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

1. Krakow, 2-4 June 2005 “Digital Ecosystems”:The Next Frontier for SMEs and European Local Regional Clusters? EISCO’ 2005:i2010 (eEurope): New Horizons, New Tasks for Local and Regional Governments Gérald Santucci European Commission – DG Information Society and Media Head of Unit “ICT for Enterprise Networking“

2. Towards a Global Dynamic Competition Industrial District Business Ecosystem Growth Node Virtual Cluster • More interrelations • More specialised resources • More R&D / innovation • Accessing to global value chain • Accessing to knowledge How to reach the critical mass of resources?

3. Different Views to Ecosystem Metaphor • Biological Ecosystem • Tightly knit into a global continuum of energy and nutrients and organisms – the biosphere. • Dynamic, constantly remaking themselves, reacting to natural disturbances and to the competition among and between species. • Industrial Ecosystem • Frosch and Gallopoulos, 1989 • To bring the principles of sustainable development into all kinds of industrial operations. • Economy as an Ecosystem • Rothschild, 1990. • The basic mechanisms of economic change are remarkably similar with those found in nature – main difference is speed. • Organisms and organisations are “nodes in networks of relationships”. • Social Ecosystem • Mitleton-Kelly, 2003. • Organisations are co-evolving within a social ecosystem.

4. Business Ecosystem • J.F. Moore, 1993 & 1996 • Customers, lead producers, competitors, other stakeholders. • “The keystone species” influence the co-evolutionary processes. • Interaction (within a business ecosystem); decentralised decision-making and self-organisation. • Core capabilities are exploited to produce the core product. • M. Iansiti and R. Levien, 2004 • A large number of loosely interconnected participants who depend on each other for their mutual effectiveness and survival. • Fragmentation, interconnectedness, co-operation, competition. • Three critical success factors: Productivity; Robustness; Nice creation. • Four different roles: Keystones; Niche players; Dominators; Hub landlords. • T. Power and G. Jerjian, 2001 • A system of websites (“organisms”) occupying the World Wide Web (habitat”), together with those aspects of the real world with which they interact. • Becoming a networked business = changing everything that the company does. • Four stakeholders: communities of shareholders; employees; businesses; customers.

5. Inter-organisational and Collective Strategies in SMEs • Astley & Fombrun, 1983: • “Collective strategy is a systematic response by a set of organisations that collaborate in order to absorb the variation present in their environment” • Gueguen & Pellegrin-Boucher, 2004 • Dialectics of competition strategies vs. co-operation strategies • Co-evolution: more co-operation yet maintaining a high level of competition • Co-operation and competition are embedded in the “culture” of business ecosystems

6. A New Concept to Understand Today’s Business “Collective Strategies” Complex interactions D E E P E N I N G Business ecosystems Game theory Multipoint/multi-market competition Simple interactions Pure & perfect competition Homogeneous actors Imperfect competition Heterogeneous actors ENLARGEMENT

7. Increased complexity in Business Networking

8. Digital Ecosystem: the Vision • An approach promoted by DG INFSO-D/5 • A “digital environment” populated by “digital species” • software components, applications, services, knowledge, business models, training modules, contractual frameworks, laws, etc. • The environment enables species to behave like species in the natural world • Interact • Express an independent behaviour • Evolve – or become extinct – following laws of market selection

9. Growth lead to Competitiveness,market & internal efficiency provide resources improve improve “Digital Ecosystem Infrastructure” catalyse Cooperation & innovation networks ICTs improve shape& foster support Biology Open Source Evolutionary infrastructure enhances encourage makeviable supports supports New organizational & business models Policy Digital Ecosystem: the Strategy A commercial environmentwhere s/w developers, service providers and service users can tradeprofitably and competitively on a new ‘Common Land’ Derivative work from P.Dini - London School of Economics Economic growth in the knowledge based economy requires a broad deployment and use of ICT by enterprises and public institutions

10. The Key Actors: SMEs • 19 million enterprises in Europe • 99.7% are SMEs, 93% are micro (< 10 • employees) • ICT skills usually from outsiders • Providing SMEs with customised ICT applications & services for improving their efficiency (through process and organisational integration) and for extending their business beyond local barriers

11. The Key Actors: ICT-related Organisations • System integrators • Service providers • Software component developers • Open source communities • Open systems developers • Enabling these organisations to keep and preserve their knowledge and the possibility to develop/integrate ICT-based applications

12. The Key Actors: Regions • From traditional rural economy to e-economy • Connectivity  high-speed fibre-optic telecom network; wireless in areas where cable is uneconomic • Digital literacy  ICT-enabled social and entrepreneurial activities • Promoting regional economic growth, competitiveness and employment • Rejuvenating industrial areas through adoption of distributed, networked and open systems • Networking of SMEs and experimenting with new services and new business models • Synergies with the Structural Funds

13. Technical Infrastructure Governance & Industrial Policy Human Capital, Knowledge & Practices Legal Framework & Financial Conditions Digital Ecosystem and Regions Support of regional research-driven clusters associating universities, research centres, enterprises and regional authorities

14. Digital Ecosystem: the General Architecture Applications and processes Framework, Middleware, Infrastructure Platform Semantic Platform

15. Looking Ahead • IST-FP6 Call 5 “ICT for Networked Businesses” • Digital business ecosystems for SMEs • Open-source distributed self-adaptive environment and models enabling SMEs to co-operate for design, development of flexible and adaptable components interoperable with proprietary systems • Support of spontaneous composition, sharing distribution of business solutions and knowledge • IST in FP7 • Technology Pillar “Software, Grids, security and dependability” • Application Pole “ICT supporting business and industry” • New forms of dynamic networked co-operative business processes, digital ecosystems • i2010 • Take-up of ICT  an integrated policy on e-business giving special attention to SMEs

16. i2010 – What is different from eEurope? • Convincing evidence of the positive effects of ICT • e.g. SMEs to take up ICT, and more investment in R&D • ICT world is more mature and global => from a pilot phase to wide deployment • Covers the whole chain of EU Information Society and Media policies • Regulation, research and deployment • Emphasis on convergence, networking, content, public services and quality of life • New ways to implement

17. Conclusions • The business environment tends to become truly “knowledge-centric” instead of “document-centric” • Clustering/networking of SMEs, CRM and SCM solutions • Business performance of SMEs throughout lifecycle • Effecting collaborative content/knowledge creation • Increasing the effectiveness of SMEs’ valuable business asset – knowledge • Digital Business Ecosystem to become the Internet’s new ‘Common Land’ • Knowledge is a ‘good’ augmented by its use and consumption • Like the Internet itself, no one owns or controls knowledge • The open road to the Lisbon goals through i2010

18. Thank you!