“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 Co-operation & innovation networks ICTs improve shape& foster support Biology Open Source Evolutionary infrastructure enhances encourage makeviable supports supports New organisational & 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’ 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

15. Digital Ecosystem: the General Architecture Knowledge-Based Economy Socio-economic knowledge Business Ecosystems and Regional Economies Business rules, Regulatory Framework Formalisation of Knowledge (F.Languages) Semantics of services Syntax of economic behaviour Digital Ecosystem Structure Basic Models and Services NetworkInfrastructure Digital Ecosystem Open-source service-oriented architecture DBE

16. 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

17. 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

18. 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