The Digital Business Ecosystems

Radical changes in the geography of costs, production, human and social capital, have affected the organization of business activities modifying the traditional dimensions both geographic and sectoral. Business organisations have reacted by decentralising production and innovation, shifting activities to external partners and adopting distributed, modular organizational structure that has given way Business Ecosystem: a loose network of suppliers, distributors, outsourcing firms, that work cooperatively and competitively to support new products, satisfy customer needs, and incorporate innovations (Iansiti and Levien, 2004; Moore, 1996). The diffusion of information and communication technology has allowed organizations within business ecosystems to use Internet-based technologies in conjunction with face-to-face interactions in order to undertake and coordinate joint tasks. Each organization adds one or more distinct aspects of product/service value to the value generated by the ecosystem, by exchanging digital knowledge with other members: business ecosystems evolves into Digital Business Ecosystem (DBE). At meso level, DBEs show an evolutionary dynamics. As described by Saviotti (2001), the structure of these networks emerges when the individual components of the systems, which are initially combined in a random way, assemble in particular organizations, whose interactions are influenced by institutions. At first the new structure is loosely organised, but gradually becomes more interconnected and rigid. This structure becomes instable due to changing environmental conditions both in internal and outside existing institutions and organizations, in the sense of requiring new firms and new institutions to define the rules. Such rules will be available ex-ante, but also can be created simultaneously with the diffusion of innovation. Because of their dynamics, DBEs seem to be suitable to be modelled by metaphors and analogies coming from biology and complexity theory. As suggested by Iansiti (2004), the biological ecosystem can provide a powerful analogy for understanding these business networks: like a biological system, a DBE is a non homogeneous community of entities, made up of a large number of interconnected participants, with different interests, who depend on each other for their mutual effectiveness and survival, and so are bound together in a collective whole. Moreover, the DBE structure, the relationships among members, the kinds of connections existing between them, the differing roles played by the members, follow a path quite similar to the ones of a biological ecosystem. Key issues become then: What are the specific characteristics and the dynamics of DBEs? How is it possible to model them? How can we develop and support DBEs by facilitating their flows of information and their business-to-business, business-to-consumer, and business-to-government interactions?