August 6, 2014

Networks, Communities, Ecosystems and Platforms

I’m now home after 3 conferences and 2 weeks on the East Coast. During the trip, much of my time — and all of my speaking roles — was spent talking about networks, communities, ecosystems and platforms.

Maybe I’m getting crotchety in my old age, but it seems like there’s some sloppiness in the use of these terms by innovation scholars. Since this is my main area of research — both for the past decade and probably another decade to come — I’d like to summarize some of my thoughts on these constructs, with pointers to the literature.

Two-Sided Markets are not Platforms

Van Alstyne and West
I started my trip at the Marshall Van Alstyne and Geoff Parker conference at Boston University, which they dub the Platform Strategy Research Symposium. It was somewhat of a misnomer, as most of the economists who visited the conference (although not the hosts) took “platform” as a synonym for “two-sided market.”

For Silicon Valley and most researchers, the “platform” definition is the sort of ICT platform identified by Bresnahan & Greenstein (1999) and studied by Gawer & Cusumano in their 2002 book. All of these are two-sided markets: Microsoft convinces gamers and game writers to join the platforms. But not all two-sided markets are platforms: cf. CraigsList or Match.com

My own paper attempted to map the platform concept onto my current employer’s interests: as Kevin Boudreau kindly told me last weekend, if you send a platform guy to a biotech institute then interesting things will happen. He tweeted the (very rough) conference paper to his followers, but I hope to have a much better version at a journal Real Soon Now.

Perhaps the most insight I got during the two weeks — certainly on platforms — came from the comments of Carliss Baldwin. The first was during QA on my paper at BU, the second was as the formal discussant for a AOM 2014 session on platforms featuring research Gawer, Liz Altman and others. If you ever want to learn what platforms are really about, be in the room when Baldwin is speaking — she cuts to the heart of the matter with an insight and clarity that are almost never found in academic journals..

Open Innovation Communities

At AOM, I had two key opportunities to discuss communities. One was in presenting my own (conditionally accepted) study of consumer 3D printing, written with George Kuk. The 3D printing world looks like the open source hardware communities of Raasch et al (2009), which in turn look a lot (but not exactly) like open source software communities.
Von Krogh and Lakhani

The other was kicking off a great communities panel at AOM with papers by Georg von Krogh, Karim Lakhani, Christina Raasch and Sonali Shah (irreverent discussion by Chris Tucci). In a session hosted by Jonathan Sims, we focused on how firms work with communities, i.e. the open innovation application of communities.

For this, I recommend Lakhani’s conceptual work. Lakhani is mainly known nowadays for his empirical work on crowd sourcing and other communities and platforms — frequently co-authored with Boudreau. But (IMHO) it is two lesser known conceptual papers by Lakhani that best cover firms and communities.

The first of Karim’s conceptual papers is West & Lakhani (2008). It was published in the Dahlander et al (2008) special issue of Industry and Innovation, which in turn was based on a 2007 EURAM conference track on firms and online communities. The Dahlander et al intro article is currently listed as the “most read” article published by the journal, while W&L is listed sixth on its “most cited” list. (According to a 2009 study, this paper is one of two by Lakhani that makes him the crucial boundary spanner between OI and UI in the first decade of the 21st century).

The other paper is newer and somewhat less known: an under-appreciated O’Mahony and Lakhani (2011) chapter in Research on the Sociology of Organizations. Today, this is the best published discussion I’ve seen on firms and communities, although in the future I hope to add additional work alongside this.

Networks, Communities, Ecosystems and Platforms

Teece
Perhaps the highlight — certainly the greatest honor — of the two weeks came as a discussant for an AOM panel on innovation ecosystems by Luigi Marengo (frequent co-author of Giovanni Dosi), Ray Miles, Chuck Snow (of Miles-Snow fame) and David Teece. These people didn’t know who I was, so I was honored by that the organizer (Sohyeong Kim of UC Berkeley) was willing to consider me as a discussant.

Since I wasn’t going to tell these senior scholars how to improve their work, instead I tried to link the papers together and offer the more junior scholars (i.e. all of us) some ideas of how to extend this work.

To the former point, I quoted from my recent brief (pp. 72-74) contrast of networks, communities, ecosystems and platforms from West (2014), i.e. Chapter 4 of New Frontiers in Open Innovation. Here’s that slide (with an error on the self-citation):


For the latter, the suggested extensions to their respective work is included in the slide deck, which I have posted to SlideShare.

Conclusions

Networks, communities, ecosystems and platforms are increasingly important to technology-based firms, in understanding inter-organizatonal collaboration, in explaining differences in firm outcomes and of course for the study of open innovation.

The cumulative process of open science requires that we use terms consistently to mean the same constructs with the same definitions. Physicists agree on a common definition of gravitational, magnetic and bosonic fields or the whole field (so to speak) would come apart.

So while any concept (e.g. network, platform) can be refined, extended or limited, the terminology should be used consistently. A platform is not the same as a two-sided market or an ecosystem, even though it may have similar attributes to both.

Given my interest (and expertise) here, I’ll probably blog disproportionately on this going forward. C’est la vie.

References

Bresnahan, Timothy F., and Shane Greenstein. "Technological competition and the structure of the computer industry." Journal of Industrial Economics 47, 1 (1999): 1-40.

Dahlander, Linus, Lars Frederiksen, and Francesco Rullani. "Online communities and open innovation." Industry and Innovation 15, 2 (2008): 115-123.

Gawer, Annabelle, and Michael A. Cusumano. Platform Leadership. Harvard Business School Press, Boston (2002).

O'Mahony, Siobhan, and Karim R. Lakhani. "Organizations in the shadow of communities." Research in the Sociology of Organizations, 33 (2011): 3-36.

Raasch, Christina, Cornelius Herstatt, and Kerstin Balka. "On the open design of tangible goods." R&D Management 39, 4 (2009): 382-393.

West, Joel, “Challenges of Funding Open Innovation Platforms: Lessons from Symbian Ltd.,” Chapter 4 in Henry Chesbrough, Wim Vanhaverbeke and Joel West, eds., New Frontiers in Open Innovation, Oxford: Oxford University Press, 2014, pp. 71-93.

West, Joel, and Karim R. Lakhani. "Getting clear about communities in open innovation." Industry and Innovation 15, 2 (2008): 223-231.

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