoo,Y.460SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

772Index761YuCui5Zeyen,A.100Znotka,M.100Zabel,C.5,253Zott,C.96,127,130Zahra,S.A.46,109Zysman,J.439Zangemeister,C.500,505SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary

773SabineBaumann-9781839107191DownloadedfromPubFactoryat05/28/202210:27:26AMviaColumbiaUniversityLibrary