Digital Business Ecosystems: ICT in support of Lisbon Agenda

1. Advanced International Summer School “e-Business and Complexity: New Management Practices” 2005 Session: The emergence of Novel Organisational Forms in the Globalising Planet:Toward the Business Ecosystem ? Digital Business Ecosystems:ICT in support of Lisbon Agenda F. Nachira European Commission DG-INFSO - Unit “ICT for Enterprise Networking” Head of Sector “Technologies for Digital Ecosystems“

2. Lisbon Objectives: “ a strategic goal for the next decade” To become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion.

3. ICT key role • ICT adoption • Responsible of 40% growth in productivity • ICT as sector • 6% GDP 6% employment • Integration in good and services • Strategic sector “The EU needs a comprehensive and holistic strategy to spur on the growth of the ICT sector and the diffusion of ICTs in all parts of the economy” Kok report

4. New strategic framework:i2010 initiative • Comprehensive and holistic approach: • Umbrella initiative for EU Information Society and Media policies (regulation, research and deployment) • Three priorities: • Completing the Single European Information Space • Strengthening innovation and investment in research • Achieving an Inclusive European Information society

5. i2010 - Community Actions • Legislation, regulation • Financial support: Two distinct and complementary financial instruments • CIP: To drive forward innovation through the adoption and best use of ICTs • FP7: To strengthen Europe’s leadership role in mastering and shaping the development of ICTs • Coordination, consensus-building

6. Knowledge, products and services(for growth and jobs) i 2010 Innovation New technologies, applications Technology trends. Vision of the future ICT in CIP Uptake and best use Research ICT in FP7 Research shaping ICT development User needs evolving requirements Uptake barriers (legal, economic,..) Acceptability of solutions New research challenges

7. Putting the knowledge triangle at work research: “Triangle of knowledge” education innovation • Europe must perform better • in producing knowledge through research • in applying it through innovation • in diffusing it through education Europe needs to investmore and better

8. CIP Competitiveness and Innovation framework Programme • New programme to boost growth and jobs in Europe • By providing horizontal measures supporting competitiveness and innovation • Entrepreneurship (SMEs) & innovation • By addressing three main “technological” domains underpinning the whole economy • Eco-innovation (environment) • ICT Policy Support • Intelligent Energy (energy efficiency & renewable energy) • ICT Policy Support : • Stimulates innovation through wider adoption and better use of ICT

9. ICT in FP7: Objectives,Main Themes • “To enable Europe to master and shape the future developments of ICT so that the demands of its society and economy are met” • ICT Technology Pillars • Software, Grids, security and dependability • Integration of Technologies • Applications Research • providing the knowledge and the means to develop a wide range of ICT-based services and applications • ICT supporting businesses and industry (business processes; collaborative work; manufacturing) • Future and Emerging Technologies

10. Create favourable conditions Service & technical Infrastructure How to create a favourable environment for business and people: a socio-economic eco- system ? Governance regulations & industrial policy Human capital, knowledge and practices Business & financial conditions • Create a climate conductive to investments, innovation and enterpreneurship: the conditions for • Attracting biz and entr. direct investments • Attracting enterprises • Attracting skilled and qualified workforce Paradigm shift: from planningto nurturing a business ecosystem

11. Peculiaritiesof EU economical structure • Cultural diversity (model of business, approaches, practices, …) • Dimensions of enterprises (SMEs vs. LE) • Historical presence of clusters with diffused tacit unstructured knowledge, skills and infrastructure Turn peculiarities and diversity into into competitive advantages How ICT could support? Which ICT ?

12. SMEs :a weakness or a potential for Europe ? Threshold (“Activation energy”, and Digital Divide) • Knowledge-base economy: migrating towards service economies mediated by ICT • More interrelations • More specialised resources • More R&D / innovation • Small companies have limited specialised resources • Access to global value chains • Access to knowledge • Access to specific services (e.g. legal) • Threshold and Digital Divide SMEs

13. SMEs in a Dynamic knowledge-based global economy Industrial District Business Ecosystem Growth Node Virtual cluster • How to reach the critical mass of resources ? • How to cope with the increased complexity ?

14. Which ICT technology for business ecosystems ? • Scenario: • “… the actual slowly changing network of organizations will be replaced by more fluid, amorphous and often transitory structures based in alliances, partnership and collaborations”... • “…building a community that share business, knowledge and infrastructure”(1) “To support this scenario of aggregation of services and organizations, is required a further stage in ITC technology adoptions and an infrastructure which exploits the dynamic interaction (cooperation and competition) of several players in order to produce systemic results; innovation and economic development.” “Towards a Network of digital business ecosystems fostering the local development ” (EC, Discussion paper, 2002)

15. Evolution in ICT-adoption: Increased complexity in business networking key role of the knowledge (knowledge soc./econ.)

16. How deal with complexity: ecosystem metaphors • Natural Ecosystems • Dynamic, constantly remaking themselves, adapting to the environment, evolution • Economy and Society as Ecosystems • Rothschild,’90: Organisms & organisations are “nodes in networks of relationships”. • Mitleton-Kelly, 2003: Orgs are co-evolving within a social ecosystem • Business Ecosystems • J.F. Moore, 1993 & 1996 • Customers, lead producers, competitors, other stakeholders. • Interaction (within a business ecosystem); decentralised decision-making and self-organisation. • M. Iansiti and R. Levien, 2004 • A large number of loosely interconnected participants who depend on each other for their mutual effectiveness and survival • “The keystone species” determine the co-evolutionary processes. • Digital Ecosystems • European Commission 2002 • Ecosystem paradigm applied to digital world • SAP, HP, …

17. How to deal with the complexity? • No easy answer, no short-term solution • long-term process, but intermediate results Paradigm shift : machine model => living organism model building a machine => nurturing players and conditions Cooperative effort : among local actors (gov, biz, uni-res) among EU regions Local actors R.O. Univ. P.A. Gov. How to foster this change of paradigm ? Small organisations

18. Lessons from the living world © ecosystems • Is built on composition and complex hierarchies • No central control, no plans defined in advance • Fault tolerant:No central point of failure, just viability concept • Diversity and autonomy (recursive) • Adaptationto the local conditions • Selection and evolution • Butyou need an infrastructure supporting the life (composed of living organisms too - rec. concept), and a critical mass of individuals and biodiversity (bootstrap problem) • But This infrastructure determines/shapes the potential evolutionary paths (regulation)

19. Dynamic composability for evolution • A digital component is made by components (“lego” approach) which: • are distributed • should change for allowing evolution • all elements could switch and change (sw, modality of usage, protocols) • Reusability of existing initiatives (web services, GRID services, semantic web) protocols • => adaptation to local conditions

20. The digital ecosystem How to create ICT infrastructure that allows digital components to exhibit natural behaviour Computingand telecom. Infrastructure vision, new paradigms OSservice-orientedarchitecture Diffused + Formalised knowledge Which ICT infrastructure for this new paradigm ? How could ICT support the transition from industrial district to knowledge-based business ecosystem ? Visionary approach + intermediate results

21. Digital Ecosystem Vision: a new “digital common” • Peculiar approach promoted by DG INFSO/D5 • Focus on regional development and local identities • Fosters enterprise dynamic cooperation and knowledge sharing • Develops enabling technologies + support deployment of interconnected network of digital ecosystems • Support network for SMEs (knowledge, practices, services), provides equal opportunities of access (mitigates digital divides) • Pervasive common infrastructure (which also evolves), open source and community principles • No central control, no point of failure, no dominant position, no pre-defined business model • Variety of digital ecosystems, self-adapting to local conditions • The “digital environment” is populated by “digital species” with their business model and description • The environment enables species to behave like species in the natural world • Interacts • Expresses an independent behaviour • Evolves – or become extinct – following adaptation

22. What is a Digital Ecosystem ? • THE DIGITAL ECOSYSTEM • is a pervasive “digital environment” • that supports the business ecosystems • that is populated by “digital components” • that evolves and adapts to local conditions with the evolution of the components THE “SOFT” SUPPORT INFRASTRUCTURE, WHICH MEDIATES SERVICES & INFORMATION (knowledge) EMPOWERING THE NETWORKINGAND THEIR SHARING architecture / structure

23. What is a Digital Component ? ©XPLANE A USEFUL IDEA, EXPRESSED IN A LANGUAGE (formal or natural), LAUNCHED ON THE NET, WHICH CAN BE PROCESSED (by computers and/or humans) • DIGITAL COMPONENTS • could be: software components, applications, services, knowledge, business processes and models, training modules, contractual frameworks, laws ... • .... and hopefully a mixture of all these formalised knowledge

24. A systemic approach to enterprises global collaboration Derivative work from Salzburg Technical University open-source, public, distributed pervasive environment - spontaneous evolution, adaptation and composition of services, digital content and sw components - embedding biz rules, revenue models, ontology...

35. A representation of the digital ecosystem Services and processes Adaptive, pervasive, self- organis/evolv. infrastructure Semantics

36. Potentisal FP7 Research areas Knowledge Economy Open source bizmodels,commun. Process,business ecosys. Business Ecosystems and Regional Economies Business rules and Regulatory Framework Formalisation of Knowledge (Languages) Semantics of services Syntax of economic behaviour FormalisedBasic Models and Services Execution environment“life support structure” Dinamic, Adaptive, Selt-organisingInfrastructure Digital Ecosystem Open-source service- and knowldege-oriented infrastructure DBE Research issues in Digital Business Ecosystem

37. Growth lead to Competitiveness, market & internal efficiency provide resources improve improve “Digital Ecosystem Infrastructure” catalyse ICTs Cooperation & innovation networks improve shape & foster support Biology enhances Open Source Evolutionary infrastructure encourage make viable supports supports New organizational & business models Policy The Digital Ecosystem integrated approach • to reduce the digital divides • among regions • - among SME and LE • to foster local economic growth and innovation; new forms of dynamic businessinteractions: • enabled bydigitalecosystemtechnologies Derivative work from P.Dini - London School of Economics

38. Digital Ecosystem: pilot regions (June 2005) Local Business Ecosystem co-funded by DBE project Local Business Ecosystem joined as new pilot THE CRACOW DECLARATION ON LOCAL AGENDA i2010 IN EUROPE AND THE PROMOTION OF DIGITAL SOLIDARITY AMONG THE CITIES OF THE WORLD i2010 Local Agenda Goal 6 – Digital ecosystems and training centres Each Local and Regional Authority will promote the creation of digital ecosystems within their territory. Potential future take-up local ecosystems

39. Elements of debate IRole of Embedded Knowledge in ecosystems Keystone organisations and Glocalisation • In the classical industrial districts a tissue of similar and complementary industries became the engines of regional economic growth • Tacit and explicit knowledge was embedded in the territory; Now in a knowledge-based economy the role of knowledge is even more crucial • ICTs promise to provide a similar repository of knowledge that supports economic growth and social development, but they must be able to capture, formalise and retain knowledge so that it can remain a public good at the sectoral and regional level • The digital ecosystems provide such a public good in the form of an adaptive environment that retains and distributes glocally the knowledge created • Because the knowledge of digital ecosystems, is diffused in the territory: in the human capital and in the network of small firms and in the business and social networks, it cannot be moved

40. http://www.digital-ecosystems.org Elements of debate IIHow the Ecosystems differ? The EU vs US approach and vision due to ~= socio-econ. structure ? (SMEs, few keystone, diversity): generate dependencies, risks? Different culture/regul. (swpat) The SAP case: SAP: A Sea Change In Software The German legend's move into Lego-like modules could revolutionize the way companies do software SAP builds a new ecosystem around NetWeaver, SAP. Thousands of independent developers could start writing specialized programs that plug into the NetWeaver framework Instead of waiting years between humongous software releases, there can be what the company calls a constant "conveyor belt" of improvements. Like Microsoft Windows on desktop PCs and servers, NetWeaver could define an industry standard for creating new business applications..