**2. Theoretical background**

This section provides background information on IE and SoS literature. Lastly, a tentative framework based on both literature is proposed to analyze actors' ecosystem interactions.

### **2.1 Innovation ecosystem**

The term "ecosystem" implies an analogy with complex biological systems. The comparison is intended to bring attention to features of business networks and unveil drivers of business success and failure [18]. Concepts in biological ecosystems such as predation, parasitism, and symbiosis may shed light on innovation and technology management [14]. When dealing with innovation challenges, some parallels with biological ecosystems can help infer which ecosystem will survive [19]. The ecosystem construct also makes the interdependencies between actors more explicit [2].

An IE is a network of interconnected and interdependent actors who cooperate and compete for value co-creation [7]. It includes the focal firm, suppliers, complementary

*Dynamics of Innovation Ecosystems: Orchestrating Actors and Interactions in Emerging… DOI: http://dx.doi.org/10.5772/intechopen.111629*

innovators, regulatory authorities, standard-setting bodies, the judiciary, research institutions, distributors, outsourcing firms, technology providers, and other actors [18, 20]. Among ecosystem actors, complementors deserve special attention. The more innovative complementors are, the more value they deliver to the ecosystem [21].

Ecosystems are supposed to have a life cycle and follow a co-evolutionary process [7]. According to Moore [19], ecosystems develop in birth, expansion, leadership, selfrenewal, and death stages. Dedehayir et al. [8] suggested the phases of preparation, formation, and operation across the genesis of IEs. However, despite the existence of coordination and governance mechanisms that guide the ecosystem life cycle, relationships between actors are always unstable, as partners can change independently of formal contracts or informal agreements [7]. Further, each actor has different attributes, decision principles, and beliefs and thus makes decisions according to them [14]. Changes in the organizational environment, such as government regulations, customer buying patterns, and macroeconomic conditions, may also threaten the ecosystem and its evolution [19].

It is also argued that IEs are built on platforms. Gawer et al. [21] defined platforms as products, services, or technologies used as a basis for other firms to create complementary innovations. Platforms can be clearly observed in the information technology industry because of their high modularity [14]. However, they can be noted in other sectors, such as automotive, aircraft, and consumer electronics [21]. Keystone organizations usually create platforms. The goal is to allow third parties to develop new products more efficiently, thus increasing productivity and improving the ecosystem's overall health [18]. Platforms can also be understood as a standard structure composed of subsystems and interfaces from which a firm can design and develop a family of products [21].

Matching a firm's strategy to ecosystem activities and innovations is one of the crucial aspects of the firm's success [1]. For example, high-definition television was expected to succeed in the early 1990s. However, other critical components, such as signal compression technology and broadcasting standards, were unavailable. Michelin's run-flat tire was introduced in 1997, but its complements of alert lights and automobile repair shops were ready only 9 years later. The online music-retailing category started in the mid-1990s but had to wait a couple of years until digital-rightsmanagement solutions and the emergence of broadband connectivity had been settled. In short, getting to the market is of value only if ecosystem partners can get there simultaneously [1]. As these examples show, while focal firms innovated cutting-edge technology, they could not capture the value for many years since they did not synchronize their innovation strategy with complementary products and services.

### **2.2 System of systems**

SoS research became a new focus for engineering in the 1980s when the US military aimed to integrate an independent weapon system into a large-scale system [22]. It differs from the traditional field of systems engineering. Whereas systems engineering is focused on single-complex systems, SoS engineering focuses on integrating multiple complex systems [23]. Today, various examples of SoS can be observed, such as in energy supply, water supply, air transportation, and the Internet [24].

There are many definitions of SoS. This study adopted the description provided by Krygiel [[25], p. 33]: "A system of systems is a set of different systems so connected or related as to produce results unachievable by the individual systems alone."

Maier [16] postulated five key characteristics that help understand the field of SoS:


Similar to ecosystems, SoS can also be built on platforms. Platforms are applied to integrate different systems, usually developed independently and asynchronously. For example, a military platform, such as a ship, an aircraft, or a ground vehicle, is equipped with sensors, weapons, and communications systems, which are independent systems integrated into a common platform to support user needs [24].

A practical framework applied to conceptualize and categorize SoS is based on the degree of authority between the SoS and its constituent systems. According to the Office of the Deputy Under Secretary of Defense for Acquisition and Technology [17], in the United States, the authority in SoS can be classified into four types:


Dahmann [24] suggests that most SoS are a combination of different types of authority. In fact, an SoS is often comprised of constituent systems that exhibit characteristics of various kinds. For example, in some cases, an SoS owner may have subordinated systems while maintaining independence from other collaborative ones. *Dynamics of Innovation Ecosystems: Orchestrating Actors and Interactions in Emerging… DOI: http://dx.doi.org/10.5772/intechopen.111629*
